Easing Food-Drink Ratio Could Have Big Impact On Downtown Decatur

The Planning Commission began talking about the food-alcohol ratio recently while discussing the possibility of relaxing the city’s ordinances that don’t allow brew pubs to open in downtown.

Support is growing for changing the requirement that 60 percent of a downtown restaurant’s business must come from food sales, with 40 percent from alcohol sales.

It’s a change that some believe could have as much an impact as the recent reduction in the alcohol setback — from 500 to 25 feet — has had on the city.

Businessman Tyler Jones, a member of the Decatur Downtown Redevelopment Authority, said real estate became hot downtown in the weeks after the city reduced the setback — the distance required between alcohol sales and a church or school — in early December.

“We’re seeing a large influx of money into downtown,” Jones said.

Whether it’s a piano bar or a cigar pub, young professionals Taylor Marks and Rebecca Stephenson want more downtown entertainment.

“I’d like to have a quiet place where I can take a client for a drink or two before I go home for the evening,” said Stephenson, a nurse practitioner. “And I don’t want to have to buy a meal. I also don’t want to have to go to Huntsville or somewhere else. I want to spend my money here (in Decatur).”

Fellow young professional Kyle Pike, 22, said people love to go to a place that features multiple establishments within a short distance of each other.

“Everyone loves to go to a place where there’s a lot of options,” Pike said.

His sister, Lillie Pike Sparks, 25, said she doesn’t think she and her husband, Nick Sparks, should have to buy food if they want a drink or two.

Christy Wheat, owner of Simp McGhee’s Restaurant and president of the Downtown Decatur Business and Merchants Association, said her group “is very much in favor” of reducing the percentage of sales that must come from food.

“We like that it gives restaurants a chance to change things up a little bit, but we don’t want full-blown bars,” Wheat said.

Food is the costliest, and generally least profitable, portion of a food and drink business because of the cost of products and the labor costs to prepare and serve it.

Wheat said reducing the percentage of food that a restaurant must serve “could take some pressure off the existing businesses and give them a little more leeway.”

Jones, owner of The RailYard, said the 60-40 ratio handcuffs restaurants during a time when he believes alcohol sales are already overregulated by the state.

Jones said he’s for reducing the food percentage “with the understanding the people need to realize what serving alcohol does to a business. There’s a reason I close at 9 p.m.”

While city leaders are focusing on possibly reducing the food percentage to 40 percent, some, like Planning Commission member Eddie Pike, believe this percentage should be smaller so businesses can make more of their gross sales off alcohol.

“There’s a perception that this is holding the city back,” Pike said. “A smaller percentage would open downtown and the Arts and Entertainment District up to investment that’s not necessarily food-based.”

A banking professional, Marks, 26, said he doesn’t understand why the government is even mandating a food percentage. He said lowering or even eliminating the food percentage required could encourage investment in downtown Decatur.

“Regulations or laws like this stop people from being creative,” Marks said. “With the 60 percent requirement, there’s way too much risk, so they’re going go somewhere else where there’s not as much regulation.”

City Director of Development Wally Terry said the food percentage requirement appears to be arbitrary. He said he believes the food percentage was initially part of state law, and it’s included in most of the city ordinances throughout the state. However, the state no longer includes a food percentage as part of its regulation of alcohol sales.

“There’s really no magic to that number,” Terry said. “I think they were trying to separate a lounge and a restaurant. They were just trying to decide how much food has to be sold so a business is classified as a restaurant.”

Athens recently changed its city ordinance so that a “brew pub” in downtown only has to make 40 percent of its profits off food. Cullman’s food ratio is 50 percent.

Since most of the state’s cities use the 60-40 ratio and Alabama’s alcohol laws make it difficult to try ideas from other states, Terry said Decatur will have to be creative on this issue.

For example, Terry said they may need to create different classes among the food and drink businesses.

In addition to changing the food-alcohol ratio, Jones said he would like the city to consider economic incentives for local privately run businesses in the same way the city provides incentives for big-box retailers and large retail developments.

Jones, who owns or co-owns four businesses, said the city needs to streamline the process of starting a business, including obtaining the necessary licensing and permits.

For example, he said it would be great if Decatur Utilities employed a civil engineer to handle inspections.