Appeals court rebuffs liquor stores’ challenge to Baltimore zoning law

Maryland’s second-highest court has rebuffed a constitutional challenge from more than 30 Baltimore liquor store owners who were forced to phase out their operations in residential neighborhoods under a 2017 city ordinance that sponsors dubbed “Transform Baltimore.”

In a 3-0 decision this month, the Maryland Appellate Court said the ordinance aimed at curbing violence in the city does not amount to a governmental “taking” of property for which compensation would be owed under the state constitution. The court said the two-year phase out provision gave the owners reasonable time to shut down, transfer locations or change their business model from alcohol to food.

In its unreported ruling, the Appellate Court cited the Maryland Supreme Court’s 1957 decision in Grant v. Mayor and City Council of Baltimore that a business owner’s “nonconforming” operations under a city ordinance can be terminated by ordinance so long as a reasonable “amortization period” for shutting down is provided.

In Grant, the high court upheld a Baltimore ordinance that gave billboard operators five years to remove their signs from residential neighborhoods, saying the time was set “only after extended hearings and full consideration” of the operators’ and residents’ concerns.

Likewise, the two-year phase-out was set by the city only after due consideration of the liquor store owners’ concerns about lost business and the residents’ concerns about violence, the Appellate Court said in upholding a decision by Baltimore’s Board of Municipal and Zoning Appeals.

The BMZA rejected the owners’ argument that two years was insufficient time to shut liquor operations because it did not enable them to recoup their investment. The board validly sided with the city, which said the public benefit of reduced violence exceeded the owners’ claim of financial loss, the court held.

“Here, the record demonstrates that the purpose of (Baltimore Zoning Code, Article 32) 18-701 was to remediate the detrimental effects created by liquor stores in residential areas….,” Judge Kathryn Grill Graeff wrote for the Appellate Court.

“There was ample evidence showing a relationship between off-premise liquor sales and violent crime in Baltimore City,” Graeff added. “Based on this evidence regarding the harmful effects of liquor stores, including all the testimony given to the city before passing the ordinance by both the public and health and safety experts, the BMZA concluded that it could not find that the ordinance was facially unreasonable.”

Peter A. Prevas, the owners’ attorney, did not immediately return a message Thursday seeking comment on the decision and any plans to seek review by the Maryland Supreme Court. Prevas is with Prevas & Prevas in Baltimore.

Baltimore Solicitor James L. “Jim” Shea, the city’s chief attorney, hailed the ruling.

“The city is pleased to see that the Appellate Court of Maryland correctly applied the law and, like the circuit court before it, affirmed the decision of the Board of Municipal and Zoning Appeals,” Shea stated via email Thursday. “The 2017 changes to the city’s zoning law that remove liquor stores from many residential areas are proper, and we look forward to the beneficial effect this will have in many of our neighborhoods.”

The push to reduce the number of liquor stores in the city dates back at least to 2012, when then Health Commissioner Oxiris Barbot cited Johns Hopkins research tying the stores’ location to violent crime.

In passing the 2016 ordinance, city leaders told liquor store owners that they must transfer their licenses to new locations with the proper zoning or stop selling alcoholic beverages.

The city gave the owners until June 5, 2019 — two years from the effective date — to comply or face citations.

Graeff was joined in the Appellate Court opinion by Judges Christopher B. Kehoe and Terrence M.R. Zic.

The court issued its decision in the consolidated case In the Matter of the Petition of Ghenretnsae G. Mangisteab et al., Nos. 93-123, September Term 2022.