Statesboro City Council suspended the city alcoholic beverage license of Club 125 LLC, doing business as Moonshiners, Thursday through Saturday because the club reported more alcoholic beverage sales than non-alcohol sales the first two quarters of this year.
Tuesday, during a hearing on the first enforcement action in five years under the city's "50-50 rule," club owner Farid Gharachorloo admitted that he could not bring his past sales into compliance without counting mixers, such as soda, separate from the liquor in mixed drinks. While asserting that the wording in the Alcoholic Beverages Ordinance appears designed to allow this, his attorney, Wesley C. Taulbee, called the rule confusing, poorly written and "nonsensical."
The council had granted Gharachorloo a continuance from its Oct. 6 meeting with instructions to produce versions of his revised reports certified by an accountant. Instead, he arrived at Tuesday morning's meeting with Taulbee explaining that the accountant would need invoices, inventories and another 30 to 45 days.
As an alternative, the attorney offered to stipulate that Moonshiners could not meet the 50-50 requirement unless businesses are allowed to count mixers as nonfood items in their quarterly reports.
"If you can do that, then my client meets the 50-50, there is no violation, and his amended returns are correct," Taulbee said. "If that is not the proper reading of the statute, then he doesn't meet 50-50."
The ordinance, adopted in December 2011, requires all parts of a mixed drink to be counted as an alcoholic beverage for the excise tax, Taulbee acknowledged. But he argued that the section requiring that a restaurant make 50 percent of its sales from things other than alcohol appears to allow mixers to be separated out as non-alcoholic.
Taulbee handed council members a notice of points that might be used to challenge the city's action in court. It asserted that a license suspension or revocation would violate the equal protection and due process clauses of the 14th Amendment to the U.S. Constitution.
As written, Taulbee said, the 50-50 rule is not a requirement for restaurants to serve more food and non-alcoholic beverages than alcohol, but a requirement that they have equal sales of alcoholic beverages and non-alcoholic items.
"That's a poorly written sentence that obviously does not give someone proper notice, because there's no rational basis for there to be an exact, equal amount on either side, and clearly the intent, most likely, was you need to exceed it," Taulbee said.
Gharachorloo submitted a first-quarter report in April showing that 75 percent of the club's sales were from alcoholic beverages, including 52.5 percent from distilled spirits and 22.5 percent from malt beverages and wine. The other 25 percent was food and non-alcoholic beverage sales. He submitted a second-quarter report in July showing 70 percent alcoholic beverage sales.
But after being notified that Moonshiners was in violation, Gharachorloo submitted amended returns showing alcoholic beverage sales of 45 percent for the first quarter and 41 percent for the second quarter.
Contrary to Taulbee's argument, Statesboro Police Lt. James Winskey noted that Gharachorloo's amended reports also showed big changes from the original numbers for beer and wine sales, not explained by separating mixed drinks. Only with these changes did the totals come into compliance.
"I have a second concern, that with each one of these reports, if it's falsified, we go beyond an administrative hearing," Winskey said. "It gets into a felony criminal situation if that's a falsified report, and I don't want this business or anybody else to be in that situation."
Gharachorloo attributed the aberrant beer and wine numbers to employees incorrectly keying in items after he installed a new system to separate mixer and liquor prices.
He created the club as Club 125 at the beginning of the year by remodeling a former pizza place behind his established restaurant, Gata's, off Lanier Drive. He later changed the name of Club 125 to Moonshiners. It is licensed as a "sports restaurant," under the city ordinance, and does not have a kitchen. Food can be brought over from Gata's, but nobody orders food at Moonshiners, Gharachorloo told the council.
Now 21 and over
Recently, he has restricted the club, which opens only Thursday, Friday and Saturday evenings, to customers 21 and over. A Georgia Department of Revenue agent, Gharachorloo said, warned him that unless he kept out people under the legal drinking age, the department's compliance checks would soon result in the loss of his license.
Patrons as young as 18 are often allowed in Statesboro nightclubs, although only those 21 and over can drink legally. A state law that took effect July 1 defines places that make 75 percent or more of their money from alcoholic beverages as bars and prohibits entry to people under age 21, with certain exceptions.
But this law was not invoked during Tuesday's hearing. It was based on Statesboro's ordinance, which does not permit bars as such. During discussions over the past year and a half about a proposed replacement for the ordinance, city officials have often mentioned the 50-50 rule as unenforced or unenforceable. The new ordinance would scrap it, but without having adopted that ordinance, the council faced interpreting the existing rule.
Now that Moonshiners does not admit under-21 patrons, it would qualify as a nightclub under the proposed new ordinance, Taulbee noted. The confusing nature of the current ordinance, he said, points to the need to replace it.
"Given that, our position would be that Mr. Farid is in compliance with his now-understanding of the understandably confusing language of this alcohol ordinance and therefore would ask that he not have any sanctions imposed," Taulbee said.
City Attorney Alvin Leaphart advised the council members that they needed to decide whether the mixers in mixed drinks could be separated out as non-alcohol sales.
The council wasn't buying.
"I think you folks are trying to change it all today, but he has violations now," said Councilman Gary Lewis.
"I don't think that our current ordinance allows for juice and/or soda served in mixed drinks to be classified as food," said Councilman John Riggs. "Our current ordinance also does not allow for bars. You have to have food."
Police and council members noted that Gharachorloo, as the holder of a different license, had been found in violation the previous month for employees serving alcohol to underage patrons at Gata's.
On a motion from Councilman Phil Boyum, seconded by Lewis, the council unanimously ruled that mixed drinks cannot be separated to comply with the 50-50 rule. With separate unanimous motions, the council found Moonshiners in violation and imposed the three-day suspension.
Al Hackle may be reached at (912) 489-9458.