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APR 07, 2016

The New York State Liquor Authority Considers Exclusive and Non-Exclusive Use Of School Premises

The New York State Liquor Authority (the “SLA”) recently issued an important declaratory ruling relating to the application of the Alcoholic Beverage Control Law’s (“ABCL”) “200 Foot Rule.” The 200 Foot Rule prohibits the issuance of a retail liquor license for the sale or consumption of alcohol to an establishment that is located on the same street and within 200 feet of a building that is “occupied exclusively as” a school or place of worship. The SLA’s declaratory ruling 2016-00220 ( clarified the scope of the meaning of the phrase “occupied exclusively as” as used in the ABCL and analyzed what is considered exclusive and non-exclusive use of school-premises. The SLA’s ruling is particularly significant because in defining the term "exclusively" occupied as a place of worship, Section 64 of the ABCL sets forth numerous examples of activities that are considered incidental to and not detracting from the predominant character of a building used as a place of worship but the statute is silent as to the types of activities that are incidental to activities of a school.


The applicant here presented the SLA with three different activities that take place at the school at issue that the applicant claimed brought the school outside the scope of being “occupied exclusively as” a school under the meaning of ABCL §64(7)(a). Specifically, the applicant noted that (1) the school’s playground is open to the general public during non-school hours, under the “Schoolyards to Playgrounds” program, (2) the school’s gym and pool are available for rental to for-profit organizations, and lastly, (3) the school intended to use its roof deck as an outdoor museum space and previously hosted film screenings showing movies that the applicant alleged were inappropriate for high school students


In providing their analysis of the facts and issuing its ruling, the SLA was guided by the principal that the SLA should exercise its authority in a manner that protects schools and churches to the fullest scope of the law, as long as “the non-educational or non-religious activities bear a logical relationship to the educational or religious purpose of the institution and are fairly to be considered subsidiary to its main purpose.” SLA Divisional Order #319, June 10th, 1952. The SLA further looked to guidance from ABCL §64(7)(d-1), which provides that a place of worship does not cease to be so when it hosts: bingo or other games of chance as a means of raising funds for the not-for-profit religious organization; yoga classes, exercise classes or other activities intended to promote the health of the congregants or other persons; and use of the building by non-congregant members of the community for private social functions. “The building occupied as a place of worship does not cease to be ‘exclusively’ occupied as a place of worship where the not-for-profit religious organization occupying the place of worship accepts the payment of funds to defray costs related to another party's use of the building.” Id.


With this framework in mind, the SLA found that the activities cited by the applicant were incidental to the operating of the school and did not detract from the predominant of the school and thus, subject to the 200 Foot Rule. The takeaway here is that entrepreneurs in the hospitality business should proceed with caution and always keep in mind that activities that on their face may appear to be non-incidental in nature for school purposes (ex: renting out the school for profit to private organizations), will be analyzed more vigorously under the framework articulated by this latest ruling.


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