Follow-up: Aces and Eights Loses Liquor License

Both the neon and the taps are off at Aces and Eights.

Following up on our story last week about the closing of Aces and Eights, we learned yesterday that the embattled East Village bar, which had been operating off the regulation grid for more than a year, has now lost the one key license it did possess.

One of the reasons Aces and Eights succeeded in conducting business without a basic operating permit from the city’s health department was that the previous tenant of 34 Avenue A, Mo Pitkin’s, had possessed a permanent liquor license. That allowed the Aces and Eights management to secure a temporary liquor license and to open its doors (in April 2009) without having to produce any city permits — while its own application for a permanent license was pending. The city shuttered the bar Sept. 14, after finally catching up with the paperwork loophole.

Late last week, the NY State Liquor Authority followed suit, yanking Aces and Eights’ right to serve alcohol.

“We received information that they didn’t have the proper city permits, and we can pull temporary permits immediately,” said SLA spokesman Bill Crowley.

Unlike applications for permanent liquor permits, which involve much more paperwork, temporary licenses require only cursory review. The agency does criminal background checks and looks at financing, among other factors, Crowley said, but paperwork from other government agencies is not inspected. As a result, Aces and Eights owner Solomon Eljashev was able to keep renewing his liquor permit without ever having to produce an operating permit from the city.

The former general manager, Tom Michaelsen, who has publicly defended the bar on EV Grieve, blamed Eljashev in a lengthy statement submitted to The Lo-Down‘s comment feed:

“The previous managing owner  … is solely and entirely responsible for this situation. It was he who insisted that paperwork not be filed. It was he who neglected to sign documents when I handed them to him time and time again,” Michaelsen claimed, among other allegations about Eljashev’s business practices.

Eljashev did not respond to e-mail requests for an interview; reached by phone, he declined comment.

(We did not publish the comment Michaelsen submitted because it included unsubstantiated allegations. Michaelsen did not respond to our request for an interview)

It’s standard operating procedure at the SLA to issue temporary permits to new establishments taking over previously licensed venues, Crowley said. The practice is aimed at allowing new operators time to secure their permanent licenses, which generally takes four to five months, not 18.

The fact that Aces and Eights continued operating without a permanent license for so long was unusual, he said. That it avoided more scrutiny was even more odd since the SLA cited the bar with a violation of its temporary liquor license on April 15, 2010, Crowley said. SLA agents charged Aces and Eights with a “fairly minor violation” of operating a second bar within its space that had not been reported, Crowley said.  The owners offered to settle the matter by paying a $2,000 penalty, which the agency rejected. A hearing was held June 28; the matter awaits an administrative law judge’s ruling.

Under normal circumstances, the city’s health department would have notified the liquor authority about the lack of paperwork and prompted the liquor license revocation action sooner, Crowley said, but the first such notice came just last week. NYC Department of Health and Mental Hygiene officials have acknowledged that the bar was operating under its radar for at least a year, beginning in the spring of 2009.

In April of this year, the health department cited Aces and Eights for operating without a permit, giving the owners “at least 30 days” to obtain the proper paperwork. Five months later, the orange “closed” stickers went on the door.  On Monday, a city spokeswoman confirmed the bar still had not received an operating permit, despite the current general manager’s assertion on EV Grieve that Aces and Eights would reopen that day.

The SLA will not begin to consider reactivating the liquor license until all the city’s paperwork is complete, Crowley said, and given the long-standing criticism from the neighborhood — reignited by recent events —  that could take a while. “We’ve received a number of complaints about this place pretty much from the day they got their temporary permit,” Crowley said.

CB3 District Manager Susan Stetzer has been on the receiving end of those comments as well, and has spent the last week working with various agencies trying to straighten the matter out. “I don’t have an answer, but I do know the process is not working ,” Stetzer said late Wednesday. “We have been complaining for over a year that Aces and Eights has been misrepresenting their business, and now that’s been proven.”