Merchant groups want public order code declared unconstitutional
By The Star Staff
Merchant organizations sued the Municipality of San Juan to declare the public order code that will limit alcohol sales starting Nov. 9 unconstitutional because it is discriminatory and will deprive the island of millions in sales tax and licensing revenues in the middle of a bankruptcy.
On Aug. 8, the Municipality of San Juan enacted Public Ordinance Num. 3, Serial 2023-2024, which prohibits the sale of alcoholic beverages after 1 a.m.from Monday to Friday and after 2 a.m. on Saturday, Sunday and those Mondays that fall on a holiday.
The members of the 16 business groups said the public order code exempts hotels and motels, including restaurants and bars located inside those premises, regardless of who owns them, from having to comply with the new “last call” hours when serving their “guests.” This exemption to businesses located inside hotels applies to any hotel located in the municipality, even those operating outside of the usual tourist hotspots of Condado and Old San Juan.
“What this ill-planned curfew will do is to further harm the city’s finances by depriving it of millions of dollars in sales tax and license revenues that will be lost,” the organizations said. “What’s even worse, this decision will cost the Commonwealth of Puerto Rico millions of dollars in sales and income tax revenue, while it is still in the middle of bankruptcy proceedings under the PROMESA [Puerto Rico Oversight, Management and Economic Stability] Act.”
The municipality’s prohibition on selling alcoholic beverages after certain hours was not a decision taken in a vacuum, the groups said. Instead, it was a “knee jerk” reaction to an unfortunate incident that took place on Loíza Street on May 6 in which two Peruvian tourists were shot and killed due to a dispute that had nothing to do with them and while they were waiting for their ride share service to take them back to their hotel. As yet no one has been charged for said killings, they said.
“Due to an outcry of a segment of the population and the media and due to the state and municipal law enforcement authorities’ inability to solve those murders and charge the culprits, the municipality decided to issue an ordinance ordering the closing of businesses after certain hours to make it look like they are doing something about a perceived spike in criminal activity during the late night/early morning hours,” the business groups argued. “In order to justify this decision, the municipality commissioned an independent study of its consequences. Not surprisingly, the study concluded that the curfew imposed by the municipality wouldn’t have an effect on the criminal activity taking place in the city, since most murders and similar violent acts take place during the daylight hours.”
Since they couldn’t use the study to justify their curfew, city officials pivoted and now claim that it is necessary to protect these businesses’ neighbors from inadequate noise levels and the like during late hours.
“This blanket curfew unjustly punishes businesses, like Plaintiffs’,” the complaint reads. “The Municipality has the legal tools to fine and eventually shut down any business that is a nuisance to its neighbors due to inadequate noise levels and/or the actions of its patrons, but again [the city’s] inability to fulfill its duties led it to enact an illegal ordinance without any rational basis.”
In fact, the groups contend, the study prepared at the municipality’s behest shows that in the long run the municipality would lose millions in tax revenue from shutting down businesses early, while the commonwealth would lose around 10 times that amount, they said.
In reality, the amount in lost tax revenue would be much higher, since the study severely underestimates sales that occur after the now prohibited hours, the organizations said. When giving interviews to the local news media, high-ranking officials from the municipality admit that their police and permits officers won’t be visiting hotels to make sure that only guests sleeping there are sold alcoholic beverages after curfew hours and that instead they hope that those establishments will self-regulate.
“This admission by the municipality creates a situation where a bar located inside a hotel in Río Piedras or Santurce, and which is not even owned by the hotel, can sell alcoholic beverages 24 hours a day, since they know that they are not going to be regulated or inspected late at night, while a bar located next door has to shut its doors,” they argued.
“The Municipality of San Juan is intentionally discriminating against plaintiffs and other similar businesses and using them as scapegoats to try and blame them for its inability to adequately control criminal activity in the city and which mostly takes place during daylight hours,” the petition adds.
The lawsuit was filed by the Calle Loíza Merchants Association Inc., the Old San Juan Merchants Association, the Placita de Santurce Merchants Association LLC, 2 Monkeys Entertainment LLC, Homar Torres h/n/c “Papi Joe”, Sanse 157 LLC, RMO Corporation, KEG Entertainment LLC, Miguel Morales h/n/c “Refill Sport Bar”, 365 Entertainment Inc., Pana MJC LLC, Harry Entertainment Music Inc., SX The Club Corporation, Onism Management Group LLC, KK Group LLC and Bulon Group Inc.