This summer, beer gardens have been popping up like dandelions, causing some legislators to say they are ready to start pulling weeds. But most Philadelphians – including the folks who run neighboring bars – say they want to keep these boozy urban blooms.
“I think they’re great!” John Longacre exclaimed over the phone, as if he were attempting to shout away the prevalent perception that he is a pop up hater.
For Longacre, president of the Philadelphia Tavern Owners Association, the trouble began when Don “Joe Sixpack” Russell exposed the so-called regulatory loophole allowing pop up beer gardens like the PHS Pop Up Garden and The Oval to sell alcohol using a catering license, instead of spending tens of thousands for a “regular” bar/restaurant liquor license.
Longacre was quoted saying that the loophole was unfair to existing liquor license holders, fermenting discord from the pop up supporters. But he wants people to know that he blames the Pennsylvania Liquor Control Board, not the pop ups themselves. “I think the loophole is brilliant,” said Longacre, adding that “from an economic development perspective, [pop up beer gardens] are great for the city.”
Let’s cut to the real numbers
Longacre’s point is that pop ups like the PHS’s can spend $1,500 for something that costs bar owners about $85,000, which seems unfair. But that comparison isn’t very fair, either – both the SSHP and the PHS PUG are as fleeting as a summer rose and will fade away into our collective memory after a brief three month love affair. On the other hand, most bars hope to be more like bristlecone pines and stick around forever. For bars, liquor licenses aren’t merely a license to swill – they are valuable assets.
If you amortize that $85,000 for a liquor license over 10 years, it costs $708.33 per month – not significantly more than the $500 a month shelled out by PHS. And if you amortize the liquor license over a 30-year period – about how long the Crowd Pleasers have been playing at Bob and Barbara’s, or the length of a standard mortgage, your pick – its only $236.11 per month.
The seemingly largest concern – that someone could theoretically abuse the loophole and spend $10,000 a year on catering licenses to operate a bar year round – is also the most myopic: a conventional license would be cheaper within nine years. Admittedly, there are financing costs to figure in, but the point remains: the pop up loophole costs about the same, on a monthly basis, as a conventional liquor license.
To be fair, Longacre doesn’t want to see the pop ups get their licenses taken away – he just wants the PLCB to let bars create their own pop up beer gardens at the cheaper rate, too. “If this was standardized … I think it would be great,” he said. “I think the anomalistic beer gardens would be far less anomalistic. They would be all over the neighborhoods and that’d be great.”
Welcome, little friends!
Longacre is far from the only somewhat surprising pop up proponent. While one might expect neighboring bar owners to hate the pretty new competitor moving in next door, the exact opposite is true. Marcus Ferreira of the South Street West Business Association polled community businesses to gauge their reaction to their new neighbor and the response was overwhelmingly positive: of the thirteen respondents, only one was not in favor of the neighborhood’s adorable new PUG.
Since PHS opened across the street “our numbers have almost doubled” says Bob Dix, manager of Bob and Barbara’s. Other bars and restaurants nearby reported that business is up compared to last summer, and even reaching peak season heights.
That the ostensible competitors surrounding a pop up beer garden actually benefit from their new neighbor is less surprisingly than one might think. Retail economists call this phenomena agglomeration: when firms in related fields industries cluster near each other, they attract more customers than they would on their own. While margins may decline, the increase in volume is enough to generate greater profits. In other words, even though competition can lower prices, the bars still make out because there are that many more consumers. Agglomeration works best when the companies are in complementary or similar industries, but have enough distinguishing characteristics to allow customers to customize their experiences. For folks like Dix, a beer garden was the “last piece” in creating that mutually beneficially cluster on South Street.
How a pop up props up neighbors
About a mile east, the Spruce Street Harbor Park’s neighbors have also welcomed the latest addition to Penn’s Landing. “The park has been huge for us,” said John Brady, president of the Independence Seaport Museum, which has seen attendance increase 32% from last year since the park opened. Moreover, the Seaport Museum has enjoyed a tsunami of visitors using its “$5 after 5” promotion, which rose 250% from last year. Those tickets are sold at the Historic Ships ticket booth located right next to the park, which saw an 85% swell in sales compared to 2013. And like a sailor spanning a red sky at night, the Seaport Museum is taking delight with its new public boat rental program, which launched (that one is ISM’s own bad pun, I swear!) in April. Rentals doubled since SSHP opened. “We are absolutely delighted,” said Brady.
“One of the things we constantly hear is that we’re blocked off from the City by I-95. I’ve always maintained that’s just an excuse. If you do something down by the [Delaware] River, people will come and they won’t care about I-95 at all,” Brady said. “This just bears it out. The number of people who go to just hang out at that park is amazing.”
Back on South Street, another hackneyed Philadelphia cliché has been upended – that the City necessarily empties out every summer as everyone goes to the Jersey Shore. “If you walk by [the pop up garden] on a warm day during happy hour, those blocks are just hopping,” said Ferreira.
“It feels like we’re five years in the future – if some of the empty lots would develop, this is what it would be,” said Ferreira. “But we’re getting it now, which is awesome.”
A role as a change agent
And that is the entire point, according to PHS president, Drew Becher.
“I think the biggest and coolest story out this whole thing is that it has really sparked the imagination of folks that vacant land and underused space can be repurposed and reused in really innovative ways.”
PHS Chief of Staff Nancy Goldenberg agreed. “Pew came out with a study showing that Philadelphia has the fastest growth in millennials of any American city,” she said. “I think all of these pop ups are … really contributing to the vibrancy of Philadelphia, and that’s why people want to keep coming here.”
To the disappointment of statistics geeks everywhere, PHS didn’t do much to measure its impact in 2013 (this year, it’s conducting surveys of local businesses and residents). Thankfully, one of the city’s other noteworthy pop ups has been taking notes for us.
The Food Trust started Night Market Philadelphia in 2010, blocking off East Passyunk Avenue and inviting 16 vendors and food trucks to create an “outdoor food court”, according to Night Market Project Manager Diana Iskolsky. Unsure of what to expect, they got 4,000 ravenous attendees, who ate the vendors out of food almost instantly and then raved about it. “I heard ‘I’ve been in this neighborhood my entire life, and I’ve never seen it so vibrant before,’ and ‘I’ve never been here before, I can’t wait to come back,’” said Iskolsky.
After that first stroll down E. Passyunk, the Food Trust teamed up with Econsult Solutions to track their numbers. According to Econsult’s 2013 report, Night Market Philadelphia “produced $15.7 million in economic impact and supported 206 jobs within the Commonwealth [of Pennsylvania], generating $358,000 in Commonwealth tax revenues … and $134,000 in City tax revenues.” That report, which excludes this year’s numbers, also counted over 200,000 total attendees to the Night Markets, who directly spent an aggregate of $7.2 million on local businesses – both brick and mortar stores in the neighborhoods and the food trucks.
Perhaps no other industry has benefited from the Philly’s pop up economy so much as the food trucks. “I think [the pop up gardens] have been great,” said George Bieber, president of the Philadelphia Mobile Food Association and owner of the Sunflower Truck Stop. “I’d like to know if anyone thinks there is a negative to them. They transform areas that are nothing into something exciting.” Certainly, these meals-on-wheels benefit from the transitory nature of the pop ups like the Night Market: for many PMFA members, Night Market are the best sales of the year.
“The numbers just keep growing,” said Iskolsky, noting that over 30,000 attended the latest Night Market. “At this point, communities are begging us for a Night Market.” The success depends on large part on the Food Trust working with the local communities. “We really want to support local entrepreneurs,” said Iskolsky. “We work with the [Community Development Corporations], and they’ve been super supportive. They see the impact that these kind of events have on their city.”
While the Night Markets don’t rely on the same regulatory loophole for their liquor licenses – as a “non-profit agricultural association in existence for at least 10 years” the Food Trust can rely on the “Special Occasion Permit” to hold up to six “special events” which may include “bazaars, picnics and clam bakes” – their experience highlights not only the huge economic benefits of pop ups, but also how the Pennsylvania legislature could statutorily provide for liquor licenses tailored for pop ups like PHS and the Oval.
According to PHS’s Becher, “the food and beverage component [is] so important” in creating the effervescence that these ephemeral escapes provide. And there is no denying that they have inspired other establishments to invest more money in making Philadelphia a more exciting city to live and play in. It’s no coincidence that Independence Beer Garden, which holds a conventional liquor license, hired the same design firm responsible for the PHS Pop Up Garden and SSHP, amongst other projects.
Jumping on the bandwagon
The PTOA’s Longacre has raged against the PLCB’s licensing machine, assuming that it wouldn’t let existing licensees partake in the pop up game. But local bars are jumping on the exploding pop up beer garden craze without much regulatory worry. Fergie’s Pub in Center City hopped on the pop up beer garden bandwagon this week, using a catering license like the other pop ups, because, as owner Fergus Carey said, “all the cool kids are doing it.”
Fergie’s experience means Longacre’s protestations over fairness are premature. As Carey said in his animated Irish accent at his newly opened “beach”. “I just think these pop up gardens are making the city a much more beautiful, fun place. When you have guests in town and you walk them down to the Spruce Street Harbor Park and its like ‘Wow! This is fun, they don’t do this in our city!’”
So, maybe the easiest solution to this apparent licensing problem is to do what so many of us love to do on a sunny summer day: just drink a beer and do nothing.