Texas Bars Look to Reclassify as Restaurants in Order to Reopen for Dine-In Services

The Texas Alcoholic Beverage Commission (TABC) is allowing bars to reclassify as restaurants depending on their alcohol sales and on-site food options, according to a new industry notice released by the agency yesterday.

If bars can prove they have been making less than 51 percent in alcohol sales since April, while also excluding to-go, delivery, and retail sales, the bars can be rezoned as restaurants. This means these bars, which were ordered to close again to the public (minus takeout cocktail and food allowances) under an executive order in late June, would be able to reopen for customers to drink and dine on the premises.

Some breweries have already taken advantage of the reclassification this week, which allowed the businesses to only report on-premise alcohol sales. This meant that to-go, retail, and wholesale beer sales didn’t count towards the breweries’ licensing sales. Austin Beerworks, Oddwood Ales, 4th Tap Brewing Co-op, and Hopsquad have already reopened their taprooms and patios under this allowance.

Likewise, bars can also apply for Food and Beverage certificates if they ramped up their on-site kitchen space or added a permanent food truck to their grounds. That would mean that these bars would be able to include new food sales towards its gross receipts, which could change the ratio of its alcohol sales towards under 51 percent, thus allowing them to reopen for dine-in service too.

Earlier this month, Lavaca Street Bar was able to reopen its South Lamar and downtown locations by changing its zoning from a bar to a restaurant under these guidances. This was thanks to on-site seafood spot Surf N’ Turf at the downtown address and the addition of sandwich shop Austin Daily Press to the South Lamar address.

Austin Daily Press actually took over Surf N’ Turf’s location at the South Austin bar. Flyrite Chicken is also taking over Surf’s location within Lavaca Street’s Rock Rose address too sometime in August, which most likely means that that bar will reopen too.

As of July 22, TABC Information Officer Chris Porter shared that 50 businesses in the Central Texas area have applied for Food and Beverage certificates or submitted sales reports showing that they have sold less than 51 percent in alcohol in their gross receipts. Applications for both reclassifications are being accepted through TABC right now.

• Industry Notice [TABC]
• Turns Out Some Texas Breweries Can Now Legally Reopen Taprooms [EATX]
• All Texas Bars Have to Close Again Because of Coronavirus Surge [EATX]