New York plans to make it permanently legal for restaurants to sell alcohol to go, after a temporary pandemic program became popular with take-out customers and proprietors. Proprietors used the alcohol sales to diversify their business model to make up for periodic slowdowns in dining-room sales.

The new program was included in the 2023 executive budget proposal Tuesday, following a pledge in Gov. Kathy Hochul’s State of the State address Jan. 5. It's expected to go into effect immediately upon the budget’s passage by the Legislature, likely by early April.

The program was renewed several times by former Gov. Andrew Cuomo but eventually expired in June, when the last state of emergency ended.

After that, advocates tried to get a modified permanent program passed in the Legislature but were unable to advance the bills.

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Hochul’s proposed new formulation of the rule once again would allow restaurants with retail liquor licenses to sell bottles of alcohol and mixed drinks to go—any products they are already licensed to sell in-house. It apparently will be left to the State Liquor Authority to decide whether restaurants may sell full bottles of booze, said Robert Bookman, a partner at Pesetsky and Bookman, a hospitality law firm that specializes in regulation. The bills in the Legislature had not permitted the sale of whole bottles, a concession to the liquor-store industry, which was unenthusiastic about the permanent program.

Bookman predicted that restaurants’ to-go alcohol sales will not negatively affect liquor stores.

“People aren’t running down to buy Triple Sec and mix their own margaritas every time they want a fajita,” he said.

Karl Franz Williams, owner of cocktail bar 67 Orange Street, said a permanent take-out alcohol program would give his bars the chance to increase sales.

“If we are thinking that we live with Covid in the future, we have to think about a restaurant or bar operating in a new normal, where there will always be people who don’t come in, whether they are quarantining or worried during a surge,” Williams said. “There will be a need for us to extend our physical business with takeout.”

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Although at one point take-out orders composed basically all of his business, by the time the program ended, it was down to about 20%, he said.

That, it turns out, is about the same percentage by which business has dropped between November, which was busy, and this month, which is quiet, he said.

“I think it will turn around in February,” Williams said. “But we are still trying to make up for two years.”

—Crain's New York Business