Judgment, Supreme Court, New York County (Kathryn E. Freed, J.),entered August 3, 2016, granting the amended petition brought pursuant to CPLR article 78 and annulling respondent New York State Liquor Authority’s (SLA) determination, dated February 16, 2016, which denied petitioner Galaxy Bar & Grill Corp.’s (Galaxy) application for a full on-premises liquor license, and remitting the matter to SLA for reconsideration of Galaxy’s application, affirmed, without costs.
The issue before us concerns SLA’s denial of petitioner’s third application for an “on-premises” liquor license to operate a tavern and cabaret. The proposed establishment is on the second floor of a commercial building located at 1370 Ralph Avenue in Brooklyn. The floor plan provides for 24 tables, a 20-foot bar with seating for 10 and a maximum capacity of 375 persons.
Petitioner had submitted two prior applications for a liquor license for this proposed tavern. The first was denied for failure to provide the SLA with requested information and the second was denied because petitioner’s principal, Carmel Jean Loiseau, lacked experience in the management of this type of establishment. The application in question sought to remedy these defects by proposing to hire an experienced manager and submitting a security plan for the operation of the tavern.
The proposed manager, Eduardo Fontan Besey, noted his professional experience from 1999 through 2013 as a manager, consultant and principal with various hotels, restaurants and lounges in Montauk, Miami and Manhattan. The security plan was submitted by Tony Caldarola, a former commanding officer of the Brooklyn North Vice Squad and partner in Illuminus Investigative Services, Inc. The plan provided that the security team would be supervised by retired NYPD personnel, with guards at the front entrance controlling the flow of patrons and scanning their ID’s via an electronic security system. Patrons would pass through a metal detector and, if approved, proceed to the second floor tavern. Security guards would be posted by the exit doors of the premises, a security camera would be installed, and a parking plan would be prepared.
After a full board hearing, the SLA denied petitioner’s application. The SLA noted that Loiseau had no experience in managing or supervising a business with a liquor license, and, although Besey had considerable management experience, at least one of the businesses he managed had a history of sales to minors.
Significantly, in its decision, the SLA noted that the subject location had twice been previously licensed in the past by two entities unrelated to either each other or to Loiseau. In both cases, those entities had their licenses revoked for, among other things, assaults, shootings, stabbings, disorderly conduct, sales of alcohol to minors, lewd conduct and various other activities that became a “focal point of police attention.” The SLA also noted that two prior applications by Loiseau had been denied.
Subsequently, a “Disapproval Hearing,” which focused on Caldarola’s security plan, was held before an Administrative Law Judge (ALJ). Mr. Caldarola testified that he spoke with community affairs personnel in the local precinct to determine the prior history of the location. The business plan envisioned serving a more mature clientele in an “event”-type setting. He testified that with these facts, along with the implementation of his security plan, the premises could be operated safely and would avoid the past unsavory activity that took place at that location.
Besey acknowledged that he was the manager of a premises in which there were some incidents of underage serving, which he brought to the attention of the owners. When they refused to change their practices, he quit their employ.
Finally, the local Community Board was notified of the hearing and no one appeared to oppose the application. In this regard, petitioner had included with its application a letter from a City Council member urging favorable action on the application.
The ALJ recommended that the application disapproval be vacated and that the application process be reopened. Although the past history of the premises was troublesome, the ALJ found that Loiseau had no connection with those events, that the plans for security and proper management demonstrated a willingness to comply with the law and that there was no rational basis to conclude that the premises would not be properly controlled and operated.
At a second meeting of the full board, the SLA counsel criticized the ALJ’s determination and gave petitioner the option of either a second disapproval hearing or a request for the SLA to reconsider its prior determination. Petitioner opted for a second disapproval hearing, which was held before a different ALJ. That ALJ upheld the full board’s disapproval of petitioner’s application, finding, among other things, that the SLA had a rational basis for making its disapproval determination, given the past history of the premises and its concern that history would “repeat itself,” thus putting local residents and patrons of the establishment at risk.
Petitioner commenced an article 78 proceeding. The motion court granted the amended petition, annulled the determination denying petitioner’s application for a full on-premises liquor license and remitted the matter to the SLA for reconsideration of the application in accordance with the court’s decision. The court found that the history of violations and reported criminal activity was not relevant here because petitioner had no ownership interest in the prior licensees and exercised no managerial responsibilities with the prior operators. The court also found community support based upon the letter from a City Council member urging the SLA to grant the license. We agree.
The SLA is given wide latitude in the exercise of its powers (Matter of Wanetick v State Liq. Auth., 8 AD2d 706, 706 [1st Dept 1959], lv denied 6 NY2d 707 [1959]). In reviewing a determination made by the SLA, the test to be applied by the court is whether its determination has a rational basis in the record (see Matter of C. Schmidt & Sons v New York State Liq. Auth., 73 AD2d 399, 404 [1st Dept 1980], affd 52 NY2d 751 [1980]).
The dissent correctly notes that the prior adverse license history of the subject premises, and the sensitive area in which it is located, may be proper factors to be considered in the licensing process. However, in doing so, the dissent ignores longstanding precedent from several Judicial Departments, including our own, that such history is not relevant where, as here, the principal of the applicant “ha[s] no ownership interest in the previous licensee and there is no reasonable factual basis to support a finding that he exercised managerial responsibilities with respect to that prior operation” (see Matter of Ha Ha Ha, Inc. v New York State Liq. Auth., 262 AD2d 1008, 1008 [4th Dept 1999]; see also Matter of 135 Rest. Corp. v State Liq. Auth., 25 AD2d 651, 651 [1st Dept 1966]; Matter of 512-3rd St. v New York State Liq. Auth., 217 AD2d 1010, 1010 [4th Dept 1995]; Matter of Tobo Rest., Inc. v State Liq. Auth., 49 AD2d 766, 767 [2d Dept 1975]).
The SLA maintains that the applicant has the identical business plan for a nightclub as the previous two licensees whose licenses were revoked. Thus, the SLA contends that the fear of “history . . . repeating] itself,” especially in light of the proposed manager’s “questionable” experience, has a rational basis and its denial should be upheld. However, its denial appears to be “based upon conclusory reasons unsupported by factual considerations of reasonable persuasiveness and should therefore ... be set aside” CMatter of Matty’s Rest, v New York State Liq. Auth., 21 AD2d 818, 819 [2d Dept 1964], affd 15 NY2d 659 [1964]). Moreover, the SLA may not deny a proper license application based on the supposition that principals of the licensee would not exercise the “proper ‘degree of personal supervision’ ” over the licensed premises to insure the premises would be operated in an orderly and lawful manner, as such denial would be based on speculative inferences (Matter of Santini Rests, v State Liq. Auth., 32 AD2d 514, 514 [1st Dept 1969]; see also Matter of Bonafino v Doyle, 39 AD2d 1009 [3d Dept 1972]).
Here, Besey explained that his “questionable experience” was limited to one employer, and that his other significant experience was unblemished. The application also included an extensive security plan, submitted by a retired NYPD lieutenant who was a former commanding officer of Brooklyn North Vice Squad and a principal in a security services company. While the SLA relies on Pastore & Assoc. v New York State Liq. Auth. (194 AD2d 409, 410 [1st Dept 1993]) for the principle that the efficacy of a security plan is subject to the SLA’s evaluation, and while the security plan, standing alone, would not mandate the granting of this application, there is no evidence that the SLA found the security plan to be inadequate, or that it would not be properly implemented.
While the SLA referenced local residents’ complaints regarding the situation created by prior licensees’ activities, community opposition in and of itself cannot sustain the authority’s determination to reject the application (Matter of Circus Disco v New York State Liq. Auth., 51 NY2d 24, 38 [1980]). In any event, there is nothing in this record to support a finding of community opposition. While the dissent interprets the failure of petitioner to meet with the Community Board as evidence of community opposition, the record shows that the Community Board was given notification of the SLA hearing and no one appeared to either oppose or support it. This essential fact is overlooked in the SLA’s determination. Additionally, as conceded by the dissent, petitioner submitted a letter of support from a City Council member. Nor is there anything in the record that the police have expressed concern about the present application. The dissent correctly notes that petitioner conceded at the SLA hearing that the police certainly had serious issues with the conduct of past licensees. However, as noted above, the security consultant, a former NYPD vice squad commander, personally met with the local precinct community affairs officers to determine the prior history of the location and to discuss the proposed new establishment. As with the Community Board, the police had the opportunity to express reservations or concerns and failed to either appear at, or send communications to, the SLA regarding any concerns they may have had about petitioner’s application.
Moreover, “[t]he likelihood of future violation can furnish a basis for denial only when there are facts in the record which rationally support doing so” (Matter of Circus Disco, 51 NY2d at 36, citing Matter of Matty’s Rest., 21 AD2d at 818).
Here, there are no such facts in the record. The concern that history would “repeat itself” is not sufficient to warrant denial since the record does not rationally support this conclusion. The SLA and residents are not without remedies “if what is . . . feared becomes fact” (Matter of Circus Disco, 51 NY2d at 36).
In affirming the motion court’s ruling, we are not, as the dissent contends, substituting our judgment for that of the SLA. Rather, we are maintaining our “judicial responsibility to review and pass upon administrative action claimed to be arbitrary and without foundation in fact or in law” (Matter of Matty’s Rest., 21 AD2d at 818; Matter of Bonafino, 39 AD2d at 1009).
As a result, upon the entire record presented here, the inescapable conclusion is that, as a matter of law, the reasons stated by the SLA in support of its disapproval of petitioner’s application, “whether considered singly or in relation to each other, d[id] not afford a rational basis for the action taken,” and should therefore be set aside (Matter of Matty’s Rest., 21 AD2d at 818).
It bears noting that, in affirming the motion court’s decision and judgment, we are not directing the SLA to issue a license. Rather, our decision confirms the motion court’s direction that the SLA reconsider the application in light of the precedential principles set forth in both our and the motion court’s decisions.
Concur — Sweeny, Manzanet-Daniels and Moskowitz, JJ.