Is it a restaurant — or a bar?

Owner says iconic North Valley eatery unfairly forced to close

Posted 7/25/20

One local restaurateur says he’s baffled by a recent decision by state officials to close dine-in service at his north Valley establishment.

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Is it a restaurant — or a bar?

Owner says iconic North Valley eatery unfairly forced to close

Posted

One local restaurateur says he’s baffled by a recent decision from state officials to close dine-in service at his North Valley establishment.

Gov. Doug Ducey’s June 29 executive order — entitled “Pausing of Arizona’s Reopening — Slowing The Spread Of COVID-19” — called on all businesses holding a class 6 or 7 license operating primarily as bars to stop serving dine-in customers.

Indoor gyms, movie theaters, water parks and tubing operators were also forced to close again, even though some had only just reopened after the May 15 expiration of Mr. Ducey’s previous shelter-in-place order. That previous order closed down all dine-in services at bars and restaurants.

Investigators from the Arizona Department of Liquor Licenses and Control recently determined Harold’s Cave Creek Corral, an 80-year-old Valley landmark, was required to pause their dine-in business again because they are classified as a bar, not a restaurant.

Danny Piacquadio, who is a co-owner at Harold’s, says that’s just not the case.

“We’ve always been a restaurant,” he said. “Since 1987, when I became part of it, we’ve always had close to 60% food sales.” 

He said when Gov. Doug Ducey issued his June 29 order, the owners didn’t expect they’d be forced to shut down again, since they view themselves as a restaurant.

“We look at the executive order, we see it, and we say, ‘We’re primarily a restaurant and have been,’” he said. “We sell 60% percent food, that’s our primary business.”

The restaurant has traditionally served breakfast, lunch and dinner from a widely varied menu, though the new takeout menu is now pared down.

Available from 11 a.m. to 8 p.m., the takeout menu features burgers and other hot sandwiches, Italian classics, fried chicken, barbecue brisket, steaks and salads, and family meal-pack deals, among other offerings. Breakfast is off the menu for now, though.

Kim Caster is a former Cave Creek resident who now lives in Anthem. She considers herself a longtime Harold’s regular, saying she’d dined there hundreds of times over more than a decade and always saw the place as a restaurant with a bar — but not as a bar with food.

“I used to go there Friday and Saturday nights,” Ms. Caster said. “Another bar with restaurant primarily serves alcohol with limited food service and it’s not family friendly. Harold’s is the reverse and is more of a sit-down food establishment that also has music and bar service. It’s family friendly the majority of the time and serves a full menu all day and into the late hours.”

She questioned the liquor department’s decision regarding Harold’s and other similar establishments struggling during the COVID-19 outbreak.

“I don’t think it is fair at all. If anything, perhaps allow the restaurant to function as usual and shut down bar service when the restaurant closes, as long as they follow the guidance for social distancing,” Ms. Caster added.

Since the first closure of dine-in establishments due to the viral outbreak, the restaurant’s owners have seen themselves as community partners, Mr. Piacquadio said.

“Obviously, we’re in a pandemic and these are challenging times,” he said. “From day one, when we were forced to close, we closed. We did everything by the book. We just did takeout only and at that point in time, we knew we were going to have a significant drop in business. But we wanted to remain open and actually created a meals program for a food bank and our school district, which provided over 5,000 meals.”

He said his employees have followed the health guidelines and remained diligent since reopening in May.

“We were doing everything in the CDC guidelines,” Mr. Piacquadio said. “We re-opened and we’ve gone above and beyond. Extra sanitation stations. Mask wearing. Temperature checks daily for employees. Social distancing of our tables and serving less than 50% or our capacity. Everything we could do.”

He said following the June 29 order, they continued to modify their business to be sure public health remained their top priority.

“We understood why the order was created, so we wanted to eliminate some of what the order was kind of directed to do,” he said. “We canceled all our bands. Moved tables onto the dance floor so no one would try to dance or congregate. We limited seating in our bar area. We closed at 11 o’clock instead of staying open until 2 a.m. We took further precautions above and beyond the guidelines.”

But Jeffery Trillo, assistant director for the licensing and administration division at ADLLC, defended his agency’s decision regarding Harold’s in an email statement.

“Harold’s Cave Creek Corral (06070069), a series 6 (Bar) licensed establishment, had to temporarily pause dine-in services because bars must close under the listed public health order. Specifically, Executive Order 2020-43 requires series 6 and 7 licensed locations to pause all but ‘to go’ operations when their primary purpose for operations is alcohol centric.”

Mr. Trillo did not provide any specific criteria used in their determination or what percentage of sales — food versus alcohol — is required to make such a determination.

But his investigators made the call after receiving a complaint. He said any changes made by the owners since the June 29 order do not count.

“It is not enough to have a full menu and provide food service. Further, the order does not contemplate or provide for affected licensees to adjust operations to try and come into compliance. Indicia present online and visible at the licensed location were the determinants in identifying this entity as being required to pause operations. Additionally, on June 30, 2020, the Department issued guidance to its series 6 and 7 licensees regarding Executive Order 2020-43. In that guidance, the Department made clear that bars and establishments in these categories could not alter from their core operations identity in order to try and exploit a gap as a means to continue operating. Primarily, Department detectives have been responding to complaints we have received about licensed businesses running afoul of public health orders and COVID-19 safety procedures since then. The Department received a complaint about Harold’s,” Mr. Trillo stated.

Mr. Trillo provided no details about the complaint or the allegations made against Harold’s.

Now with more than 60 of his employees — primarily cooks and wait staff — furloughed and sitting at home yet again, Mr. Piacquadio claims state regulators made a mistake.

In a written response to the liquor department, he claimed area businesses were unfairly targeted because of media exposure brought on by another non-compliant business.

“We do not believe Harold’s was targeted, but we do believe Cave Creek was. We attribute that targeting to the national media pointing out one particular class 6 business and the amount of people congregating at that business,” stated Mr. Piacquadio.

He said the state investigator recorded video at his establishment on a cell phone, which showed no bar stools or patrons seated at the bar, 90% of customers sitting at tables with food, proper social distancing and sanitation, employees wearing masks and the dance floor shut down.

“This video clearly proves Harold’s Corral operating as a responsible restaurant and following all CDC, State, and County guidelines, but the detective was still instructed by his boss to shut us down,” Mr. Piacquadio claimed.

He said the department’s investigators gave Harold’s owners the option to either shut down their dine-in business voluntarily — or else face a 60-day suspension of their license.

Maricopa County Supervisor Steve Chucri, who is also president and CEO of the Arizona Restaurant Association, said that Harold’s isn’t the only such establishment struggling to comply with the governor’s executive order.

“This is a widespread problem. Many restaurants obtained a series 6 license as an investment or as part of an acquisition, but have never utilized the main benefit of a series 6, which allows the license holder to sell alcohol without any food sales quotas. In fact, we have seen restaurants with upwards of 60% food sales shut down just because they hold a series 6,” Mr. Chucri said in an email statement. “The difficult part is there is not a clear-cut definition being used to make these determinations. It basically boils down to if a single inspector ‘thinks you are a bar,’ then you are a bar. This means it is impossible for establishments to self-analyze for compliance.”

He said restaurants, which have adjusted their operations since the outbreak of the pandemic, get no credit for that effort.

“One of the biggest problems we have seen with this order is that inspectors are looking at what an establishment’s operations looked like before COVID-19. This means places such as Harold’s that adapted their activities (i.e. eliminating the dance floor and live music) receive no consideration,” Mr. Chucri stated.

And for those affected, there is no easy way to get a new license, which might cover their food service operations in the meantime.

“It would be incredibly difficult for a restaurant in this situation to obtain another license. First, you are not allowed to stack a series 6 with a series 12. This means they would first have to divest in their series 6 license (which is worth upwards of $100,000) and then purchase a series 12 license. This process would not be quick, nor would it make any financial sense,” he stated.

For those struggling to stay afloat through the novel coronavirus public health crisis, there are no quick solutions, unfortunately, Mr. Chucri explained.

“There is no current option for restaurants in this situation. The Executive Order and DLLC guidance lacks any review or due process. If an inspector determines you are a bar, that is it, you are shut down until the order expires. If DLLC exercises their authority to summarily suspend your license (without a judicial review process), the establishment must go through an administrative hearing process and plead their cases to get their license back,” he stated.

Daily Independent reached out to the governor’s office, asking if the actions of state regulators matched up with Mr. Ducey’s intentions when he issued the June 29 order.

Mr. Ducey’s office did not respond to a request to comment as of press time.

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