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Pawtucket City Council v. Habanos Lounge, Inc.

Superior Court of Rhode Island

April 27, 2015


Providence County Superior Court

For Plaintiff: Frank J. Milos, Jr., Esq.

For Defendant: Michael F. Horan, Esq.



This matter comes before the Court on an appeal by the Pawtucket City Council, acting in its capacity as the City of Pawtucket Board of License Commissioners (the Board), from a September 23, 2010 decision of the State of Rhode Island Department of Business Regulation (DBR) granting Habanos Lounge, Inc. d/b/a Habanos Cigar Lounge's (Habanos Lounge) application for a Class BV liquor license. Jurisdiction is pursuant to G.L. 1956 § 42-35-15.


Facts and Travel

On or about February 17, 2010, Habanos Lounge filed an application for a Class BV liquor license for its premises in Pawtucket, Rhode Island.[1] On April 21, 2010, the Board held a hearing on the application and unanimously voted to deny Habanos Lounge's application for reasons of oversaturation and public safety.

On or about April 26, 2010, Habanos Lounge filed a timely appeal to the DBR, and a de novo hearing was held on June 8, 2010 before Hearing Officer Catherine Warren. At the hearing, Mr. Mohd Eid (Mr. Eid) testified in his capacity as the President of Habanos Lounge. (Hr'g Tr. at 16, June 8, 2010.) Mr. Eid explained that Habanos Lounge has been at the leased location for approximately nine months, and the business has been operating as a cigar retail store. Id. at 17. Habanos Lounge currently has two humidors to keep the cigars fresh, a main seating area, showcases, a custom-made humidor locker for customers to rent, and eleven parking spaces, as required by zoning ordinances. Id. at 19, 21, 22, and 26. Mr. Eid testified that an addition is under construction and will include a kitchen, a bar with six stools, a bathroom, a walk-in humidor, and the building will have approximately thirty-eight seats. Id. at 28-29. The building currently has a ventilation system and a new smoke eater for 1200 square feet. Id. at 30.

Although Mr. Eid stated that he had no experience running a cigar bar in Rhode Island, he was previously a manager at a cigar bar in Tarpon Springs, Florida. Id. at 18. Additionally, Mr. Eid is receiving help from Cigar Masters, a national company and operator of a Providence cigar bar, as well as Bam, a wholesale business in Pawtucket. Id. at 36-37. Mr. Eid testified that he plans to operate Habanos Lounge from 12:00 p.m. to 12:00 a.m. Monday through Thursday, and 12:00 p.m. to 1:00 a.m. on Friday and Saturday. Id. at 29-30. The cigars are imported, handmade, and range in price from approximately $5-$30 per cigar. Id. at 31. Mr. Eid stated that the alcohol service will be secondary to the cigar sales. Id. at 32. The bar may sell imported beer, but will mostly sell hard liquor and wine. Id.

On cross-examination, Mr. Eid confirmed that he testified before the Board that if he was unable to obtain a liquor license, Habanos Lounge "would probably have to close . . . because there just isn't enough business with cigar sales only." Id. at 39-40. Mr. Eid explained that having a liquor license will help Habanos Lounge stay in business "[b]ecause people will buy more cigars and will sit down and smoke them." Id. at 40. Mr. Eid testified that most patrons come from out-of-state, as Habanos Lounge is a high-end establishment, and, in his opinion, the Habanos Lounge neighborhood cannot afford such cigars. Id. at 44-46. Since appearing before the Board, Mr. Eid stated that his plan has slightly changed. Id. at 47. Specifically, Mr. Eid decreased the amount of seats from forty-four to no more than forty because he had a company review the space and the kitchen had to be enlarged. Id. at 47-48.

Subsequently at the hearing, Councilman David Moran (Councilman Moran) testified on behalf of the Board. Id. at 60. He stated that he is a casualty and claims adjuster and handles motor vehicle accidents for an insurance company. Id. Additionally, he is a City Councilor representing District One, where Habanos Lounge is located. Id. at 61. Councilman Moran testified that he has spoken to approximately four or five of his constituents who are not interested in having another liquor license in the area, and they are concerned with safety and traffic. Id. at 63-64. Moreover, Councilman Moran testified that there are eight to ten liquor establishments in close proximity to Habanos Lounge. Id. at 65-66.

Thereafter, Councilman Moran testified that the first reason the Board denied the liquor license was for public safety and traffic concerns since Habanos Lounge is located at the corner of Benefit Street and Newport Avenue, a busy intersection. Id. at 70-71. Newport Avenue consists of four lanes with two lanes each running north and south. Id. at 72. Councilman Moran described the area as "very commercial, and very busy" with businesses located on all corners. Id. at 73-74. Councilman Moran expressed concern that vehicles would back up into Newport Avenue from Habanos Lounge's parking lot, causing accidents. Id. at 75-76.

Mr. Raymond Moreau (Mr. Moreau) and Mr. Gordon Duquenoy (Mr. Duquenoy) also testified in objection to granting Habanos Lounge a liquor license. Id. at 105 and 121. Mr. Moreau expressed concern of oversaturation in the neighborhood and difficulty parking in the area. Id. at 105-120. Mr. Duquenoy testified regarding parking challenges ...

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