Vote Yes on Prop F: Our Plea to the Neighborhood

To the neighborhood that has so graciously supported Agricole Hospitality from the very beginning—the Houston Heights—Ryan and I would like to ask for your consideration and support in going to the polls on Tuesday, November 7th and VOTING “YES” FOR PROPOSITION F, in a special election to repeal the 100-year-old law that has kept the heights “dry” for restaurants.

Over the last ten years that I’ve lived in this neighborhood, I’ve witnessed it grow into one of the most unique, interesting, mind-blowing places to live and call home. Whenever I travel, I am always so relieved and happy to get back to the Heights.

Independent small business has been an integral part of that growth of making the Heights into one of the coolest neighborhoods in the country. With world-class establishments like Manready Mercantile, and Cutthroat Barbershop on 19th street—Black Swan Yoga and Juiceland on White Oak—the incredible new Heights Mercantile at 7th and Yale, small independent businesses have contributed massively to that cool factor. 

The other piece in that puzzle of success is our independent Heights restaurants. Southern Goods, Alice Blue, Downhouse, Eight Row Flint, Coltivare, Better Luck Tomorrow—the soon-to-open Superica and Local Foods; the much-loved Torchy’s Tacos and Harold’s—all strive to compete with every restaurant outside of the Heights, but are encumbered by archaic, senseless laws that eat away at profit margin and cause massive headaches regarding compliance with the TABC (Texas’s liquor board). 

Below, I will get into what all this means, if anyone cares to dive in that deeply. If you prefer not to get bogged down in the excruciating minutiae that your independent Heights restaurants deal with daily, trust me that you would do us all an appreciated favor by going to the polls today or Tuesday and voting “YES” for Proposition F.

Voters living within these boundaries in the Heights can vote in the special election. 

Voters living within these boundaries in the Heights can vote in the special election. 

What does it mean to operate a restaurant in the dry area?

For the guest, it really isn’t a huge deal. A guest walks into the restaurant, orders a glass of wine, server asks for a driver’s license to make them a member of the private drinking club, free of charge. Server returns to the table with a small receipt. Guest signs receipt making them an automatic member of the private drinking club. Guest never thinks about it again.

For the restaurant however, the work has only just begun. The restaurant has two companies that exist within it. The operating LLC and the non-profit entity that is the private club. Each night after service, the numbers are looked at and the percentage of food to beverage sales are determined. Let’s say that Coltivare did $10 in business for the whole night. If food sales were 60% of that and beverage sales were 40% of that, $4 (the 40%) is transferred to the private club bank account, per TABC law. That $4 is now untouchable by the restaurant save and accept under certain circumstances of which I will get into in a moment. 

However, the restaurant needs to purchase new liquor to replace the liquor that was sold the previous night, so TABC allows for up to 35% of those liquor sales to be transferred to a THIRD bank account that can solely be used for inventory replenishment. What happens if you transfer too much or too little? You get audited yearly and fined by the state if you’re off. However, that part is a guessing game at best, because no one truly knows how much or how little guests will partake of nightly.

How does the restaurant function with the private club if they have strict guidelines as to how the non-profit money can be used? Well that is a great question. Technically, the private club money (per TABC) can be used for the benefit of the club members, and it is on the “management” of the private club to determine what that means and be able to justify it in an audit. If the auditor doesn’t agree, the restaurant gets fined.

The private club CAN pay for any capital improvements that benefit it’s members—like bar stools, bar tops, the club’s % of the monthly electric and utilities bill; glassware for drinks, etc.

There exists board members and regular meetings at which minutes are kept by an elected secretary—an elected treasurer makes sure funds are being accurately transferred (hopefully). The daily memberships from guests are tracked weekly and sent to TABC in Austin for compliance. The details are never-ending.

There is an extra layer of alcohol distribution for private clubs which is added as well, which eats into already slim profit margins of this industry. Unlike every restaurant in the City not within the dry zone, private clubs cannot receive deliveries from distributors. Our staff spends hours upon hours per week physically chasing down inventory that would otherwise be easily dropped off by the distributors.

Once yearly, all the board members can get together and assess whether or not the management fees (which are a % of gross sales) are accurate. The management fees allow the operating LLC to charge the private club for handling all the above-mentioned tasks. Along with a set fee for rent that the operating LLC can charge the private club, these are the only ways the restaurant can function.

It’s a complicated process that requires a lot of attention to detail, constant babysitting, and frequent audits—all to “act” as if we are as normal as any other restaurant in the city. Anyone owning and operating a restaurant in the map above deals with this on a daily basis.

All we want is the opportunity to function as every other restaurant in the city. This possibility now exists for this to become a reality on Tuesday.

This special election may not seem like a big deal to non-restaurant owners in the Heights—but to the places that you and your family frequent on a weekly basis, we absolutely cannot communicate enough, how important it is to continued success in an extremely competitive industry.

Thank you so much for your years of support and consideration in this election. We all hope you take a few minutes today or on Tuesday, go to the voting booth and vote YES for Proposition F.

Thank you again,

Morgan Weber
Agricole Hospitality

AJ Mistretta