How Your New Jersey Restaurant Can Take Advantage of the New Outdoor Dining Law

For New Jersey restaurants struggling under the weight of COVID-19 restrictions, legislation recently signed into law by Gov. Phil Murphy may provide a lifeline…

For New Jersey restaurants struggling under the weight of COVID-19 restrictions, legislation recently signed into law by Gov. Phil Murphy may provide a lifeline, particularly as we approach warmer months. Under the new law, restaurants, bars, distilleries, and breweries will have opportunities to expand their operations outdoors until November 22, 2022.

“As we weather the devastating effects of the COVID-19 pandemic, we are continually trying to find new and innovative ways to aid our state’s business community while not sacrificing our public health,” Governor Phil Murphy said in a press statement. “This bill will give our restaurants more certainty for the future so they can once again lean into the outdoor expansions we allowed this past summer to help recoup losses and strengthen their businesses and the jobs they support.” 

Outdoor Dining Opportunities for NJ Businesses

The new law, Senate Bill  3340, seeks to create opportunities for restaurants, bars, distilleries, breweries, and farms to adjust operations in response to the COVID-19 public health emergency. It extends the effective period of permits issued under the Division of Alcoholic Beverage Control’s (ABC) Special Ruling 2020-10, which allowed licensees to expand the premises where they can serve alcoholic beverages to include outdoor spaces. The ruling will now expire on November 22, 2022, or the date at which indoor dining returns to full capacity at restaurants — whichever is later.

The new law also establishes protocols for municipalities to review and approve outdoor space expansion requests by restaurants without liquor licenses and those with liquor licenses that have not previously obtained expansion permits. The law defines “outdoor spaces” to include patios and decks, both covered and uncovered, yards, walkways, and parking lots, or a portion thereof. Senate Bill 3340 would also allow the owners and operators of those establishments to use public sidewalks as an extension of their business premises.

Owners and operators of establishments seeking to utilize outdoor spaces or public sidewalks as extensions of their business premises pursuant to the provisions of the law must file an application with the municipal zoning officer. The application must include:  (1) a plan, sketch, picture, or drawing that depicts the design, dimensional boundaries, and placement of tents, canopies, umbrellas, tables, chairs, and other fixtures of the outdoor spaces; and (2) a plan for the control of litter, the removal and storage of garbage, and the cleaning of fixtures and grounds.  If a business premises’ parking lot is used for the service and sale of either food or beverages, or both, the restaurant, bar, distillery, or brewery may not encumber more than 75 percent of the lot’s total parking spaces for such service and sale, unless the parking lot contains less than eight parking spaces, and must maintain at least one handicapped parking space in the parking lot. A walking path of at least four feet wide must be maintained on a public sidewalk, at all times, for pedestrian traffic.

Additionally, a municipality may require that an applicant provide one or more of the following:  (1) written consent of the owner of the premises, if other than the applicant, (2) an insurance certificate naming the municipality as an additional insured, with general liability on an occurrence with a limit of liability of at least $1,000,000, with respect to losses arising solely from the operation of the outdoor dining facility, or (3) an indemnification agreement with the municipality with respect to losses arising solely from the operation of the outdoor dining facility.

Senate Bill 3340 mandates that zoning officers issue an approval to the applicant within 15 business days of the application being submitted and deemed complete provided that the applicant meets and abides by all qualifications and requirements of the law, with the exception that “the zoning officer may deny an application based on current violations of any other health, safety, fire, permitted use, or zoning regulation, or upon any applicable law permitting the denial of a zoning permit, that is not otherwise directly superseded by this section or Special Ruling No. 2020-10.” An applicant may appeal a zoning officer’s decision to the municipal governing body.  Senate Bill 3340 specifically provides that an outdoor dining application is not a variance application.

Municipalities must require that any restaurants, bars, distilleries, or breweries granted permits under the new law follow, maintain, and enforce COVID-19 protocols, such as concerning social distancing and use of personal protective equipment during the period those protocols are in effect. In addition, a municipality may deny, revoke, or temporarily suspend the permit of any applicant or permittee that violates, or is not in compliance with, any provision of the new law or any provision of a law, ordinance, or regulation related to health, safety, fire, permitted use, zoning, or the consumption or control of alcoholic beverages not otherwise under the jurisdiction of ABC.

Senate Bill 3340 further preserves the right of municipalities to regulate outdoor dining operations, unless otherwise specifically prohibited or suspended by the provisions of the bill. For example, municipalities, may not prohibit or limit the hours of outdoor dining service of food and beverages except after the hours of 10:00 p.m. and before 11:00 a.m., except in the same manner that indoor dining hours may have been regulated prior to March 2020. However, it expressly provides that municipalities may regulate live and recorded audiovisual performances and broadcasting as part of the approval process. 

Additional Opportunities for NJ Distilleries, Breweries, and Wineries

The new law also creates new opportunities for New jersey distilleries, breweries, and wineries to sell their products at local farm markets. Senate Bill 3340 specifically authorizes the ABC Director to issue a daily or annual permit to the holder of a limited brewery license, restricted brewery license, craft distillery license, plenary winery license, farm winery license, or cidery and meadery license, which would allow the permit holder to sell any of the licensee’s products at a seasonal farm market for off-premises consumption. Licensees issued a permit may: (1) transport their products in original containers for the purpose of selling them at a seasonal farm market; and (2) offer samples to individuals of legal drinking age during each day the seasonal farm market is operating.

The director must issue a separate permit for each seasonal farm market at which the licensee’s products are intended to be sold. Senate Bill 3340 further directs the Director of the Division of Alcoholic Beverage Control to issue a special ruling or adopt regulations necessary to effectuate the purposes of the new law. 

How We Can Help

Scarinci Hollenbeck’s experienced attorneys stand ready to help restaurants, breweries, and other New Jersey businesses navigate these uncertain times. If you have questions about taking advantage of the new outdoor dining opportunities, we encourage you to contact us at 201-896-4100.