News

An administrative law judge has recommended that the California Bureau of Alcoholic Beverage Control revoke the liquor licenses for two longtime Arcata bars, Sidelines and Toby & Jack’s.

Judge Alberto Roldan’s recommendation, handed off to ABC this morning, comes after a four-day hearing held in late September surrounding allegations of widespread narcotic sales at the two establishments. ABC now has 100 days to adopt or reject Roldan’s proposed decision. If ABC opts to follow through with the license revocations, Salvatore “Sal” Costanzo and his son Michael, owners of the Genco Olive Oil Co. that holds the liquor licenses for both establishments, would have 40 days to bring the matter before the ABC Appeals Board.

ABC sought to have the two bar row establishments’ licenses revoked after a months-long sting operation concluded in April, culminating with the arrests of three of the bars’ employees and a host of patrons. In total, ABC filed a combined total of 30 allegations against the two establishments, alleging a widespread drug culture existed in both and that undercover agents were able to easily purchase narcotics — including cocaine, MDMA and methamphetamine — in both bars, often with “house knowledge,” meaning an employee or licensee was aware of, or even aiding in, the illegal activity.

During the hearing, the Costanzos argued there was insufficient or no house knowledge of drug activity on the premises and that employees at both establishments were trained to be aware — and wary — of drug activity.

Roldan’s recommendation finds cause for suspension or revocation of the licenses under each of the 30 allegations.

“M. Costanzo and S. Costanzo have both asserted that they were unaware of the circumstances that had taken hold at the licensed premises,” the recommendation states. “This testimony is found not to be credible. … While there is no evidence that the respondent was actively engaged in the sale of narcotics at the licensed premises, it is clear that the respondent knowingly permitted the conduct that was alleged in this accusation …”

In the recommendation, Roldan states there was plenty of reason — beyond illegal narcotics sales — for the Costanzos to realize a negative culture was taking hold at the establishments yet there was “lax oversight.”

“The respondent’s own security manager between 2008 and 2016 testified to the epidemic of drug activity in the licensed premises and taking drastic measures like smearing Vaseline on toilet seat covers to prevent people from snorting cocaine off them,” the recommendation states. “In the present case, outright revocation is warranted. The respondent had an affirmative obligation to ensure that the licensed premises was operated in full compliance with the law. The respondent did not.”

Reached by the Journal late this morning, Patrik Griego, the Costanzos’ attorney, said he hadn’t had a chance to review the recommendations yet and to review them with his clients. If he gets back to us with comment, we’ll update this post accordingly.

If ABC follows Roldan’s recommendation, the two licenses would be revoked and, according to ABC, they wouldn’t be replaced. According to ABC, liquor licenses are dispersed in counties based on population and Humboldt County already has more licenses than its population warrants. That means if Toby & Jacks and Sidelines are shuttered, there’s little chance of new bars replacing them.

Read Roldan's proposed decisions on Sidelines here and on Toby and Jack's here.