Ian Duncan Members of Community Board 3 debated changes to the liquor licensing process Tuesday night during a meeting at P.S. 20.

Ending months of debate, Community Board 3 Tuesday night approved a sweeping overhaul of the way it makes recommendations to the State Liquor Authority for alcohol license applications.

As the motion passed, by a vote of 37 to 1, attendees made hasty moves for the exit. When board members were asked toward the end of the three hour meeting at P.S. 20 whether they wanted further time to debate, there were groans and calls of “No!”

The vote ended five months of consultation and debate, some of it acrimonious, about the new policies, which are aimed at providing applicants with clarity and guidelines to follow if they are awarded a license.

Much of the debate focused around so-called “transfers” or the ability to pass liquor licenses on to new owners following the sale of business. Bar and restaurant owners had argued this increases the value of the business and any moves to change the policy would hurt them financially.

Under the policy adopted Tuesday night, the board’s State Liquor Authority committee will review transfers of licenses as though they are new applications. In the past they had been automatically approved. The committee does not have the final say over licensing decisions but passes on recommendations to the State Liquor Authority.

“We as a board spoke strongly that we will consider transfers as new applications,” said David Crane, a member of board’s executive committee. During the voting, Mr. Crane described the process as the board’s “the most important vote ever.”

Transfers describe the status of a license when a business is sold. In a 2008 article titled, “The truth behind the transfer application,” Kerri O’Brien,
deputy commissioner of licensing, attempted to clarify the definition.

“In actuality, there is no such thing as a ‘transfer application,’ ” she wrote. “A licensee can sell their business to another party, but the license certificate and the privileges that come with the license are not a part of that sale.”

Instead, the new owner is granted a renewable 90-day temporary license until a decision is reached by the Community Board and State Liquor Authority on the application for a permanent license.

Ian Duncan Tuesday night’s meeting at P.S. 20 lasted about three hours.

Previously, the board had considered transfers distinctly from new applications. The board’s Web site listed only basic details, but Mr. Crane said members had been operating on the basis of “tacit” conventions. No other Manhattan community board had separate procedures for transfers, with the exception of Community Board 1 – which encompases the TriBeCa and the Financial District and has its own guidelines.

In a compromise to protect the perceived value of licenses to existing businesses, the first sale of any licensed premises to a new owner will be handled under the old rules in a processing the board describes as “grandfathering.”

At a meeting last week, that grandfather clause had been considerably strengthened. The Board’s State Liquor Authority committee voted to change the wording of the draft policy so that the license would effectively have been attached to the business location, and giving the committee fewer opportunities to review the transfer.

An amendment proposed by Mr. Crane passed at Tuesday’s full board meeting undid that revision.