When a fire shut down a gas station and convenience store in south central Fresno, the city didn’t have two key rules about liquor and tobacco.

Now that Baldev Khela — owner of Circle D at Fresno and Olive avenues — is getting ready to reopen, those two rules nearly kept him sidelined.

The city council approved the liquor license Thursday, 6-1, with councilmember Miguel Arias opposed. But that decision only came after months of hearings, vocal opposition, and back and forth about what rules he has to open under — including having to buy two liquor licenses while retiring one.

Dirk Poeschel, consultant for Khela, said reconstructing the business will probably cost $1.5 million. And, getting a liquor license will help Khela secure financing, which he has had trouble obtaining.

Not having a liquor license also makes it harder to compete with businesses that do, Poeschel said.

“It puts these facilities at an economic disadvantage. People will simply not go to this facility and not get their all of their needs met,” Poeschel said. “They’ll simply go somewhere else.”

However, since the convenience store burned down, the city enacted a rule limiting the number of liquor licenses. It’s called the Responsible Neighborhood Market Act. Another new regulation limits tobacco sales.

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Community groups sought to use the ordinance to compel city council to keep Khela from selling liquor again —despite Khela’s good standing and high praise from neighbors.

While councilmember Nelson Esparza initially wanted to keep Circle D from selling cigarettes, he ultimately changed his mind, saying the store can be open until midnight and sell tobacco.

“The RNMA is certainly doing its job, it’s certainly in full effect. But given the circumstances, in light of all the facts, I’m inclined to support the general market today,” said Esparza. “I did not come to the decision lightly.”

Liquor Licenses Can Cost $150,000: Poeschel

Khela has not worked since the fire closed his business in 2018, Poeschel said. He has been communicating with attorneys and insurance companies to reopen.

Since opening in 1994, the gas station never had a violation with the California Department of Alcoholic Beverage Control, Poeschel said. In fact, Khela’s application came with 52 signed letters from neighbors supporting the business and a liquor license.

Homeless advocate Dez Martinez praised the owner, saying he frequently gave away food and water to people who need it.

Liquor licenses can cost $150,000, Poeschel said, so he requested that the council exempt the store from RNMA and only require him to buy one. That didn’t fly with the council, which required him to buy two.

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Interim Police Chief Mindy Casto wrote in a memo she can support granting the license. She found locating the liquor license would not be detrimental to public health nor would it increase calls to law enforcement.

Councilmember Miguel Arias — who co-authored the RNMA — went on a line of questions about whether or not it was located in a high crime area.

Casto in her memo said there are pockets of crime throughout Fresno. Police calls to six other nearby liquor stores showed an average of one call a month, and Casto said she didn’t expect the reopened store to significantly increase calls for police service.

Nearby Elementary School Complicates the Situation

Circle D is 650 feet from Webster Elementary, a fact that caught the attention of the League of Women Voters.

Under RNMA, stores seeking to open modify their liquor license cannot be within 1,000 feet of another liquor store or school. The league opposed approval of the liquor store.

Several members of Fresno nonprofit Youth Leadership Institute — which supported RNMA — also showed up in opposition.

“While we understand the hardship faced by the shop owner who lost his business, it is crucial for you all to consider the broader impacts of allowing another liquor store in such close proximity to a school in the Fresno community,” said Julio Lopez, program manager with YLI.

Councilmember Mike Karbassi, however, said the discussion went beyond the business owner and became a “global discussion” of alcohol. He said RNMA never accounted for acts of God, like a fire, nor did it shut down problem liquor stores.

“This particular location has not had any ABC violations, we don’t get a lot of complaints about them from a law enforcement standpoint,” Karbassi said. “I want to just push back against the notion that just because they’re a convenience store that this operator isn’t a good operator.”