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Tuesday, July 30, 2013

Did the State bait and switch in liquor license 'auction'?

The Plainfield
liquor license formerly held by JC's Lounge on Richmond Street was auctioned last Friday morning, but not to the expected buyer. Did the State pull a 'bait and switch' on the auction process?

When I posted the story on Thursday, I was expecting the successful bidder to be Frank Cretella, who has several projects brewing in Plainfield and who has been openly shopping for a liquor license for some time. But someone else got the license. How?

When I read the state's announcement and terms, which had been forwarded by Municipal Clerk 'AJ' Jalloh, I pictured your normal auction where it is held openly and the auctioner keeps taking higher and higher bids until finally no one will bid up and the sale is made to the highest bidder to that point. That is called an 'English auction' or 'open ascending price auction' and is the most common form of auction.

That is not, however, the way it was conducted. Once present, the bidders learned that it was to be a 'Sealed first-price auction', in which each bidder was only allowed one bid, to be submitted in a sealed envelope. The auctioneer then opened the envelopes and the sale was made to the highest bidder. This is by far a less common type of auction, and you would think the State would have notified prospective bidders in its announcement of this basic rule.

I can find no such mention in the state's document (see above).

Did the State pull a 'bait and switch'? What do you think?

-- Dan Damon [follow]

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