The city of Brookhaven is suspending Medusa Restaurant & Lounge’s alcohol license after the business failed to pay more than $32,000 in liquor taxes. The result follows the city’s crackdown on several restaurants and bars the city says owe back taxes on liquor sales.

In another alcohol license case, the popular Hudson Grille has been ordered to pay more than $10,000 in liquor taxes after losing an appeal before the city’s alcohol beverage hearing officer earlier this month. The owner says he intends to pay the money and avoid having the restaurant’s alcohol license suspended.

Assistant City Manager and CFO Steve Chapman said the city tried multiple times to reach the owners of Medusa about the $32,240 the nightclub owed in unpaid liquor taxes but never heard back. That left the city with the only option to suspend the nightclub’s alcohol license, he said. A notice was taped to the business door on April 24 letting the owners know the suspension goes into effect on Friday, April 26. The suspension can only be lifted when the money is paid to the city, according to Chapman.

A representative from Medusa could not be immediately reached.

Two other nightclubs in Northeast Plaza face their alcohol licenses being suspended — Josephine Lounge was told it owes $48,334 and XS Lounge was told it owes $18,443. These businesses have not disputed the amount but plan to appeal the alcohol license suspension at a May 7 hearing, according to the city.

The city last year hired an outside accounting firm to audit 77 businesses in the city that are licensed to sell alcohol on premises, such as restaurants, bars and nightclubs, between January 2016 and March 2018. Thirteen businesses were initially found to have underpaid their taxes. Seven businesses met with city officials and either proved through their record keeping they owed lower amounts and paid the amounts or proved they owed nothing.

One of the six remaining businesses, the Hudson Grille, was found to owe $10,132.92.

Jeff Landau, CEO of Metrotainment Cafes, which owns the Hudson Grille chain in metro Atlanta as well as other popular restaurants including Sugar Shack and Einstein’s in Midtown, argued during an April 11 appeal hearing that the city used incorrect information to come up with the numbers and denied he owed the back taxes. For example, he argued, the city determined the average price for a drink was $7 while Laundau said the actual average drink price was $4.50.

But the city’s alcohol beverage hearing officer, William Linkous, ruled April 17 the city was correct in its finding, including on average drink prices, and said Landau must pay the taxes. He also criticized Hudson Grille for not keeping accurate records.

“Had Hudson Grille kept accurate records of the number of each drink sold at each price, its evidence might have met the preponderance of the evidence standard required … But here Brookhaven has met the preponderance of the evidence…” Linkous stated in his decision.

Landau said April 24 in an interview he plans to pay the amount “first thing in the morning.”

He also said that after the April 11 hearing he learned the restaurant was not paying taxes on complimentary drinks given to customers who were part of a loyalty program. That program has since been eliminated, he said.

“That was our error and we are now rectifying it,” he said.

Dyana Bagby

Dyana Bagby is a staff writer for Reporter Newspapers and Atlanta Intown.