Editor's note (Sept. 4): A previous version of this article incorrectly said the bar's liquor license was "invalid" when it was actually "inactive." A licensee can temporarily deactivate their license if they expect not to manufacture, buy, or sell liquor for 30 consecutive days. That liquor license can then be reactivated by the owner, which is what Varsity Tavern did, a spokesperson for the Department of Liquor said.
A spokesperson also said in an email Friday, days after our story published, that Varsity Tavern's case is still in the investigative stage.
"Once final, the Department of Liquor will set a date with the State's Office of Administrative Hearings to seek revocation. Second to this, and up to the time a case is presented to an administrative law judge, a licensee has the option to engage in talks with Department officials to try and reach a negotiated settlement as a means to resolve the matter amicably," the spokesperson said.
Back in late June, the Arizona Department of Liquor Licenses and Control launched an investigation into Varsity Tavern, a bar and restaurant in downtown Tempe that has a short, but extensive history with the department, for allegedly allowing or requiring its employees to work after testing positive for COVID-19, among other violations.
The bar closed and its liquor license was deemed inactive, the liquor department said in its news release at the time. Director John Cocca said in the same new release that it was his intention to revoke the bar's liquor license.
Nearly two months later, Varsity Tavern reopened last weekend along Mill Avenue, according to posts on its social media, and its license with the liquor department is currently listed as active.
Here is why the bar was allowed to reopen and what we know about the investigation so far.
Last week, Maricopa County and seven other counties met the threshold to move into the "moderate" phase of reopening, which allowed bars, gyms, movie theaters, water parks, and tube operators to reopen with reduced capacities and strict guidelines to follow.
Most of the industries were forced to close at the end of June when Arizona Gov. Doug Ducey issued a new executive order in response to an uptick of COVID-19 cases in the state.
Varsity Tavern has a Series 6 license, according to the department's online database, and filled out the required attestation form on the Arizona Department of Health Services' website, which allows it -- and its sister concepts, Rodeo Ranch and One One Bar -- to immediately reopen as a restaurant.
Jeffery Trillo, public information officer for the Arizona Department of Liquor Licenses and Control, confirmed to ABC15 in an email on Tuesday that Varsity Tavern was allowed to reactivate its license under ADHS' rules, thus reopening as a restaurant.
"The licensee did complete the attestation form as required by ADHS thus allowing them to open," he said in an email.
According to an online menu, Varsity Tavern features a variety of appetizers, salads, and upscale bar food, such as burgers, tacos, sloppy joe-inspired nachos, sandwiches and bowls.
Trillo also said in his email that the department is still seeking to revoke Varsity Tavern's liquor license, stemming from the June investigation.
"The Department is still seeking license revocation as part of the disciplinary process tied to the June 30, 2020, investigation of Varsity Tavern," he said. It is not known where in the disciplinary process the case is.
When reached via Facebook Messenger for comment, Varsity Tavern said in a series of messages: "You are fake news," and "print that," among other quips. An email sent days later seeking clarification was not returned.
A spokesperson for the Tempe Police Department said it did not issue any citations to any bars in Tempe during the first week that those businesses were allowed to reopen.
Varsity Tavern opened in 2018.
When it opened, the bar was owned by Texas-based Reign Group, but now is owned by Ipsum Creative, LLC, another Texas-based company, according to the Arizona Corporation Commission's website.
Since 2018, Varsity Tavern's Tempe location has been investigated by the Arizona Department of Liquor three times: 2018, 2019, and, now, 2020.
In 2018, the bar had its liquor license suspended and agreed to a $15,500 fine, among other operation changes, after employees allegedly served alcohol to minors.
In 2019, the Department of Liquor summarily suspended the bar's liquor license after an intoxicated man fell or jumped off the bar's second-story balcony and onto the ground below. In that case, Varsity Tavern agreed to a $24,000 fine, among other changes.
In both cases, its liquor license was reinstated.
Most recently, on July 2, the liquor department issued a "notice of violation and opportunity to comply" to Varsity Tavern and accused the business of failing to protect its customers and of violating Gov. Ducey's executive order at the time.
Among the alleged violations:
- Multiple instances where management required or permitted employees who had tested positive to continue working
- Management failed to take appropriate measures to notify the Arizona Department of Health Services (ADHS) or other agencies, employees, or customers that employees who had tested positive had worked while symptomatic
- Management failed to create or enforce written policies in compliance with the executive order, CDC or ADHS guidelines
- Management failed to enforce social distancing guidelines requiring masks or limiting groups to gather
As a result, Varsity Tavern told the Department of Liquor that it would close. Because of that, it's liquor license was deemed inactive.
Depending on the result of the investigation, penalties could include suspension or revocation of the bar's liquor license or up to $3,000 in fines per violation, according to the notice.
It is unclear where the disciplinary investigation current stands, but a department spokesperson said the department intends to move forward and seek to revoke Varsity Tavern's liquor license.
Editor's note: This story was updated to add ownership information.