
    In the Matter of Q. T., Inc., Respondent, v New York State Liquor Authority, Appellant.
    [649 NYS2d 788]
   —Order, Supreme Court, New York County (Sheila Abdus-Salaam, J.), entered March 13, 1996, which granted petitioner’s application pursuant to CPLR article 78 to annul respondent’s determination denying petitioner’s application for an on-premises liquor license, and remanded the matter to the respondent, unanimously modified, on the law and the facts, to the extent of directing further proceedings before respondent in accordance herewith and otherwise affirmed, without costs.

We disagree with the motion court that respondent’s concern that petitioner might permit illegal activity, or otherwise might not be able to exercise adequate control over the licensed premises, is based on mere speculation. However, we conclude that further proceedings before respondent are necessary because petitioner was not given a sufficient opportunity to confront an investigator’s report upon which respondent relied in making its determination. Thereafter, the agency shall reconsider this matter on the merits. Concur—Sullivan, J. P., Ellerin, Ross, Williams and Andrias, JJ.  