Safeway Inc. signage is displayed at a grocery store in Vancouver, British Columbia, Canada, on Thursday, June 13, 2013. Safeway Inc., the second-largest U.S. grocery-store chain, rose the most in more than three months after agreeing to sell its Canadian stores to Empire Co.�s Sobeys Inc. unit for about C$5.8 billion ($5.7 billion). Photographer: Ben Nelms/Bloomberg (Ben Nelms/BLOOMBERG NEWS)

While a divided Congress fought over health care and tax reform, a battle in a divided neighborhood in the nation’s capital was being waged with campaign-style yard signs, packed community meetings and the pithy slogan “food not booze.”

The quarrel was over a liquor license at a Safeway grocery store on 17th Street NW that residents have long dubbed the “Soviet Safeway” because of its reputation for long lines and empty shelves.

The Dupont Circle grocery store and community leaders reached a settlement late Tuesday allowing Safeway to receive a liquor license on restricted terms, but the drawn-out debate resurfaced old questions in a fast-changing city about the level of input residents should have in the operations of a private business.

And the resistance, residents say, was never just about the booze.

The grocery store applied for a liquor license earlier this year, but residents argued it would bring competition to locally owned businesses. They also opposed alcohol taking coveted shelf space that could be used for food at a cramped store.

“The ANC [Advisory Neighborhood Commission] has dug their heels and they will not acknowledge what the people want,” said Nick DelleDonne, who serves on the ANC, which narrowly voted to protest the liquor license on a 4 to 3 vote. “And why is that? I think they are biased toward corporations.”

But then, of course, some say there is the issue of capitalism: Was it really the ANC’s role to tell a private company what it can or cannot sell?

“We live in a free society and businesses can operate as they choose,” said Scott Davies, an ANC commissioner who didn’t oppose the liquor license.

A neighborhood association, a nearby liquor store and a parent group from an elementary school organized opposition to the liquor license.

Receiving a liquor license is a multistep, bureaucratic process.

First, a company must apply with the city’s Alcoholic Beverage Regulation Administration. The administration determines whether the establishment meets qualifications and publicly posts the application, giving a deadline for the community to protest the application.

If the local ANC or neighborhood association decides to protest — and the Alcoholic Beverage Control Board determines that the protest has standing — the parties enter into a mediation phase. If they can’t reach a settlement, the Alcoholic Beverage Control Board hears arguments and decides whether to issue the license.

In the Safeway settlement, which still needs final approval from the control board, the business agreed to limit beer and wine sales to 4 percent of annual revenue. The grocery store had wanted more than 80 feet of shelf space dedicated to beer and alcohol but agreed to half that. The location is open until midnight, but it agreed to stop selling alcohol at 9 p.m.

The store also agreed not to promote alcohol through in-store displays and said it would develop a plan showing how it would contribute to the community.

Safeway spokeswoman Stephanie Maxwell Ridoré described the agreement as “amicable.”

“Part of the community concern was that we would remove food items, and we do not anticipate that any items will be displaced that are in constant demand,” Ridoré wrote in an email. “The agreement with the ANC is similar to our other stores and we will abide by the terms of our commitment.”

Residents who protested the liquor license were lukewarm to the agreement but said the terms seemed promising.

“We’re going to have a party to celebrate what people can do when they come together,” said Robin Diener, president of the Dupont Circle Citizens Association. “We didn’t have a complete win, but we did help mitigate the negative effects of a large footprint.”

Barbara Donaldson, who spearheaded the opposition of parents from nearby Ross Elementary School, said Safeway agreed that checkout lines wouldn’t snake through the alcohol aisle. She said her children often go to the grocery store by themselves and she wants to ensure a robust selection of healthy foods is offered.

The settlement could bring an end to a months-long fiery — and sometimes nasty — battle. In August, hundreds of people packed into a community meeting about the liquor licenses, many wearing matching shirts that said "Food Not Booze at Safeway." Residents planted signs in their yards with the same slogan. Fliers linked the owner of Safeway to President Trump and gun manufacturing.

DelleDonne received an official reprimand from the commission for “disrespectfully communicating” with other ANC officials, according to the commission’s resolution on the matter. He said those claims were untrue, and he only took a strong, opinionated stance because that’s what his constituents wanted.

“I intend to represent my constituents aggressively,” he said. “I think we have woken up the community to the decisions that are made on their behalf.”