Not this year.
Not next year.
Not for the foreseeable future.
Indeed, due to an apparent overestimation of state population, the license shortage may get worse, and unlike restaurants, those seeking club licenses won’t see any relief from lawmakers this year.
“I believe that the majority of the Legislature has a very similar intuitive view that I do, that we would rather encourage consumption with food than without,” Valentine said as he was putting the finishing touches on a yet-to-be-released bill regarding alcohol regulation that he has summarized on the SenateSite.com blog (update: 2-9-11: Valentine's bill now seems to be numbered as SB314, "Alcoholic Beverage Licensing," but its contents are still not available).
That incenses David Trenton, president of the Utah Hospitality Association—which represents bars, clubs, hotels and the liquor industry generally. At the last board meeting of the Utah Department of Alcoholic Beverage Control, Trenton says 17 hopeful club owners sought licenses, but only two club licenses were available under the state’s quota system. A similar waiting list currently exists for restaurateurs.
“We’re talking the American dream, free enterprise,” Trenton says. “What happened to trying to take care of the people who are trying to bring income into the state?”
Valentine says that drinkers drink less and eat more at restaurants than at clubs, and that translates into safer drivers. “With the consumption of foods, usually the total consumption of alcohol is less, and definitely the absorption rate is less. ... Our DUI data is very clear, and that is that our DUIs come out of social clubs more than they do restaurants.”
That doesn’t mean new clubs can’t open. One new liquor license is issued each quarter if Utah’s population is estimated to have grown by at least 7,850 residents, and more licenses are issued if the population increases more than that. Licenses are also recycled: If bars close or are shut down, their licenses go back into the mix.
An even-tighter license squeeze may come as a result of the recently released census estimate of state population. “Our population did not grow as fast as estimated,” Valentine says. The estimates that had been used to calculate how many liquor licenses were issued in recent years were higher than the census figure by about 75,000 residents. That could result in several quarters in which no new licenses are issued until the actual population catches up to inflated population estimate—resulting, in the short term, in nine or 10 fewer club licenses available.
Too many restaurant licenses have also been issued because of the population overestimation, Valentine says, but, unlike with bars, he wants to relieve the scarcity of restaurant licenses. Valentine plans to turn some beer-only tavern licenses—of which there is an abundance—into beer-and-wine-only restaurant licenses, as well as full-service restaurant liquor licenses. He hopes this will result in licenses for about 40 more restaurants statewide.
Valentine’s yet-to-be-released bill also would allow liquor-license holders to sell their license if they sell their business. Under current law, when a bar or restaurant is sold, the new owner goes into the license-starved applicant pool with everyone else. With that kind of scarcity, liquor licenses could become overnight gold mines sold to the highest bidders, which is why Valentine plans to delay implementation of that provision for a year as the state studies its possible impacts.
Digital identification scanners—introduced to Utah in 2009 at the same time that private clubs were abolished and replaced with bars that do not require membership—would also become required equipment at beer-only taverns as well if Valentine’s bill were passed.
Lobbyist Jeremy Johnson of the Utah Hotel Association says he has worked with Valentine to allow hotels to serve a single drink to hotel guests. Currently, they can only buy entire bottles of liquor. Valentine supports that concept and will incorporate it in his bill, he said.
Valentine’s future plans may hold some good news for hopeful club owners, however. Though it won’t happen this year, an oft-discussed plan to allow big resorts to have just one overarching liquor license for the whole complex—rather than a license for each individual bar or restaurant—is attractive to Valentine, but it’s not going to happen this year. “I may consider that for the 2012 session,” he says. Such a move could make available dozens of liquor licenses for both restaurants and clubs.
The club-owners lobby, however, has been left in the cold. “As president of the Utah Hospitality Association, I sent Sen. Valentine a letter, and also to [Gov. Gary Herbert] to ask, before the Legislature started, to sit down and meet about these bills,” Trenton says. “I haven’t heard back from either office.”
One of Trenton’s biggest priorities is to remove the Department of Alcoholic Beverage Control’s single authority to both investigate and adjudicate claims that a license holder is a nuisance business. Current law allows the DABC to revoke a license if too many citations are issued to patrons on a bar’s premises.
Trenton admits that power is used rarely, but he wants to have it removed from state law before it is used. But Johnson, who has been working closely with Valentine on behalf of the hotel industry, has been successful in shaping the liquor bills this year, is not overly concerned with that piece of state law and has not prioritized removing it.
Whether lawmakers this year will instruct the DABC to close liquor stores to save money is not yet known, Valentine says, and may not be until the budget is finalized weeks from now. For the past two years, some lawmakers have pushed to close stores, especially those that have new competition from newly built stores nearby. In 2009, lawmakers asked for an audit of the DABC to see whether closing stores would save expenses, but Valentine says auditors found many other ways of adding efficiency to the liquor-store system, including decreasing employee work hours at stores with lower sales.
In reaction to the 2009 audit, the DABC has proposed administrative rules concerning conflicts of interest among DABC board members and new rules on when those board members can hold private meetings—two issues identified by auditors. Valentine says he is looking over the DABC’s proposed rules. If they are satisfactory, he may incorporate them into his bill.
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