Friday, April 17, 2009

Liquor bill fizzles in House

State retains control over license issuance


By JON DUVAL
Express Staff Writer

Bartender Christopher Poggi pours a cocktail at Zou 75 in Hailey, one of the few restaurants in the Wood River Valley that is allowed to sell hard alcohol. The Idaho House of Representatives killed a bill that would have allowed cities and counties to regulate liquor licenses sales to restaurants and lodging establishments. Photo by David N. Seelig

Those looking for more options on where to imbibe a stiff cocktail in the Wood River Valley will have to keep on looking, as Idaho's 62-year-old rules regarding liquor licenses remain intact.

The Idaho House of Representatives on Wednesday defeated a bill aimed at giving cities and counties control of the issuance of liquor licenses.

Despite Gov. C.L. "Butch" Otter's championing of the high-profile and contentious bill, it failed by a vote of 42-28.

The Senate had supported the plan, 23-12, and it passed last week in the House Judiciary Committee, 8-6.

As written, the bill would have given cities and counties across Idaho the ability to issue an unlimited number of liquor licenses to restaurants and lodging facilities, as opposed to the current law, created in 1947, which limits licenses to one for every 1,500 residents.

State Rep. Wendy Jaquet, D-Ketchum, reported that the bill somewhat surprisingly met its end as a result of arguments that focused on the moral aspect of the law. Jaquet said that opponents contended that is the bill passed, it would result in more establishments serving hard liquor, and, in turn, increase in alcoholic consumption and traffic accidents.

"Although some argued against the business competition, the decision really involved religious and moral values," Jaquet said.

According to the Associated Press, the bill's sponsor, Rep. Jim Clark, R-Hayden, said he misjudged the opposition, having anticipated arguments on behalf of existing license holders rather than the issue of temperance and morality.

"That was a surprise," Clark told the AP.

Jaquet said that when she voted for the bill last week in the House Judiciary Committee, she had reservations regarding the potential negative impact it would have on existing licensees and the lack of compensation written in on their behalf.

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Jaquet said that existing license holders would have paid approximately $1,500 per year in renewal costs, around half of the minimum annual fee new licensees, and would have received a 10 percent discount from the Idaho State Liquor Dispensary, from which all restaurants and bars must purchase their liquor.

However, Jaquet said those considerations were a bit meager when considering that liquor licenses in Sun Valley and Ketchum are currently valued at approximately $400,000.

While an influx of new licenses could devalue existing ones, Jaquet said that the current prices in the north end of the Wood River Valley are too high.

"You can tell the market isn't realistic because there are no license sales," Jaquet said. "The market here just isn't strong enough right now to support another bar, so it's unlikely to see a license sell in Ketchum soon."

With such a high entry fee, Jaquet said that the barrier to entry is so great as to keep any new businesses from entering the market.

"We have some young entrepreneurs that have ideas for restaurants that could, in turn, attract more young people, but they would need a license to cover the start-up costs," Jaquet said. "But they can't get a foot in the door without $400,000."

The problem extends to existing restaurants as well, Jaquet said.

"An expansion of licenses through the cities and counties to food establishments, such as Apple's in Ketchum, can mean survival in this difficult economic climate," Jaquet wrote in an email last week.

Another problem with the current system, according to Jaquet, is that with only 1,150 licenses issued in the state and over 500 people on the state's waiting list, there is opportunity for "speculators" who are only looking to resell the licenses rather than actually sell liquor at an establishment.

"There's definitely an argument that people should not be making a profit off of a state-issued license," Jaquet said.

Jon Duval: jduval@mtexpress.com




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