Liquor Vs. Beer - Why Is One License More Valuable Than the Other?

I’ve never understood our city and state laws regarding liquor licenses. For a beer license, all you have to do is fill out some paperwork and pay a small fee. Theses licenses are unlimited (at least they are in Sioux Falls), with the only hurdle to jump is the planning commission. All you generally have to do is show that you have some sort of reasonable business plan that’s not in areas where such facilities are prohibited and you’re good to go.
Liquor licenses, however, are another matter altogether. Thanks to a law that was put on the books 70 years ago, these permits are not only tied to the community’s population but cost a buck per resident. In other words, a license that goes for a couple of grand in a town like Redfield costs around $150,000 here.
But that extravagant figure is not the figure that these permits generally cost. Thanks to the scarcity of these licenses, there has always been a secondary market that has always guaranteed a profitable return on this investment. From what I’ve been told, new bars that come into this town routines pay over two hundred grand for the right to serve me a whiskey-coke instead of a stupid Miller Lite…despite the fact that one can get just as drunk off beer as whiskey.
And people wonder why this city has become a wasteland of mediocre chain restaurants. Who else can afford such a fee other than the likes of Applebees or Ruby Tuesday? Even the locally owned businesses that serve booze are generally either longtime owners (the good guys) or video lottery suppliers whose seemingly dozens of clubs all look exactly alike in design, layout, and format (the bad guys).
Why do we continue such a policy? I thought this city and state was all about providing an environment for individuals to open businesses with little governmental interference. I firmly believe that one of the major reasons that our city has struggled to create a viable music scene in recent years is this very policy. A band doesn’t immediately have the clout and popularity to play the few mass-market clubs in town. They need smaller clubs to hone their skills, just as every great Minneapolis act had to do before they were ready for First Avenue.
The only reason I’ve heard in favor of continuing this method of licensing bars is to protect those who have already paid the big bucks to procure their permit. C’mon, that’s ridiculous. You have to look at the overall good of the community instead of protecting a few property owners. If you’re really serious about this drawback, though, all you’d have to do is either refund a portion of their original fee (prorated by the number of years they’ve been in business) or allowing a credit against their sales taxes. Those who own unused licenses should also be forced to turn them in. (I don’t know if this is still an issue, but I do know it has been a huge problem in the past.)
Why do I bring this topic up now? Well, with the knowledge that our city will probably gain a handful of new licenses later this year, the city commission recently changed the law regarding the process for applying for liquor licenses. A lottery was held a few days ago for those who filled out applications, and the results created a 23-place waiting list that will just become longer as the years go by.
The winner? Tim Kant, the man who believes that the sidewalk is private property. The man who doesn’t believe in any kind of competition, even if it could potentially boost his own business. The man whom is known to verbally antagonize fellow downtown business owners who isn’t in lock step with his viewpoints.
Nobody knows if he even plans to open another bar. That’s one of the flaws of this situation. Applicants had to submit a proposed location for their new license, but there’s no obligation for said license to ultimately be used there. This means that the Kant-owned Biggie’s Subs will technically have a liquor license by the end of the summer, while the much-heralded new retail development near the spot where Interstates 29 and 90 will ultimately be forced to pay top dollar for the two establishments planned for that area. Really makes sense, doesn’t it?


Anonymous said…
Pretty IRONIC his name was the first to be pulled out of the hat?

Robin said…
Government bureaucracy at it's finest. So much for free markets.
Anonymous said…
I've seen Munson at his place quite a bit. What a coincidence, huh? Clowns like Kant also stand to profit the most from a downtown arena...

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