Restaurant liquor licenses to get another shot

In a move intended to help Idaho restaurants, the Legislature is expected to hear legislation next session that would make it easier for restaurants to get liquor licenses.

The legislation is expected to be similar to S 1332, said Sen. Jim Rice, R-Caldwell, speaking during the Southwest Idaho Legislative Business Summit on Sept. 19. He introduced that bill during the 2018 legislative session in late February, where it languished in the Senate State Affairs committee.

Currently, restaurants need to compete with establishments like bars for the scarce licenses, based on the number of people in a city. Driggs, for example, has two, Rice said. Waiting lists are often years long, and consequently, license holders sell and lease licenses to restaurants that want to offer liquor as well as beer and wine.

Saint Lawrence Gridiron in Boise encountered this last year. It was leasing a liquor license from a Hailey developer, and the Marriott on Capitol Boulevard bought that license from the license holder, said Chris Mitchell, owner. Smaller restaurants typically lease licenses because the waiting list for Boise is 18 years, and buying one would cost $180,000 he said.

“The time it would take us to earn that back would be longer than the lifespan of the restaurant,” he said. He now pays $1,500 a month to lease another liquor license.

During the periods when the Gridiron didn’t have a liquor license, it lost 80 percent of its business, Mitchell said. “There were nights we closed because there was no point in being open,” he said. Plus, it had an ongoing effect. “I had people last month say, ‘Hey, you got your liquor license back,’” he said. “We’ve had it back for a year, but we didn’t have it that one time when they visited.”

Idaho’s liquor license laws are particularly tough on small business, Mitchell said. “It’s designed to bring in more national chain restaurants like Chili’s that are willing to invest that money,” he said. “It takes away from local business.”

Numerous attempts at modifying Idaho’s liquor license laws have been made over the years, with Rep. Luke Malek most recently trying in 2017, where this time it languished in the House State Affairs committee. But Rice said he thought this year might be different, adding that he has received positive responses from cities, chambers of commerce and restaurant associations.

There is the perception that Idaho legislators who belong to the Church of Jesus Christ of Latter-day Saints are against bills that would make alcohol easier to obtain, because the church prohibits “strong drinks,” which has typically been interpreted to mean alcohol. But Rice said he expected the Church’s contingent in the Idaho Legislature to split on the bill, calling it a matter of fairness to businesses.

“I’m LDS, and I’m carrying this bill,” he said. (He voted against legislation in 2015 that would make it easier for event centers in resort cities to get liquor licenses.)

The bill also sets up parameters based on the type of restaurant. Kevin Settles, owner of Bardenay Restaurants and Distilleries, who said he owns three liquor licenses, said he worked on the legislation and it requires servers and a fully staffed kitchen. “McDonald’s isn’t going to start serving liquor,” Rice agreed.

Currently, licenses cost $2,000, $800 of which goes to the state, with some of the rest going to the city or county issuing the license, Settles said. The new legislation would price the restaurant liquor license at about $3,500, with more of the funding going to the city or county.

If the legislation follows last year’s – which Rice said it would, unless problems were discovered with it – restaurants would be required to buy the liquor from the state liquor dispensary but would receive a 10 percent discount.

Gov. C. L. “Butch” Otter criticized the Legislature’s inaction on liquor licenses earlier this year.