Borough can't hold its liquor licenses

August 21, 2007

By Russell Stigall

Frontiersman

MAT-SU - Booze can now flow freely across the Matanuska-Susitna Borough and its encompassed municipalities.

No longer will a languishing liquor license be left unused, trapped in the Borough and unusable by city businesses.

A new state Alcohol Beverage Control law will allow the free flow of liquor licenses across city boundaries and within the Borough, said Doug Griffin, Director of the ABC Board.

Before the new regulations a license could be transferred from Talkeetna to Big Lake, but not into the cities of Wasilla or Houston.

The new regulation is a portion of Senate Bill 128, the only portion of the Bill that pertains to the Mat-Su Valley. The Bill was signed into law in late June.

Although the regulation, which affects boroughs of 60,000 or more, will cover the Mat-Su Borough and the Fairbanks North Star Borough, its proponents were predominantly from the Mat-Su Valley, Griffin said.

The law comes with very specific restrictions on the transfer of licenses in and out of municipalities.

Licenses can only be moved across the city/Borough boundary if the license supports a restaurant. &#8220It definitely has to be a bonified restaurant,” Griffin said. Food must equal 50 percent of of the establishment's sales. It was done so people who run bars in Wasilla and Palmer don't get hurt too much.

However, Griffin said &#8220If you own a beverage dispensary license it will probably go down in value.”

Todd Carpenter, Manager at Great Bear Brewing Company, said Wasilla is where the customer traffic is, so that's where bars and restaurants want to locate. Places like Applebees are looking for these licenses, he said.

&#8220It is pretty simple, it is supply and demand,” Carpenter said. &#8220This is where the entire Valley does its commerce.”

The limited supply of liquor licenses in Wasilla drove their price to as much as double that of liquor licenses in the surrounding Borough, Carpenter said. However, Carpenter said, by bringing in licenses from outside Wasilla, the value of the license owned by Great Bear Brewing and other Wasilla bars and restaurants will suffer.

Carpenter said he is also worried that small bars around the Borough may cave to pressure to sell their licenses at high prices to deep-pocketed Wasilla businesses.

&#8220This may take away the remote bars in the Borough,” Carpenter said.

Places like Applebees or Chili's could woo a current license-holder to sell &#8220if [the restaurants] were willing to write a big enough check,” Griffin said. Though, he said, it is possible that supply and demand is driving the price of licenses to exorbitant levels.

The new law does not give licenses for free.

&#8220They are still going to have to buy one,” Griffin said.

The arrival of chain restaurants like Applebees and Chili's can be big economic boons to the area, Griffin said. The restaurant buildings alone can cost $1.5 million to $2 million and once operational hire many Valley residents.

The regulation change does not apply to packaged liquor stores or clubs.

To limit the flow of licenses even more, only three will be allowed each decade. Three will be allowed by the end of March 31, 2010, then another three each decade after. License transfers must be approved by both the municipality and the Borough.

&#8220It is going to be controlled, there isn't going to be an avalanche of these things,” Griffin said.

Griffin said the law's proponents did a lot of threading the needle to not create too much opposition but still allow some flow of new licenses into the cities.

&#8220It is better than opening the flood gates and allowing unlimited licenses,” Griffin said.

Part of the job of the ABC board is to maximize the licenses, Griffin said. To make sure licenses go to sound businesses with much to lose.

&#8220So they have something at stake for following the law. We don't want a business that is barely making it because [the business] may sell to minors and break the law to make ends meet,” Griffin said. &#8220We want businesses to make a lot of money within the bounds of the law.”

Griffin said the ABC Board took a position in favor of the new regulations, a move the board normally does not make.

&#8220It allows the licenses to move more freely between municipalities,” Griffin said.

Contact Russell Stigall at 352-2267 or russell.stigall@frontiersman.com