Liquor licenses not expected to rise

March 22, 2005

KATE GOLDEN/Frontiersman reporter

MAT-SU - With all the hubbub about growth, can the Valley expect to see new liquor licenses cropping up?

"Unless Mat-Su Borough expands [to] at least, let's say, 150,000 people, there will not be another beverage dispensary license available," said Dawn Holland-Williams, Alaska Alcoholic Beverage Control Board records and licensing supervisor, doing some mental arithmetic.

Liquor licenses are authorized based on population numbers. Alaska statute allows one full beverage dispensary, serving beer, wine and liquor, for every 3,000 people, minus prison inmates and military personnel.

For licenses attached to restaurant-bars, 50 percent of whose gross sales must be for food, the board authorizes one license for every 1,500 people, which cost $600 every two years.

In Anchorage, obtaining a license means getting the approval of the Assembly's public safety committee, which includes all the Assembly members. There are guidelines, but the Assembly also approves licenses subjectively: Felons, for example, generally don't get licenses.

The Mat-Su Borough, however, generally delegates the administration of licenses to its planning department, which works under stricter numbers-based guidelines.

"That may be not a bad way to go; it kind of depoliticizes alcohol regulation [to] do it by the numbers," Griffin said.

Any bars that existed before the population criteria went into effect have grandfathered-in licenses. If the owner lets a license in an oversaturated area expire, the license dies forever.

But it can be bought or sold. Theoretically, a beverage dispensary license costs a bar owner $2,500 every two years. Demand, however, far outstrips supply: ABC Director Douglas Griffin said that private sales of existing liquor licenses run between $100,000 and $300,000.

"It just depends on need and where it's at and what somebody's willing to pay for it," Griffin said.

Wasilla's population number of 6,343, for example, allows the city three licenses within city limits, yet there are actually seven.

The story is the same all over the state. The law allows 5,100-person Palmer two full bar liquor licenses, but there are six in town.

The Mat-Su Borough, with 52,000 people in its unincorporated areas, gets 18 by law and currently holds 50 licenses. To get 51, the borough would need exactly 153,000 men, women and children.

But there's a loophole in the license laws.

"The big one for the beverage dispensary is the tourism license," Griffin noted. He anticipates more hotels are on the way.

At the borough's population level, a prospective bar owner must operate at least 50 rooms and provide food to patrons. For an area of fewer than 1,500 people, such as Houston, a hotel owner only needs 10 rooms plus food. These licenses are free and non-transferable.

That's the type of license under which Grand View Inn, on the Parks Highway in Wasilla, operates, for example. Griffin said the owner of Evangelo's Restaurant was considering building a hotel partly to get a liquor license.

For beer-and-wine-only restaurant licenses, there's another way to get past the population criteria. Organized areas like Wasilla can offer public convenience licenses. The prospective bar owner has to get signatures from a majority of the residents in a one-mile radius.

The bar at Evangelo's operated under a public convenience license until a restaurant license became available. Mekong, a Thai restaurant in Wasilla, currently operates under one.

Do proprietors ever exploit the statute and front nonfunctional hotels-with-restaurants to get bar licenses?

They could, said, Griffin, but they generally don't.

In recent years, he said, the board cracked down on the Silver Fox Inn, a bar/hotel/restaurant near Mile 50 Parks Hwy.

"There's an instance where someone did build a hotel to keep their liquor license," Griffin said. "They knocked out a couple walls, dropped below 10 rooms. We had to step in." Griffin said. The board gave the establishment a period of time to build the right number of rooms; it did so.

Griffin said the days of neighborhood bars with not much more than liquor and a jukebox may be dying in Alaska.

He attributed it partly to tougher enforcement of drunken-driving laws in recent years. He also noted that while liquor sales are not going down, state economists aren't seeing as much revenue from bars and restaurants. People must be drinking more at home, he said.

"You almost have to have food or entertainment, live naked women," he noted. "It's getting harder and harder to just push liquor across the bars."

And not everyone wants more liquor licenses as the Valley grows. In Talkeetna, community members voiced concern at a council meeting that there are too many liquor licenses already.

Another issue: Theoretically, an owner can move a license from one side of the borough to the other.

"There continues to be some of those land-use issues," Griffin said.

The recent complaints of noise causing a review of the license for the Wasilla-area bar, Fish Heads, is one example of the inevitable disputes that arise when population density goes up. That issue is "working its way along," Griffin said.

Small-restaurant owner Mark Wilson said that finding a place with an open liquor license isn't the limiting factor for choosing a location.

"My feeling is that it's very difficult for a small business to address all the issues within an economic framework," he said.

Wilson focuses rather on balancing the essential purpose of profit with social issues, like noise pollution or maintaining family and customer relationships.

"I think it pays to do your homework," Wilson said. "The community is in flux and is changing here quite a bit."

Contact Kate Golden at 352-2284, or kate.golden@frontiersman.com.