Salt Lake Tribune: Utah Lawmakers: Letas Untangle Liquor License Shortage

From Salt Lake Tribune:

Lawmakers are trying to tame the perfect storm they created when they failed to free up enough restaurant liquor licenses to meet demand, while also deciding to allow permit holders to sell existing licenses on the open market, starting in July.

Commercial developers testified on Wednesday during a legislative interim hearing that the state’s acute license shortage will cause existing permits to be priced artificially high — pushing small business and entrepreneurs out of the mix. At the same time, national chains probably won’t be purchasing licenses for operations in Utah because they typically must have several permits on hand to break into the market and guarantees that more licenses will become available as they build their brands.

"It’s simple economics," said Mark Bouchard, senior managing director in Salt Lake City for CBRE, one of the world’s largest commercial real estate services firms. "When there is no supply [of licenses] but a great demand, costs will increase significantly."

Restaurant liquor licenses — which are issued based on state population quotas — are so scarce that national chains have had to make do with seasonal permits or they’ve been placed on a waiting list, if they’ve come to the state at all.

"How do we un-ring this bell?" Rep. Brad Wilson, R-Kaysville, asked Wednesday.

Sen. John Valentine, R-Orem, who sponsored SB314, which allowed licenses to be sold on the open market, said the intent was to make it easy for restaurants to sell all assets when they closed.

He acknowledged the need for him to bring back proposals to the committee to free up more licenses. But administrative rules or proposed legislation could take months to enact.


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