A national restaurant chain and a hotel group came close to going away empty-handed Tuesday when they applied for Utah liquor licenses. They scored, but other contenders weren’t so lucky.
Nearly twice the number of applicants applied for restaurant liquor permits than there were available licenses. No more licenses will be available until the state’s population grows or eateries go out of business and surrender their permits.
Attorney Robert Reynard, representing Buffalo Wild Wings Grill & Bar, told liquor commissioners that the chain would have to delay construction on its second Utah location, in Layton, if the restaurant could not serve liquor.
The Minneapolis-based chain was awarded one of the last remaining licenses to serve beer, wine and spirits, but seven other eateries missed out and two others were asked to make do with a summer seasonal permit. All made their pitches, and the winners were chosen by the board of the state Department of Alcoholic Beverage Control using a broad range of criteria.
In January, Buffalo Wild Wings opened a restaurant in Lehi at 92 N. 1200 East. Construction on the Layton location is expected to begin next month, with an opening set for August.
Reynard said the chain, with annual sales of $2 billion, is expecting to open 10 to 12 other restaurants in Utah, “but obviously it will be very difficult if there are no liquor licenses. I don’t know of any other of its restaurants that do not serve liquor.”
Liquor sales throughout the chain represent 23 percent of all receipts — far less than the Utah requirement that alcohol sales cannot exceed 30 percent of all eatery sales. In Lehi, the percentage of alcohol sales is even lower, at 12 percent.
Still, the chain’s business model calls for alcohol service for customers who want it, said Reynard.
The Hilton Garden Inn found itself a similar situation Tuesday but also was awarded a full-service liquor license.
The hotel, at the Salt Lake International Center near the airport, is expected to open in September. The liquor license was critical, said its representative, Jonathan Butler, because agreements require that restaurants in the group serve alcohol. Each hotel and restaurant represent a sizeable investment, he added, with costs in excess of $15 million.
The Utah-based chain, Wing Nutz, was not as fortunate.
Although its restaurant in Sandy was awarded a full-service liquor license, eateries in Park City and Ogden had to make do with a summer permit to serve beer and wine, which is only in force from May 1 to Oct. 1. Unless more permits become available, those eateries will have to again serve only beer.
Wing Nutz founder Will Owens said the lack of liquor licenses and other restrictions “make it difficult to expand in Utah.” The chain has 14 locations in Utah and one in Idaho.
Most Wing Nutz locations serve only beer. But last year, lawmakers added more restrictions to beer-only restaurants, including construction of partitions, dubbed Zion curtains, to hide bottles of beer from public view before they are served. In addition, servers must be out of diners’ view when they pop open a bottle or can of beer, and diners may not drink without an order of food.
Owens said the new restrictions on beer prompted the chain to apply for permits to serve other types of alcohol “because we took a hit when we had to make these changes. We tried to turn a negative experience for our customers into a positive one by having more choices” of alcoholic beverages.
The state has no limitation on the number of eateries that may serve beer only.
The Big Z Restaurant in West Haven was among other eateries that missed out Tuesday. Owner Jeff Mogharrab said he will apply for a beer-only permit, “but with fine dining, customers expect a glass of wine with their meal. It’s a concern.”
Last year, lawmakers created 40 more restaurant licenses, easing concerns among some developers who were pushing for changes in license quotas.
Just last week, members of the International Council of Shopping Malls meeting in Salt Lake City were assured that Utah has an adequate supply of liquor permits. But on Tuesday, the state again ran out of restaurant liquor licenses.
In all, 14 businesses had applied for seven permits that allow the sale of beer and wine with food. And 19 eateries applied for 10 year-round licenses that permit beer, wine and spirits sales with food.
In addition, 17 applicants are on a waiting list for bar permits, which allow for sale of all types of liquor and have not been available for nearly two years.
Lawmakers have refused to create any more bar permits, creating a backlog of applicants.
The number of available licenses are tied to a quota system related to the state’s population. Business owners in the past have unsuccessfully asked that lawmakers also factor in the number of tourists when determining the number of licenses.
In July, businesses that have licenses may sell their permits on the open market, which could go for thousands of dollars because of the dearth of permits. In other states that allow the private sale of licenses, such as Montana and New Jersey, permits have sold for more than $1 million dollars.
Buffalo Wild Wings Grill & Bar
Utah • Lehi restaurant opened in January; Layton location to open in August.
Restaurants • 827 eateries in 47 states and Canada.
Sales • $2 billion systemwide last year; revenue $220.5 million Q4 2011.
Company • Founded in 1982, with headquarters in Minneapolis.
Employees • 60,000; about 130 to 140 employees for each restaurant.