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Terry Montano, owner of the La Frontera Mexican restaurant in St. George, was in tears Tuesday after the Utah Alcoholic Beverage Control Commission denied her request for a beer and wine license.

"I don't know whether we will be able to stay in business," an emotional Montano said after the 2-2 vote.

Customers leave when they find out they can't get a beer with their tacos or chile verde burritos, she said. "We're hanging by a thread."

Montano's request was denied, because her restaurant — the newest location in the Utah family-owned La Frontera chain — is located within 384 feet of a Mormon meetinghouse.

Under state law, bars and restaurants are prohibited from serving liquor if they are within 600 feet of a church, school or park. A business can apply for a variance — or exception — to the state law if it gets local city council approval — which Montano did.

The business also must convince the DABC commission — through statistical data — that the license will satisfy an unmet demand in the area and there is no reasonable alternative.

Montano said she thought she had a strong case for her restaurant, explaining how St. George and Washington County are among the nation's fastest-growing metropolitan areas. The area also is a hub for tourists, yet lacks places where customers can get beer, wine and spirits.

Additionally, Montano submitted a petition with 280 signatures from customers from throughout the state and region in favor of giving the restaurant a limited-service alcohol license, which allows for beer and wine sales. The building where La Frontera is located had previously been a restaurant with a liquor license, Montano said, "so we didn't think there would be a problem."

Commission members Amanda Smith and Jeff Wright — both of whom drink alcohol — voted to give La Frontera the variance. "Given the growth in the community and the amount of traffic that area sees in terms of tourists, I'm in favor of giving the license," said Smith.

Chairman John T. Nielsen and commissioner Steven Bateman — both of whom abstain from alcohol — were not swayed, since there is another Mexican restaurant that serves alcohol nearby. "I don't see that there is a substantial unmet need," said Nielsen.

Three commissioners were absent, and Montano was told she could make another attempt before the full commission.

Last month, the DABC commission said it would make it tougher for businesses located near churches to get liquor licenses.

In recent months, the DABC had been more willing to grant liquor licenses in close proximity to churches, especially when leaders from The Church of Jesus Christ of Latter-day Saints didn't speak up at public hearings or send a letter of opposition to city officials. The church inaction, argued one member of the commission, was considered "tacit approval."

But recently, legal counsel from the LDS Church made it clear to the commission that saying nothing does not imply neutrality.

In other DABC news:

• Strap Tank Brewery in Springville was granted a manufacturing license, making it the first beer brewer in Utah County since before Prohibition.

• Terry Wood, 69, has been hired as the DABC's new public information officer. A veteran television news anchor, reporter and radio personality, Wood has worked and lived in the Salt Lake City area since 1971.

• Water Witch Bar, a new bar in Salt Lake City's Central 9th redevelopment area, and the new owners of The Gateway Saloon, a historic bar in Vernal, received club licenses. The list for bar licenses has been reduced in recent months; now only six business are waiting for approval.