When Utah opened its 45th liquor store in West Valley City last summer, it was the state’s first new retail outlet in seven years.
The lull in new store construction — at a time of record liquor sales — may seem pennywise, but it has cost the state money, says Rep. Gage Froerer, R-Huntsville.
Froerer has drafted House Bill 149, which is designed to accelerate the store-building process by giving the Utah Department of Alcoholic Beverage Control a pot of money to buy property, design and build new outlets and remodel existing ones. Froerer is suggesting the DABC get up to $15 million over the next two years — $10 million in 2018 and $5 million in 2019.
The proposal will be considered during the 2018 legislative session, which begins Jan. 22.
To get the money, the DABC would create a five-year building plan using retail market data. That plan would be subject to approval by the Infrastructure and General Government Appropriations Subcommittee, of which Froerer is co-chair.
“If we can put a plan into place and bring a store online every two or three years, we’re not scrambling and costing taxpayers more money,” he said.
The DABC must now go to the Legislature for funding every time it wants to purchase land or build a new store. Froerer said that process is slow and hampers the DABC’s ability to act quickly when purchasing property.
“Oftentimes, we end up with inferior locations and we are paying too much,” he said.
The seven-year gap between new liquor stores was unusual. Plans already are under way for a new retail outlet in Syracuse; the DABC also is looking for property and retail space for stores in Farmington and southwest Salt Lake County.
But even with those new stores, the state still needs at least 12 more in targeted areas — specifically along the Wasatch Front — to keep up with liquor sales and a growing population, according to a 2016 study conducted by Zions Public Finance, a division of Zions Bank.
Utah’s population, currently about 3 million, is expected to jump to 3.9 million in 2030 and 4.5 million by 2040, the study shows.
Liquor consumption also is rising. Utah’s per-capita consumption increased from 2.37 gallons in 2010 to 2.75 gallons in 2015, according to the Zions study. Nationally, consumption per capita also is increasing.
The state could have as many as 63 liquor stores under a legislative formula allowing for one liquor store for every 48,000 residents.
The DABC and lawmakers have tried to fund new stores annually, but cities often are unwilling to host the outlets — something officials have found surprising because liquor stores bring in millions in tax dollars to local communities.
According to the Zions study, communities receive 0.5 percent of total sales generated, while counties can receive 0.125 percent.
Hoping to appease conservative communities — but still serve drinkers in Utah — the DABC has tried to identify market areas, rather than individual cities, in hopes of finding communities willing to host new stores.