Salt Lake City business owner sues the DABC after it took away her bar license

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Kimi’s Chop and Oyster House, like many restaurants and bars, was closed for nearly a year because of the pandemic.

And even when the Salt Lake City business, located at 2155 S. Highland Dr., was able to reopen in February 2021, social distancing requirements limited the number of diners that could be seated in the main-floor restaurant.

The Oyster Bar lounge upstairs — for those 21 and older — also remained empty on many nights, as bars were considered a high-risk for the spread of the virus.

However, when a routine audit from the Utah Department of Alcoholic Beverage Control showed that during three different time periods in March and April 2021, Kimi’s Oyster Bar sold no alcohol — it raised red flags for the liquor agency beyond just a COVID-19 slow down.

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In May, the DABC liquor commission forfeited Kimi’s bar license, saying that the business violated state law by stopping operations without first getting approval.

Owner Kimi Eklund insists that the bar — along with the adjacent restaurant — has been consistently open since reopening in February and believes the commission acted arbitrarily.

She recently filed a complaint in 3rd District Court asking a judge to reinstate the bar license — a permit that is in short supply in Utah.

While Eklund waits for a decision, Kimi’s Chop House will continue to sell alcohol to patrons under its restaurant liquor license — which allows customers to order alcohol only when they also order food.

DABC spokeswoman Michelle Schmitt said the agency “cannot comment on pending legal matters.”

But under state law, a business with a liquor license “may not close or cease operation for a period of longer than 240 hours,” unless the owner receives agency approval.

The DABC audit said Kimi’s Oyster Bar was “closed without pre-approval” because there were no alcohol receipts between Feb 27 and March 9; April 4 and 13; and April 28 and May 11.

When the days were combined, the DABC audit said, the closures exceed the 240-hour limit set in state law.

Eklund’s legal complaint, however, points to several examples that showed the Oyster Bar was open but no patrons ordered in the bar area. It had a valid business license with the city, its website advertised that the bar was open; and its OpenTable reservation site offered tables in the bar.

“Kimi’s was indeed open and operational during the times the DABC Commission found Kimi’s to be closed,” the complaint said, “and, during the alleged times of closure, Kimi’s offered for sale liquor or beer as allowed under their license.”

The DABC based its decision, the complaint added, “solely on when sales of alcohol took place, not on whether the establishment was open and operational or whether Kimi’s offered liquor or beer for sale.”

While circumstances surrounding the The Oyster Bar lounge remain disputed, this is not the first time the DABC has revoked a liquor license because of “unapproved closure” violations.

In April of 2020, Scott Evans lost the liquor licenses he held for George restaurant and the adjoining Bar George, both at 327 W. 200 South. At the time Evans, faced “automatic forfeiture” because he failed to produce liquor dispensing records, and Bar George was closed for more than 10 days without department approval.

Bar license was being sold

Complicating the matter was the fact that Eklund also was in the process of selling the bar license to the owner of the ‘Bout Time Pub and Grub Sports Bar franchise.

In April 2020 — at the height of the pandemic when things looked financially dire for Kimi’s Chop and Oyster House — Eklund decided to sell.

Eklund told the liquor commission during her May hearing that she made the decision when she was “extremely distraught” about the business and before she knew that federal coronavirus assistance would become available.

“I don’t think you realize the intensity those of us in the industry were facing,” she said, adding that she had 26 employees and several food vendors to pay with only $35,000 in her bank account.

“At that point in time, it was the only thing I could think of to survive,” she told the commission, adding that “It’s also is the only reason we are having this conversation — because you think I’m keeping this license just to be able to sell it.”

Commissioners have previously said that they do not like business owners holding on to bar licenses in order to make money, especially when they are limited. Currently, eight business owners have applied and are waiting to receive a bar license from the state.

Typically, those who want a the hard-to-get license must apply with the DABC and then wait — sometimes for several months or more — until one becomes available through an increase in population or another bar closure.

Businesses can also buy bar licenses from other owners. But they can be costly, selling for $30,000 and up in recent months.

Eklund told the commission she regretted her decision to sell. “I don’t want to give up the bar license,” she said, “but at the same time I made a commitment.”

However, before the sale could be finalized, the DABC forfeited the bar license and both Kimi’s and ‘Bout Time were left empty-handed.