Removal of dining club licenses shakes up Park City establishments
April 23, 2018
It's no secret that Utah has strict liquor laws.
During the 2017 legislative session, some regulations were loosened while new ones restricted establishments even further. One of the biggest changes, included in H.B. 442, made it so dining club licenses, which allowed places to be both a restaurant and a bar, would be eliminated this year. After failed attempts from dining club owners — including many in Park City — to lobby for a change to or delay of that part of the law during this year's legislative session, the elimination of dining club licenses is expected to go into effect on July 1. Businesses operating under a dining club license must decide by the end of next month whether to become a bar or a restaurant, designations that both carry various requirements.
Those in the restaurant industry say the situation has left almost two dozen establishments around Park City struggling to determine their next steps.
If businesses choose the restaurant route, they must follow the 70/30 rule, meaning that the ratio of food to alcohol gross sales must be at least 70 percent to 30 percent. Max Doilney, the owner of the Corner Store Pub and Grill, said that is especially difficult because Utah sets the wholesale cost of liquor by requiring restaurants to purchase liquor from the state. For restaurants with high-priced food, hitting the ratio is not a problem, but at places like the Corner Store, where the average cost of a meal is $15, he said it is an obstacle.
“The state is essentially dictating our entire food and beverage market by setting their price,” Max DoilneyCorner Store Pub and Grill
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"The state is essentially dictating our entire food and beverage market by setting their price," Doilney said. "We are in a pickle because we can't hit 70/30 or we'll have to raise our food prices, which alienates families."
The alternative, dropping the cost of alcoholic beverages, would reduce the restaurant's net profit, he said.
If the Corner Store and other businesses around Park City choose to be licensed as a restaurant, they also must require guests who drink an alcoholic beverage to order food with their drink. With dining club licenses, that was not the case.
David Wakeling, the owner of Collie's Sports Bar, said that requiring guests to order food is not good for business.
"It's giving our state even more of a bad reputation," he said.
Plus, if Collie's is a restaurant, it would have to close at 11 p.m. rather than 1 a.m.
But even with those consequences, Wakeling does not want to lose the families that visit his restaurant, which would happen if he were to become a bar. People under 21 are not allowed in bars.
"Park City in particular has so few options for families as it is, and this is taking away more of that," he added.
Elected officials did pass a law this year, H.B. 456, that allows businesses to hold both a restaurant and a bar license. But the restaurant and bar areas must be in separate rooms with distinct entrances and with shared walls being at least 8 feet high. For many, that would require construction that they do not have the money or space for.
Shantel Stoff, sales and marketing director of Red Rock Brewery and co-president of the Park City Area Restaurant Association, said that Red Rock Brewery in Kimball Junction could go that route. There is a room in the back that Red Rock would be able to convert into a bar, but it is not ideal.
"The portion of the restaurant that has to become a restaurant versus the bar is not how we would prefer to continue, but it is what we are faced with given the legislation that passed," she said.
She said that Red Rock has not yet decided what it will choose to do. It was so difficult to get the dining club license that it had, it is hard to give it up, she said. She served as general manager of Red Rock Brewery for 10 years and, during that time, spent 27 months meeting with the Utah Department of Alcoholic Beverage Control to be permitted a dining club license.
Doilney worries what would happen if the majority of the establishments choose to opt for a bar license, since it seems to be easier to comply with.
"You might as well have an ID station at the Junction saying, 'Don't come into town with your kids because there is no place for them to eat,'" he said.
Doilney predicts that it will balance out, but there does not seem to be a perfect solution for most of the Park City dining clubs.
"It's not an easy task for any of the business owners in Park City," he said.
Doilney said that he built his business around the previous liquor laws, and now he will need to do construction if he wants to keep the guests, and lifestyle, he has. If he is licensed as a bar, his nephew, who is 15-years-old, will no longer be able to work at the establishment or even step foot in the building. His young son will not be able to either.
"They are not just taking away a little bit of our revenue and a little bit of our livelihood, they are taking away our lifestyle," he said.
He said that part of his frustration is that he and several other business owners spent months lobbying to get the elimination of the dining club license delayed or changed during this year's legislative session. He said that senators and representatives toured establishments with dining club licenses in Park City and restaurant owners shared with them a list of their concerns.
"They gave us assurances that our concerns would be addressed," he said. "In my opinion, they look us in the eye and say they are going to do something and they don't do it."
Stoff said that the restaurant association hired someone to help guide it through the legislative session so it could voice its worries about the law, but no progress was made.
She said that many businesses were blindsided by some elements of the law last year. Doilney said it seems they are being punished.
"The law is incredibly shortsighted," he said. "It puts stresses on small businesses that otherwise have been abiding by the law better than other liquor outlets."