The Brookings City Council is holding a special meeting Wednesday (tomorrow!) at 1 p.m. The only item on the agenda: "Discussion on full and restaurant liquor license fees."
Brookings councilors issued two of three available liquor licenses last week to the Shamrock and the planned Brownstone. Each license costs $25,000... which seems like an awful lot of money to spend up front just to offer one specialty product. The two licenses issued last week are good for just one year; if Brookings does not extend the licenses, the owners will get 90% of their license fee back.
Not explicitly listed on the agenda but surely on their minds will be public grumbling about the fact that the Brookings City Council left local applicants Katie Knutson and (fellow city commissioner) Jael Thorpe high and dry. Knutson and Thorpe plan to open the Old Market Eatery this fall. Their business plan seems sufficiently diverse and unique to fly without selling the hard stuff, but Knutson and Thorpe would like to include liquor in their offerings. Whether or not liquor is necessary to their success, it still seems more sensible for Brookings to put that last liquor license to use on a sure local bet right now rather than hanging on to it in hopes that some big chain restaurateur will roll into town to bless the I-29 bizplex with more brand-name blandness. (Brookings Councilor Mike McClemans says he doesn't expect any big chain to bid for a liquor license in the next six months.)
So keep an eye on the Brookings City Council tomorrow at 1 p.m.: maybe commissioners will approve one more place to get a stiff drink.
25k is very very very cheap for a liquor license.
192,000 in Sioux Falls
http://www.argusleader.com/article/20110517/NEWS/105170326/Sioux-Falls-sets-price-nine-new-liquor-licenses
From kcautv.com the following:
In south Dakota, the cost for a restaurant to get a liquor license can be as much as a quarter of a million dollars.
So most restaurants including Red Steak house in Vermillion can only afford a beer and wine license.
For a restaurant in Vermillion to get a liquor license the cost is $95,000.
"The initial purchase of this building for this business was roughly that range," said Thomas Wiley, Red's General Manager.
But, believe it or not, that's cheap compared to $295,000 in Rapid City.
Al Viereck, Yankton's finance officer, said the Yankton City Council set their price at $70,000
From Keloland.com
Restaurants in Sioux Falls may have to fork over a lot of cash if they want to serve liquor. Monday night, the city council will consider raising the fees for on-sale liquor licenses for full service restaurants to $260,000. Some current restaurant owners think that lofty price could be a hard fee to swallow.
The owner of Joey's Seafood considers his establishment a family restaurant. John Park bought a liquor license last year from the city for $152,000, but sold it seven months later.
"We found it didn't increase business that much," John Park said.
That's why Park wonders how any restaurant can afford to buy a license at the proposed price.
"$260,000, you better sell a lot of liquor, a lot of liquor," Park said.
But the ordinance limits those sales. A restaurant can't make more than 40 percent of its profits from alcohol.
Unlike the city's liquor licenses for bars, there's no limit on the number available for restaurants.
While $260,000 is the going rate in Sioux Falls, Park thinks it could deter some people from opening new restaurants.
"$260,000 yeah, that's a lot of money. That might stop some people from getting a liquor license," Park said.
A license that could cost restaurants $100,000 more than it used to.
The cost is even steeper in Rapid City. A restaurant liquor license there is $295,000.
Apparently there is a chain interested in coming to Brookings: http://www.brookingsradio.com/New-Restaurant-Franchise-for-Brookings/10511338.
God I would by 10 @ $25k. Our restaurant liquor licenses in Yankton are $75k, but the full-blown liquor licenses sell for more than 100k.
I stand corrected: $25K apparently is a steal! If licenses costing as much as Yankton's and elsewhere can still produce a return on investment, I clearly need to burn my WCTU card and get into the booze biz!
http://www.brookingsregister.com/v2_news_articles.php?heading=0&page=76&story_id=11916
Showing again that the council has no clue what they are doing they have created a huge mess by leaving one of the two remaining $25,000.00 license on the table that it sounds like they gave Whiskey Creek the impression was theirs while raising all new restaurant licenses to $100,000.
They had to have an attorney there advising them of law and the attorney of the bars that successfully sued them for ruining the fair market there overseeing their nefarious deeds.
They really are clueless.
Give the 2 remaining 25k license to locals and hit the chains (whiskey creek and Buffalo Wild Wings) for 100k.
Some follow-up...
https://www.facebook.com/#!/permalink.php?story_fbid=231430786939834&id=119650041451243
http://www.brookingsregister.com/v2_news_articles.php?heading=0&page=76&story_id=13406