www.montereycountyweekly.com april 13-19, 2023 MONTEREY COUNTY WEEKLY 21 Bottles of vodka and gin, tequila and whiskeys drawn from the world’s distilling regions arrive in boxes and are stacked behind the bar. It’s a normal scene at area bars and restaurants, but for April Montgomery and her crew at Links Club in Carmel, it marks a long awaited turning point. The establishment’s liquor license had been approved on Wednesday, March 29, and for the first time—two days later—spirits were about to pour. “We’re excited about doing craft cocktail and whiskey flights,” Montgomery says. She picks up a container of wood chips and shows it off. A bartender gives her a puzzled glance. “Smoked old fashioneds,” Montgomery adds, her smile broadening. It is a good day at the unique place that mixes food, drinks and golf simulation. It was also an expensive one. The full liquor license—Type 47, in California Department of Alcoholic Beverage Control (ABC) nomenclature—allowing for the on-premises sale of distilled spirits, in addition to beer and wine, cost Montgomery $160,000, perhaps the largest amount ever paid in the county’s history. A few months earlier, Bill Lee shelled out $140,000 for a full license at his new spot in Monterey, Kona Steak & Seafood. If it is a record, the mark might not stand long. Already, Montgomery reports seeing a price tag of $165,000. “All of a sudden it’s very expensive— an all-time high,” Lee observes. In his four decades as a restaurateur, he has generally paid between $40,000 and $80,000 for a Type 47. “It’s all supply and demand.” In the course of casual conversation, when Art Harris tells others what he does for a living, the response often borders on incredulity—“What? That’s a thing?” Harris owns Liquor License Network, a Sacramento-based company that operates statewide, connecting the owners of dining and drinking establishments with available liquor licenses in what is known as the secondary market. His company and others like it are critical to the process of obtaining the right to sell alcohol from the state. It has been four years since a new license was granted in Monterey County. San Luis Obispo County hasn’t added a full license in a decade. When the state granted five new permits to San Francisco in 2016, it marked the first expansion in that county since 1939. So restaurant and bar owners seeking a license in many cases must approach other restaurateurs or turn to brokers to locate an existing document. “It’s a weird niche,” Harris says of the state’s secondary market. “No one knows about it, unless you’re buying a restaurant.” The state ABC department is responsible for issuing licenses to sell alcohol on and off premises. While licenses to sell beer and wine are readily available and granted year-round to qualified applicants, full licenses—the ones allowing the sale of distilled spirits—are offered once a year during a short, designated period. It would seem as if this process would allow for all interested parties to apply. However, as Bryce Avalos, communications analyst for California’s ABC explains, there is a limit to the number of licenses the department is allowed to approve. “If a population grows by X amount, we can grant more licenses,” Avalos says. “But the population has to grow by a lot.” There are calculations and exceptions built into California’s Code of Regulations, as well as a complex table that prioritizes a target number of licenses for each narrow census tract within a county. In general, however, for ABC to issue a single new on-premises full license, at least 2,000 new residents must be added to the particular census tract. Between 2020 and 2021, however, Monterey County’s population fell by just over 2,000 people, dropping from 439,035 to 437,325, according to the U.S. Census Bureau. The estimated population for 2022 shows a further decline, to 432,858. California established 99 different liquor license types, allowing for the sale of beer, wine, spirits or all three at everything from importers to catering operations and restaurants. Type 54 approves sales at a bar or kiosk on board a boat; Type 64 is an on-premises document for nonprofit theater companies. Meanwhile Type 88 is a “Special On-Sale General for a For-Profit Cemetery with Specified Characteristics.” As of the end of March, there are 984 active retail permits for the on-premises sales of liquor in Monterey County. That number includes those held by country clubs and organizations such as American Legion and VFW posts, as well as 402 Type 41 licenses, which limit restaurants to beer and wine sales only. Types 47 and 48—the licenses needed by restaurants and bars for a full complement of liquor—amount to 234 of these. Avalos explains that the only other way to obtain a full license is by purchasing an existing one from someone willing to sell in the same county. And that leads to the secondary market. “The license everyone wants, you have to go to a broker,” says Russell Bloom, owner of Liquor License Auctioneers, which operates in California as well as other states. With a finite number of licenses available, they become a commodity—a fixed supply subject to the whims of demand that can drive prices down, or send them rocketing skyward. The cost of a full liquor license is at an all-time high in Monterey County, and prices are still rising. By Dave Faries April Montgomery, owner of Links Club in Carmel, shows off part of the first delivery of spirits, which came at a record licensing cost. The unique restaurant-bar-golf simulation establishment had previously been limited to selling beer and wine. “In the liquor license business, there is no one regulating.”
RkJQdWJsaXNoZXIy MjAzNjQ1NQ==