Smoking, DUI laws reduce demand for liquor licenses

PHOENIX — Nearly five years ago, lobbyists for Arizona's liquor industry succeeded in convincing lawmakers that there was a pent-up demand for hundreds of new liquor licenses.
But in the first four years after the law passed in 2005, just 151 new licenses were issued to liquor stores, bars and restaurants, according to a state audit report. That's less than a third of the number expected.
Liquor industry officials cite a tough business climate and the ongoing recession, a recent crackdown on DUI offenders and a new statewide ban on smoking in bars and other public places.
"All these things have had an effect," said Bill Weigele, president of the Arizona Licensed Beverage Association. "The marketplace has changed."
In fact, the sales price for existing licenses has dropped in recent years, with prices for a bar license in the Phoenix area slipping from $100,000 to $85,000 or $90,000, he said.
The 2005 law included a four-tier system for allotting a total of 120 additional licenses a year to counties based on their populations. The allotments ranged from 30 annually for Maricopa County, which includes most of the Phoenix area, to three for each of seven counties with populations less than 100,000.
Arizona hadn't awarded licenses since the late 1980s before the 2005 law passed. That was largely because holders of existing licenses didn't want to diminish their resale value.
Resistance from some local governments also proved to be a factor.
"It was thought that we should put some more out there to relieve the (cost) pressure," said Jerry A. Oliver Sr., director of the Arizona Department of Liquor Licenses and Control.
The new allotments did help make licenses more affordable "for a little guy," partly because the state doesn't charge commissions on its sales, according to Oliver.
He said brokers began lowering prices on resale licenses in response, reducing interest in the new ones being issued by the state.
And the recession began taking its toll on overall demand.
"There was some disappointment. We thought we'd do better," Oliver acknowledged.
The new licenses were expected to produce approximately $6.3 million of new state revenue annually, according to a 2005 legislative staff memo.
However, a recent state audit report says the amount actually generated in the four fiscal years that ended June 30 totaled about $15.6 million.
The fixed annual allotments go away in 2010, replaced under the 2005 law by a formula keyed to population growth.
Weigele, a real estate broker specializing in bars and restaurants, said he doesn't expect demand for liquor licenses to increase much.
Even before the recession hit, Arizona's 2007 law requiring first-time DUI offenders to install breath-test devices on their vehicles "was a killer" that keeps many casual drinkers home, Weigele said. A voter-approved ban on smoking in bars, restaurants and other public places took effect in 2007.
"There's not going to be the demand there was previously," he said.
"We're on the road to becoming a dinosaur. There are just too many reasons.
Oliver, who is active in an association of state liquor regulators, said Arizona "is probably in worse shape" on interest in new liquor licenses than other states because of its stringent DUI laws, the smoking ban and other factors.
"I think it's going to be a while for us to turn it around here," he said.


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Arizona DUI task force update

Phoenix, AZ - As of early saturday morning the new Arizona DUI task force efforts that are scheduled to last through September 7, 2009 had netted 120 DUI arrests statewide.

Police agencies throughout Arizona, including Phoenix, Scottsdale and Tucson are participating in the efforts, which include DUI checkpoints and saturation patrols.

Throughout the state they made 700 stops. Of the 120 DUI arrests, there were 12 felony DUIs and 115 misdemeanors. There were also 13 minors arrested.

"This time of year police agencies in Arizona pool their resources towards DUI enforcement," said Arizona DUI lawyer Stewart Bergman, whose practice in Scottsdale focuses on defending people accused of DUI throughout the greater Phoenix area. "It is not unusual to see a Gilbert Police Officer patrolling in Scottsdale, or a Scottsdale Officer working in Glendale or Phoenix."

While the pooling of police resources makes it easier for law enforcement to concentrate on any given area in the state, it can create logistical problems.

"After a large task force event, you might see a DUI case charged in Scottsdale Municipal Court because the arrest was made there. But then you have a Gilbert Police Officer who made the stop and took a blood sample. Gilbert sends their blood samples to the Chandler Crime Lab for analysis. So you end up with a prosecutor's office like Scottsdale using Chandler and Gilbert city witnesses in the prosecution."

The logistical difficulties of getting several law enforcement agencies to cooperate and coordinate during a DUI prosecution can provide an advantage to the defense, especially when the DUI defense attorney is on top of the situation and make appropriate and frequent requests for discovery. Because of the administrative slowdowns, there is often times more opportunity to get favorable deals.

"It is never worth it to drink and then drive in Arizona," says Bergman, "because we see cases getting charged where the person is well under the legal limit."

Under Arizona DUI Law, the police can charge a person with being impaired to the slightest degree even if the person is well under the legal limit of 0.08 percent body alcohol concentration. And prosecutors are capable of getting convictions for DUI when the persons alcohol level is as low as a 0.06, or 75 percent of the legal limit.

"Task force events are about more than pure public safety," explained Bergman. "They are about numbers, and between and within some police departments, they may even be about competition. Because of this, even if you know you are okay to drive but have had drinks, if you can find another way to get home it is a cheap insurance plan against getting a DUI."

A first offense Arizona DUI can carry up to a minimum of 45 days in jail, depending on the alcohol level, and comes with loss of driving privileges, ignition interlock devices and heavy fines.


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