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Spacebar Arcade needs your help to get a liquor license and continue to provide you the service you have asked for and deserve, spirits!

As you may or may not know, Idaho has a quota system (enacted in 1959, long after prohibition) that allows 2 licenses for every incorporated city and another license to be issued at a 1500 person population increase. At some point the state realized that the demand for licenses was outpacing the growth of Idaho so they allowed the license’s to be sold person to person while taking a 10% cut on each transfer. They also allowed these licenses to be leased to service industry business owners (sharecropping for people who are not in the industry and have a liquor license in their investment portfolio, exploiting and extorting small business owners). However, as the law reads;

Title 23 Chapter 5: NATURE OF PERMIT. A permit shall be a personal privilege, subject to be denied, revoked, or canceled for its abuse. It shall not constitute property; nor shall it be subject to attachment and execution; nor shall it be alienable or assignable. Every permit shall be issued in the name of the applicant and no person holding a permit shall allow any other person to use the same. The division, if not satisfied of the integrity and good faith of an applicant for a permit, may refuse to issue the same, or may refuse to issue a renewal thereof.

 (https://legislature.idaho.gov/statutesrules/idstat/Title23/T23CH5/SECT23-514/)

So we now find ourselves in a position as a state and an industry where the demand is extremely high and the supply is extremely low, driving up prices on the licenses.

These are the barriers to entry for someone wishing to pursue entrepreneurship in the service industry in Idaho. 1.) Get on the list for a license. This wait is 15-20 years in Boise and a new license hasn't been issued in places like Ketchum, Marsing, Horseshoe Bend, Driggs and Sandpoint since the early 1970's. 2.) You can cut the line by buying a license for the asking price in your particular city (licenses must be issued in the city the business resides in so you cannot have a license in Meridian and operate a business in Boise.) in Boise the going rate is currently $300,000.00 in places like Ketchum, $500,000.00. In small towns they will never be for sale because the folks operating them have a state imposed monopoly on their community (https://en.wikipedia.org/wiki/Regulatory_capture#:~:text=In%20politics%2C%20regulatory%20capture%20(also,geographic%20area%2C%20industry%2C%20profession%2C).

This breeds status quo and stagnation for these communities which in turn makes living there bleak and depressed.


So do either of these options sound reasonable to get into this business which is already extremely hard to operate? We are bootstrapping, native Idahoans who have an idea, we want to enrich our community and give them something they can be proud of and we along with so many others are being punished before we have even made any mistakes. All this while the state has a monopoly to sell and distribute liquor at the state run liquor stores, touting every year how they have made more and more money. Even staying open during forced government shut downs as "essential services." We would like to know how this fits into their narrative of temperance. "Do as I say, not as I do." We suppose.

We reside in a historic building. "The Valencia" was built in 1940 by the Basque immigrant, Benito Ysursa. Starting its life as a Basque boarding house helping countless Basque families navigate their new life in Idaho. It has been a bar in the 70's (Les's Stereo Lounge) and an Italian Restaurant in the 1980's through the mid 2000's (Louie's). It was bought by the Barclay Group and Spacebar put down the cash to get them a construction loan to refurbish and restore The Valencia.

We applied for a Continued Operation Facility License also known as a Historic License with the ABC and they denied us. They told us that because the building had been closed for 13 years that it did not qualify for a Historic License even though the verbiage in the code reads as follows;

Title 23 Chapter 9 Section 8: If an owner, operator, or lessee has a validly issued retail liquor by the drink license at the time of application, nothing in this chapter shall prohibit the issuance of a license to the owner, operator, or lessee of a food, beverage, and/or lodging facility that has been in continuous operation in the same location for at least seventy-five (75) years, except for temporary closings for refurbishing or reconstruction, or a food, beverage, and lodging facility serving the public by reservation only, having a minimum of five (5) rooms operating in a structure that has been in existence for at least seventy-five (75) years and has been on the historic register for a minimum of ten (10) years.

We challenged the ABC on their ruling by asking them to define what "Temporary Closings" was. They had not promulgated many rules in their code and they told us it was for, "changing out carpet, windows and other updates that may need to be made to the building.

We accepted this and moved on to work with the state legislature in hopes to change the laws and to make licenses more available to small businesses across the state. There we met our opponents, FARE Idaho and the lobbyist who represents Hagadone Corporation out of Coeur d'Alene. These folks want to hold on to their monopoly and the status quo. Of course because they have a state imposed monopoly they have a lot of money to influence our lawmakers and love to pout about how they might lose money from the quota system being repealed. Our stance is, what were you doing with all the money you were making all those years as a monopoly? Why should it be a burden we bear for the fairness and betterment of Idaho? Selfish people who are saying they want a healthy service industry all while keeping a boot on the throat of potential competitors.

Since we did not get much traction at the Capitol and what came of our efforts, the S1120 bill which makes licenses non-transferable again, we went back to exploring getting a historic license and bringing an attorney along to help challenge the ABC's ruling.

In the bill S1120 Historic Licenses are being sunset and were no longer available to be issued, however we got our application in before this took into effect. We again received a rejection from the ABC and we started working on a plan for litigation. While we were doing this we started looking at other buildings that had been issued this license and we came across, "The Owyhee Hotel" and "The Avery Hotel" (formally the Blues Bouquet). We checked and the Owyhee had been closed for 6 years with owner, Clay Carley posting an interview saying, construction had stopped, he wasn't sure he would be able to resume and that he didn't have any tenants for his building. The Avery Hotel had clearly been closed for nearly a decade with countless articles written about this fact and construction permits not being pulled until 2021.

We brought this information to the attention of the ABC, the legislators we have been working with, the Attorney General's office and the Governor. We heard from the Attorney General's office only. The person who had given authorization to grant The Avery Hotel their Continuous Operations Facility license. When we told them of the inconsistencies and asked why they had been granted a license and we had not, we were told that construction at The Avery had started 8 years ago. When we asked what the ABC and AG's interpretation of "Temporary" was they told us they navigate to the dictionary's definition of the word. When we asked if 8 years of construction was temporary we got a lot of push back and were told that there were, "a few licenses for sale in Boise, we should go buy one." Then we let this person know that $300,000.00 was not obtainable for us and that according to the state law, licenses are not property and cannot be sold. The phone call ended in a stalemate.

So this is where we find ourselves. Without a license and wanting to continue to serve our guests with the service that is legal in this state to sell (the state sells it) one that they have come to expect from us and one that other business can participate in selling.

We are asking for your help to raise the money to pay for a liquor license, the 10% transfer fee the state will take on the sale, the fees GoFundMe will take and for the attorney fees we have incurred up to this point. 

We are so thankful for all the support we have and continue to receive from our community and beyond and we want to continue to fight for what's right and a better Idaho, your donation will allow us to do that. We are forever grateful for your support.
Cheers,


-The Spacebar Crew


Who To Contact:
 

State Affairs Committee Chairman Senator Jim Guthrie JGuthrie@senate.idaho.gov 

 

State Affairs Committee Vice Chairman Senator Treg Bernt 

Tbernt@senate.idaho.gov 

 

Idaho State Governor Governor Brad Little governor@gov.idaho.gov

 

FARE Idaho Liquor License Stance:

https://www.fareidaho.org/advocacy

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