By Walter Rubel Southern New Mexico Journalism Collaboration
Lawmakers striving to increase the number of restaurants in New Mexico that can serve alcohol are trying to find a “soft landing” for bar and liquor store owners who have invested their savings to buy liquor permits. It turns out to be difficult to do.
On Friday, February 5, liquor licensees across the state told members of the House Commerce and Economic Development Committee that legislation allowing restaurants to purchase restricted liquor licenses at a much lower cost would devalue their allowed. Many said they had used their licenses as collateral for business loans and would default if the value of the licenses declined.
“I believe in the free market, I just want to compete on a level playing field,” said Mike Cheney, owner of a bar and liquor store in Ruidoso. “Allowing people to come in at a much lower cost than what I got just doesn’t seem fair. “
Cheney said if the value of his license was halved, he would risk defaulting on his loan. John Anderson of the New Mexico Bankers Association confirmed that many bar and liquor store owners have used the value of their licenses as collateral and risk losing their business if that value is reduced.
“It is likely that the value of the license will drop significantly, which will impact the value of our collateral,” Anderson said. “We might have to cancel the loan and have it foreclosed, which is the last thing we want to do. We have no interest in having a liquor license.
New Mexico is a quota state, with a set number of liquor licenses available. This created an artificial scarcity that made licenses incredibly valuable. Some have sold for over a million dollars.
Rep. Moe Maestas, D-Albuquerque, who is both a co-sponsor of one of the liquor reform bills under consideration and chair of the committee, said lawmakers were trying to address alcohol-related issues from New Mexico.–licensing laws that have been in the works for decades. He said a state Supreme Court ruling in the 1980s concluded that liquor licenses are not the same as property and are not subject to the same rules.
“We want to buy them back, but it’s unconstitutional. It is not a property right, and if we devalue them, it is not a take, ”he said. “So how do we make people whole? How do you give them a soft landing? There will be a landing. There will be a devaluation.
The two bills under consideration on Friday, House Bills 8 and 164, have been merged into a new bill, HB 255. It will be debated Wednesday in the same committee.
The bill would create a new liquor license for restaurants that sell beer and wine in a local options neighborhood. The new Type B license would allow the sale of hard liquor with meals. The license fees would be $ 1,050 for the Type A beer and wine license and $ 3,000 for the Type B licenses authorizing blended beverages.
A second provision of the bill would allow the delivery of alcohol as well as food orders, either by the restaurant or by an independent delivery service. Several restaurant owners have said they support the delivery provision, but not the $ 3,000 licenses.
Mark Rose of the New Mexico Package Liquor Association said the bill had a domino effect. Low-cost licenses will hurt restaurants and bars. In an attempt to appease them, the bill allows delivery, which will hurt liquor stores.
“The dominoes stop then and there is nothing to pay them back,” Rose said.
Oscar Andrade, owner of Pic Quick stores in Las Cruces, said that instead of helping local small business owners, the new licenses would all be taken over by national chains.
Marci Dickerson, owner of Game I and II sports bars in Las Cruces, said she had three liquor licenses, plus one that she leased to the state for her food service at the New Mexico Farm and Ranch Museum. She proposed that instead of creating a new class of licenses, the state should create something like a stock split, where current licensees could divide their licenses into thirds and sell the other two.
Bill representative Doreen Gallegos D-Las Cruces stressed that lawmakers are listening to concerns and proposals and have yet to make a final decision. She said she asked opponents of the bill to testify so that committee members can hear all points of view.
“This bill is still going on, and boy, did we hear a lot of different ideas today, and that was good,” Gallegos said. “But we don’t have a lot of time. New Mexicans need a way forward.
Senator Ron Griggs, R-Alamogordo, is co-sponsor of a duplicate Senate bill, SB 6. He is further along in the process, having authorized his first committee.
Walter Rubel can be contacted at [email protected]