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Dueling Bills Create Fight Over Liquor Licenses

Booze Delivery Major Topic of 60 Day Session


In a legislative year dominated by pandemic relief, budget worries and spring-loaded topics like civil rights and abortion, it's hard to believe anything else could muscle its way to center stage. But this is New Mexico, and the subject is alcohol. And depending on how the politics play out, it could be the issue of the 60-day session.

New Mexico lawmakers are pitching multiple pieces of legislation on the topic, highlighted by a measure that would allow restaurants to deliver beer and wine to people at their homes — assuming those folks also buy some food. Safety measures, proponents insist, will be put in place to ensure the customers are not minors or inebriated.

Advocates say it's a necessary move to help struggling restaurants survive, adding there's no reason to think that once the pandemic subsides, the desire to have dinner and a bottle of wine delivered to your doorstep will subside. "It's about time we reached this position," said Rick Pedram, CEO and president of Santa Fe Dining, which runs a number of restaurants in Santa Fe. "It's definitely going to help us recover and recuperate from 2020."

But critics contend the move would only exacerbate a drunken-driving issue that has plagued New Mexico for decades. The state has long ranked near the top of national lists for the most number of DWI arrests. Based on data compiled by the DWI Research Center, Santa Fe had 192 DWI-related crashes in 2009. Ten years later, that figure was 194. "So, not much has changed," said Linda Atkinson, executive director of Albuquerque-based DWI Research Center, a nonprofit designed to reduce DWI deaths and injuries.

But the bills — House Bill 8 and Senate Bill 6, which are mostly identical — may only be a preview on the fight over alcohol. The future of the state's liquor license laws, which haven't been comprehensively updated in 40 years, also may be up for grabs.

All the while, legislators may have to wrestle with how to balance the needs of current license holders, a restaurant industry hunting for additional revenue after being pummeled by the pandemic and those worried that an expansion of alcohol sales could do long-term damage to a state already battling a chronic DWI problem. 

As of Friday, a six-pack of bills had been introduced, some giving more restaurants the ability to acquire a liquor license and, in most cases, allow for home delivery service of beer and wine in limited quantities. And lawmakers say more legislation on the issue may be coming.

Advocates say the push makes sense; that it's an economic development initiative, one borne not just out of the reality of the pandemic but the need to keep current liquor license fees in line. "Those license fees are now in excess of $500,000," said Rep. Antonio "Moe" Maestas, D-Albuquerque, who introduced a bill that would, among other measures, provide at least four years of tax breaks to restaurants with current licenses to offset their devaluation. "If we don’t do anything they’ll be up to a million dollars and impossible for entry," Maestas said. 

But attorney Mark Rhodes of Albuquerque, who represents various entities in the state's liquor industry, called the two home-delivery bills  "the tip of the iceberg," which he claims would ultimately "gut the value" of existing liquor licenses. 

The licenses are highly valuable because they can be leased or resold like pieces of property. Late last year in Santa Fe, Whole Folds sold its liquor license to Circle K for $700,000, according to state Alcoholic Beverage Control Division data. But longtime liquor license holders who built up mom-and-pop restaurant businesses over the past few decades say much more than money is at play.

"Years, not just dollars," Terry Keene, co-owner of the Artichoke Cafe in Albuquerque, told the House Commerce and Economic Development Committee during a hearing on the issue Friday. Having operated that business for two decades, Keene said the proposed change to the rules makes him think the state is now saying to him, "It was a bad investment."

Georgia Maryol, who runs Tomasita's restaurant in Santa Fe, said she feels the same way. Recalling the days some 40 years ago when she sold enchilada plates for $6.50 and paid nearly $200,000 for a liquor license fee, she said the potential change devalues the sacrifice longtime license holders made to obtain the ability to sell liquor. "Everyone who has a liquor license now paid a tremendous amount for it," she said.

Now, she said, someone might be able to buy a license for $25,000 or $30,000 and potentially open a restaurant right down the street. If state legislators are set on pursuing liquor license fee changes, she has a suggestion for them. "Compensate us for it," she said.

Maestas' bill includes a provision allowing liquor license lessors to claim deductions from their net income for up to $50,000 for dispenser liquor licenses. House Bill 255, scheduled to be heard in committee later this coming week, also allows restaurants to deliver food and wine or beer to customers at home.

Other bills, some being reworked even this weekend, offer different approaches to the issue. House Bill 164, introduced by Rep. Larry Scott, R-Hobbs, would allow for new licenses in an amount equal to the current number of restaurant licenses — 712 — through a competitive, sealed bid. Money raised from the bid would go into the state's general fund.

Efforts to reach Scott for comment were unsuccessful. 

Meanwhile, Sen. Ron Griggs, R-Alamogordo, introduced Senate Bill 320, which would set up a new array of liquor license tiers based on a number of categories — including how many bar counter seats a restaurant has or hours of operation.

Griggs said he's been working on reforming the liquor license fees for years. He said restaurants, like churches, are important to small rural communities. "Economic opportunity in the restaurant and hospitality industry is stopped because of the license costs," he said. "There’s no telling how many restaurants may have opened had they been able to afford a full license."

Griggs said he realizes there's a lot of confusion and complexity over the many pieces of legislation popping up during this year's 60-day legislative session. "We’re trying to create a difference between the cheaper license fees and the more expensive license fees," he said. "Does that mean we are 100 percent right with some of the material in these bills? It certainly doesn’t."

Does he think legislation lowering those fees puts the newcomers at odds with the old-timers who paid hundreds of thousands of dollars? "Sure it does, sure it does," he said. 

Carol Wright, CEO of New Mexico Restaurant Association, which represents some 1,300 restaurants, said she doesn't like that potential for conflict. But she said the state's restaurants "desperately" need a home delivery clause to help them come back to life after the pandemic.  "Here's the kicker," she said. "It would have been great to have had this throughout last year. Once we get open again it may not be that important. But who knows if we will ever get back to open again?"

She said her association has not yet formulate a final stand on the bill. But she, like Maryol, thinks the state has to find a way to compensate license owners who stand to lose on their initial investment. 

"All we wanted was liquor delivery, and now we’re having this greater discussion that probably needs to be had — but not now," she said. 

For Gordon Schaeffer, CEO and founder of the Santa Fe-based Fetch delivery service, the issue isn't so complicated. The laws being developed open up the possibility of a third-party contract service like his to pay an annual fee and do the driving. Those drivers would have to have a restaurant server's license and know how to identify and deal with inebriated people. 

Though he said alcohol sales would only boost his own revenue by three to 5 percent in any given year, Schaeffer thinks it's something people want.

"Oh yeah," he said. "Almost every day people request alcohol from Fetch." 


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