Voters
weigh in on local option elections; Danville prospered from
sales
Source: The Independent
Carrie Stambaugh
Jan 20th
In the
last decade, local option elections have taken place in nearly every corner of
the state with communities voting, more often than not, to allow or expand
alcohol sales rather than to limit or prohibit them
entirely.
The
driving force behind the trend is economic. Most proponents of allowing alcohol
sales view the move as a way to make their community more attractive to new and
old businesses while helping to create what economists call a positive "balance
of payments," meaning more dollars are spent in the community than outside
it.
According
to the Kentucky Department of Alcohol Beverage Control, there were 188 local
option elections from 2002 through 2012 - 113 of which were approved by voters.
Only 87 local option elections took place statewide in the previous two
decades.
This
surging tide of alcohol expansion does not appear to be receding anytime soon. A
number of local option elections are already on tap in 2013, including two in
northeastern Kentucky.
On Tuesday
Greenup County voters will decide whether to go wet, while Ashland residents in
two downtown precincts will vote on Sunday sales in restaurants on Feb.
26.
A third
local option election in a single Grayson precinct was slated for last week but
was called off after the petition that led to the election was invalidated.
However, another petition is already in the works to put city-wide alcohol sales
on the ballot. In addition, there are unconfirmed reports that a petition is
being considered in Boyd County seeking Sunday sales there, too. Organizers are
reportedly waiting on the results of Ashland's vote.
In all
three counties, proponents for allowing alcohol sales cite economic development
as their motivation. Opponents call it a hoax.
Locally,
many opponents point to the city of Russell as proof there is no guaranteed
alcohol sales will spur development. Russell approved liquor by the drink sales
in restaurants back in 2008 but, to date, not a single business has applied for
a license to sell it despite proponents claims it would make the city attractive
to new restaurant development.
Other
cities, though, have seen positive results quickly.
DANVILLE
In Boyle
County and the city of Danville, which expanded alcohol sales to seven days in
mid-2009 and then went completely wet a year later, the results have been
indisputably positive for the local economy.
Regulatory
fees, amounting to more than $1.2 million from June 2010 through August 2012,
flowed into city coffers. Local payroll and business taxes also increased,
tripling expectations.
Last year, the city of Danville finished
the year with $1.8 million in surplus funds, due in large part to expanded
alcohol sales, officials there said. Three new police officers and two new code
enforcement officers have also been hired because of alcohol proceeds, according
to the Advocate Messenger in Danville.
Alcohol-related crimes including DUIs, alcohol-related collisions
and alcohol intoxication arrests
have remained in line with historical averages.
Jody
Lassiter of the Danville-Boyle County Economic Development Partnership said
overall the decision to allow broad sales of alcohol in Danville has been good
for the town of more than 16,200 residents.
"In
Danville's case, the results are evident, not only with what we've documented in
revenues but the business development that has taken
place."
The move
had broad public and city support, following a comprehensive study conducted by
an Alcohol Sales Task Force, which examined the issue strictly from a commercial
expansion and tourism development standpoint, and made recommendations based on
its findings.
The study
found limitations to alcohol sales was not only taking dollars out of town but
preventing new businesses from locating in Danville and hampering the growth of
existing ones.
At the
time the alcohol sales study was commissioned, the city of Danville allowed
alcohol sales by the drink in establishments seating a minimum of 100
individuals with 70 percent of gross receipts from food sales Monday through
Saturday. Much like Ashland, however, sales were only happening at big box chain
restaurants located outside of the downtown area on the bypass road, said
Lassiter.
"Our
objective from an economic development standpoint was to open up some options
for downtown businesses," Lassiter said.
Through
the study, officials learned that not only were Danville's historic downtown
structures not able to immediately accommodate 100-seat restaurants to meet the
requirements for a licenses but the cost to reconfigure the buildings was
"prohibitively expensive." Furthermore, it found that the 100-seat restaurant
was not necessarily "an economically viable business model." Most restaurants
wanted to start small and grow larger. Alcohol sales, the study found, are also
more profitable than food and often generate the revenue needed for small
restaurants to offset losses in their first years.
Based on
those findings and many others, the task force recommended the city go wet in
order to encourage smaller bistro and cafe-style businesses to locate in the
downtown central business district.
It also recommended the city commission take action to allow Sunday
sales.
Sunday
sales allowed existing businesses to immediately capture dollars originally
spent out-of-town on that day and instantly allowed officials to attracted new
entertainment events like a large golf tournament and new festivals, said
Lassiter.
"We were
just missing out, with what is today is a seven-day, 24-hour economy,"?explained
Lassiter. "The only way for us to
crack that nut was to get the six bar licenses that became available by going
wet."
Two years
out, he said, all six of those licenses are being used by small, locally owned
businesses. Not one is being used for a traditional bar, said
Lassiter.
"It has
also brought other businesses in who want to take advantage of what is a growing
buzz in downtown, no pun intended," added Lassiter, listing them. There is a
women's accessories boutique, a tea shop and a confectionary among
them.
In
Danville, as in other "wet" or "moist" communities, the bulk of alcohol sales
are package sales of liquor and beer. From June to August 2012, package sales
accounted for $3.9 million in sales compared to by the drink sales of just more
than $481,300.
Two other
Kentucky communities that have made the switch from wet to moist in recent years
are also reporting instant growth. Most of it from package stores as
well.
In western
Kentucky, the city of Calloway went wet in November 2012. It previously had been
"moist." Signs of growth are
already showing there, too, said Mark Manning, president of Murray-Calloway
Economic Development.
"It has
had an economic impact. A lot of dollars that had been going out of the
community are now being spent in the community and it is bringing in some
dollars from outside," said Manning.?He added the changes haven't been fully
implemented yet, but there are plenty of applications pending for package stores
and establishments hoping to sell alcohol by the drink without the burden of
quotas for food sales.
The city
of Corbin went wet last February. Already two new package stores have opened and
a third is under construction, according to economic development folks
there.
