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City by the Lake.org, The Voice of Michigan City, Indiana _ City Talk _ 10 new liquor licenses may accompany riverfront district
Posted by: southsider2k7 Mar 11 2008, 01:07 PM
http://thenewsdispatch.com/main.asp?SectionID=1&SubSectionID=1&ArticleID=10831&TM=54565.88
Jason Miller
The News-Dispatch
MICHIGAN CITY -While the city might be granted up to 10 new liquor licenses if a plan to create a riverfront entertainment district comes through, it's not likely all would be used.
"We could hold a number of them back, essentially in a bank," Michigan City Redevelopment Commission Attorney Michael Bergerson said. "I wouldn't recommend we issue all of our allotment because that would give us no real flexibility in dealing with this development."
The redevelopment commission Monday presented a resolution to create the district, which would allow it to apply to the state alcohol commission for extra liquor licenses. Officials think the additional licenses would spur redevelopment along Trail Creek.
Bergerson said Tuesday the city wants to use the licenses to attract "family-type" restaurants to the area. He said the city's not looking to bring in "adult-type" establishments.
"To me, restaurants and taverns are pretty much similar," he said.
The resolution would include three stipulations that Bergerson said he feels will allow the city to control development. All new license holders would be required to keep their businesses open 330 days a year to avoid seasonal restaurants.
It also states a license can't be used as collateral or as part of a settlement of any kind and can't be transferred. The resolution also states that holders must contribute monthly to a riverfront marketing fund.
"I'm in favor of this," board member Ed Bigda said. "Hopefully this will promote efforts to redevelop the North End."
The redevelopment commission will vote on the resolution at its meeting on Monday, March 17, and will then pass it onto the Michigan City Common Council for its approval.
Contact reporter Jason Miller at jmiller@thenewsdispatch.com.
Posted by: Ang Mar 11 2008, 04:30 PM
well, if they're going to add that many licenses for the north end, they probably should leave the police station where it is so they can all sit in lawn chairs and catch drunk drivers.
Posted by: ChickenCityRoller Mar 11 2008, 05:11 PM
Good! I like my beer and wine.
Posted by: Teach Mar 11 2008, 06:53 PM
How did you get 20 new licenses out of that article? I'm only seeing 10 mentioned.
Posted by: lovethiscity Mar 11 2008, 07:59 PM
How did you get 20 new licenses out of that article? I'm only seeing 10 mentioned.
Obviously you have not had enough to drink. Drink till you see double man, come on now.
Posted by: southsider2k7 Mar 12 2008, 06:44 AM
How did you get 20 new licenses out of that article? I'm only seeing 10 mentioned.
Bad typing, that's how!
Thanks, I will edit the title.
Posted by: Ang Mar 12 2008, 07:34 AM
Obviously you have not had enough to drink. Drink till you see double man, come on now.
I wondered why I saw 40 when I looked at that yesterday!
Posted by: RedDevilMC Mar 12 2008, 08:11 AM
Question to the group: Do you think someone would open a new restaurant or establishment without one?
Posted by: southsider2k7 Mar 12 2008, 08:18 AM
Question to the group: Do you think someone would open a new restaurant or establishment without one?
I wouldn't, I know that much. That is where you make a real profit in the restaurant business according to what I have been told. I have no problem with more establishments, but can we really fit 10 in that little area? If we can, cool.
Posted by: Ang Mar 12 2008, 09:08 AM
I would want to be able to at least serve beer & wine.
Posted by: JHeath Mar 12 2008, 09:20 AM
Question to the group: Do you think someone would open a new restaurant or establishment without one?
If Simmer couldn't survive without it, how would any other establishment? They were always busy on the weekends...or at least seemed to be whenever I drove by.
Another example...Baker's Square...or Popeye's...not that either were favorites of mine, but they didn't make it either.
Posted by: kharris Mar 12 2008, 05:19 PM
Question to the group: Do you think someone would open a new restaurant or establishment without one?
I imagine it would depend on what your target group would be ... but I think I would have to agree with SouthSider and say that is where the profits are. But on a side note on the subject - if these additional 10 licenses are issued, will it not diminish the value of those licenses that already exist?
Posted by: lovethiscity Mar 12 2008, 05:23 PM
I imagine it would depend on what your target group would be ... but I think I would have to agree with SouthSider and say that is where the profits are. But on a side note on the subject - if these additional 10 licenses are issued, will it not diminish the value of those licenses that already exist?
Ten years and $130,000,000 towards economic development didn't work. Ten Taverns or returaunts should do the trick.
Posted by: RedDevilMC Mar 12 2008, 08:27 PM
I don't think it will diminish the value because these will be restricted licenses. They cannot move away form that district. They will be tied to that specific district.
Posted by: southsider2k7 Mar 14 2008, 06:49 AM
I don't think it will diminish the value because these will be restricted licenses. They cannot move away form that district. They will be tied to that specific district.
Which is my concern. 10 taverns in that small of an area? That is a pretty tight fit, unless we are looking to establish some kind of club row, sort of like Rush St in Chicago.
Posted by: Ang Mar 14 2008, 09:36 AM
Are the licenses restricted to just pubs, or can they be used for eating establishments also?
Like MC needs more restaurants. When I was in the Navy, stationed in Maryland, I met a man who knew about Michigan City. He called it "The Restaurant Town." He said he had visited City many times, and the one thing he noticed was how many eating places there were. This was about 20 years ago and the town has more now than they did then.
Posted by: ChickenCityRoller Mar 14 2008, 10:12 AM
Are the licenses restricted to just pubs, or can they be used for eating establishments also?
Like MC needs more restaurants. When I was in the Navy, stationed in Maryland, I met a man who knew about Michigan City. He called it "The Restaurant Town." He said he had visited City many times, and the one thing he noticed was how many eating places there were. This was about 20 years ago and the town has more now than they did then.
Well, I live here and I think we do need more restaurants OR close 75% of the petri dishes out there and get some GOOD restaurants. I'm pysched that Gary and Nicole Sanders are reopening Bruno's.
Posted by: JHeath May 13 2008, 11:13 AM
http://thenewsdispatch.com/main.asp?SectionID=1&SubSectionID=1&ArticleID=13383
Jason Miller
The News-Dispatch
MICHIGAN CITY - A new restaurant in the former Michigan City Yacht Club will be the first to receive a liquor license under the umbrella of a new district created last month to aid North End redevelopment.
The Michigan City Redevelopment Commis-sion granted a liquor license Monday to 12 on the Lake, owned by local businessman Ed Arnold and his business partner, Chicago restaurateur Richard Mott.
Board members Ed Bigda, Ken Behrendt and Lynne Kaser voted in favor of the move while Cranston Harris abstained and Michael Kniola voted no. Behrendt had to vote to create a majority of the five-member board.
Harris said he abstained because he didn't know enough about the issue. Kniola was not in favor.
The license was made available late last month after the Indiana Alcohol and Tobacco Commission granted the city the right to create a riverfront entertainment district, which will allow the city to go over quota in the sale of liquor licenses.
The move was made to entice developers to create restaurants and taverns along Trail Creek, an area in which the city hopes to see a development boom in coming years.
Arnold said Monday the business fits all criteria set up by the commission, chief among them a contribution to the community and an addition to the tax roles, which will aid in development.
"Some people have really stretched the rules to fit in with legislation like this," Arnold said. "This case is exactly what the rules were designed for."
Redevelopment commission attorney Michael Bergerson said Monday the Alcohol and Tobacco Commission gave the OK to create the district last month, but in doing so didn't tell city officials how many licenses would be made available.
Valparaiso created a similar district last year and received 10 licenses.
"They told us it would go on a case-by-case basis," Bergerson said. "It's certainly not infinite, but it will be decided as each case comes up."
Local tavern owners have argued the need for the extra licenses because they will be available for a price thousands of dollars lower than what existing licenses could be purchased for.
Many tavern owners were at Monday's meeting saying the cheaper licenses will devalue theirs and make it difficult for them to sell their licenses and bars.
"We're not against (Arnold) having a restaurant, we're against him getting a free license," said Larry Fegaras, owner of Galveston Steakhouse, which lies within the new riverfront district. "We want the North End redeveloped. But I didn't expect a free license."
Contrary to that statement, the licenses are not free. The commission will sell them for around $1,000.
The license application for 12 on the Lake now goes before the city's excise board for approval.
Contact Jason Miller at jmiller@thenewsdispatch.com.
Posted by: Roger Kaputnik May 13 2008, 03:39 PM
This is typical of the nomenklatura of MC. They are flooding the market at firesale prices. And the holders of the existing licenses are forced to pick up the soap in the showers. I think they have information about the people or corporations who will end up with the licenses. I do not trust them, and they do not operate in the open. Why should anyone trust them? ANSWER: There is NO reason to.
Posted by: CaddyRich May 13 2008, 06:38 PM
Ten years and $130,000,000 towards economic development didn't work. Ten Taverns or returaunts should do the trick.
Well done. But I guess that's what the people want...no one speaks with their ballot anymore.
Posted by: southsider2k7 May 14 2008, 06:21 AM
This is typical of the nomenklatura of MC. They are flooding the market at firesale prices. And the holders of the existing licenses are forced to pick up the soap in the showers. I think they have information about the people or corporations who will end up with the licenses. I do not trust them, and they do not operate in the open. Why should anyone trust them? ANSWER: There is NO reason to.
At the sametime, think of yourself as a business man from outside of MC. Why would you locate in that area, sans the most profitable portion of the restaurant business, when you could locate in another town with a more stable clientèle? Instead of hoping for a rival, you could go somewhere else and have a really good idea at what your business would look like. You have to give a little something to get people here.
Posted by: Roger Kaputnik May 14 2008, 09:30 AM
Yeah, but burning all the local folks with the licenses already? It stinks.
Posted by: southsider2k7 May 14 2008, 09:37 AM
Yeah, but burning all the local folks with the licenses already? It stinks.
Its not a pretty situation, that's for sure. The problem is no matter what you decide, someone is going to be mad.
Posted by: RedDevilMC May 14 2008, 05:01 PM
I guess my hope in all of this, Is that MC would be a regional destination for all restaurants to reap the benefits of. There have been several weekends in the past year, that I've decided to go to Valpo, New Buffalo, or Chesterton to eat. I know it may stink but we have to look at creative measures to bring business here. The Blue CHip is already overbooking the new hotel for conferences. The are looking alternative agreements with other hotels in the area to meet the capacity. This should help all of the restuarants in the area. We also have to really market the area. I can already hear people saying, Let's go over to the RiverWalk in MC this weekend to eat and shop. It can happen. I don't want to downplay the fact that the local business owners are concerned about their investments. Several great comments and questions came up on Monday. I am looking into them.
Posted by: Ang May 14 2008, 06:00 PM
I guess my hope in all of this, Is that MC would be a regional destination for all restaurants to reap the benefits of. There have been several weekends in the past year, that I've decided to go to Valpo, New Buffalo, or Chesterton to eat. I know it may stink but we have to look at creative measures to bring business here. The Blue CHip is already overbooking the new hotel for conferences. The are looking alternative agreements with other hotels in the area to meet the capacity. This should help all of the restuarants in the area. We also have to really market the area. I can already hear people saying, Let's go over to the RiverWalk in MC this weekend to eat and shop. It can happen. I don't want to downplay the fact that the local business owners are concerned about their investments. Several great comments and questions came up on Monday. I am looking into them.
Is there a plan to help businesses during the winter, or do these new businesses understand it's seasonal?
Personally, I think that a place that has been in MC struggling for how ever many years ought to have first dibs at anything new if they think it will help their business. Once the guys that have been there are getting back on their feet, then we should invite new touristy places to come in. Then people can say, "Look, Michigan City is a place that really looks out for the little guy and cares about its own. I think I want to move to that town."
Posted by: Roger Kaputnik May 15 2008, 11:30 AM
Part of the problem in the MC restaurant scene is the reputation of Rodini's and that place on Franklin. Fine dining? yeah, for around here. If you want to eat better, you have to try the places like Sahara and PPaanniinnii. How to attract good restaurateurs? Not sure; I think it is not likely that they will lead the charge.
Posted by: mcstumper May 19 2008, 08:08 PM
Yeah, but burning all the local folks with the licenses already? It stinks.
So less competition means more quality for the citizens of MC? Do you work for Microsoft?
Posted by: Roger Kaputnik May 20 2008, 09:50 AM
If I worked for MS, I would not be using a surplus cop laptop on a grocery store buggy!
I am not against competition; I am against subsidizing one competitor over another.
Posted by: southsider2k7 May 20 2008, 11:05 AM
I guess my hope in all of this, Is that MC would be a regional destination for all restaurants to reap the benefits of. There have been several weekends in the past year, that I've decided to go to Valpo, New Buffalo, or Chesterton to eat. I know it may stink but we have to look at creative measures to bring business here. The Blue CHip is already overbooking the new hotel for conferences. The are looking alternative agreements with other hotels in the area to meet the capacity. This should help all of the restuarants in the area. We also have to really market the area. I can already hear people saying, Let's go over to the RiverWalk in MC this weekend to eat and shop. It can happen. I don't want to downplay the fact that the local business owners are concerned about their investments. Several great comments and questions came up on Monday. I am looking into them.
You guys are really in an interesting spot. Balancing the concerns of local businesses versus the long term interests of the City is a tough spot. Is there any room for a compromise situation with the local interests where some expansion can take place? I do honestly believe we can't go forward with this type of district without getting other people's money involved, and that isn't going to happen out of the charity of their hearts. They want profit potential, and unless they think they can get it here, new investors aren't coming here.
Posted by: Roger Kaputnik May 20 2008, 12:15 PM
RedDevil, can you elaborate a li'l on some of the questions and comments you are looking into?
(PS--personal aside: u d best!)
Posted by: Ang Jun 6 2008, 09:04 AM
This poor fella can't seem to catch a break. If his problems are indicative of starting a new business in Michigan City, then no wonder no one wants to come here. It's like the Mayor says, "Yes come to Michigan City, home of sand, sun, and smiles. We will welcome your new business!" Then all of the rest of the people are saying, "No, we don't want your competition. Go away! If you won't go away we will make you! We will try to stop you from getting the things you need. We will prevent your customers from having ideal (free) parking. We will do what ever we can to prevent you from opening your doors. Oh, and by the way, Welcome to Michigan City."
Despite Opponents, 'Grille' Gets Permit
Court denies request from group to forbid restaurant from receiving liquor license.
Jason Miller
The News-Dispatch
MICHIGAN CITY - A La Porte County judge Wednesday denied a request to stop a new restaurant from obtaining the first liquor license in the city's new riverfront entertainment district.
Ed Arnold, a La Porte businessman and partner in 12 On The Lake LLC, received final approval from the La Porte County Liquor Commission on Thursday for a new liquor license. That license will be used by the Michigan City Harbor Grille, a new restaurant being built on the site of the former Michigan City Yacht Club.
The license was granted a day after Judge Steven King told a group of local tavern owners they didn't have standing to ask for a restraining order against Arnold's operation.
The group, which called itself the Michigan City Bar and Restaurant Association, has been pushing to stop the issuance of liquor licenses by the city for $1,000 under the new city law.
They say licenses will devalue existing licenses, which were bought on the open market for tens of thousands of dollars.
"It was a futile and erroneous attempt. They were just trying to come up with something to stop our progress," Arnold said. "Matey's is our closest competition."
Carol Bailey, who owns Matey's with her husband, Bill, spoke on behalf of the association Wednesday and has headed its efforts to stop the new district's license deals.
She declined to comment when reached at Matey's on Thursday afternoon.
Michigan City Redevelopment Commission Attorney Michael Bergerson said Thursday a key point in King's rejection of the suit was the revelation that the association doesn't exist.
He said the group of local tavern owners gave itself a name, but never officially created the group.
"The liquor commission set its hearing for (Thursday) and (opponents) filed this as soon as they found out so they could stop that hearing," Bergerson said. "But most importantly, this association doesn't even exist. They never officially organized. They're a non-entity."
The group apparently claimed 12 On the Lake's application for the license didn't sufficiently show enough evidence to support the need for a license. Michigan City Plan Director John Pugh and Plan Commission President Ken Behrendt testified in front of King that the restaurant does exhibit a need.
"I'd prefer the tavern owners embrace the idea of redevelopment. I'd rather work with them than fight it out in court," Arnold said. "Ultimately they'll benefit from it."
Bergerson said the restaurant now has its license and must only pass final inspections to begin operation, which Arnold hopes will come in July.
Posted by: Roger Kaputnik Jun 6 2008, 09:30 AM
The question, as you may recall, is that the licenses are flooding the market at below market costs. If this is done by business, it is considered an unfair trade practice. The licenses the established businesses have are usually valued at 60-80 thou US.
Posted by: Ang Jun 6 2008, 09:37 AM
But that's not this guys fault that the city is selling them so cheap. He's just a guy who is taking advantage of a situation presented to him by higher powers. To try to stop him is rediculous. The people who are fighting it should take their beef up with the city, or should have done so a long time ago before this guy applied to get one. I agree with Judge King that this is frivolous.
I'm sorry that they paid so much for thier licenses and now the City is selling new ones for so cheap, but it's the same prinicple as if you go to Wal-Nart and buy that super grill you've been wanting for years. You buy it when it first comes out at a price of $500. Three months later you're back in Wal-Nart and you see that same grill for $250. Are you going to stop other people from buying one because you had to pay so much for it?
Posted by: Dave Jun 6 2008, 12:35 PM
The whole concept behind liquor licenses is beyond my comprehension.
When I think "license," when I'm thinking in english instead of legalese, I think of something like a car license -- pay a fee on a regular basis for a permit to do something. I don't have any kind of property interest in my car's license, at least not such that it would be something I could sell.
Liquor licenses are a different animal. Once you've got one, you can actually find banks which will lend money based on using the license as collateral (a problem some local businesses are currently having, due to the "devaluation" of the existing licenses). Apparently there is something of a market for them -- they're sold through agents, like real estate. And the value seems to me to be outrageously high, but that is apparently due to their being available in limited supply.
Silly me. I used to think that if I opened a restaurant and wanted to sell booze, all I'd have to do would be to go to the appropriate government agency, fill out some forms, possibly get permission (or at least no serious objections) from my new restaurant's neighbors, pay a fee, and there you go. Wrong! Only "X" licenses in town, to sell booze I'd have to acquire one of the pre-existing licenses from a current license holder.
The whole thing just strikes me as wierd.
Posted by: Roger Kaputnik Jun 6 2008, 12:37 PM
That is NOT the situation at all.
Posted by: Ang Jun 6 2008, 01:32 PM
What is not the situation at all? Me or Dave?
Posted by: Dave Jun 6 2008, 01:46 PM
That is NOT the situation at all.
If you're addressing my post, I'd appreciate an explanation.
Heck, if you're addressing ANYONE'S post, I'd appreciate an explanation.
Posted by: Roger Kaputnik Jun 9 2008, 06:05 PM
Sorry about the delay in clarification of my post. I typed the message right after reading Ang's "WalNart Grill" post. I sent it after Dave sent his "Silly me" post, and his got listed first.
At any rate, Ang's post's hypothetical situation is quite different from the case of the liquor licenses. Ang does not address the fact that the gov't is supposed to be neutral in the market. This is the basis of open, competitive bids for public works, f'rinstance. The gov't has strict limits on how many licenses are available. This highly-controlled market results in a market price of 60,- 80,000 USD. Much of the value of the license is due to its scarcity. Under these conditions, even banks concur in such valuation.
Now, the gov't has allowed ten more licenses to enter the market under further conditions of a controlled price of just 1,000 US, and concentration in a specific area. We can all agree that giving a license that has a value an order of magnitude greater for this price and protecting these licenses in a choice area of the city undermines the entire way the established licenses' value is determined.
To make Ang's "Grill" story work, we have to change some things to achieve some rough equivalence. First of all, WalNart is only allowed to sell a finite number of grills. No one else in town is allowed to sell grilled food. This controlled market, where only a small number of grills are allowed and grilled food may only be sold from those with these official grills, will naturally result in the grills having a certain value. Let us say that SSider, Dave, Ang, and I have the grills. We are grilling away, maybe even developing a side business of selling alcohol, and sooner or later, someone else wants a grill. We have the gov't tell that person, let's say mcstumper, "Sorry, you cannot get a grill. You have to get one when SSider, Dave, Ang, or Rog want to sell theirs."
Mcstumper considers this, generates a plan of how much money he plans he can make from using a grill, and considers that this is the value of the grill to him.
Now, RedDevil wants a grill, too. She figures out what she can make from using the grill, and decides that she wants to have a grill so much so that she adds a certain amount to her valuation.
They both call the four grillholders, and offer what they each figured the value of a grill. As you can imagine, barring any altruistic interference, the higher bid wins out, and RedDevil buys a grill. The other three grillholders now offer their grills as roughly this price, and get it, because the market determines that this bid is appropriate.
Now, the gov't decides that it wants a grill in a certain locale. It decides to sell a grill at not 50%, not 20%, not 10%, but at 1½% of the value of a grill that the market set.
The original three grillholders are rightly chagrined at the gov't because they followed the rules as the gov't set forth. RedDevil is rightly chagrined because the premium she had to place on the grill was devalued at a stroke. The effect on the balance sheets of the grillholders will be determined in the future as soon as the market corrects the value of having a grill.
Under these conditions, Ang's WalNard Grill post has some resemblence to the liquor license situation.
Posted by: Dave Jun 10 2008, 12:05 AM
Thanks for the clarification, Roger. I think your analogy is pretty good.
However, I still maintain that the whole situation strikes me as odd. I can think of two better ways to do liquor licensing right off the top of my head.
Make the liquor licenses annually (or every 2, 3, 4 years) renewable, on good behavior of the licensee, and price the licenses either by:
1. determining the social costs of an establishment selling alcohol (additional police visits due to drunkenness, costs of rehab for alcoholics spread over the population, etc.), and that's how much the license costs, or;
2. if there is going to be a limited number of licenses, every 2, 3, 4 years or so, they are up for sale to the highest bidder(s). Do them like a "Dutch" auction -- sealed bids, if there are 10 licenses, the top 10 bidders get them. Non-transferable, too.
Posted by: Roger Kaputnik Jun 10 2008, 07:05 AM
How do you maintain a business if the central asset of a license is put in question every few years?
Posted by: Dave Jun 10 2008, 11:37 AM
That would be a potential drawback for model #2, admittedly.
Under model #1, licenses would be "shall issue" to anyone who asked, however, presuming they pass some kind of background check (no serious felony convictions, etc.). Wouldn't necessarily be cheap, though. And there would still be zoning to keep bars out of residential neighborhoods, away from schools, etc.
I'm absolutely NOT saying I have any answers. I just have a dislike of the concept of a government issued license being a tradable "commodity."
Posted by: Roger Kaputnik Jun 10 2008, 12:44 PM
The question is the role of gov't in controlling liquor sales vs. the market itself controlling the business.
Posted by: Ang Jun 10 2008, 07:40 PM
To make Ang's "Grill" story work, we have to change some things to achieve some rough equivalence....
Point taken
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