Budding restaurateur Josh Christensen has a problem: He wants to open a restaurant in San Luis Obispo County but is missing an important ingredient — a liquor license.
The problem is that there’s a scarcity of liquor licenses in the county.
No new liquor licenses have been issued for restaurants locally since last year because the county’s population is not growing enough to warrant new ones.
The shortage is making existing liquor licenses a hot commodity and inflating prices to a point where they have become unaffordable for many restaurant owners.
So, Assemblyman Katcho Achadjian has proposed a bill that would provide San Luis Obispo County with five additional liquor licenses annually for three years.
The bill was unanimously approved by the Government Organization Committee this week and is winding its way through the Legislature.
Achadjian said the bill is intended to help restaurants stay in business because so much of a restaurant’s income comes from liquor sales.
Christensen, the general manager of Sidecar restaurant in San Luis Obispo, said, so far, he has only found two licenses for sale, ranging in price from $90,000 to $110,000. Now he may be forced to open his business in another county.
A new license issued by the state’s Alcoholic Beverage Control is $13,800.
Achadjian said he became aware of the license shortage and the impact it was having on local business when several council members from Atascadero approached him in an effort to save the Colby Jack’s restaurant.
The business’ owners were forced to file bankruptcy last month — in part because they couldn’t afford a liquor license, which would have boosted revenue and possibly allowed them to manage the lease at The Carlton, the landmark hotel in downtown Atascadero.
“If they had had a license to serve liquor, it might have been different,” Achadjian said.
The Department of Alcoholic Beverage Control regulates liquor licenses distributed in all of the state’s counties.
San Luis Obispo County is one of 26 counties in California that has reached its “saturation” point and is not allowed new licenses.
On-sale liquor licenses, those used by restaurants, are limited to one for each 2,000 people in the county. There are 1,094 alcohol retail licenses in the county.
The population in San Luis Obispo County is not growing fast enough to warrant new licenses based on that formula. Typically the county would gain three additional licenses annually. That stopped in 2012.
Achadjian said the growing tourism industry warrants more.
“If you look at the number of tourists that come to our county each year, we have a growing wine and tourism industr y,” Achadjian said. “People want to come, enjoy the scenery, go to restaurants and have a drink while they are there.”
An identical bill was passed in 2012 for Marin County based on the same tourism premise.
Trevor LaSalle, co-owner of Guest House Restaurant and Grill in Atascadero, scored the last local liquor license available in 2010.
He had owned the restaurant for three years before he was able to get one.
In that time he watched existing licenses resell for as much as $155,000.
In the end, it all came down to luck.
Seventeen people were put in a lottery for three available licenses. Names were literally drawn out of a bowl, and LaSalle won the draw.
Sales increased by 35 percent the following year, he said.
Despite Achadjian’s efforts, some locales in the county have limited the activity of bars in their jurisdiction. San Luis Obispo has recently tightened regulations to make it more difficult for restaurants to morph into nightclubs because of a growing concern by some that there are too many bars downtown.
Achadjian said he is not concerned about cities controlling where additional restaurants serving liquor can locate by using zoning regulations.
“That is a local control issue, and I have no problem with that,” Achadjian said. “I have heard no concern from local governments that this is a problem or I would not have carried the bill.”
Reach AnnMarie Cornejo at 781-7939. Stay updated by following @a_cornejo on Twitter.