News & Features

As Revitalization Efforts Center on Downtown Kalispell, Debate Over Alcohol Licenses Reignites

Influx of summertime tourists shines a light on downtown dining options and the dilemma of alcohol licenses

On a recent summer weeknight, Brian Clark took some friends out for dinner in downtown Kalispell. Except when they arrived on Main Street, the restaurant was jam packed with a waiting list.

As Clark’s group waited to be seated, a constant stream of people inquired about reservations. Once the waiting list had reached a point, the crowd began to disperse, seeking other nearby options along Main Street and beyond.

“How many more choices do they have?” Clark said, recalling that night.

In Kalispell and Evergreen, there are 32 restaurants and bars that serve food with some type of state license to serve a variety of beer, wine and liquor, according to the latest data from the Montana Department of Revenue. There are also 24 casinos and nine stand-alone bars with on-premises alcohol licenses.

Civic and business leaders are in the middle of a broad core-area redevelopment plan that hopes to revitalize the heart of Kalispell and many believe the addition of restaurants will play a key role in the success of the city’s efforts.

Yet anytime alcohol licenses are involved, it’s a complicated and thorny topic in Montana.

Just ask Clark, president of Fun Beverage, which distributes to the valley’s bars, restaurants and casinos.

“The challenge is obvious — there is a legislative quota system that has been in place for decades. But how do we evolve and modernize while keeping those people who own a license whole?” Clark said.

“It’s not an easy solution. But it’s a challenge. All of those people are my customers. I understand their situation. I empathize and understand Kalispell’s situation, too.”

Montana is one of 17 states in the U.S. with a quota system regulating the number of licenses that allow bars, restaurants and casinos to sell alcohol, dating back to the original law’s inception in 1947 after Prohibition ended. Quotas are established for each city and county and are based on population. The state issues new licenses that are varied by the types of sales — liquor, beer and wine — to cities where the population increases by increments of 1,500-2,000.

Every major city in Montana has surpassed its allotted quota, either because existing bars and restaurants before the 1947 law were allowed to keep theirs or because of a controversial aspect of the law that allows licenses near city limits to float in after nearby annexation.

In Kalispell, which has a quota of 16 liquor licenses, there are 30. The city will need another 21,000 residents before it will catch up to its quota standards.

Similarly, the quota for cabaret licenses in the city — 14 — has also been surpassed.

Yet many people look at the Flathead Valley’s tourism season, which historically draws over 1 million visitors during the bustling summer months, as a factor that is overlooked by the current system.

“Clearly certain communities in the state, especially the Flathead, are underserved with the current system because it underestimates the population,” Clark said. “The resident population is pretty small but the tourist population of 1.2 million people doesn’t get factored in.”

Dating back to its inception, Montana’s quota system has drawn heavy scrutiny. Since the system was established, it has created a tug-of-war among those with licenses and those without. Because of the limited supply within the cities, these licenses are valuable personal property that banks loan on and owners rely on as equity.

The latest liquor license sold in Kalispell went to Buffalo Wild Wings for $693,700 in August 2015, according to state data.

The high value of these licenses has created a significant hurdle for any changes to the current system.

“You have to maintain some semblance of equity or fairness for those who have paid the prices and played fairly,” Clark said.

Kalispell Mayor Mark Johnson and Pam Carbonari, coordinator of the Kalispell Business Improvement District and an active downtown advocate, recently met with Clark to learn about the issue and discuss how Kalispell could find a solution that would help the core area.

“These liquor laws go back to the 1930s after Prohibition and it was a completely different society back then,” Johnson said. “Kalispell has too many licenses based on population and we’re a tourism-based economy. We serve way more people than the population.”

Johnson acknowledged the importance of not damaging the value of current license holders’ assets, but he hopes a creative solution can emerge in the near future to help downtown Kalispell thrive.

“We’re seeing a resurgence back to downtown. We should serve the amenities that people want, and restaurants are a key amenity,” Johnson said. “In a tourism-based economy, it’s really critical to have that. And I think there’s room and I think there’s a market for more restaurants in downtown Kalispell.”

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