Alcohol

State Charges Man $1,000 to Open Business in Dying City, Wins Praise

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Today at CNN.com, there's a piece chronicling the awesome awesomeness of the stimulus, and the miracles hundreds of thousands of federal taxpayer dollars have brought to the semi-defunct manufacturing town of Kokomo, Indiana:

The mayor leveraged $800,000 in stimulus funds to help with a revitalization project that has netted 11 new stores since the start of the year.

For sure, Kokomo still faces big challenges. The fate of a huge manufacturing facility Delphi recently sold to General Motors—and its 1,200 workers—is uncertain. And the housing market is in the toilet.

Impressive, no?

antique wood! stimulating!

But over at Crispy on the Outside, Baylen Linnekin (after sharing some choice words about the quality of the analysis offered by the piece, one of which is "muckiness") highlights this doozy of a sidenote about one of those exciting new businesses:

26-year-old Blake Kinder is using recycled antique wood and glass to open up an Irish bar in what was once a Chinese restaurant.

Kinder said the city's designation of the downtown as a redevelopment zone allowed him to get a state liquor license, normally valued at over $100,000, for a mere $1,000.

Elsewhere on CNN.com, the new price is described as "dirt cheap." Here's a tip for would-be entrepreneurs in Indiana, or any other state. If you can buy three two-bedroom houses for the same cost as one liquor license in your town, you probably shouldn't buy any of the above. The state offering to accept a mere 1,000 clams in exchange for allowing someone to opening a business is a dying town shouldn't be so impressive.

Of course, Kokomo could benefit from some of the tips Reason had for Cleveland.

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62 responses to “State Charges Man $1,000 to Open Business in Dying City, Wins Praise

  1. So, 800k of our money is needed to make liquor licenses less that incredibly fucking ridiculously expensive?

    The more moeny we throw at problems, the more things will get into a range of reality. Think of the possibilities.

    Jeez, maybe if we give $1b to the health care industry we could get the cost of having a baby down to less than a quarter of a mil.

  2. Dirt cheap my ass. Every penny over $0 is outrageously expensive.

  3. a state liquor license, normally valued at over $100,000, for a mere $1,000.

    Fuck me. In Camden County, NJ it’s about $1 million. In Cumberland, its about $450,000 (less people, more rural). I know, I looked into buying a bar. Fuck, send some of that Stimulus over here. I got a business plan, and everything.

    1. Wow! I believe the price is in the range of $100,000 in Ann Arbor, Michigan. I recall reading a local newspaper article on the issue of liquor licenses. Not only are the licenses ridiculously expensive (any fee over zero is too high) but they are limited in number. Some businesses just can’t get a liquor license. I was f’ing amazed. I had no idea the government extorted money from citizens for liquor licenses, let alone ass-raping them at the same time. One more piece of knowledge that would have hastened my conversion to libertarianism.

      Oh yeah, there’s more lunacy in Michigan liquor laws. Liquor stores must be at least one hundred yards from each other. I was at a Merchant of Vino in Ann Arbor and was surprised that they had no liquor – imagine that, an alcohol store without liquor! The explanation? There was a liquor store across the street about 90 yards away which prevented them from also selling liquor. Not surprisingly, they went out of business.

      1. It’s not just the cost, either. They want to look into your entire life history. You can’t just “buy” a license, you have to be approved. I’m not even sure I would qualify with my youthful indiscretions.

        NJ is kind of funny. there are some towns, like Haddonfield, and Collingswood that are “dry”. Then, there’s Gloucester City, which at one time, had more bars per square mile than any other place on the planet, but they have Blue Laws, and they’re not allowed to be open on Sundays.

        1. NJ is kind of funny. there are some towns, like Haddonfield, and Collingswood that are “dry”. Then, there’s Gloucester City, which at one time, had more bars per square mile than any other place on the planet, but they have Blue Laws, and they’re not allowed to be open on Sundays.

          Those dastardly Atheists!

          1. This is obviously bigotry against the Irish. There is no better stimulas than drunken Irish crashing through windows, (provides jobs to glass makers), crashing cars (providing jobs to auto manufacturers), and breaking jaws (providing jobs to oral surgeons). And of course the prodigious amounts of spirits consumed provide a veritable fortune to the brewers and distillers.
            When o When will we realize our anti Irish prejudice only hurts ourselves?
            hmmm… all this writing is making me thirsty…

  4. What’s the hundred-G for, covering some of Chony’s externalities?

  5. I could understand a fee that covered administrative costs.

    But 100,000-1mil? The ABC in baltimore isn’t even open during normal business hours. 3pm on a weekday? Nope, sorry, no service for you.

    It’s a Sin Tax. Simple as that. How bout a nice argument for why sin taxes are a violation of the separation of church and state? Has that already been tried?

    1. It’s all about artificial scarcity.

      By keeping the license fee high or restricting the number available in a free resale market they limit the competition of retailers and “prevent low prices from increasing public drunkeness”. It has the side effect of making liquor retailing an almost idiot proof business.

  6. What justification is given for charging these fees? Where is the money purportedly going?

    1. City services.

      Everything.

      Depends on the city, but it goes to pay for school districts a lot of times too.

      Developing 20 acres of industrial buildings used to run us a cool million or so.

      Most people understand why school districts charge fees per thousand sf of house for the construction of single family homes–who better to pay for public schools than home buyers with children who are moving in to use those schools?

      Why did they charge us up the wazoo for industrial buildings?

      Because they could!

      And what else are you gonna charge fees for in a dying city like that? Liquor licenses might actually make sense–they might make some money back on that. If they don’t have a bar, they need that tax revenue. Blowing stimulus money on something that probably won’t make its money back–that doesn’t make any sense.

      Unless you’re Krugman, I guess.

      You know what might sense there? A U-Haul center! Sounds like there’s gonna be all kinds of people moving out of that town.

      1. There are fees for everything. I ran into this recently when I had a paving job to hire out. Talking with a couple of contractors I learned that the city had charged $120k for a permit to repave a parking lot at the local FedEx distribution center. Why? Because it is FedEx and they could afford it. No other reason. Yikes. They were able to negotiate it down to about half of that, but the contractor was only charging about $40k for the job in the first place. So the city wanted 3x the cost of the job in taxes, but was willing to settle for only 150%. Yeah, lots of business will be relocating here….

        1. I’ve had city council people negotiate fees with us on the night the plans were up for approval.

          We spent 18 months and a couple million on EIR reports and fees just getting this thing in front of the city council, and they know if we have to wait another three months to get back on the calendar, we’re gonna have to pay for another three months of interest on the land loan…

          …and it’s gonna cut into our absorption time. It’s gonna cut into the IRR and the splits. And who’s to say they won’t ask for the same thing in another three months? So, why not ask us for another $100,000 for parks and recreation before they take the vote?

          They can have the secretary write it into the conditions–right now! So, how ’bout it?

          Life’s a never-ending marginal analysis, and everything’s always up for negotiation, but sometimes? It’s hard to keep smilin’ all the time.

          Just for the record, some land is worth more because of the city it’s in. It’s the first question every developer I know asks when they’re looking at a project in a city they’ve never worked in before–so what’s it like workin’ with the city?

          It’s something you have to know before you can even do the math on the back of a napkin–they can make or break you.

        2. Cyto, you’ve pretty much nailed the city planner’s enablement of “sprawl” in a nutshell. Sprawl is created by the people allegedly trying to prevent it.

  7. So maybe your solution is to have the state license would-be booze-hawkers willy-nilly, with no exclusivity?

    Next you’ll say government shouldn’t even need to license the enterprise at all! And what would we have? A bunch of people engaging in the business of selling intoxicating beverages without any of the extensive and very necessary training that comes with earning the privilege to pour – in exchange for money – these types of dangerous liquids people seem to want to ingest. What have you been drinking?

    1. If they can get $100,000 for a liquor license, I wonder how much they could get for a license to sell yes we cannabis?

    2. That sounds ideal!

      I hope you’re being sarcastic.

  8. Fuck all liquor market paternalism.

  9. Have you seen how much liquour costs at these places? With the amount they charge, the state better be getting back a tidy sum so that society can benefit at least a little rather than having all the profit go into some fatcat’s pocket.

    1. Eat a fucking dick. They’re trying to recoup the licensing cost. Society can fuck itself, no one benefits from regulatory bullshit like that.

      1. I’d point out that some of that was vulgar and pointless, but with a handle like “cunnilingus”, I’m guessin’ those are positive qualities in your world?

        1. If anybody deserves it, it’s smartass Dan T.

        2. I personally thought it was hilarious.

        3. Fucken A!

    2. Lol, fatcat liquor store owners.

    3. The markup on wine and liquor is ridiculous.

      The taxes on it are always really high too, but even before taxes, they’re doubling and tripling the price.

      1. It’s amazing how limiting competition can inflate prices.

    4. Perhaps if it didn’t take 100k to 1.5 million to get in the game, slimmer cats could get some of the action. I mean shit, you don’t even have to refrigerate it! Some guy with nothing but an econoline van and 1000 bucks worth of hooch could make a comfortable living driving between frat houses.

    5. Have you seen how much liquour costs at these places? With the amount they charge, the state better be getting back a tidy sum so that society can benefit at least a little rather than having all the profit go into some fatcat’s pocket.

      Do you really believe you are doing ‘society’ any favors with your presence? Maybe a remote island would be a better fit. Your means to an end justifications are antisocial in the extreme. Join the human race, progressives. It isn’t too late!

  10. Have you seen how much liquour costs at these places? With the amount they charge, the state better be getting back a tidy sum so that society can benefit at least a little rather than having all the profit go into some fatcat’s pocket.

    1. Wierd, huh? Who knew that limiting the number of people who can sell something leads to higher prices. My goodness, somebody should give that phenomenon a name.

      1. Yeah, it is amazing how cheap the beer is out in the hinterlands of America where the taxes and regulations are much more lax. $1-2 beers are the norm out in the boonies where there are less taxes and licensing fees. Take the state out and it would be even less. Alcohol is like gasoline, the state takes a bigger cut than any of the other players in the game.

  11. The state is drunk on licensing fees.

  12. IN a dying town, you stupid cunt.

    1. In a dying town, there lives a stupid cunt named Max.

      Wee! This is fun!!

  13. $1,000 for a liquor license is a fucking great deal. The real question is why it takes stimulus funds for the state to issue that $1,000 LL.

    1. Right, isn’t this just a transfer of federal cash to the state treasury?

      All to subsidize a bar in a town where a second mortgage wouldn’t pay your yearly tab.

  14. $1,000 for a liquor license is a fucking great deal.

    Anything over $0 is a ripoff. And if you can’t turn a profit, that $1,000 is an exorbitantly priced bribe.

    1. True,
      But in a country where a liquor license can cost upt $2million getting one for $1k is a sweetheart deal.

      How did that guy get so lucky? &

      Why did it take stimulus to make it happen?

  15. Kinder said the city’s designation of the downtown as a redevelopment zone allowed him to get a state liquor license, normally valued at over $100,000, for a mere $1,000.

    Sooooo, municipalities charge these exorbitant fees for liquor licenses with the background reasoning that it keeps the business clean and the riff-raff out.

    So when times are hard, are municipalities saying that they don’t care about the riff-raff and clean business? Or is this a tacit admission that the entire liquor license concept in this country is unadulterated bullshit.

  16. The fee was reduced from $100,000 to $1,000. How is that a bad thing?

    1. Yeah, like when your uncle started getting old and only molested you twice a day. Progress!

    2. He still had to fork over a grand for permission to run his business. How is that a good thing?

  17. Personally I know a guy is gay when we meet and i feel the need to check my fly~qwe

    1. Better spambots, please?

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  20. “The state offering to accept a mere 1,000 clams in exchange for allowing someone to opening a business is a dying town shouldn’t be so impressive.”

    I know this is a blog and all, but please, proofread, proofread, proofread. That sentence is so many kinds of fail.

  21. Third is the relatively low cost of doing business. While the average union wage in town is somewhere around $60,000 a year, the per capita income is around $20,000 and the average house costs just $75,000. That means companies can get a skilled workforce for a relative bargain.

    Holy shit. And they wonder why it takes $89 million in government money to create 200 jobs, and another $300 million to create 900? That’s $445K and $333K PER JOB respectively. Talk about missing the lede. Do the assholes who write these articles even know how to do simple division?

    Hey, this worked so great, why don’t we go full Krugman and give every town in America half a billion dollars to play with? What could go wrong?

    1. Well, if they were really thinking, they could probably use that to cover their pension shortfalls.

      I have a business in a locality that has a UAAL of about $404 million (calculated in 2009). I look forward to having city tax men crawling up my rectum in future years looking for that last dime.

      In reality, that money would be better spent hiring hitmen to knock off the pensioners. Injecting some much needed liquidity into the market.

  22. I think some commenters here are missing the point ofhigh costs of liquor licenses. True, it’s driven by the state’s desire for cash, but it’s also driven by good old fashioned NIMBYism. If you didn’t make bars artificially scarce through inflated costs, then the fear is that every ice cream counter and pizza joint would open a bar, and there’d be no place for the children to enjoy their obesity.

    1. there’d be no place for the children to enjoy their obesity

      It’s early in the day, but I believe we have a winner.

  23. The state offering to accept a mere 1,000 clams in exchange for allowing someone to opening a business is a dying town shouldn’t be so impressive.

    Yes. Thank you, government, for letting me live.

  24. You can thank MADD for the outrageous liquor license costs.

  25. It’s $1,000 THIS YEAR. Wonder what it’ll be 3 years from now?

    Business licensing is no different than mob protection rackets.

  26. I live near that town. It’s absolutely true (and disgusting, btw). Fifteen years ago I inquired about a beer/wine license with the local officials- they were running ~ $150k at the time, but none were available at the time. The official told me to contact a retired local attorney as he “usually knew of any that might become available, as well as what they might go for” (!). Does that tell you anything?

    1. That attorney’s house probably sells for more than 30K?

  27. And the housing market is in the toilet.

    This gives me much hope. If toilet metaphors count as journalism at CNN, then the standards are low enough for me to succeed as a professional columnist.

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