This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Burt's Tiki Lounge in Salt Lake City may become the first Utah business to sell its state liquor license for a profit.
Earlier this week, the Utah Department of Alcoholic Beverage Control (DABC) received a notice of "intended transfer" from the tiny bar at 726 S. State St.
The document, which does not include a sale price, "is just the first step in the sale process," said Nina McDermott, DABC director of compliance and licensing enforcement. Before it is finalized, club owners must prove there are no unpaid creditors or tax debts on the property. They also must pay a $300 license-transfer fee.
A potential buyer, listed as Son Dang Inc., plans to keep the lounge in the same location and operate under the same name, according to the notice, which was provided to The Salt Lake Tribune.
The liquor commission, which is charged with granting all alcohol license transfers, is likely to review the Burt's application at its monthly meeting on Tuesday.
On July 1, a new state law went into effect that allows the holder of a state alcohol license to sell to a qualified buyer, something previously prohibited. While Utah liquor licenses technically have no monetary value, there have "always been these sort of underground transfers," Sen. John Valentine, R-Orem, who helped sponsor the alcohol license transfer law, said last month.
He contended business owners worked behind the scenes to purchase bars, taverns or restaurants to get the alcohol license, skirting the state application process and, in some cases, leaving unpaid creditors in the balance. The new law helps bring the process into the open, he said.
And for those with enough money, it also may make it easier to get one of the state's coveted club licenses. Currently, 14 businesses are waiting for a club license, which allows customers to drink wine, beer or spirits without ordering food. In addition, businesses with club licenses are not required to have a bar enclosure, dubbed a "zion curtain," to keep drinks out of the view of minors.
Every month, the state usually has available only one license but sometimes zero so most applicants wait at least a year. Under the new law, alcohol licenses may be sold to another person whether it is for the same location or a different premise. The license still must be used in the same county where it was issued.
Buying and selling alcohol licenses
On July 1, a new state law went into effect that allows holders of a state alcohol license to sell it to a qualified buyer. But there are some restrictions:
Alcohol licenses may be sold to another person, whether it's for the same location or a different one. However, the license must stay in the same county where it was issued.
Buyers must meet a list of qualifying conditions to acquire a license and must have satisfied all tax debts.
Buyers must begin operations within 30 days or forfeit the license.
There is a transfer application fee of $300.
Sellers must notify all creditors of licenses being transferred. Unpaid creditors may file claims.
All transfers are subject to state liquor commission approval.