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Diners at Lamb's Grill have been unable to order a drink with their club sandwiches and lentil soup after the venerable downtown Salt Lake City restaurant lost its liquor license recently due to a paperwork slip-up.

To get a new liquor license from the Utah Department of Alcoholic Beverage Control, Lamb's — one of the oldest restaurants in the state and known for its antique wooden bar — will be reclassified as a new restaurant and required to build a "Zion Curtain."

The Main Street staple was previously exempt from having the 7-foot-tall barrier because it had a liquor license before 2009. That's when a law took effect that mandated all new restaurants have a room or barrier — aka a Zion Curtain — to shield patrons from seeing the mixing and pouring of alcoholic beverages.

"This is a huge stumbling block for us," Ashley Francis, Lambs' general manager, said Tuesday. "We had 12 private parties booked in October and half of them have canceled because we can't serve alcohol."

Besides the loss of revenue, creating a separate area for the mixing and pouring of alcoholic drinks will cost Lamb's thousands of dollars in application fees and construction costs, Francis said.

Lamb's opened in 1919 in Logan and moved in 1939 to its current location at 169 S. Main in Salt Lake City. Francis Liong and his wife, Joan Barlow, took over the operation in 2011. After the couple divorced, Barlow and her father, Wayne, bought out Liong's equity last year. The Barlows believed the proper paperwork for the liquor license had been submitted at the time of the sale.

But it wasn't, which meant Lamb's forfeited its coveted grandfathered status under the Zion Curtain law.

A liquor license, under state law, does not automatically transfer to new business owners. Before any sale, potential owners must contact the DABC, which requires, among other items, a criminal-background check and financial review to ensure there are no delinquent taxes, said DABC spokesman Terry Wood. If those are not in place when the sale is made, the license is automatically forfeited.

"If the new owners had come in last November, when the restaurant was being sold, we could have transferred the license easily and they would still be grandfathered into the law," Wood said. "But there has been a break in the license, and they have to submit a new application."

DABC compliance officers learned about the change in ownership last week, when Lamb's submitted its annual renewal application and fee.

"When the compliance officer learned there were new owners," Wood said, "he told them they didn't have a license and they needed to stop serving alcohol."

Since taking over Lamb's, the Barlows have been rebranding the restaurant. They have updated the lunch and dinner menus, improved the company website, painted the interior with modern colors and were about to begin a new cocktail program to showcase Lamb's ornate wood bar.

The Barlows also had hoped to get a license to turn a private room in the middle of the restaurant into a bar and cater to the many out-of-town guests "who just want to have a drink," said Ashley Francis. Lamb's also hoped to become a go-to spot for fans attending shows at the new Eccles Theater just a few doors to the north. The theater's grand opening is Oct. 21.

"We wanted to be part of the new downtown bar scene, but I'm not sure that's going to happen," said Francis, noting that the side room originally planned as a bar will be reworked into the mixing and pouring room.

Problems with the Zion Curtain law are a regular occurrence for new restaurants. Last week, the DABC told officials with the Eccles Theater that a "Zion Ceiling" would be needed to prevent patrons standing on the sweeping balconies from seeing alcoholic drinks being mixed and poured below inside a cubicle-size, partitioned space at the Encore Bistro in the grand lobby. The bistro's liquor license is on hold until the ceiling is built.

Critics have urged the Legislature to repeal the barrier requirement, saying it makes Utah look strange, confuses diners and out-of-state visitors, and lacks scientific evidence that it prevents overconsumption or underage drinking.

It's also costly for new restaurant owners.

Recent attempts to repeal the law have been unsuccessful.

Lamb's hopes to submit its new liquor application in time to be considered at the next DABC Commission meeting Oct. 25.