This is an archived article that was published on in 2011, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Utah's shortage of liquor licenses is so acute that 13 applicants were willing to pay a fee that nearly doubles their cost rather than risk missing out on one.

Pallet Bistro owners purchased a permit last month that was set to expire on Oct. 31 under the state's licensing system, before the restaurant was to even scheduled to open for business in December.

They quickly paid the annual renewal fee the next day, even though they would have saved that $1,750 if they had waited a few weeks to purchase the $2,300 license.

"We couldn't afford to wait," said Pallet Bistro co-owner Rocky Derrick. "We couldn't take the chance that there might not be any more restaurant licenses left."

Pallet Bistro, 237 S. 400 West, is inside the old Challenge Cream & Butter Association building. Derrick did not disclose remodeling costs, but said every effort was made to preserve the historic structure.

But given their expenses, co-owner Drew Eastman said it would have been helpful if the expiring liquor license had been prorated, which under state law it was not. "We had no choice. We couldn't afford the gamble of not knowing how many licenses would be available, so we ended up paying two full years of fees before we could even open."

Here's how it worked. Ten new restaurants that wanted to serve all types of alcohol paid $2,300 for their initial full-service license fee Sept. 29, but the next day had to pay the annual renewal fees, ranging from $850 to $1,750. Three other new restaurants that wanted to serve only beer and wine paid $1,050, and all forked over same renewal fee of $550.

That leaves eight remaining full-service restaurant permits and 11 limited-service licenses when they are issued later this month by the state-run Department of Alcoholic Beverage Control. Typically, 10 to 15 restaurateurs apply for licenses each month, which means that the state could run out of restaurant permits well before the end of the year.

Blanca Gohary, co-owner of Good Karma restaurant in Park City, said the fee "was awfully steep" for a full-service license that is set expire on Oct. 31. But she paid it, in addition to the renewal fee.

The restaurant, which offers gluten-free and vegan menu choices, has served beer and wine for the past two years. Because some customers could not tolerate grains in beer or sulfates in wine, the restaurant had to expand its liquor list.

"We were worried about being put on a waiting list," she said. "It's certainly happened before."

For example,18 applicants are waiting for bar licenses, but no permits are expected to become available for up to two years.

The bottleneck has developed because lawmakers went against legislative auditors' recommendations to ease quotas for liquor licenses, whose numbers are based on the state's population.

Legislators, citing concerns about overconsumption, also refused to make any accommodations to inflated population estimates. Earlier, the inaccurate estimates resulted in too many club licenses being handed out.

The state is so upside down on bar permits that seven clubs must go out of business and surrender their licenses before the quota is met, said Vickie Ashby, spokeswoman for the Department of Alcoholic Beverage Control.

Until then, small-club owners selling their business may not transfer their bar liquor permits to buyers — making many sales untenable.

During the interim legislative session this summer, lawmakers did allow for some licenses to be transferred when an establishment is sold, but only in cases of large hotels.

In an effort to free up more licenses, lawmakers approved legislation to allow restaurants and bars to sell their permits on the open market beginning in July 2012. But the move would not increase the total number of licenses, only the cost of obtaining the permits.

Bar, restaurant liquor permits

There already is a dearth of bar permits, and Utah may again run out of restaurant licenses.

Bars • 18 applicants on waiting list; some have waited for more than a year.

Full-service restaurant • 10 applicants in September vying for 18 permits.

Restaurant, beer, wine • Three applicants last month vying for 14 permits.

Source: Utah Department of Alcoholic Beverage Control