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Liquor license waiver becoming issue in campaign for Las Vegas mayor

Daniel Coughlin has been working on opening his Le Thai restaurant on Fremont Street for more than a year. He found an empty storefront in the 500 block, near Las Vegas Boulevard, and decided that was the place.

And then something popped up that could have been a major obstacle — the liquor license.

"It didn’t even cross my mind," Coughlin said. "I was like, ‘All we need is a beer and wine license.’ "

That turned out not to be true, and the license he needed usually carries a steep upfront charge. But under a special program for the Fremont East district, where his restaurant will be, and the Arts District, that fee is suspended for businesses that open expeditiously in the city of Las Vegas.

"That’s a big deal. It worked out," said Coughlin of the $20,000 charge. His application was recently approved by the city Planning Commission.

He’s not the only one.

At one point recently, the Fremont East district had only four venues, and the Arts District had none. Largely because of the waiver program, now there are 10 nightspots either approved or pending on Fremont and five open or pending in the Arts District. It’s becoming an issue in a mayoral campaign focused on jobs and business issues.

If the waiver works that well, said candidate Chris Giunchigliani, why not make it permanent and expand the reach of the incentive?

"We really ought to. It absolutely helped businesses get started," she said.

"Fees should always justify the work that you’re doing. I would need someone to show me why it costs $70,000 to process a liquor license."

Her opponent, Carolyn Goodman, thinks the issue should be studied, but she is concerned about the impact on city revenue.

The "origination fees," which are one-time initial costs for the liquor license, vary. The tavern-limited license for the Fremont East district carries a $20,000 fee, while the Arts District’s urban lounge fee is $50,000. The tavern-limited license prohibits gaming, while the urban lounge license allows some.

Other origination fees elsewhere in the city include $75,000 for a regular tavern, $40,000 for a supper club and $40,000 for a package liquor store.

"The origination fee was put into place prior to 1990 during a tavern boom," city spokesman Jace Radke said. "The origination fee was used as a way to control the number of taverns prior to the current distance separations. It was also thought that due to the fact that this is a privileged business, the city should receive a fee for this."

North Las Vegas and Henderson also have origination fees for liquor licenses. Clark County does not.

The waiver program will continue through February. The origination fee is waived for those business categories provided the new business opens within a year if it’s in an existing building or two years if it’s new construction.

Mayor Oscar Goodman said expanding the reach of the incentive has been discussed.

He recently talked to hypnotist Anthony Cools about plans the entertainer has at the Plaza downtown, including a proposed bar/miniature golf combination. Because the hotel-casino is not within either of the two special districts, though, the waiver doesn’t apply.

"That is a real sock to his wallet," the mayor said. "As a result of that conversation, we may try to expand it.

"The problem is, it could be too expansive, and then we won’t be getting the fees that we need to pay for our obligations to provide services."

Carolyn Goodman, the mayor’s wife, echoed her husband’s thoughts and concerns about the waiver and its expansion.

"The waiver program is working to spur development and create new businesses, which will be on the tax rolls," she said in a statement released by her campaign.

However, "the city relies on fees to meet its budget in order to provide services … Therefore, a balance has to take place in business-fee suspensions for existing businesses. The idea is worthy of consideration."

This year, the city has taken in $225,000 in liquor license origination fees and $1.5 million in regular liquor license fees, which are separate from the origination fee and not subject to a waiver. The money goes into the city’s general fund, which pays for city operations, primarily salaries and benefits for employees.

Goodman and Giunchigliani both want voters to view them as business-friendly, job-creating candidates when it comes time to vote. Early voting begins May 21, and the general election is June 7.

Giunchigliani, who is currently a Clark County commissioner, had a media event with business owners Tuesday in which she outlined a business plan. It included the liquor fee waiver component, as well as promises to consolidate business license functions among local governments, establish a loan fund for small businesses and create a more convenient permitting process for regular events that now must get a separate permit for each date.

Goodman has touted her experience as founder and former president of the Meadows School. She, too, backs a streamlined business licensing process but has otherwise made less specific pitches on job creation and continuing the redevelopment work championed by her husband.

Grand opening festivities are scheduled at 5 p.m. April 26 for three venues in the Arts District — Lady Silvia at the Soho Lofts, Artifice at 1025 S. First St. and Bar + Bistro at 107 E. Charleston Blvd.

Another business, Downtown Vintage Guitars on Third Street, recently secured an urban lounge license and will be a hybrid business — guitar shop by day, guitar bar with live shows and jam sessions by night.

The waiver "was a major factor. It was what really got me down here," store owner Mark Castillo said.

It was less of a factor for Insert Coins, a video game bar that opened last week in the Fremont East district, manager Chris LaPorte said.

"It was a part of it," said LaPorte, although it didn’t play a decisive role. The business required a large capital investment in flat-screen televisions, arcade games and turning an empty space into a high-tech bar.

"In the scope of what we have here, it wasn’t that big of a number," LaPorte said. Still, "it’s great. It’ll bring other people in here."

Contact reporter Alan Choate at achoate@review journal.com or 702-229-6435.

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