Sale, lease of liquor licenses can pay off

TWIN FALLS, Idaho – More would-be investors are turning to liquor licenses as a long-term way to make a few bucks.

The licenses, which are issued by the state and tightly controlled, can be a lucrative investment. Some have resold for more than $150,000, said Lt. Robert Clements, chief of the Idaho State Police’s Alcohol Beverage Control Bureau.

“People do look at it as an investment,” Clements said.

But investors must be willing to wait. In Idaho’s larger cities, the average wait for a new license is between 15 and 20 years. In Twin Falls, where 25 licenses are currently active, 22 names are on the waiting list. In other regions, the list – and the wait – is even longer.

“Some people have been on the list since the ‘70s and early ‘80s,” Clements said.

Idaho law allows one liquor license for every 1,500 people in incorporated areas, though some municipalities have persuaded lawmakers to make exceptions for golf courses, resorts and historic buildings.

The licenses cost $800, including a $375 deposit to get on the list, and potential buyers must pass an FBI background check for alcohol-related felonies and misdemeanors, said Nichole Harvey, management assistant for the beverage-control bureau.

The licenses are transferable after they’ve been used for at least six months and may be sold or leased after two years. That allows investors who do make it to the top of the waiting list to make some money.

“We know they go for much more than they’re issued for,” Harvey said. “They’ve become such a commodity of the market.”

The state doesn’t control how much the license is sold or leased for, though it does collect a transfer fee of about 10 percent of the sale price. The bureau does not keep records of how much licenses sell or lease for.

But while some consider a permit an investment, others simply dream of owning and operating their own business.

Steve Soran, co-owner of Soran’s Catering, Depot Grill and the Turf Club, said his family has owned its liquor-by-the-drink license since 1969. The family has no plans to sell or lease it, Soran said.

“Most of the liquor licensees are small-business owners,” he said.

Soran wants Twin Falls County to allow liquor to be sold all week long to help defray the cost of liability insurance once a license is obtained.

“These licenses cost so much money, and we can’t even use them seven days a week,” Soran said.

In some counties, liquor cannot be sold on Sundays.