Developers lose as House rejects liquor-district bill

By Bill Harlan, Journal staff | Sunday, February 18, 2007

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PIERRE - Bar owners beat developers Thursday in a fight in the state Capitol over whether to let South Dakota towns create districts with unlimited restaurant liquor licenses.

Rapid City Mayor Jim Shaw had testified at an earlier hearing that the special liquor-license districts would have helped spur development in four large projects in the city costing almost $500 million.

But last week the full Senate rejected one version of the bill 18-15.

Thursday morning another version of the bill was killed by an 8-5 vote in the House Local Government Committee, despite a last-minute effort to find a compromise.

Holders of current liquor licenses say the new districts would have driven down the value of current licenses, which can be worth hundreds of thousands of dollars because the state limits the number of licenses a city can have.

The compromise would have used money collected for the new licenses to compensate current license holders for lost value.

Rep. Joel Dykstra, R-Canton, said the state's 60-year-old liquor-license limits were "a real development constrictor," and he said the compromise bill was a fair way to end an out-dated system.

The compromise was not enough to persuade current license holders, such as Stan George, who owns Murphy's Irish Pub and Eatery in downtown Rapid City.

"I think it's land developers who think, we have all this land here, the way to get the most value out of my land is to take your liquor license or at least devalue your liquor license."

Contact Bill Harlan at 394-8424 or at bill.harlan@rapidcityjournal.com