When the city approved the alcohol license density ordinance (known by its Muppet-esque acronym, ALDO) in 2007, it was trying to reduce the number of bars and taverns heavily concentrated in the downtown area.
But seven years later, officials largely concede that ALDO has failed. The city is now looking at replacing it with new regulations that would have an impact citywide.
ALDO forbids new tavern licenses inside the downtown area -- bounded by Blair Street on the east, Park and Regent streets on the west, and the lakes on the north and south. People can still get liquor licenses there for new restaurants, but they are required to generate at least 50% of their revenue from food sales.
Many have complained that the law is stifling development of new entertainment venues, like music clubs and bowling alleys -- ventures that aren't about drinking but need high alcohol sales to make a buck.
The number of tavern licenses within ALDO's boundaries has decreased by five since it was established, says Mark Woulf, the city's alcohol policy coordinator. But the number of overall licenses there has actually gone up, he says, from 138 in October 2007 to 148 as of the middle of last year.
The new licenses were all for restaurants, Woulf says. He adds that some new establishments have apparently tried to skirt the law by pretending to be restaurants but operating like taverns.
"We've had many legitimate new restaurants open downtown," Woulf says. "But there were some that said 'we're going to be a restaurant,' and while their plan on paper was very good, they never even got close to that 50% food mark."
As an alternative to ALDO, the city is looking at creating new zoning regulations for places that sell alcohol.
"Essentially what we're doing is regulating the use of the land," Woulf says. "The main distinction is we can do these things within our zoning code that we can't do explicitly within our alcohol chapter."
Although state laws break on-premise alcohol licenses into two categories, restaurant and tavern, the city's zoning laws currently allow several uses for serving alcohol: restaurant, tavern, brewpub, theater, outdoor recreation and restaurant-tavern.
City officials propose adding two more: nightclub and restaurant-nightclub. The nightclub would be a tavern that features live music or entertainment. To qualify for one of these land uses, the applicant would have to get a conditional-use permit and go before the Plan Commission, requiring a public hearing.
The city wants to require nightclubs to get conditional-use permits citywide, because establishments that have live music are often the ones that get complaints from neighbors.
"This doesn't get to the genre of music at all," says Ald. Mike Verveer. "It's just experience. Unfortunately it's been the case that if you look back at discipline cases filed, the lion's share involve live music venues."
Woulf stresses that the new land-use regulations will not affect existing businesses, which will be grandfathered. New businesses can decide what designation they want and follow the regulations for that use. For instance, if the business wants to be a restaurant, it will have to make 50% of its profits from food. If it wants to be a tavern and not worry about the food percentage, fine, but no one under 21 will be allowed.
The proposal still provides additional restrictions downtown, but in a much smaller area. The new ordinance would establish an alcohol overlay district, where new taverns, brewpubs and liquor stores would be forbidden. New nightclubs would be allowed, but with additional regulations. This area -- including the 500 and 600 blocks of State Street and the 600 block of University Avenue -- will be much smaller than ALDO's boundaries.
Says Verveer: "Under this proposal we're trying to have it both ways, with no new taverns close to campus, but entertainment venues allowed. And citywide, [entertainment venues] have an extra layer of scrutiny."
Woulf says there's potential for alcohol overlays elsewhere in the city. "Overlay as a concept is something other neighborhoods may look at, so they don't feel like they have to battle each and every [new nightclub or tavern]," he says. "They may feel they're getting saturated but don't want to stop development in the neighborhood. Hopefully, this is a blueprint."
The Central Business Improvement District, which has always complained about ALDO, is pleased with the new direction, says Mary Carbine, its executive director. "It's more refined and more flexible," she says. "It's more specific on the licensing issues that affect safety and quality of life, rather than a blanket prohibition across a certain area."
But not everybody is happy with the direction. Sandi Torkildson, owner of A Room of One's Own bookstore, admits that ALDO was an imperfect beast, but she continues to worry about the proliferation of bars downtown.
"There has to be some guideline for the number of bars we have in an area. It's a matter of economics. People can make a lot more money selling alcohol than books," Torkildson says. "If you're a property owner, if you rent to someone who sells alcohol, you can charge them a lot more rent.
"This place right here would make a great nightclub," she adds, referring to her West Gorham Street store. "My landlord could make at least double [renting to a bar] what they're making from me."
Torkildson fears that State Street might morph into something like Austin's "Dirty Sixth," a historic area with a heavy concentration of nightclubs. "We should be cautious about that," she says. "For any downtown to be viable you have to have diversity."
The proposal is currently being reviewed by city committees and is expected to be voted on by the Common Council in April. If approved, it will go into effect on July 1, the same day that ALDO expires.