Sacramento County binges on liquor stores

Sacramento doesn’t have a drinking problem. It has a drinking solution. County supervisors last year approved a flood of new liquor licenses for high-crime and booze-saturated neighborhoods.

On the upside, the county can make up for tax dollars it lost when the feds changed their tune (again) and began raiding medical-marijuana dispensaries (again).

“The county was expected to get tremendous revenue from medical-marijuana dispensaries, and when the feds came in, the county stopped their progress,” said criminal-defense attorney Mark Reichel, who counts a number of dispensary operators as clients.

Reichel says the county expected to collect a figure similar to the $1.5 million the city of Sacramento had annually received through its licensing of medical-marijuana operators. But with that revenue stream presently dammed up by federal intervention, the county is back to favoring that other intoxicating vice.

“There are two different kinds of buds people like—the green kind and the one that comes in a bottle,” Reichel quipped.

In the third quarter of 2011, the tax on alcoholic beverages brought $86 million to the state’s coffers. California collected a combined total of $362 million in alcoholic-beverage and license sales-tax revenues in 2010, according to the U.S. Census Bureau.

There were 2,861 active licenses in Sacramento County last year alone, up 9 percent from 2008, when there were 2,600.

The Board of Equalization tallied more than 25,000 taxable transactions at county businesses that sold alcohol for offsite consumption in the third quarter of 2010. That’s actually a 0.7 percent drop from the same period of time the previous year. The 2011 numbers are not available yet.

County officials deny they’re ginning-up alcohol-related businesses during distressed times. After all, the county doesn’t decide who gets most off-sale (for consumption off the premises) liquor licenses. That responsibility falls mainly to the California Department of Alcoholic Beverage Control and is tied to fluctuating population figures. The state allows one new off-sale license for every 2,500 new residents and one new on-sale license for every 2,000 new residents, according to ABC spokesman John Carr.

But local municipalities get to weigh in on off-sale liquor licenses when they’re being proposed in high-crime neighborhoods or areas where there’s already an undue concentration of alcohol-related businesses. “We have limited authority,” observed Supervisor Don Nottoli.

But more liquor licenses were approved for Sacramento County’s most booze-impacted neighborhoods in 2011 than in any of the past five years.

Supervisors approved 16 of these “undue concentration” licenses in the unincorporated county last year, compared with three in 2010, eight in 2009, nine in 2008 and three in 2007. Nine of the permits approved last year are in Supervisor Susan Peters’ district, which encompasses neighborhoods North Highlands, Foothill Farms, Carmichael, Arden Arcade and Fair Oaks, among others.

Only six license applications were denied between 2007 and 2011. It’s possible even fewer get turned down by the ABC.

“Very few if any have been denied,” Carr said in an email. “We don’t track denials. The number is less than two per cent statewide. However, it should be noted that some withdrawn applications may have been a result of protests filed by citizens or local municipalities. The decision to withdraw an application is up to a licensee.”

Futile is the resistance

A lack of community opposition may be one reason oversaturated communities and neighborhoods with high crime rates are targeted, said Sacramento State sociology professor Jacqueline Carrigan, an expert on the subjects of drugs and alcohol, and social class and inequality.

These neighborhoods are more likely to be “disadvantaged in many other ways, so the liquor-store owners may face less resistance from the citizens of the neighborhood when they try to open up there,” she posited. Conversely, neighborhoods with more affluent and politically connected residents are better positioned to resist such businesses, Carrigan added.

Nottoli couldn’t say whether neighborhoods that are lower on the socioeconomic ladder were more vulnerable to alcohol-related businesses, though he acknowledged the appeal of reviving shuttered storefronts counted as a pro when considering liquor-license applications.

Meanwhile, the county’s limited ability to fine-tune license requirements has resulted in some friction with the state.

For example, during a September 2011 meeting of the board, a full alcohol license was considered for the upscale Total Wine & More megastore proposed on Arden Way. The applicant, which produces its own microbrews, asked to be spared the usual condition of the license that forbids selling single servings of alcohol.

“I never saw that type of flexibility exercised with some of the small markets and so, in some cases, we just said no [to their applications],” Nottoli told the applicant and their attorney, Jerry Jolly, a former ABC director, during the hearing.

Nottoli noted that the state’s inflexible set of standardized conditions had the effect of granting more leeway to the large retailers who could throw money—and former ABC officials—at the process, while smaller, mostly ethnic markets that want to offer specialized products suffered. “That’s not lost on me, and I wanted to be really up front about that,” he said during the hearing.

And on the rare occasion that there is a dispute between local municipalities and the state, an administrative law judge who’s employed by ABC is the one to arbitrate.

“And not all those instances have gone in our favor,” said sheriff’s department detective Juliette Sanchez, who used to investigate the public-safety impacts of liquor-selling businesses.

A dangerous neighbor

Law-enforcement agencies can’t track the public-safety impacts of liquor licensees the way they used to, because of budget and personnel losses, said Sanchez.

But law enforcement’s role remains crucial, say officials. “We process the specific permits, but ultimately we defer to ABC and the police department on that,” said Amy Williams, spokesperson for the city of Sacramento, which currently boasts 1,470 active retail-liquor licenses, both for on- and off-sale. “It’s all closely coordinated with the [police department].”

“If we didn’t place conditions on any license and didn’t [challenge] any license, they’d probably approve a huge amount of licenses,” Sanchez said of the state.

In January, the sheriff’s department opposed the first liquor-license application of 2012 unless the applicant, a Fresh & Easy Neighborhood Market on Fulton Avenue, agreed to limited promotion and sales hours of alcohol, among an assortment of other specified conditions. The census tract was both high in crime and already host to three other off-sale liquor businesses, a letter from the sheriff’s department stated.

There’s evidence of a likely increase in criminal activity in neighborhoods with a large number of liquor stores.

“Neighborhoods with more alcohol outlets do have more violence than those without, even when controlling for other neighborhood characteristics, such as poverty rate, unemployment rate, median age, etc.,” said Carrigan.

On December 27, 2011, two masked men entered the Capital Food & Liquor store on Folsom Boulevard and pistol-whipped a 50-year-old male employee during the course of a robbery. The accomplice who drove the two men away in a white 2002 Chevrolet Impala was later apprehended, but the two robbery suspects remain at large.

There were several other liquor store robberies in recent weeks in the county, according to sheriff’s department records.

“Businesses that sell liquor are very frequent targets of robberies,” said department spokesman Deputy Jason Ramos in an email. “They are structured in such a way that a robbery suspect can enter, obtain close proximity to the employees very quickly, commit the robbery and be on his way within a minute or two.”

Neighborhoods may be hurting, but the alcohol industry is benefiting, said attorney Reichel. “They’re thrilled they’re running the medical-marijuana folks out of town.”

“These two industries are competitors,” agreed Carrigan. “Also, the alcohol industry has not taken much of a hit during the economic downturn over the last few years—consumption has remained steady, unlike the consumption of many other products.”

More alcohol outlets on our neighborhood streets may get local tax collectors buzzed but Reichel and others argue the long-term effects will end up costing the state more than Big Alcohol can ever bring in.

In 2008, alcohol-industry watchdog Marin Institute released a study that estimated the costs of alcohol consumption in the state reaches more than $38 billion annually. Efforts to raise the tax on alcoholic beverages, which hasn’t been lifted since 1991, have thus far failed, thanks in large part to heavy industry opposition.

“By and large, it’s been very bad for the economy,” Reichel said of the alcohol industry.