Benton County Liquor Sales Slowly Catching Up With Washington County

Benton County Liquor Sales Slowly Catching Up With Washington County

STAFF PHOTO BEN GOFF • @NWABenGoff Steve Harvey, left, and Lew Indorf, both with Ken’s Signs in Springdale, work Thursday on a new sign for Buster’s Liquor on West Walnut Street in Rogers. Renovation of the former Blockbuster Video location is under way, including installing of a large walk-in beer cave. The new business should open its doors in coming weeks.
STAFF PHOTO BEN GOFF • @NWABenGoff Steve Harvey, left, and Lew Indorf, both with Ken’s Signs in Springdale, work Thursday on a new sign for Buster’s Liquor on West Walnut Street in Rogers. Renovation of the former Blockbuster Video location is under way, including installing of a large walk-in beer cave. The new business should open its doors in coming weeks.

Benton County drinkers need to pull a few more corks if they want to catch Washington County in sales tax revenue from retail alcohol, tax records show.

Taxes from sales at liquor stores in Benton County were 28 percent of the same sales in Washington County in July, available records show. The same figure for January through July is less than 18 percent, but the gap is likely less and is narrowing as new liquor stores open, records show.

The state issued permits for 55 liquor stores in Benton County last year after the residents voted themselves "wet." Twenty-five have yet to open, and many of the 30 that did have not been in business long. Washington County has 33 liquor stores.

Opening a liquor store means more than unlocking a door and stocking a shelf, said Bud Schwartz, owner of the soon-to-open Buster's Liquor in Rogers. Renovating a 6,000-square-foot space with specialized refrigeration and secure storage is a major project, he said.

"It's definitely a gamble," he said. "Of course, anything you do is a gamble." He demurred when asked how much money he has riding on his bet so far.

"I'm under no illusions. This is going to be a tough business with lots of competition," Schwartz said.

Matt Morgan is a liquor store manager with 13 years of experience who moved to Rogers from Nebraska. He now manages Hollywood Liquor in Rogers, which opened four months ago.

"I don't see how 55 liquor stores are going to be prosperous," he said. Morgan said he was glad his store was one of the first to open in Rogers in April.

Benton County's first liquor store opened a year ago. Voters approved alcohol sales in the previously "dry" county in the November 2012 general election.

A nonprofit group called Keep Dollars in Benton County circulated petitions to place alcohol sales on the November 2012 election ballot. The group commissioned the University of Arkansas' Center for Business and Economic Research in to study the economic impact of legalizing retail alcohol sales in the county. The report estimated alcohol sales in Benton County would have an annual economic impact of $33 million in areas ranging from increased sales and property taxes to new jobs. The area could also see a one-time bump of $14.3 million from the construction of 21 liquor stores, the study said.

Kathy Deck, the center's director, said last week it's too early to determine a true economic impact because not all permitted stores have opened.

"That is roughly consistent with what we thought would happen," she said. "We knew a lot of new permits weren't going to be ready right away."

Even some stores that have opened haven't been operational long enough to have an impact, she said.

The start of the liquor trade in Benton County is no faster or slower than expected and poses no unique problems or advantages, said Michael W. Langley, director of the state's beverage board.

County residents, however, know and appreciate the difference, said customers interviewed last week.

"The impact is huge," said Beth Holmes, a customer at Hollywood Liquor. "You're able to stop on your way home from work instead of making a trip. We're providing jobs in our area, and these businesses are going into buildings that were vacant."

Holmes and other Benton County residents mentioned they're glad their sales taxes are staying in their county and cities to pay for parks, police and other services.

"I was worried about what the businesses moving in would be like. I wouldn't want them to be tacky," said Randy Jackson, another Hollywood Liquor customer. "But I'm seeing that the ones going in are very nice. Look at this place. It's a nice building, and they have designer patterns on the sidewalks. They also have a wide selection of craft beers."

Economic Impact

Benton County and the cities within it collected an estimated $82,083 in 1 percent county sales tax on liquor in July, state and county tax figures show. That figure doesn't include alcohol sales in bars or restaurants, or sales of beer and wine from convenience or grocery stores.

This compares to the $295,667 for the same month in Washington County for the same kind of sales. The Washington County figure is just for the 1 percent county sales tax and doesn't include the 0.25 percent added tax for the county jail.

Washington County had $611,696 in sales tax collections from liquor stores in the first seven months of this year, records show. Benton County had $108,811, but the figure is below actual tax collection, according to spokesmen for the state Department of Finances and Administration.

If there is only one liquor store in town -- or herbal medicine store, or car parts store, or any other type of business -- then a full release of sales tax figures in that store's category would reveal how much in sales a store had. Therefore, state law requires unique stores' tax payments be lumped into a catch-all category.

That "unique business" category jumped more than $100,000 in Rogers in one month, for instance.

The overall impact of the new businesses is certainly positive for the economy, but the benefits of the new tax revenue are hard to account for precisely, said Bentonville Mayor Bob McCaslin.

"I probably speak for all four of the region's major cities when I say this, but we don't operate on a hand-to-mouth strategy, where we'd notice where every change comes from," McCaslin said.

"We're blessed with a growing hospitality industry, a thriving museum that has a gift shop, restaurants, hotels and boutique shops," McCaslin said. "So there's growth and these sales are just a part of it. It's difficult to say how much of that is attributable to any one sector."

In Rogers, one impact was easy to measure, foreseen and negative, Mayor Greg Hines said. The city expects to lose $600,000 a year of a mixed drink tax levied on private clubs. All those restaurants operating as private clubs either switched or are switching to permitted liquor licenses, which the tax didn't apply to. How much that loss has been offset by increased alcohol sales elsewhere in Rogers is hard to pin down, Hines said. So far, that category of tax revenue dropped by almost $400,000 between 2012 and 2013, he said.

The commercial impact of Benton County sales on sales in Washington County was easier to measure, at least for the businesses involved.

"My beer sales fell by probably 50 percent," said Lenny Blankenship, manager of Liquor Mart and Wine Shoppe on College Avenue in Fayetteville.

"The liquor stores opening weren't the big impact," Blankenship said. "Their customers were going to Missouri to Macadoodles anyway. What had the big impact on our sales was people able to buy beer on the way home at grocery and convenience stores. So we've put the focus on craft beers and microbrews."

Human Impact

The casual acceptance of liquor as a routine part of life is what opponents of going wet feared, said Tom Hatley, pastor of Immanuel Baptist Church in Rogers. Hatley was a leader in opposition to the wet vote. He quoted the website of the federal Center for Disease Control in Atlanta, which said: "Excessive alcohol use is a leading cause of preventable death. This dangerous behavior accounted for approximately 88,000 deaths per year from 2006 to 2010, and accounted for one in 10 deaths among working-age adults aged 20 to 64 years."

People say prohibition doesn't work, but a sustained, focused effort on removing a health threat does, Hatley said. It's working against tobacco and should be applied to liquor, he said. Social acceptance of liquor sales was a setback.

"If a disease was causing 10 percent of the deaths of people between 20 and 64, we'd do something about it," he said.

"It's a small group of people who are selfish who are benefiting from this, and they don't have to pay the cost," Hatley said. "It's the pastor they call after someone in their family has died in a head-on collision, not their beer distributor."

The measure was supported by a group called Keep Dollars in Benton County. That group has since disbanded, but former spokesman Marshall Ney, an attorney in Rogers, said he doesn't see where any criticisms raised by opponents came to pass. The benefits promised by supporters have come about, he said.

"I can't imagine the AMP opening here without the right to sell wine and beer," Ney said, referring to the recently opened amphitheater concert venue in Rogers.

"There was concern expressed that the whole complexion of the community would change, and I have yet to meet anyone who thinks that's come to fruition," Ney said. "My view is that there's little to no regrets by anyone."

Criminal Impact

Police noted a short spike in alcohol-related offenses in Bentonville and Rogers after in-county sales opened, but that has faded, they said.

Arrests for public intoxication are below last year's numbers despite an initial uptick, said Bentonville Police Chief Jon Simpson. The department made 132 public intoxication arrests so far this year compared to 158 in the same time last year. Simpson said the initial spike did put a strain on his officers.

"We saw some things that we just didn't see before in Bentonville, Ark.," he said. "When a police officer comes to work there are some undesirable types of calls, and public intoxication is one of them."

He said there have also been cases of people stealing alcohol by shoplifting or by "grab-and-dash." A grab-and-dash is when a suspect runs out of a store holding an item they didn't purchase.

"Those crimes just weren't a possibility before," he said.

Keith Foster, Rogers police spokesman, said officers made fewer arrests for driving while intoxicated through July this year compared to the first seven months of 2013. Officers made 82 arrests this year compared with 90 in 2013.

There were increases in arrests for minor in possession and public intoxication, but Foster said the numbers are small and could even out by the end of the year. Minor in possession arrests increased from 10 to 16 and public intoxication arrests increased from 79 to 86.

He doesn't consider it a trend.

"Overall, our numbers have remained relatively consistent," he said. "I do not believe there have been any serious negative impacts regarding alcohol sales in the city."

Foster said one positive impact from alcohol sales in the county is the department's ability to secure federal grant money for added DWI enforcement.

NW News on 08/31/2014

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