Is State Street at risk of being overtaken by bars?
That's at the center of a recent spat between downtown businesses, some of which claim that letting the Alcohol License Density Ordinance expire will usher in a slew of new bars and push out retailers.
The law, which was approved by the City Council in 2007, capped the number of bars that could locate within one square mile of the UW campus. A new bar can only be approved if it is replacing an existing one, so the number of bars hasn't increased since 2007.
The original idea behind ALDO, as it's called, was to reduce crime. Fewer bars would allow cops to better monitor alcohol-related debauchery.
So far, the law’s effect on crime is debatable. Alcohol-related calls to police have fallen slightly, from a high of 3,141 in 2007 to 2,706 in 2012. But the trend has not been consistent during that time and many alders and business leaders say other factors have been at play, such as better enforcement and the closing of a couple of problem-prone bars.
But now, as the policy is due to sunset later this summer, a group of businesses is arguing in favor of keeping it, but not necessarily because it has reduced crime. Instead, they say, the policy protects retail shops from being pushed aside for more bars.
In a recent letter to Mayor Paul Soglin, 15 business owners on or around State Street voiced fear that ALDO’s elimination will lead to a “Bourbon Street” atmosphere at the expense of a family-friendly, daytime economy.
“Property owners will want a bar or bar/restaurant rather than a retail shop because they generate more revenue and can pay higher rents,” wrote the group, which included Sachi Komai of Anthology and John Hayes of Goodman's Jewelers, among others. “You have stated that you fear State Street is becoming a food court and we share your fear of this future.”
Sandi Torkildson, the longtime owner of A Room of One’s Own bookstore, signed the letter. She says she appreciates the presence of bars in Madison but says that too many may drive retail away permanently.
“They should look at a city like Austin, Texas, where they have a street that’s 20 blocks long between their campus and state capitol and the first 10 blocks is all bars. And all the retail has been driven out.”
The letter prompted a strong reaction from other business leaders in the area, who accused the group of stoking division in the business community. In a letter to area retailers, Jeanette Riechers, owner of Madison Sole, and John Hutchinson, owner of Fontana Sports, argued that those who think ALDO is the key to protecting their business are unfamiliar with the facts.
“Data on our business mix compared to 15 years ago shows that the percentage of food/drink establishments is fairly consistent,” they wrote.
The data they cite, which was compiled by the downtown Business Improvement District (BID) — an organization that represents downtown businesses — also shows that retail has decreased from 50 percent of downtown businesses in 1998 to 26 percent in 2012. But the percentage of bars and restaurants has only increased from 38 percent to 39 percent. The executive director of BID, Mary Carbine, says the decline in retail is more likely due to the proliferation of online shopping as well as the increase in service-related businesses, such as gyms, salons and banks.
Riechers and Hutchinson, who both sit on the BID board, also chastised the letter-writers for not bringing their concerns to BID or the Greater State Street Business Association first.
Hutchinson, a retailer and an area landlord, also doesn’t buy the claim that food and drink establishments drive up rent.
“I don’t think the bars pay much more than everybody else is paying,” he says. “The money doesn’t just roll in (for bars).”
But Torkildson, a former tenant of Hutchinson, says that he twice discussed buying her out of her lease because two bars were interested in her store’s former location on West Johnson Street. It was evidence, she says, that bars could provide much higher rent than retailers.
Hutchinson disagrees. “It wasn’t that I couldn’t get a higher rent from (other retailers), it was that her rent was quite low,” he says.
For city policymakers, the chief concern is not about limiting the number of food and alcohol establishments, but encouraging bars and restaurants that offer something besides an opportunity for young people to get plastered (otherwise referred to as “vertical drinking”). More diversity in food and drink outlets would hopefully reduce crime, but it would also provide a more diverse clientele and keep the downtown attractive to professionals who can spend money to boost the local economy.
That was the idea two years ago when ALDO was amended to allow more alcohol licenses for new businesses that offered “entertainment,” such as live music or shows. Since then, however, the city has not received one application for an entertainment license, a fact that Mark Woulf, the city alcohol policy coordinator, says is due to the strict regulations imposed on the license. For instance, the business would not be allowed to get more than 70 percent of its revenue from alcohol and it would have to offer entertainment most days of the week.
“There’s too great of a risk as a new business knowing that you’ll be under a high level of scrutiny,” says Woulf.
Few in city government are interested in allowing ALDO to sunset without implementing something in its stead. Woulf and others are currently working on a number of recommendations that they hope to present to the Council at some point next month. Many opponents of ALDO are pushing for a set of criteria for approving alcohol licenses, instead of a strict policy.
Carbine, of BID, says giving the Alcohol License Review Committee more discretion to judge bar applications based on their “concept, track record and experience” will encourage applicants to provide downtowners with a diversity of dining, drinking and entertainment options.