Liquor sales should give Arlington economic boost, but exactly how much remains unclear

Posted Sunday, Oct. 13, 2013  comments  Print Reprints

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While no one can say exactly how much money will pour in, economists and consultants say Arlington will benefit economically if its residents pass a November proposition to allow liquor sales in its city limits.

Economist Ray Perryman of Waco has conducted numerous economic studies for cities around the state on the impact of alcohol sales, including researching “before” and “after” tax receipts in places where voters went from “dry” to “wet” or expanded allowable sales.

“In every instance, we have found significant increases in economic activity and tax receipts — both from beverage sales and other purchases,” said Perryman, who has not studied the Arlington situation. In general, retail sales rise by 4 to 7 percent, depending on the nature of the change, he said. “The presence of sports venues usually increases this effect.”

Voters go to the polls on Nov. 5 to decide whether to allow the sale of liquor. A “yes” vote will allow liquor stores to seek permits to locate stores within the city limits.

The Texas Rangers spearheaded the proposition, to expand wine sales at the ballpark. For the past two seasons, the Texas Alcoholic Beverage Commission had issued a temporary waiver that allowed some wine sales in limited locations at the ballpark.

“The Rangers temporary permit has expired, and hopefully will be resolved permanently with the November election,” said John Blake, Rangers spokesman.

Wine isn’t a big seller at Major League Baseball parks, said Chris Bigelow, president of The Bigelow Cos., a Kansas City, Mo.-based consultant to the sports and entertainment industries.

Typically baseball fans spend $18 per person on concessions with 40 to 50 percent of that spent on beer, he said.

“Wine is a very small seller — under 5 percent of concession revenue,” he said. Still, the move makes sense, he said. “Wine sales are on the increase while beer sales are on the decline in some markets. Likewise the changing demographics of sports fans —more females — is changing consumer tastes.”

Locations near Arlington’s entertainment district likely would be prime spots for liquor stores, should the proposition pass, as they would benefit from sports fans buying liquor for tailgating parties. But stores would need to attract customers beyond the sports fan to be successful, Bigelow said.

Lubbock and the Strip

The small cities of Dalworthington Gardens and Pantego — both completely surrounded by Arlington — already allow liquor stores. It’s a conundrum for Arlington, which only allows beer and wine sales in stores, not hard liquor.

Lubbock had a similar issue and in May 2009 passed a ballot initiative to allow package stores and to allow mixed drinks in restaurants. Before that, Lubbock residents would drive to the “Strip,” a gaudy collection of about a dozen liquor stores immediately outside the city limits in a wet county precinct where liquor has been sold since the 1960s.

More than 30 liquor stores opened inside Lubbock’s city limits after the initiative passed, said Eddie McBride, president and CEO of the Lubbock Chamber of Commerce. Some of those were stores that closed on the Strip and moved to more central sites, thus limiting the overall economic impact.

McBride estimated that more than 100 new jobs were created, but other jobs merely shifted from the Strip. Sales tax receipts increased only slightly, he said. Part of the reason was that the city had annexed the Strip about three years before the liquor election and was already receiving sales tax receipts from its liquor stores, McBride said.

“This was not an election for increasing jobs or sales tax collection as much as it was for ease of access,” he said. Property tax revenue has been more of a factor than sales tax receipts in terms of providing an economic benefit, he said.

McBride said the unrestricted availability of liquor has also been helpful for business recruitment as the previous restrictions always raised questions.

“I can’t prove that some of the businesses that relocated here came here because we are wet, but I can say that it is not a point of discussion anymore,” he said.

A “common-sense issue”

Some in Arlington want to stem the sales tax leakage to Pantego and Dalworthington Gardens.

“The population for those two cities is not great enough to support the package stores in those cities,” said Arlington Councilwoman Sheri Capehart, who supports the liquor proposition. “Their primary customers are Arlington residents. That is pretty clear. I think it is a question that the voters are willing to have put before them.”

In 2011, Capehart, who represents District 2, spearheaded a proposition in which voters overwhelmingly approved mixed beverage permits for restaurants in the city’s southern sector — the only area in town that still required restaurants to sell patrons private memberships to buy distilled spirits.

After the 2011 election, Capehart said more than a dozen inquiries came in to the city for potential mixed beverage permits in the southern sector. Ultimately, four restaurants have received mixed beverage permits in the area since the election: Coppertop Saloon, Spice India, Rio Mambo and Wingstop, according to city of Arlington records. It’s an indication that the election in just two years, has had an economic impact on the southern sector, she said.

Although no one has put numbers to it, city coffers stand to benefit if the Nov. 5 proposition passes, she said.

“Should the election be successful, there is the economic impact of sales tax revenue,” Capehart said. “There is an economic impact if someone builds a store. There is property tax revenue. There is the economic impact of employees.”

City Councilman Charlie Parker, whose district covers the Texas Rangers ballpark, calls it a commonsense issue.

“Whenever anyone wants to buy liquor they can go to the middle of Arlington [Pantego or Dalworthington Gardens], or go to Fort Worth along Eastchase,” he said. “It just makes sense to make all of Arlington wet.”

Low turnout

In 2005, Arlington voters agreed to allow wine sales in grocery stores, convenience stores and pharmacies. That election has had a significant economic impact on the city, says one former council member, although the city has never studied the financial impact.

Former Councilman Joe Bruner, who spearheaded the drive, believes the economic benefit has been significant.

“We did projections and it was in the millions of dollars,” he said. But quantifying the impact is difficult as Arlington has not studied the issue, and the state comptroller does not break out alcohol sales receipts from a city’s total sales receipts.

“I think that was one of the biggest things we’ve done on economic development because we didn’t have to give anything up,” Bruner said, referring to costly financial incentive packages that Arlington has used in the past to woo business and sports entertainment venues. “There were no tax abatements. It was all a plus.”

Bruner said he’s heard very little about the new proposition and wonders if people even know about it.

“Turnout could be low,” he said. “I don’t know if that will hurt or help. I surely think it will pass.”

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