Alcohol regulators question theater's licensing tactic

State alcohol regulators were split Tuesday on whether to grant three single-event liquor licenses for upcoming concerts at a Salt Lake theater where owners have already staged some 35 similar events.

The State Room, 638 S. State, was granted the permits by a 3-2 vote of the Department of Alcoholic Beverage Control Commission only after extended debate over whether the theater should be operating as a club.

Typically, such permits are issued for single events conducted by churches and other nonprofit groups to raise money. Groups are limited to 12 permits annually.

Applying under separate corporate entities has allowed the theater to obtain permits for 35 events so far this year, according to Earl Dorius, the department's compliance director. He told commissioners that club licensees, unlike permit holders, have a long list of requirements, including making food available to customers and verifying they are old enough to legally drink.

But owners Chris Mautz and Dari Piccoli said the theater is already voluntarily complying with many of the club requirements at the permitted events.

Even if a Salt Lake City prohibition against more than two clubs on a street were changed, they said, they would not want to become a club, Utah's equivalent of a bar. Having a club license would mean the theater could no longer be rented out for events that attract underage customers.

Piccoli said only about 30 percent of the money collected at concerts at the nearly 300-seat venue comes from alcohol sales. "We are zoned as a theater," he told the commission. "We are not a wolf in sheep's clothing."

Commissioners, however, questioned whether allowing the theater's unique business model to continue would create a precedent that could allow others to get around obtaining a club license.

One of two new commissioners, Jeff Wright, warned it could be seen as opening a floodgate for special-event permits.

Attorney Pat Shea, representing the theater, said this was not a way around applying for a club license. He said the theater's focus is on music. "It's hard to say they're there for drinking," he said.

The commission's vice chairman, Gordon Strachan, argued the theater was not using the permits as the Legislature intended. The other new commissioner, Richard Sperry, said the request appeared to be for "a category of license that doesn't exist."