|By John P. McAlpin, The Record,
Knight Ridder/Tribune Business News
Dec. 20, 2005 - New Jersey lawmakers are ready to hand over more than a dozen special liquor licenses worth nearly $2 million to the nation's largest builder of upscale ski resorts -- all because the developer couldn't buy them.
The massive Mountain Creek housing and ski resort in Vernon would be granted at least 12 "special permits" to sell alcoholic beverages under a bill moving through the lame-duck Legislature.
The bill is so narrowly written that the Mountain Creek development is the only property in the state that would qualify for the special licenses. Nothing requires the developer to pay the going rate for a license -- something that has cost bar and liquor store owners as much as $1 million in some parts of New Jersey.
The measure bypasses the state's current strict liquor law, which grants licenses based on a town's population. The Sussex County resort's Canadian developer, Intrawest Corp., owns one license, and wanted to buy up the remaining seven in Vernon. But no one was willing to sell, company officials said.
That's when Intrawest turned to the Legislature.
With help from Princeton Public Affairs Group, a top Trenton lobbying firm whose clients include some of the state's largest developers, Intrawest recruited state Sen. Raymond Lesniak, a powerful Union County Democratic party leader, and Assemblyman Joseph Cryan of Union County, vice chairman of the state Democratic Party and a restaurateur, to sponsor the measure.
Supporters and company officials say the success of the project -- and in some ways, the economic health of New Jersey's rural northwest corner -- depends on getting these special permits. Anchoring the project is a 65-acre village-style town center, which will include, shops, restaurants and bars.
But small bar owners, restaurateurs and even some developers fear that if the measure prevails, other large-scale developers are almost certain to demand special exemptions from the Legislature.
That will dilute the value of their licenses and undercut a valuable asset of thousands of small bar and restaurant owners who paid a premium to operate in the state, the critics say. The bill is a prime example of the rich and powerful getting preferential treatment from the Legislature, they add.
"What this says is that in New Jersey, if you are big enough and you have enough money, you get what you want," said Tom Schmierer, a Princeton bar owner and vice president of the New Jersey Restaurant Association.
The bill, which has cleared committees in both the Senate and Assembly, does not name Intrawest or any other development project.
It does list six detailed provisions for a development to qualify for those special liquor licenses, and reads like a checklist for the Intrawest project right down to the acreage and the amount of tax revenues it is expected to generate. Another legal requirement to qualify in this bill: A "ski area" is a must.
An earlier version of the bill was so broadly written that several prominent developments, including the Xanadu project in the Meadowlands, would have qualified. That set off a feeding frenzy among lobbyists, who pressured lawmakers to keep the bill vague enough to let several projects be able to win the special permits. One lawmaker involved in the negotiations called the lobbying "relentless" before the bill was narrowed earlier this month.
Legislators said Intrawest's situation shows how desperately the state's liquor rules -- some of which date to 1938 -- need to be rewritten. Rules don't reflect modern consumer preferences and discourage developers from building large projects that include a mix of housing and retail featuring bars and restaurants. Some projects are planned in small towns that don't have an excess of liquor licenses but the surrounding area has a large enough population to support the businesses.
"The real message of the bill is there's a lack of a sound liquor policy in the state," said Cryan.
But Intrawest is ready to begin building its prefabricated downtown and shopping village next spring and can't be held up while the Legislature examines the entire law, said Lesniak, who is sponsoring the measure in the state Senate.
"That's exactly what we did. We didn't have enough time to do a thorough revamping. We did it for this case because they needed it," Lesniak said. "There's a false supply and restriction and the cost of buying liquor licenses is prohibitive. We're looking at a way to balance the interests of the current license holders and offer some economic development where it's needed."
Intrawest owns or operates some of the world's best-known ski resort villages, including Copper and Winter Park in Colorado; Stratton in Vermont; Snowshoe Mountain in West Virginia; Mammoth in California; Whistler Blackcomb and Panorama Mountain Village in British Columbia; Blue Mountain in Ontario, and Tremblant in Quebec. It is creating similar resort villages in Colorado, Utah, California, Nevada and France.
In 1998, Intrawest bought the 2,100-acre resort Vernon property, which had been the Vernon Valley/Great Gorge Ski Area and Action Park.
The Mountain Creek village and resort will eventually straddle both sides of Route 94 with an Alpine-style village of cafes, restaurants and specialty shops along with 1,000 condominiums and town houses.
Intrawest is building Mountain Creek in phases. Local officials estimated that the town center will add as much as 40 percent to the township's taxable worth and that even more would be added if the 65-acre "downtown" grows.
"We've got a couple projects out of the ground and we're about to start on the village core itself and we need these licenses," said Robin Conners, Intrawest's vice president of commercial development.
Intrawest owns one of the liquor licenses in Vernon, Conners said. That license would allow Intrawest or a single contractor to run all of the restaurants and bars in the development, he said.
But the company relies on many different businesses to own and manage the various eateries at its other resorts and plans to do the same at Mountain Creek, something New Jersey law allows only if the developer has separate liquor licenses for each business, Conners said.
"We can't have multiple business come in" under the current liquor laws, he said. "We really want that entrepreneurial, eclectic spirit that comes with a mom-and-pop operation."
The bill requires only an unspecified fee for the special permit, which carries many of the same rights as a liquor license. The last liquor license sold for $120,000 in Vernon, but prices often rise when an area is being developed. Licenses in New Jersey routinely sell for over $500,000, with some prices near $1 million.
If approved, the bill would grant Intrawest the ability to dole out the special permits to separate businesses. Intrawest would be liable for any violations of state liquor laws at those other bars and restaurants. The special permits could not be resold or transferred, except back to Intrawest.
Nothing in the bill requires Intrawest to buy the special licenses from the state at market value. The bill does say the director of the state Division of Alcoholic Beverage Control will charge a fee to be split between the state and the municipality.
"What's most troubling about this bill is that you don't need to pay fair market value," said Barbara McConnell, executive director of the New Jersey Licensed Beverage Association.
Intrawest will pay Vernon, but that fee has not been determined, Conners said.
New Jersey law limits the number of liquor licenses for a bar or restaurant to one for every 3,000 people in a town.
About 3,000 liquor licenses are spread throughout New Jersey, but most predate the laws that are based on a town's population.
The bill would grant Intrawest, the North Jersey ski resort operator and developer, "special permits" that would work just like regular liquor licenses but could not be transferred or purchased on the open market.
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