While city officials try to curb underage drinking by holding the bars accountable, the bars themselves don’t necessarily have to suffer.
In the past, some Iowa City establishments dodged liquor-license problems by switching ownership.
Shortly after closing its doors, the property reopened in April 2008 under new ownership.
Redubbed the Industry, the bar is known for drawing mainstream music artists to perform.
Officials said although the state is willing to grant licenses to new bar owners, they do examine their applications more closely. For instance, the new owner must prove he or she is unrelated to the previous owner. That goes beyond blood relations; the “arm’s-length transaction” essentially requires the owners to be complete strangers.
Walding said current license holders will often try to find replacements to stand in for them as new owners to keep the bar open.
“It’s a common issue,” Walding said.
The transaction itself is scrutinized. Officials make sure they see a financial exchange rather than a contractual one.
The burden to prove the transaction is legal and legitimate falls on the new applicant.
Walding said the sale of Union Bar, 121 E. College St., followed strict regulations. After years of violations, the bar’s Iowa City-based owners sold the property to a Des Moines group.
Another well-known case is Et Cetera, 118 S. Dubuque St., which received a fine and had its license suspended after a bar fire in 2002.
In that incident, a bartender poured Everclear on the bar and lit it on fire. The flames got out of control and nine people were injured.
Et Cetera was sold in June 2002, two months after the incident. The bar’s former owner voluntarily gave up his liquor license.
The new owner is George Etre, who is now appealing the nonrenewal of his liquor license because of the PAULA ratio policy.
But he fought hard to land the license. As the new owner, Etre said, he had to work to persuade the state to grant him a license after the fire and subsequent lawsuits. He met with Walding in Ankeny, Iowa, to discuss the severity of what had happened.
Etre said he kept much of the same staff — sans the one who started the fire — but changed management.
Iowa City police Sgt. Troy Kelsay said the shift in management and policy made sense.
“It would be foolish to purchase a bar with issues and try to keep the status quo,” he said. “And I don’t think we see that happening.”
Whether police see an improvement in bars after ownership change varies, however.
Kelsay cited Sports Column, 12 S. Dubuque St., as a positive example. While its ratio of underage drinking tickets to bar visits ratio remains high, Kelsay pointed out the number dropped significantly — from 2.3 in March to just under 1.5 in July — after a recent ownership change.
Police issued only one ticket in four visits during July.
Etre was able to purchase Et Cetera in 2002 because the license had been suspended — not revoked.
In the case of license renewals being denied, however, a new owner can be granted a license if he or she meets the state’s criteria.
Even with the bar’s reputation, Etre said he was focusing on where he could take the bar.
“I wasn’t concerned about the past,” he said. “I was concerned about the city as a whole and how we would move forward.”