Et Cetera’s and 3rd Base’s respective owners are appealing the Iowa City City Council’s decision not to renew their liquor licenses, but early indications from state officials do not appear to favor their cases. There’s a real possibility the bars could lose their liquor licenses and with them, their businesses. If they do — and others follow — student- and university-oriented businesses should fill the void.

The future is far from certain at this point, because both bars are still in the appeals process with the Iowa Alcoholic Beverages Division. The agency traditionally has allowed bars to keep their licenses.

But if Alcoholic Beverages Commissioner Jim Clayton’s approval of Iowa City’s decision is any indication of the commission’s verdict, 3rd Base and Et Cetera could be in trouble. Without the ability to sell alcohol, it is highly doubtful whether either bar would be able to stay in business. If a bar doesn’t open in the same location within a year, such an establishment would be barred from opening at that site again, in accordance with the 500-foot ordinance.

Debating the merits of these measures is futile at this point. Aside from voting in city councilors willing to overturn these measures, there’s not much anyone can do. Figuring out what type of business would succeed in place of these bars is a bigger issue now. Mayor Regenia Bailey said she’d like to see a more diverse business environment downtown, suggesting a kitchen-appliance store as a good candidate. Councilor Connie Champion said she’d also like to see a kitchen-appliance store downtown, citing its uniqueness as the key to its success.

Businesses should cater to the market they serve and the traffic in the area.

Tiffany Cohen, a manager at Bo-James who has observed the downtown economy for 11 years, said students are a huge and integral part of the downtown market. Cheap & Chic’s success, as opposed to its predecessor, highlights how much buying power students and people of college age have in this town. John Dolhancyk, the director of sales and marketing for the Den, echoed Cohen.

“Business picks up a lot during the school year,” he said.

Champion — who owns Catherine’s with daughter Catherine Champion — says out-of-towners make up a big part of the store’s clientele. These customers provide a limited market downtown, because of competition from the Coral Ridge Mall and the lack of available parking downtown. Connie Champion and Catherine Champion also own Cheap & Chic, and they previously operated a high-end male clothing store at its location. It didn’t attract enough business to survive the recession and closed its doors in November 2008. The pair opened Cheap & Chic shortly after, and the store has thrived despite the economic downturn. Students, particularly young women, make up the store’s biggest customer group, Connie Champion said.

Downtown businesses rely on pedestrian traffic for the most part, and students make up most of that traffic. They also compose a big share of the market. Both Champion and Bailey have called students a “captive market,” but students are, in fact, the market drivers.

Bars bring in bigger revenues than do other businesses. That is a generally accepted fact. They do it because they cater to students better than other businesses. Their approach is simple: provide a product or service that is trendy but affordable. Future businesses looking to tap into the same market should also follow that approach.