Douglas, Wyoming – a city of under 7,000 people – is slated to get a Homewood Suites by Hilton extended-stay hotel project costing roughly $37 million developed by Erck Hotels.
The logic of a 100-room, Hilton-branded hotel in a tiny city on the Wyoming plains is oil and gas. There’s a plan to drill up to 5,000 wells in the area. Homewood Suites makes sense for long-term oil worker stays. There’s also power generation and mining nearby. And there are local events that draw tourists from the state fair to rodeos, livestock shows, concerts, and more.
The Douglas Homewood Suites will be an upscale option relative to the community, and it secured the only remaining liquor license the city had available, beating out a local craft taproom that was vying for the license. The Douglas City Council voted to award the town’s sole open liquor license to the hotel project this month, sidelining the microbrewery/taproom.
The Bar and Grill liquor license was the last of its type that Douglas could issue under state quota laws. Winning this license means the planned Homewood Suites will be able to operate a bar/restaurant with full alcohol service.
Wyoming has bizarrely restrictive liquor laws. The state government controls wholesale distribution of spirits and wine, and tightly limits retail liquor licensing at the local level. The number of full retail liquor licenses that a town can issue is capped based on population – even where most patrons will be tourists. This state-imposed quota system often forces local councils to choose winners among businesses competing for a scarce permit.
- It means incumbent businesses are protected from competition against new ones
- And growth in new businesses is limited
- This also means there’s little competition driving quality experiences to attract customers
- And divvying out scarce resources through politics means the best connected politically are more likely to succeed in business.
Wyoming’s cronyist approach to alcohol licenses is hard to dislodge because it benefits prominent incumbents (who have the licenses, and the most political influence) and benefits state revenue (since they’re the only wholesale supplier of spirits and wine).
Art and Catherine Nicholas, one of the state’s largest ranch owners, are reportedly behind the Homewood Suites project. Art Nicholas built his wealth in finance, and said to be worth at least $580 million and they have been active political donors in the state. It’s no surprise they’d prevail. But there’s no conceivable reason why offering alcohol at a Homewood Suites should mean unrelated entrepreneurs shouldn’t be able to open a brewery taproom.
Utah does the same
Gimmeabreak…I’ve covered government for years, and it’s a fact that they can fix this if they want to. Setting aside the fact that a municipal board can just increase the number of licenses by passing an ordinance, there are numerous classifications of licenses that give them flexibility in this.
I wonder if the taproom is owned by a local.
There’s also the statewide police academy and a community college. Plus, Douglas is right on I-25. So, you’ll get people going north and south needing a place to stay. Especially in the winter when the highways can close due to blowing snow.
Wyoming is weird because Wyoming has drive-thru liquor stores.
Maybe the hotel and restaurant/taproom can get together. Move the taproom to the hotel and operate under the hotel’s license. Win-win.
@Bill Dwyer…. the locals can’t fix it, as the quotas are set at the state level. Bizarre, but true. But you’re almost certainly correct in that there are other ways around this, but the truth is that the idea of a brewery and taproom in a tiny town like Douglas is… ambitious. My guess is that the board allocating the license was less motivated by cronyism (as Mr Leff, whose articles are often quite, err, remarkable, implies) but by commercial sustainability: put the bar in a hotel, and the longer term survival is much more likely (and there’s nothing to stop non-guests from frequenting it, obviously).
I should note that I had the best breakfast I’ve had in years when I stayed overnight in Douglas (in a Hampton Inn, as it happens). But that was in Caspar, which kinda tells you something about Douglas!!
Is there an address to send a crying towel?
“Hilton Got The Last Liquor License”
There should never be a “last” liquor licence. The number should be determined by the market, not by a few busy-body bureaucrats.
This is obviously not the hotel owner’s fault. The big hotel probably SHOULD be getting the last license: it will have a larger economic impact on the community. Of course, the fact that the city council had to choose between the two businesses is incredibly stupid.
No question, this is cronyism of the highest degree. It doesn’t really fit Wyoming’s philosophy which is largely pro capitalism and anti regulation. The only possible justification is to protect the politically influential donor class.
The cap on liquor licenses is unnecessary. Let the market regulate the number of establishments service liquor. And why would a taproom which doesn’t need to serve anything over 10% ABV even need a liquor license?
While we are at it, I would like to see more competition in offering beer and wine. Why are supermarkets prohibited from selling beer and wine? And why are the number of liquor stores also regulated?
If the state wants to earn a markup, just put a tax in place.
One of the most hidden areas of (dare I say “corruption”) American life is the issuing of licenses of all kinds by state and local government. (Just look at the corruption involved in taxi licenses and what ridesharing services had to do to break that monopoly.) As I understand it, the 21st Amendment (Prohibition Repeal) gave states almost total control over alcohol distribution within their borders and if you want to know where the power lies within a state, look who control alcohol. Since a liquor license of any type is almost a license to print money, that’s where the power lies, whether that’s to hold the license or the power to issue it.
And the first rule of alcohol licenses is you don’t talk about alcohol licenses…
So stupid. Why doesn’t the hotel partner with the brewery to run their restaurant? I’m sure it would be much better than the generic bar Hilton will come up with.
@Carl: Supermarkets aren’t prohibited from selling in every state. It’s just that every state is different. That’s federalism. In my state, I can buy wine, beer and the hardest of alcoholic spirits at gas stations. They even sell mini-bottles of booze right by the self-serve soda fountains and coffee machines. I know for a fact that people buy some soda and a mini-bottle of alcohol only to mix them together in the car.
My state also does this (completely inappropriate) limitation on numbers. A local country club was relegated to a wait list. They realized that a brewery is allowed a full slate of licenses (beer, wine, hard). So they started a brewing operation. They brewed the legal minimum, never sold it, and poured it down the drain. A previous city I resided in had a number limit as a local option. They dropped it. The number of licenses first rose, then fell back to original levels. Markets work.
Many states have bizarre laws related to alcohol licenses. If anything, frustration should be directed toward state elected officials who can change the rules. New Jersey does not count hotels and bars/restaurants within hotels toward the quotas, if Wyoming did the same there would be no story here. Arizona has a rule prohibiting alcohol sales within a certain number of feet of a school, which results in a Target at one end of a strip mall not being allowed to sell beer/wine but a supermarket at the other end of the strip mall to sell it.
It’s a shame they did this. Per prior comments, it would probably behoove the Hilton owners to work out a deal with the brewery. A Hilton Garden Inn in my town did this when it opened. It ultimately didn’t work because the Hilton restaurant couldn’t attract people away from the better nearby food options (it’s not a small town), and then Covid closed the restaurant and bar, not because of the brewery deal.
If you think Wyoming is weird, then you haven’t been to Pennsylvania. Where you have to go to a beer distributer to buy beer, a state Liquor store to buy wine and spirits (but not beer and heaven forbid things like Diet Coke or water!), and when those are closed, you have to go to a pizza shop and you can buy beer.
In PA, everything is backwards- I mean, even in Ohio you can buy beer at a gas station!
But it becomes ironic as well… i.e., half of the pizza shops exist only because they can sell carry out beer (and oh yeah, you can’t buy more than 12 at a time… you literally have to leave the store, go to your car, then walk back in and buy more).
But where do you find the best pizza? At the gas station of course!
-Jon