Village won’t sell liquor license to Cedarburg

Leary of compromising Grafton’s ability to attract development, the Village Board voted unanimously Monday to deny a request from the City of Cedarburg to purchase one of the village’s reserve Class B liquor licenses on behalf of an unnamed business.

The number of regular Class B liquor licenses Grafton has is capped by state law at 11, 10 of which have been issued.

Municipalities also receive a number of Class B reserve licenses based on population, which cost applicants $10,000 each. Of Grafton’s eight reserve licenses, four are currently in use. 

Reserve licenses can be transfered from one municipality to another for a fee of at least $10,000, but the transaction is permanent. That means that if Grafton transfered a license to Cedarburg, it would lose that license forever. 

Grafton officials rejected Cedarburg’s request because of continued growth in the village, fearing that having one fewer reserve license could one day discourage new businesses from opening in Grafton and give the City of Cedarburg an advantage in attracting restaurants and bars.

“I’m not in favor of selling off our liquor licenses given the fact that we are certainly growing,” Village President Dan Delorit said. “There are a lot of folks who come in and say, ‘Geez, I’d like to do X, Y and Z, and I’d like to have a full license.’” 

Village Administrator Jesse Thyes noted that transferring a license would give Cedarburg sole discretion over who receives it — meaning the business currently seeking it may not receive it.

“I understand the City of Cedarburg actually has a waiting list for liquor licenses as they are out,” Thyes said. “If we were to sell this license to the City of Cedarburg, it may not actually go to the private entity who requested it in the first place because again, it is at the sole authority of the City of Cedarburg.”

Thyes called reserve licenses valuable assets and recommended against selling one in this “one off” situation. Village Clerk Kaity Olsen clarified that Cedarburg put in the request as a courtesy to the business owner who requested it, not because the city has interest in obtaining another license for itself.

Though the number of regular licenses available in Grafton can’t increase, the number of reserve licenses may increase by one for every 500 increase in population. Reserve licenses were enacted after the State of Wisconsin limited the number of regular Class B licenses to the number of businesses that held them in 1997.