Bar measure more likely to hinder revenue than cut drinking
A diverse economy is an important reason behind Iowa City’s proposed zoning ordinance. If approved, the measure would prohibit new bars from opening within 500 feet of existing bars. City Councilors hope the so-called 500-foot rule, which passed its first vote Tuesday night, will make way for a wide variety of businesses to replace bars as a downtown staple.
Good luck.
For that to happen, Iowa City will need to do more to compete with other communities for entrepreneurs’ affections. Unfortunately, the bar-restriction move could strangle an essential revenue source in Iowa City.
The measure also prohibits liquor stores downtown from opening within 1,000 feet from another liquor store. Most of the discussion leading up to this vote was concerned with curbing underage drinking and alcohol violence in Iowa City. At a meeting on Tuesday, the City Council invited members of the UI’s new Alcohol Steering Committee to speak about studies showing correlation between bar density and problem drinking.
All this talk about binge drinking and bar density has overshadowed Iowa City’s desire to diversify the local economy.
The council has made very strong arguments about restricting bars and restaurants operating downtown, but it has made little indication on what it wants to replace the bars with. The councilors also haven’t addressed other problems nonservice-based businesses face moving downtown, other than competing with bars for building space.
It is questionable that the new zoning ordinance will even decrease the number of bars downtown. While the ordinance does prevent new bars from opening up in proximity, it does not impose any restrictions on existing establishments. New bars could still move into spaces older bars inhabited. Besides, downtown Iowa City’s limited available space already makes it prohibitive for any business, let alone a bar, to move downtown.
Further, taxes could be a major hindrance for newer businesses looking to move downtown. Iowa City has the highest tax rate on commercial properties in Johnson County. Businesses that rent still feel the hardship of higher taxes through higher rents landlords charge as a result.
Coralville presents numerous challenges for Iowa City as well. It has a lower tax rate than Iowa City, though it does not need lower taxes to compete with Iowa City. The Coral Ridge Mall has direct access to two of the state’s major highways. That intersection brings in people from all over eastern Iowa.
These two issues alone underscore the numerous challenges Iowa City faces in diversifying its downtown. Restricting the number of bars will probably not give the economic boost Iowa City is looking for; in fact, it may hinder the city’s fiscal viability. Bars are a central element to the city’s economy and a major money-maker for both their owners and the city. If the zoning ordinance is effective in reducing the number of bars, it could cut into a vital source of revenue with little guarantee that other businesses will take their place.
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