22 Zombie Licenses Pass at Latest LCB Auction
Giant Food Stores, which currently has five “R” licenses in safekeeping in Bucks County, was the high bidder at $351,000 for a license at the latest LCB Zombie license.
The Board, in reporting on it’s auction said, “The Average winning bid in the sixth auction was $94,609.” This number (representing the statistical mean), grossly overstates the state-wide results.
The average when stated as the “median” actually reflects the outcome more accurately. The median is the value separating the higher half from the lower half of a data sample. For a data set, it may be thought of as the “middle” value.
In this case, where three licenses did not bring even the minimum bid of $25,000, the median is between $46,500 and $50,000, meaning that half of the 25 licenses offered and sold were between $25,331 (2) and $50,000. Only 7 of 25 offered were sold for more than $100,000, about one third. One was over $200,000 and another at $351,000.
Meanwhile, in Bucks, there are 30 restaurant licenses in safekeeping, 5 held by Giant and two by Weis. This auction bid is a “high” for the 5 that have been sold out of Bucks since 2016, with a low of $281,101.
Recently, Turkey Hill sought a municipal transfer into the City of Lebanon. In a unanimous vote, City Council turned them down saying that the convenience store wanted to sell beer at a dangerous intersection along Route 72. Turkey Hill rejected their advice. It quickly found a license that did not require a municipal transfer to do the deal which, of course, was available to it all along.
Zombie licenses bring revenue into the State which otherwise would go to small business owners. Lawyers like these transfers because they are not routine and require lots of billable hours, going to meetings, making presentations, and perhaps lobbying, which at this point is unregulated at the municipal level.
The point is that there were 22 “R” licenses created by the State which should have been purchased from private enterprise investors. For Bucks, the State received $1.5 million since 2016 for “R” liquor licenses that could have gone to private investors who are still paying to have their license held in safekeeping.