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Getting the spirit 

Mike’s Place sets the pace for a booze-fueled restaurant boom in dry counties.

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If you accept William Faulkner's maxim that distillation is civilization, then it follows that Arkansas is an enclave of barbarism. Of the state's 75 counties, 43 prohibit the sale of alcohol.

But rules are made to be avoided. A 2003 change in state law has spurred many new private club permits in what, for all the world, look like restaurants, and fine ones at that. No more are the club permits limited to the country club for rich folks and the VFW or Moose Lodge for everyone else.

The state Alcoholic Beverage Control Division issued 29 private-club permits in dry counties in 2007. Although ABC doesn't distinguish between restaurants and other clubs in its records, ABC director Michael Langley said most private-club permits issued last year were to restaurants.

A pioneer in this shift was Mike's Place, a New Orleans-style steakhouse co-managed by Mike Coats and Mike Kraft. It is located in Conway, the seat of sober Faulkner County. When ABC granted Mike's Place a permit in August 2004, it was the first Conway restaurant to go wet. And it's a good one. Our readers voted it the best in Arkansas outside Pulaski County (at least partly a result of a heavy concentration of Times readers in Faulkner County).

Alcohol didn't come to Conway easily. Although a 1969 Arkansas statute allowed private clubs to serve alcohol, restaurants were typically unable to claim themselves private clubs. To change that, Brad Lacy, head of the Conway Chamber of Commerce, helped establish Citizens for a Progressive Arkansas, a non-profit that advocated blue-law liberalization. After a lobbying campaign, the legislature amended the law in 2003 to require the state to consider a region's economic development when granting private-club permits.

The change made it easier for restaurants in a growing city like Conway to serve alcohol. The permit process requires some accounting acrobatics, however. Each private club in Arkansas is required to register as a non-profit. The regulations ensure that restaurants in dry counties don't make money from alcohol sales. Still, it's a counterintuitive classification — although restaurants can be hard-pressed to bring home the bacon whatever their tax structure. “Almost any new restaurant can be a non-profit because you don't make money for the first few years,” said Coats.

Under state requirements, a non-profit wishing to serve alcohol must be in existence for at least a year and have a hundred members before ABC issues a private-club permit. In the case of Mike's Place, that organization was already in place with Citizens for a Progressive Arkansas, which supported Coats and Kraft. Citizens for a Progressive Arkansas is now registered to Coats and covers some of the expenses for Mike's Place, including those for taxes, alcohol and rent. It is controlled by Limestone Partners, a for-profit limited liability company that gives Coats and Kraft an investment vehicle for future business.

The dry-county permits entail an added level of cost (lawyers to negotiate with ABC were expensive) and bureaucracy (“We couldn't even have bar stools!” Coats said). As the first Conway restaurant to serve alcohol, Mike's Place came under especially strict scrutiny. According to Coats, he and Kraft even underwent a dead-end investigation by the FBI, which suspected they had bought the private-club permit from ABC.

Despite the red tape, Mike's Place opened in June 2005 in a converted strip of Front Street stores. The restaurant got off to a fairly quick start — albeit “not gangbusters like we were expecting,” said Kraft. Part of the foot-dragging can be attributed to the novelty of a Conway restaurant serving booze. “There were people whispering to themselves: Should I get a drink?” Kraft said.

Mike's Place may be in rebellion against Faulkner County alcohol policy, but it's no speakeasy. The atmosphere is typical of any sit-down restaurant. The private-club permit does require its patrons to undergo a minor hesitation at the door — diners must either be a member or come with one. At the cost of $5 annually, however, membership is painless, and members are allowed to bring as many guests as they like.

While Mike's Place has garnered attention for its full bar, Kraft stresses that it's really about the food. No more than 15 percent of the restaurant's revenue comes from alcohol sales. Kraft himself has no great personal passion for drink. He doesn't even keep the stuff at his house, and if you try to talk wine and spirits he seems a bit bored.

Bring up the entrees, though, and he carries on at length. Kraft said he has two particular favorites. From the expansive Mike's Place menu — which includes hearty meat dishes as well as salads, seafood and wood-fired pizzas — he pointed to the Omaha steaks and the pecan-encrusted grouper, an entree inspired by a similar dish at Emeril Lagasse's New Orleans restaurant.

Kraft heaped praise on Andy Burris, the head chef and “a diamond in the rough.” “He's what I would call a country chef,” said Kraft. “Your dish is going to look exotic, but it's going to taste like something your mom made.”

The cultivation of a particular culinary style fits nicely into the restaurant's overall philosophy. “Food is the priority,” Kraft said. “Serving fine drinks complements the meal.”

That attitude that food and drink naturally go together helps explain why more Arkansas restaurants are applying for private-club permits. Where the restaurants are located is determined by regional growth and economic development. For Kraft, Conway is an attractive location because of the area's rising population and because three local colleges provide a solid workforce.

Faulkner County now has 20 private-club permits. That's the third-highest dry-county tally in the state behind Craighead County, which has 21, and Benton County, home to Wal-Mart's headquarters. Frequently called the “wettest dry county in Arkansas,” Benton County has 110 private-club permits. ABC head Langley estimated 90 percent of these belong to restaurants. ABC issued 14 private-club permits in the county last year.

Even chain restaurants are getting into the private club booze business. Outback Steakhouse first attempted to bring alcohol to Conway in 2001, but the state snuffed the effort. Following the change in law, Conway's Outback began serving strong drink, as did the local El Chico and Ruby Tuesday.

All signs are that alcohol in dry-county restaurants is here to stay. Few expect rivers of whiskey to flow through the streets of Bee Branch, however. “A lot of people feel that Mike's Place is opening the floodgates for private club permits, but they don't understand that ABC believes there's a saturation point,” Kraft said.

Langley concurs. He supports private-club permit expansion for restaurants only, not for bars. And, although he has no plans to issue a regulatory cut-off point for private-club permits, he thinks a town can only support so many restaurants. “Economics will take care of it,” he said.

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