Gallup bars could lose liquor rights
King Dragon, Paramount Lounge and Silver Stallion cited under 'three strikes' law

By Zsombor Peter
Staff writer

GALLUP — Three local liquor dealers could soon lose their distribution licenses under the state’s new “three strikes” rule if convicted of all liquor law citations pending against them.

King Dragon, Paramount Lounge and the Silver Stallion Saloon are among the six Gallup and Farmington dealers the state Regulation and Licensing Department singled out for potential liquor license revocation during a news conference inside the towering rotunda of the McKinley County Courthouse Wednesday morning.

“The point of this is to get the bars to sober up and to treat their customers with respect,” said Robert Schwartz, the department’s lead prosecutor.

The announcement coincidentally follows on the heals of a failed petition drive by five Gallup business owners, including King Dragon co-owner Mike Hsu, to make City Hall call a public referendum asking voters to bring Sunday liquor sales back.

Since imposing its three-strikes rule on New Mexico liquor dealers in October 2006, the state his issued three citations each — for selling to intoxicated persons — to the Silver Stallion and King Dragon and five to Paramount Lounge — four for selling to intoxicated persons, one for selling to a minor.

Silver Stallion owner Benny Padilla Jr. could not be reached for comment. Sam SooHoo, who owns Paramount Lounge, declined comment. King Dragon co-owner Joanne Hsu did not return the Independent’s request for an interview.

The state will hold hearings for each in the next few months. If convicted of all citations against them, three in the case of Paramount Lounge, they’ll automatically and immediately face a $10,000 fine and the revocation of their liquor license.

“When the license is revoked,” said Regulation and Licensing Department Superintendent Edward Lopez Jr., “it vanishes.”

In Gallup, a liquor license can cost upward of $200,000 these days. Schwartz called a revocation “the administrative version of capital punishment.”

Before October, the state needed five convictions against a dealer to take away a liquor license. Consequently, Lopez said, the state “has never, never revoked a liquor license.”

Considering those rules too lenient on the industry, a governor-appointed task force recommended reducing the number of convictions needed to revoke a license to four, and public hearings followed in July 2006. By the time the proposal passed the governor’s desk a month later, the number had fallen to three.

Despite the tougher regulations, some local authorities worry the state may prove lenient with its new power. Lopez assured them Wednesday that the state would prosecute the citations “aggressively and to the fullest extend of the law.”

The Paramount and Silver Stallion both have histories with the Regulation and Licensing Department.

Between January and April 2005, before the three-strikes rule took effect, the Paramount had racked up seven state citations and the Silver Stallion another four. In February 2006, the state fined Padilla $8,000 and suspended his license for nine days after convicting him on one count of selling to an intoxicated person, two counts of selling to a minor, and two counts of open container violations.

King Dragon’s Joanne Hsu, on the other hand, was honored by the Gallup-McKinley County Chamber of Commerce in 2006 as its “businessperson of the year” for the work she and her husband Mike put into expanding the restaurant.