Lawyer Oversees Firm, Liquor Store

A little more than a year ago, Fayetteville attorney Erik Danielson was involved in a liquor legality in the River Valley, representing a group of citizens seeking to stop the flow of booze into the Fort Smith suburb community of Barling.

Residents there overwhelmingly approved alcohol sales in a November 2012 vote. But a handful of Barling residents challenged the vote in Sebastian County Circuit Court, citing several examples of Arkansas case law that said voters in a city can’t approve alcohol sales if they had previously been banned by a vote of the entire county.

Danielson, then practicing in his hometown of Booneville, had previous involvements with alcohol law, specifically with legal challenges to the state’s native wine preferences in 2007.

“Most of the wineries in Arkansas are in my backyard where I grew up,” he said.

Danielson represented the Barling group and was successful in arguing that the issue shouldn’t have made it to the ballot in the first place, and the results were not valid. The vote was thrown out in January 2013.

So for the time being, thanks to Danielson’s legal maneuvering, it’s still illegal to sell alcohol in Barling, though he said the city is mounting an effort to change the state law to let individual cities in dry counties vote on allowing liquor sales.

Unless hired by someone to get involved, Danielson said he won’t have anything to do with that endeavor. Danielson, you see, isn’t a crusading lawyer leading the anti-liquor movement.

In fact, he is a liquor store owner. Through a random lottery draw last summer, he was awarded a permit by the Alcoholic Beverage Control to sell alcohol in Benton County.

Danielson was one of 73 applicants who each paid $2,000 for a chance at one of the 55 permits distributed.

 “I decided I’d put my name in the hat [for a permit] and I thought there would be hundreds, if not thousands, of applicants,” Danielson said. “I didn’t think it would work out, but it did, and I found myself opening a liquor store.”

 

Legal Lineage

Danielson, 36, set up his own law office, Danielson Law Firm, in Booneville in 2005 after passing the bar, but he moved to Fayetteville a few months back to establish the firm in Northwest Arkansas on North College Avenue.

He comes from a legal family full of attorneys and judges. His grandfather, Paul X. Williams, was nominated by Lyndon Johnson to be a United States federal judge for the Western District of Arkansas, serving from 1967 until his death in 1994.

His father, Paul Danielson, served as a circuit court judge for more than 10 years and was elected to the Arkansas Supreme Court in 2006.

Elizabeth “Betsy” Danielson, his mother, currently practices with the firm. She has served on the Arkansas Court of Appeals and spent 18 years as an administrative law judge. She is currently serving her fifth year as district court judge for the Southern District of Logan County and is seeking election to the circuit bench.

Danielson has three uncles who are all attorneys, including David Danielson, who practices in the family’s Fayetteville office.

 “My uncle does mostly plaintiffs’ work, and my mother’s practice, I would call that domestic relations,” Danielson said. “From wills, estate planning and just general small, small-town, whatever somebody in her church congregation has a problem with.”

The firm deals largely with work in the civil realm. Litigation involving oil, gas and property disputes occupy most of Erik Danielson’s time. Running for a judgeship isn’t in his plans, he said.

“I won’t ever say never,” he said. “But I enjoy practicing [law] and doing other things, other business ventures.”

 

Expensive Endeavor

Danielson’s primary business venture right now is Walton Boulevard Wine and Spirits, opened at 9 a.m. Dec. 20 at 406 Razorback Drive at the intersection of Walton Boulevard.

Because of the time of year, he was able to devote much of his energy to the second endeavor, without interfering with his law practice.

“Fortunately, December is generally a pretty slow time for law firms,” he noted. “I was able to be really hands-on at the store and was there from open to close the first couple of weeks through the holidays.”

The initial financing, without getting too deep into specifics, was “very expensive,” Danielson said. Margins are thin and inventory is anything but cheap.

Products must be paid for upon delivery, according to state law, and ABC director Michael Langley told the Northwest Arkansas Business Journal last summer that a 3,000- to 4,000-SF liquor store might contain as much as $150,000 in product.

Danielson’s store is about 2,600 SF.

And because liquor distribution in the state is heavily regulated with a system comprised of manufacturers, distributors and retailers, each group has its own set of rules and regulations.

The paperwork trail is something only a lawyer could love.

“The process you go through is tough,” he said. “And if I was to hire the [legal] work done like I’m sure most people did, it would have been that much more expensive.

“People have the misconception that a liquor store is a cash cow or money machine, and it absolutely is not. You have to sell a lot of product to break even.”

Danielson originally had a lease-to-own agreement with the building owners, but bought the building outright in November for $280,000.

Floyd and Shirley Slimmer were the sellers.

The building, formerly occupied by Coffelt Memorials and Reynolds Pest & Termite Control Inc., underwent an extensive remodel by J.R. Ball Contracting Group Inc. of Springdale, Danielson said.

“Other than the roof, which was replaced two years ago, the only thing not new in that building are the concrete walls and concrete floors,” he said.

That includes the electrical and HVAC systems, which had to be replaced after they were stolen one weekend during the remodel.

 

Long-Term Investment

Danielson said his store is stocked wall-to-wall with more than 2,600 different products.

For an additional $1,000 permit, Danielson is able to offer a tasting bar at the front counter.

In a crowded market for liquor stores, Danielson hopes the store develops a reputation as a go-to business for hard-to-find products that are desirable to a certain niche of customers.

His store is one of three within a few hundred yards of each other along Walton Boulevard.

“In that market, there is a thirst for unique craft beers,” he noted. “Our average price of what we’re selling has been higher than what I would have anticipated — a little bit nicer wine, craft beers they’ve never had. High-end bourbons and scotches have been popular, too. It’s been a surprise seeing interest in high-end, more unique products.”

Danielson, though technically the store manager, gets most of his information these days from an assistant he hired to do most of the ordering and the “hands-on” work.

As for employees, the store is staffed by six part-timers who each work about 20 hours per week.

“It’s a long-term investment just like anything else,” Danielson said. “Even if the store wasn’t going to make it 5 or 10 years down the road, I’d still be happy with the investment in that property.”