The city of Santa Barbara might require new restaurants to stop serving alcohol at midnight.

Anthony Wagner, a spokesman for the Santa Barbara Police Department, said Santa Barbara has more than its share of liquor licenses.

“We are one of the most over-saturated cities of our size in the state,” Wagner told the City Council on Tuesday.

The state’s Department of Alcoholic Beverage Control says there should be one on-site liquor license for every 2,000 residents and one for every 2,500 residents for off-site consumption, Wagner said.

Santa Barbara has a total of 617 licenses, and 389 of those are for on-site consumption, such as restaurants and nightclubs. There are 146 for off-site consumption, such as grocery and liquor stores.

Santa Barbara also has 82 licenses for microbreweries, distilleries or wine-tasting facilities.

Wagner pushed the idea of creating a conditional-use permit program as a tool that would allow new restaurants the opportunity to serve past midnight.

After two failed motions, the council voted to direct staff to create an informational report that examines the possibility of a conditional-use permit for new restaurants or other options to regulate the deadline to serve liquor at new restaurants.

The informational report would return to the ordinance committee.

The vote was 4-2, with Mayor Cathy Murillo and council members Eric Friedman, Kristen Sneddon and Oscar Gutierrez in support. Councilmen Jason Dominguez and Gregg Hart voted no.

Councilman Randy Rowse recused himself from the meeting because he owns the Paradise Cafe, a restaurant and bar that serves alcohol, wine and liquor.

“We need more tools to be able to provide for public safety,” said Police Chief Lori Luhnow. “We have reached a saturation point in the city.”

Luhnow said there has been an increase in aggravated assaults in the downtown area, which could be linked to the high rate of liquor licenses.

Tina Takaya, the owner of Opal Restaurant on State Street, said she is already saddened by the state of the downtown area, and that this ordinance would work against Santa Barbara’s efforts to revitalize the area.

She objected to a two-tiered system that allows some restaurants to serve until 1:30 a.m. and others to stop before midnight. She is looking to open another restaurant on Cabrillo Boulevard.

“It becomes confusing to tourists and locals alike,” Takaya said. “Every town has some problem areas. Don’t try to make the entire town suffer for isolated issues.”

She said penalizing new businesses doesn’t make sense when it’s the established businesses that are allowed to serve until 1:30 a.m.

“This really doesn’t help those problem areas,” Takaya said. “Many of us have worked hard to make responsible drinking environments at our establishments.”

She said that a liquor license from ABC costs about $240,000, and that the city would be lessening the value of the license by requiring restaurants to close by midnight.

“We have just been affected by mudslides,” Takaya said. “We are trying to come back and be more prosperous, and I would like to work together for the betterment of Santa Barbara rather than creating regulations that cripple us.”

Property owner Richard Berti said he is not a drinker and that he only drinks water and milk.

Still, he scolded the council for trying to fix a problem with the wrong solution.

“We are who we are, keep it that way. Let these people operate, you make money, they make money,” Berti told the council.

“Let’s look at some of the cheap liquor stores,” Berti added.

He said there needs to be consistency in the city’s standards.

“When you risk your money, you want a return on it,” Berti said. “Please look at this thing as a business. I know it is emotional. I know some people don’t like drinking, I don’t like drinking.”

State Street property owner Ray Mahboob pressed Wagner’s contention that Santa Barbara is oversaturated, saying that he wasn’t counting the full number of tourists who come to Santa Barbara to drink and enjoy nightlife.

“People are coming to Santa Barbara for wining and dining,” Mahboob said. “I don’t know, when I go on vacation, I am not looking to detox.”

Mahboob said the market will bear how many alcohol establishments are in town, noting that Tonic and Blush recently went out of business.

“If you have too many business that serve the same thing, they will go out of business,” Mahboob said.

Hart said the city should focus only on off-site consumption sites, not fine-dining restaurants. He said conditional-use permits are lightning rods for controversy.

“While I understand there is a problem, this is such a quagmire with opening this box,” Hart said.

Sneddon said she was “stunned and a little sickened” that Santa Barbara ranks so high in liquor license saturation. She said Santa Barbara has “a really serious alcohol problem.”

“Being the drunkest city in the state, it hurts my heart,” she said.

Still, she said restaurants are not the core issue.

“I don’t see the restaurant that serves alcohol between 12 and 2 a.m. is really the main source of the problem,” Sneddon said.

Friedman said when the police chief says she wants more tools that it is important to hear her.

“I am going to listen to the chief,” Friedman said.

Murillo said that she stands by the chief.

She said the regulations would not "destroy the economy."

Dominguez said: "It wouldn't make sense to write laws that punish people who aren't causing harm while allowing serious neighborhood disruption to continue by those who ignore the law."

— Noozhawk staff writer Joshua Molina can be reached at .(JavaScript must be enabled to view this email address) . Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.