Commonwealth Journal

March 23, 2013

High Spirits

Negotiating with ABC is whiskey business, but city officials have nothing to wine about

by Chris Harris
Commonwealth Journal

Somerset —  

At least one team with the name “Wildcat” had a big day Thursday.
While the basketball ‘Cats were sitting at home watching the NCAA Tournament from afar, the first store in Somerset to officially receive the licenses it needed to open was Wildcat Beer, Wine, and Spirits.
Located at 775 South U.S. 27., the store got its Retail Liquor Package license from the Kentucky Department of Alcoholic Beverage Control at 8:45 a.m. Thursday, and the accompanying permit from the City of Somerset at 2:45 that afternoon.
“We’re excited about it,” said owner Chris Daniels, whose wife Maria will be running the store. “We’re businesspeople, and we saw what we thought was a good business opportunity.”
So who’s next? Maybe more than just four additional licenses to go.
On Friday, officials from the City of Somerset — including Mayor Eddie Girdler, Alcoholic Beverage Control (ABC) Administrator Nick Bradley, and City Attorney Carrie Wiese, as well as attorney Charles Cole of Lexington — visited with state ABC personnel in Frankfort to address the city’s plea for more than five available liquor store licenses.
The hearing “went remarkably well,” according to Girdler. “We got very positive feedback from the ABC board and commissioner.”
Girdler said that it would “probably be sometime early next week” before they learn what the state has decided.
The hour-long PowerPoint presen-tation made Somerset’s case to increase upon the five quota licenses the state granted Somerset in January. Kentucky law allows cities like Somerset — which went “wet” last June, permitting the sale of alcoholic beverages — only a certain number of retail liquor package licenses (relating mainly to liquor stores, selling products like wine and distilled spirits) and retail liquor drink licenses (relating primarily to bars and nightclubs). 
State officials hold all the cards: They determine how many “quota” licenses of each a city is allowed, and then decide which businesses get them, based on the applications.
For Somerset, Kentucky ABC chose five of each type of license — 17 notices of intent to apply had been received by the Commonwealth Journal — even though Girdler felt the area could support more. 
Additionally, because the ABC chose smaller liquor retailers, including both local entrepreneurs and national drug store chains Walgreens and Rite-Aid, and did not approve Liquor World — a high-volume retailer ready to make a multi-million dollar investment that the city was counting on — the city stands to lose $150,000 a year in fee revenue, according to Girdler.
As such, Somerset took steps toward convincing the state to allow more liquor store licenses, based on the county’s population and regional market potential, particularly as a tourism hub thanks to Lake Cumberland. In the past, Girdler suggested that the city could realistically support two to four more liquor stores than the state currently has allowed access to licenses.
One move the city took was to file a complaint against the state in Pulaski Circuit Court, calling the process behind the quota number set by the state “arbitrary and capricious.” 
Last week, however, Girdler told the Commonwealth Journal that the legal action was being taken off the table, because of the state’s reception to Somerset’s request. 
“(State officials) have agreed to work very closely with the city to accomplish not only the possibility of increasing the number (of quota licenses allowed to Somerset), but better cooperation in implementing the ordinance and economic factors that we want as part of the process,” said Girdler last week.
On Friday, Girdler told the Commonwealth Journal that he expected the state to make a “quick decision” and that he and other Somerset officials felt “very positive about it,” and that he thinks “we’re to be well-pleased with the results.”
Bradley said that Friday’s presen-tation has to do with “market inform-ation about Somerset and how the population (of the town) doesn’t dictate the market.” 
State officials went by the size of Somerset — only the city is “wet” instead of the entire county — in deciding how many stores the community could support. City officials are arguing that people from all around Pulaski and surrounding counties use Somerset as a commercial hub, meaning it could support more businesses selling wine and distilled spirits. (An unlimited number of licenses to sell beer in stores is allowed under Kentucky law.)
Girdler was hopeful that the ABC commissioner’s position changing hands to Fred Higdon from Tony Dehner would help the city’s cause. So far, it would seem, so good.
“The people we deal with as far as the questions we have and commun-icating with as far as licenses, they’ve done a really good job in helping us and communicating with us,” said Bradley. “Everything’s gone seamless-ly with the transition.”
The city had decided to hold off awarding their licenses to four of the five licensees picked by the state until after the matter with the state could be resolved, but had decided to move ahead with Wildcat Beer, Wine and Spirits. While Bradley suggested that the time for the others could be coming soon, as of Friday evening, only Wildcat had been granted all of its appropriate licenses.
Daniels said that the store would have a “soft opening” on Wednesday of this coming week, along with a Somerset-Pulaski County Chamber of Commerce ribbon cutting, and a “full-blown” opening on Saturday, March 30.
The store has 3,200 square feet of retail space, and capacity for 7,000 bottles of wine, as well as hundreds of shelves for beer and liquor, said Daniels, who runs robotics technology for Japanese Automotives.
“I think so,” he said when asked if his story would fill a commercial need for Somerset. “Now we have the opportunity to purchase alcohol here instead of going to some other community to buy it. Now we benefit from the tax revenue from it.”