Commonwealth Journal

January 5, 2013

Package store licenses still on hold

BY HEATHER TOMLINSON, CJ Staff Writer
Commonwealth Journal

Somerset —  

Even though Somerset is now “wet,” those looking to pick up a little champagne to take home for New Year’s Eve knew they wouldn’t be able to do so in Somerset.

What they — and even city officials — don’t know is exactly how much longer it will be until they can.

While restaurants and bars are serving drinks by the glass and shoppers looking for beer can stop in nearly any gas station or grocery here in Somerset, liquor stores — those retailers for distilled spirits and wine — are still AWOL. 

That’s thanks to the type of license needed to operate one of those stores, available via the state’s Alcoholic Beverage Control (ABC) office. The “Retail Liquor Package” license is what’s called a “quota license,” meaning only a limited amount of them may be issued to a “wet” community, according to Kentucky law.

The number set for Somerset by the ABC? Five. The number of applicants? According to the notices of intent to file for a license as published in the Commonwealth Journal, 17 — including drug stores like CVS and Walgreen’s which would merely add these types of products to their current inventory. 

It’s up to the state ABC offices to decide which five out of that weightier number

Earlier estimates suggested that Somerset should have its liquors stores start popping up by this month, January of 2013. Mayor Eddie Girdler told the Commonwealth Journal in November that he expected the licenses to be decided upon by early December, with the stores beginning operation a month to three months later.

Yet here it is January — and still no word on when Somerset citizens will be able to legally buy wine, bourbon or vodka by the bottle.

“Nothing’s really changed; I’ve expected something soon for quite a while now,” said Nick Bradley, Somerset’s ABC Administrator, the local figure overseeing how businesses sell alcohol in a community. Bradley said he had “heard of a specific time ... sometime back” in the past, and “that time has come and gone.”

That time would have been “some time before Christmas,” he said, but like those business owners hoping to sell spirits and customers hoping to buy it, Bradley is still waiting on Kentucky’s ABC headquarters to give the green light.

“I haven’t heard anything,” he said. “Obviously, there’s a lot that has to be done before (word from the state) gets to us.”

It’s pretty much only the liquor stores — of which Bradley said there were “14 or 15” current applicants — that Somerset is waiting on, as the other types of businesses that have filed for alcohol licenses have gotten what they need to proceed.

Likewise, there’s likely to be little new competition join the liquor store quota fray. More or less, the applicants Somerset already has are the ones they’re going to be choosing from.

“There’s still some people calling in interested in some things,” said Bradley. “The majority of people who call in (about obtaining licenses), you don’t see a lot out of it. We’re constantly answering questions about the process, but very few pan out so far. They may in the future but they definitely have a lot of work to do.”

Once they get the license from the state, prospective liquor store owners would then have to obtain the necessary documentation from the city, including building permits, certificates of occupancy, “that sort of thing,” noted Bradley. That would delay the process of opening the store for a period of time even after Kentucky ABC makes a decision.

“I assume that both those that receive a license and those that don’t would be notified by a letter from the state saying that they have or have not been selected,” said Bradley. “At that point, construction or inside retrofits or whatever they need to have done (to accommodate an alcohol stock) would start.”

Bradley observed that an influx of liquor stores would certainly boost the revenue the city makes off of alcohol sales, thus far they’ve been fairly healthy anyway. From the time the first beer was sold in mid-September, the city has been able to collect two month’s worth of data, which is available on the city’s website (www.cityofsomerset.com). 

By the end of October, total alcohol sales in Somerset had reached $1,240,515, and that month saw an increase of nearly $300,000 over September as more alcohol retailers trickled in. As for the money pocketed by the city via the regulatory fee collected on alcohol sales, the number grew by over $10,000 from September to October, for a total of $47,136.46.

“I don’t know that I’m shocked,” said Bradley, “but (the numbers are) pretty high.”

Given that the city doesn’t receive any revenue information until the 15th of a given month, the available data is two months behind, said Bradley. More recently-opened businesses, like the Captain’s Lounge in Somerset, the first actual bar in town, are expected to make the above figure jump noticeably in future reports.

“Anything new, especially when it’s by the drink — and we don’t have a ton of that right now — will boost the revenue,” said Bradley. “When we get the package stores, it will be a completely different market.

“With beer sales, you kind of get an initial burst (of sales), and then as there’s more to come on board, the sales spread out among different places,” he added. “As you add on different types of locations, that means more (rises in revenue).”

Bradley said that “there’s been pretty good turnover” in stores so far, and “without seeing a lot of change in the negative activity, (alcohol business) seem to be pretty good.” 

Businesses have been cooperating with fee collection and other city regulations, he noted.

“Everybody seems to want to do what’s right and please everybody pretty well,” said Bradley. “I hope it continues.”

And is he as hopeful about hearing about the liquor package licenses in January, at least?

“It’s pretty early in the month,” said Bradley, “so I could be optimistic.”