Commonwealth Journal

October 6, 2013

Ruling on alcoholic licenses expected

Somerset wants 5 additional outlets

by Chris Harris
Commonwealth Journal

Somerset —

The City of Somerset’s ongoing battle to secure additional liquor store licenses took another step forward this week in Pulaski Circuit Court.
According to information pro-vided by attorney Charles Cole, who is representing Somerset in the case for the law firm Sturgill, Turner, Barker & Moloney, PLLC, a written ruling may be made in the case before long based on the events of the hearing held this past Monday.
In August, the City of Somerset re-filed a lawsuit against the Kentucky Department of Alcoholic Beverage Control (ABC) in an attempt to “(ask) the judge to clarify the law,” according to Somerset Mayor Eddie Girdler.
The state agency has ruled that Somerset only qualifies for five quota licenses for possible wine and distilled spirit retailers, while Somerset is arguing that they should be able to issue more such licenses to interested entre-preneurs.
Somerset and the ABC had worked out a deal earlier this year following the first legal action Somerset took against the state agency, but that arrangement was thrown into tumult by a state legislative subcommittee’s decision to find the ABC’s regulations deficient.
According to the statement issued from Cole, who provided information to the Commonwealth Journal via Somerset City Attorney Carrie Wiese, a motion to dismiss Somerset’s lawsuit was filed by the ABC and brought before Pulaski Circuit Judge David Tapp.
After hearing argument by counsel for both parties, Tapp did not rule from the bench, but indicated that he would be making a written ruling in the near future.
Cole argued that the lawsuit should not be dismissed and emphasized the city’s allegations that the ABC acted “arbitrarily” and in violation of the Kentucky Constitution during the licensing process.
Girdler declined to comment on the case when contacted by the Commonwealth Journal earlier this week. Cole’s statement on the case is as follows:
“The Kentucky Revised Statutes provide the Local ABC Administrator with the authority to first approve applicants for liquor package licenses and further provide that the City Administrator can set regulations for the issuance of city licenses that are no less stringent than the regulations of the ABC for the issuance of state licenses.
“Local Administrator Nick Bradley, with input and approval of the Somerset City Council, went to great lengths to enact an Alcohol Ordinance that emphasized factors such as jobs, payroll tax revenues, property investment, location, and long-term growth for liquor package license applicants. However, the ABC denied the City the opportunity to apply these criteria to the nine applicants for the licenses that the ABC determined to be qualified. The criteria, if any, applied by the ABC prior to the issuance of five state licenses is not known at this time.”
Following the June, 2012 vote by Somerset citizens to allow legal alcohol sales within the city limits, Somerset had big plans for the expected liquor stores in town, including a proposed $5 million investment by regional business Liquor World to not only locate in the North Plaza shopping center but renovate it and even bring in a chain restaurant interest.
Instead, the ABC issued licenses to three smaller-inventory stores — Apple’s Wine and Spirits, First Stop Party Supply, and Wildcat Beer, Wine and Spirits (though the city has noted that the latter was more in line with their expectations) — and two pharmacy chains with a limited supply, Rite-Aid and Walgreens.
The city felt that the ABC didn’t take their needs and economic forecast into consideration, and even held up issuing licenses to some of the above businesses while they tried a two-fold approach to working out a deal for more licenses — both through the courts and more directly. 
Somerset officials contended that the state had failed to follow Kentucky statutes in the application of the city’s ordinance, and that the existing quota system had no current regulations to limit the numbers beyond the guidelines of county population. The ABC had used Somerset’s population to arrive at the figure of five, based on a calculation of one liquor store for ever 2,300 residents. If they had gone by county population, Somerset could have qualified for over 25 such licenses, which allow for the operation of retail stores that sell distilled spirits and wine, rather than just beer.
Girdler felt like the two entities had reached a deal to grant Somerset five more potential licenses. However, when the subcommittee — of which Somerset’s own state representative Tommy Turner was a part — ruled the ABC’s regulations deficient, the agency went back to the drawing board.
“ABC has admitted that there is no current quota system for cities like Somerset, except for using the county population totals,” stated a release issued by the city in August after the decision to re-institute legal action against the state was made. “The lawsuit seeks to determine what statutes and regulations to apply in the issuance of quota licenses since no rules exist.”
Added Bradley at that time, “Really, it’s all about laws and regulations, getting those set and clarifying exacts the ins and outs of how this works. ... (It’s about) holding people accountable for making sure laws are followed, and making sure we’re doing the same.”