Mad Rush For Liquor

Seems the passage of the liquor store referendum has started a near mad rush of folks hoping to be the first to offer booze by the jug in Loudon.  No less than nine different applications have been submitted for the two permits that will ultimately be granted by the Loudon City Council. More applications may be forthcoming.

Krishna Enterprises Inc. 206 Willington Manor, Loudon.
John & Mary Ann Sanabria 128 Turtle Cove Ct., Lenoir City.
Lalita Inc. 930 Mulberry Street, Loudon.
Manjula K. Bhalodia 122 Kawonu Lane, Tellico Village.
Rick Blankenship 1074 Mulberry Street, Loudon.
G & M LLC. 210 Bank Street, Lenoir City.
WI Investments  LLC. 500 Phillips Road, Lenoir City.
John D. James 606 Mulberry Street, Loudon.
Loudon Wine and Spirits 3662 Brooksview Road, Lenoir City.

Obviously all these applicants feel there is a lot of money to be made but is there? Ultimately council will be granting just two permits. So there will be two liquor stores in close proximity that will have to compete in a very small market. These two outlets will also be competing with much larger liquor outlets at Dixie Lee Junction and Campbell Station Road.

Certainly there are those in Loudon who buy liquor but many of those will still go to Knoxville to get their liquor due to price and the fact they wouldn't want their neighbors to see them in a liquor store. The larger market for the Loudon Liquor outlets as we all know will be the residents of Tellico Village.

Depending on which part of the village one lives in, the Dixie Lee liquor store will be closer than the Loudon liquor store and it's a safe bet that the little liquor outlets in Loudon will struggle to compete price wise with the larger west Knox stores. The assumption that a liquor store in Loudon will automatically be a money maker may not be a safe assumption at all.

The city of Loudon hasn't yet taken up the question of "municipal inspection fees." This is actually where local governments make their big money on liquor sales. Municipal Inspection Fees is actually just a term for an additional 8% tax on all the booze sold through a liquor store. Permit fees and sales taxes collected on liquor sales is just a drop in the bucket compared to Municipal Inspection Fees which depending on the liquor store sales can total into the tens of thousands of dollars for local government.

In a related story, two of the applicants are competing to buy the same piece of property on Hwy. 72. See story below. The property owned by the city of Loudon and Loudon County, had been promised to Waffle House but now seems destined for a liquor store. Economic Development president, Pat Phillips has now got his finger in the pie and is trying to convince the city and county officials to sell the property to which ever applicant gets a liquor license. The whole affair has a bad smell to it epically with Phillip's involvement.

It's ironic that the residents of Loudon voted not to permit liquor stores in their city but now it appears the tax payers of Loudon paid for the land that a liquor store will locate on in Center 75.

For More Read The Hunter Report

Two applicants competing for same package store site

Vicky Newman News Herald

With deadlines steadily approaching for submitting applications and advertising their intent, two parties are vying to purchase the same piece of property in Loudon for location of a liquor sales establishment. 

Because the city of Loudon jointly owns the property with Loudon County, Loudon City Council members once again are squeezed by unwanted and unwelcome tasks associated with liquor sales issues.

The .62-acre tract of property in Loudon at Centre 75 Business Park had been optioned at one point for a Waffle House, but that project fell through with the economic downturn of the last year. 

Both Johnny James and partners Ed Bell and John Tuck have submitted to the Loudon County Economic Development Agency letters of intent to purchase the property for a liquor store establishment. 

The LCEDA Board of Directors recommended that the City of Loudon approve the sale to the party successful in obtaining a license from the city, for the purchase price of $325,000 an acre, which would be $201,500 for .62 of an acre.

The matter was placed on Tuesday’s Loudon City Council agenda. While it created considerable discussion about the ordinance, and brought forth questions about the viability of the procedures for granting Certificates of Compliance (local liquor licenses), no action was taken on the matter.

Under the new liquor ordinance, two applications for Certificates of Compliance will be approved by the city, after which the applicant will have to get a Tennessee Alcoholic Beverage Control license.

The council had discussed selecting liquor store applicants objectively, using a blind ratings system, whereby points would be ascribed for various criteria. 

One suggested criterion for rating proposals was location.

Councilman Lewis “Charlie Brown Garner” noted that, conceivably, both applicants could be successful in receiving Certificates of Compliance for basically the same project, at the same location. 

“It’s a crapshoot,” Garner said. “If one doesn’t get it, there is not time to get another proposal. I don’t have to tell you what’s going to happen ... it will default to the third property in line, and that won’t comply with us or the state...”

Garner continued, “There’s no way, if we’re unbiased, that we will give John James a lower score than Ed Bell. There’s a good possibility they will get the same points...”

James, who was attending the meeting, said he had not intended for his offer to purchase the property to be contingent on the liquor store locating there. He said he intended to construct a building on the site, and had plans for locating another business there if the liquor store license was not approved.

“Once all this smoke clears, and all is said and done, there’s going to be a check written for the property... It’s going to get real interesting,” James said.

James said he was ready to begin construction, and had attempted to make a down payment on the property, but the money was not accepted.

Lynn Mills, Loudon city manager, noted that the Centre 75 property is not sold for speculation, but for specific city and county approved projects.

Councilman Eugene Lambert said, “You’re getting the cart before the horse. They (LCEDA) have no authority to sell the property; their obligation is to come to us, the city council and county commission... You couldn’t put money down.”

Council members said, if all other things were equal with applications, they would like to know who submitted the letter of intent to purchase the property first.

Pat Phillips, president of the LCEDA, said the letters submitted by both James and Bell/Tuck had specified that the purchase would be contingent upon receipt of a Certificate of Compliance for a liquor store. “The language in both was very similar, almost identical,” he said.

The property at Centre 75 is located near Taco Bell and Kentucky Fried Chicken. Tuck, who also attended the meeting, told council members that he and Bell had been first to attempt to purchase the site for a liquor store.

James said he had no way of knowing when the other party applied. He said he submitted his letter in early January, after he got the idea for trying to purchase the site during a city council meeting. “A light bulb went off,” he said, adding that he felt it was an ideal location for a liquor store. 

Mayor Bernie “Inky” Swiney responded, “It is.”

Proximity and location are issues that should be addressed when the council evaluates proposals. Mills said the state will not grant two liquor licenses within 1,000 feet of one another.

Applications for liquor store establishments must be returned to the city by March 5. Applicants will be required to pay a $300 fee per proposed establishment, allowing city officials to conduct background and financial checks on applicants. Also, the applicant will be required to advertise the proposed liquor store location three times in the local newspaper, and include the public hearing date, March 16, for public comments.