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ABC not moving forward with new warehouse, for now

The Alabama Alcoholic Beverage Control Board is not moving forward with proposals to lease a giant new liquor warehouse.

Instead, the agency will continue to operate out of its crowded Montgomery space while it looks for other options. And at least one state senator things the agency should have the option to own its warehouse space.

In response to a request for proposals, ABC in October received three from companies offering significant new warehouse and administrative office space.

“After what we consider to be a very thorough examination, staff came back to (ABC Administrator Curtis) Stewart and recommended that we not take any action at this time,” ABC spokesman Dean Argo told Alabama Daily News on Thursday. 

“They even recommended that we extend the fact-finding portion of our process, looking at what other states that are in similar circumstances are doing to meet customer demands.”

All of the submitted proposals had positive aspects, Argo said. The companies, DHL Supply Chain; Scannell Properties; and Aronov and BL Harbert International, were informed last month that ABC would not be moving forward with plans at this time.

Asked if the decision was at least in part financial, Argo said he didn’t think so.

“It really came down to trying to find the right opportunity, the right fit,” he said. “I don’t think money was an issue.”

Several other states are challenged in finding space for increased alcohol products, Argo said.

Whether it stays in the facility it’s rented for nearly 40 years or finds new space, ABC is going to have to grow with consumer demand, Argo said.

State law says ABC must rent, not own, all the properties it uses, including retail space. Sen. Sam Givhan, R-Huntsville, said in October that lawmakers should consider changing that rule. On Thursday, he told ADN he’ll sponsor such a bill.

“While I understand the risks and potential political issues with the state owning retail sites, I believe it is in the state’s best interest to have the option to either own or lease warehouse space and/or administrative offices,” he said. “I believe that we should keep the law intact as to retail locations, but intend to sponsor a bill allowing flexibility for other sites.”

The RFP sought a contractor to design, build and lease the agency a warehouse that could be more than double the size of its current 140,000-square-foot Montgomery facility. The RFP called for a 250,000-square-foot warehouse with expansion capabilities of up to 325,000 square feet and a separate, two-story central office.

Agency officials have said the current site, from which almost all liquor sold in the state is distributed to ABC and private package stores, is too small and outdated. The amount of liquor sold in Alabama has nearly doubled in the last decade and is expected to continue to increase. 

Those increased sales would pay for higher rent costs, ABC Administrator Curtis Stewart previously said. He said the agency could pay $5 million more in rent per year — an estimate he considered high — and the state would still see an increase in liquor tax profits.

John Knight, an ABC board member, previously told ADN he was concerned the new site could cost up to $100 million. He worried about the impact the expense would have on state revenues.

Lawmakers will likely debate in the upcoming session another consumer demand question: whether pre-mixed drinks should be sold in grocery and convenience stores along with beer and wine. How and by whom those drinks would be distributed will likely be part of any debate.

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