The Alabama Alcoholic Beverage Control Board is continuing discussions with the Retirement Systems of Alabama to have it build a large liquor warehouse and adjoining administrative headquarters.
The two entities haven’t finalized an agreement but ABC officials told Alabama Daily News they would likely lease the space with an option to purchase. Lawmakers and RSA entered a similar agreement last year to construct a new State House in Montgomery.
The retirement system has constructed multiple buildings in Montgomery and around the state. The agency is currently constructing a new home for the Alabama Legislature behind the current outdated State House.
The project and potential timeline are still in development, according to a written statement from ABC.
Last year, ABC issued a request for proposals to lease a larger warehouse and offices. It received three proposals but decided not to move forward, pausing the process.
Until this year, ABC could only lease its warehouse and retail spaces. It’s rented its main liquor warehouse in Montgomery for nearly 40 years and has said the space is now too small and inefficient to accommodate growing demand.
This year, lawmakers and Gov. Kay Ivey approved legislation to allow ABC to own its warehouse space. Retail space must still be leased.
“It makes the most fiscal sense for the citizens of this state,” ABC’s statement said. “(The board’s) operations contribute to funding for the General Fund as well as other state and local agencies. As the ABC Board saves money through efficient operation, additional money will flow to these other entities to the benefit of citizens of this state.”
In a new RFP for warehouse automation, ABC describes a 250,000-square-foot warehouse with expansion capabilities of up to 325,000 square feet to accommodate future growth. Those are the same specifications discussed last year.
Nearly every bottle of liquor sold in the state is distributed from the current 140,000-square-foot Montgomery warehouse.
According to ABC, its sales volume has almost doubled in the past ten years and it maintains an almost 5% increase in annual sales.
Last year, ABC Administrator Curtis Stewart told lawmakers 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.
Sen. Sam Givhan, R-Huntsville, on Thursday said his warehouse ownership legislative gave ABC some leverage when negotiating for new space.
“It gives them some avenues they didn’t have before,” Givhan said. “…” Before they were at the mercy of the market because everyone knew they couldn’t build their own (warehouse). And now, they have the flexibility that they can choose.”
He also said the RSA option “makes sense.”