Local governments in Washington are confronting a major change in how liquor will be sold starting in three months.
The City of Lakewood, where stores are already applying for licenses to sell liquor and where officials are looking to raise more tax revenue, is certainly no exception.
On Monday, the City Council will hear a report on how the state’s deregulated alcohol distribution system could affect the city’s bottom line.
“It’s a whole new world for us,” Councilman Paul Bocchi said last week.
Washington voters ended the state monopoly on spirits by passing Initiative 1183 in November. The first privately run stores can legally open June 1.
Lakewood budgeted a total of $725,000 in liquor profits and taxes this year; the initiative alters the distribution of revenue to local governments.
Early indications are the number of liquor stores in Pierce County’s second-largest city may at least triple under the new system. There’s a possibility the change could attract a large, standalone liquor retailer to Lakewood, though officials said there have been no inquiries so far.
City staff calculated 15 retailers in Lakewood are likely eligible to sell liquor. Three major chain stores have filed applications: Albertsons on Steilacoom Boulevard, Safeway on Gravelly Lake Drive and Walgreens on Steilacoom Boulevard.
Shin Shin, which operates a Korean grocery, submitted an application to open the first standalone liquor store on South Tacoma Way, senior planner Deborah Johnson said.
In addition, two state-run liquor stores in Lakewood could continue to operate in the private market. The liquor control board plans to auction off the rights to these stores. It will announce its plan in the next couple of weeks, said Brian Smith, an agency spokesman.
Johnson wrote in a staff report that three liquor megastores – BevMo, Total Wine & More, and Liquor Depot – may be looking to open standalone stores in the state. The Seattle Times reported last month that Total Wine plans to open 10 stores in Washington, including one in Tacoma.
Competition from cheaper alcohol sold at neighboring Joint Base Lewis-McChord may mute market interest in Lakewood, however, Johnson wrote.
Liquor is sold at 19 locations on Lewis-McChord, said Judd Anstey, spokesman for the Army and Air Force Exchange Service. Its policy is to sell spirits for no more than 10 percent less than what a shopper would find at a liquor store in a nearby community.
Lakewood staff conducted an informal survey and found liquor was priced $1.50 lower per bottle on average at the base than in state-run stores.
That means Lewis-McChord’s 30,000-plus service members aren’t a key target for increased local liquor sales and the accompanying tax revenues.
“We can’t really count on the military population unless a store is featuring a specialty product that is not available on the installation,” said Ellie Chambers-Grady, the city’s economic development director.
Police Chief Bret Farrar said he doesn’t anticipate an increase in crime once the new liquor distribution system goes into effect.
“There’s plenty of states all around the country that have privatized liquor sales and have large liquor establishments that sell to the public,” he said.
But Andie Gernon, a former City Council member involved in several community organizations, said she worries increased availability of liquor will have a negative impact.
The City Council last week rejected imposing a moratorium to keep big-box-type liquor stores out of Lakewood, but didn’t rule out regulating their size and location. Under the state’s new system, retailers in urban areas can sell liquor if they’re at least 10,000 square feet; there is no cap on their size.
Lawyers for the Municipal Research and Service Center, a Seattle-based nonprofit consultant to cities and counties, have advised it’s unlikely that a city could prevent an existing store of at least 10,000 square feet that already sells beer and wine from obtaining a license to sell hard liquor.
But the initiative gives communities leeway to restrict or stop new standalone liquor stores, according to Municipal Research. Cities could require a permit to open a store and restrict its size in certain zones.
Lakewood has previous experience with moratoriums, enacting one in 2002 and another in 2005 to keep new minicasinos out of Lakewood. The city let it expire in 2008, the year voters rejected a citizen initiative to ban minicasinos.
But there’s no political will to use a moratorium on liquor distributors now. Mayor Doug Richardson suggested the council was hesitant to keep out stores that voters indicated they wanted in passing I-1183.
Added Councilman Don Anderson: “I have a personal moratorium on declaring a moratorium.”
The mayor also noted there’s no rush to figure out what regulations are needed for standalone liquor stores
“If the phone isn’t ringing, we have time to do that in a thoughtful way,” he said.