Local liquor store licenses draw more than $1M in bids

Bids for all 167 state-run stores total $30.75 million as transition to private retail sales continues

By Cami Joner, Columbian retail & real estate reporter

Published:

Updated: April 23, 2012, 6:22 PM

 
photoLiquor store employee Eric Simonson helps customer Andrea Gecho on Monday at the state-owned liquor store at 1700 Main St. in Vancouver. Tony Singh of Terre Haute, Ind., was high bidder at $150,000 in a state auction to purchase the store.

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photoAuctioned stores in Vancouver. Click on chart to enlarge.

Bids totaling $30.75 million earned 121 bidders the right to apply for spirits retail liquor licenses at 167 state-run liquor stores, including seven in Clark County, the Washington State Liquor Control Board announced Monday.

The bidders participated in an online auction that ended Friday, part of Washington’s voter-approved transition to private retail liquor sales, which take effect June 1. The seven Vancouver stores sold to six different bidders for a total of more than $1 million. It’s anyone’s guess which liquor sellers will turn a profit in Clark County and which stores will be wiped out in the newly competitive retail sales market.

State stores in Vancouver sold from the downtown core north to Hazel Dell and east to Southeast 192nd Avenue. Money from the sale will go to the liquor control board’s liquor revolving fund and from there it will flow to the state’s general fund, said Mikhail Carpenter, a spokesman for the state liquor agency.

Not included in the auction were seven Clark County contract stores, which are operated by small-business owners who contract to sell liquor through the state. Some of those stores will close, predicted Susan Goedert, who has owned a contract store in the tiny hamlet of Amboy since 2004. She plans to close the 600-square-foot store before the June 1 deadline for transitioning all of the state-run stores.

“As a stand-alone store, there is not enough profit in it,” said Goedert, who estimated it would cost $60,000 to buy the store’s inventory from the state.

Winning bidders of the state-run stores also will have to buy the liquor, although it will be offered to them at a discount rate, said Brian Smith, communications director for the liquor control board.

“What the top bidders get is the right to apply for a liquor license at that specific location, in that footprint,” he said.

Initiative 1183

Voters decided in November to privatize the state’s liquor sales and distribution system, via Initiative 1183, which directed the liquor control board to auction the state store properties at their current locations. Because the state leases the properties instead of owning them, winners of the auction earn the right to apply for a liquor license, but must negotiate with the landlord to sell in the same space, Smith said.

Clark County’s winning bidders and contract store owners will compete with liquor sales at approximately 69 grocery and variety stores requesting licenses, all of which measure at least 10,000 square feet.

Smith said the state liquor board ran two simultaneous auctions to achieve “maximum reasonable value,” as directed by the initiative. The first auction tracked bids for each individual store. The second was to secure the highest single bid for all store locations combined, with the state taking the higher of the two. The sum of individual bids exceeded the $4.6 million all-store high bid by a nearly seven-to-one ratio.

Employees of the state-run organization have started a mass exodus as the weeks tick down to the June 1 deadline. The agency has had to hire temporary workers to try to keep all of its 167 locations open.

Since the auctioned-off stores are all under 10,000 square feet, those locations will be the only exceptions to the rules of I-1183, which only allows privatized liquor sales in stores 10,000 square feet and larger. If the winning bidder is unable to secure a lease, they may re-sell their right or request an alternative location within a one-mile radius of the existing location, Smith said.

The auction was scheduled to end at 4 p.m. Friday. However, the state followed typical online rules that allow for a five-minute extension if a bid is placed during the final five minutes of the auction. Last-minute bidding activity extended the auction until 6:25 p.m. Friday.