MONTGOMERY — Alabama Alcoholic Beverage Control (ABC) Board administrator Curtis Stewart defended plans for a new, bigger central warehouse and office facility on Wednesday.
Stewart announced in August that the ABC Board requested proposals on a new lease for a more extensive facility due to the agency's operations nearly doubling in the last decade.
According to the RFP, If the bidder plans to build a new warehouse and office for the ABC to lease, construction must be completed by the end of 2025. The RFP outlines a 250,000-square-foot warehouse facility with expansion designs "for up to 325,000 square feet for future growth." The new lease would be in the range of 10 to 25 years.
By law, the ABC Board is required to lease all facilities. The Board's central offices and warehouse, located at 2715 Gunter Park Drive West in Montgomery, were leased in April 1982. The site has been modified multiple times to increase warehouse space, parking and office space. The ABC Board now requires "facilities designed to alleviate current constraints that foster continued growth and support the future business needs of the state of Alabama," according to the ABC. The current lease for the central office complex and main warehouse will expire on March 31, 2025.
If a new lease at a new facility is finalized, Stewart estimated at a Sunset Committee meeting on Wednesday the rent would be an increase of $5 million annually.
"Yes, we can afford to do it, and I hope these are conservative. These assume 4% increases in costs a year and, on top of that, 4% an additional $5 million in rent in that last year. It assumes 3% increase in sales, and our sales this year are going up 5.8%. The 3% is conservative. The 4% of costs going up, hopefully, that's a little bit high, and I put the rent on top of that, and it still shows at the very bottom that distributions to the state and local governments will go up, and we will still have profits to distribute included in that," Stewart said.
State Sen. Sam Givhan (R-Huntsville) told Stewart at the meeting, "I'm interested in dropping a bill that would allow you to own your own facility."
"I'm not crazy about renting this, and if you do rent it maybe you need to look at renting it from RSA. They seem to be doing a lot of good things for us. Something to think about," he added.
Stewart said, "I would love to have the state be the ultimate beneficiary of this, and the state receive the lease payments."
"That would be great so if there is such a bill to allow us to buy and own the property or own it at the end of the lease, we would certainly welcome that," Stewart said.
General Fund chairman State Rep. Rex Reynolds (R-Huntsville) told 1819 News on Tuesday he's not been involved in conversations over the possible new ABC warehouse.
"I've not been involved in that conversation. Obviously, they're doing that out of their revenue they receive at ABC, but certainly, we'd be interested in being a part of that conversation because anything they expend there could impact what they typically give back to the General Fund," Reynolds said.
John Knight, an ABC Board member, told 1819 News in August he had questions about the project over cost concerns and the process around how the request for proposal was sent out.
"I don't have a clue what they're talking about other than they want a new warehouse, and somebody put together a proposal on what's needed, and they've said that they want to send out an RFP. It's short notice. It's almost like on a project that size, I think it would take longer even for the RFP to be out there for people to get situated so that people can have time to run the numbers to see what it would take to really do a warehouse like that," Knight said.
Some state lawmakers on a task force established in the 2023 legislative session are also considering expanding the sale of ready-to-drink cocktails or mixed drink beverages such as High Noon in grocery stores and convenience stores. According to Bradley Arant Boult Cummings, those beverages are currently only sold in package and ABC Board stores in Alabama.
State Sen. Garlan Gudger (R-Cullman) asked at the meeting if changing the law around ready-to-drink cocktails would change the need for a new ABC warehouse.
"I know there's been talks for the past couple of years about RTDs (ready to drink). Obviously, it's a pretty popular subject anyway, and they seem like they continue to grow and grow and grow in quantity and the volume that people would like to get those products in their hands anyway," Gudger said. "From that, though, this warehouse seems to be growing a couple million cases. If that changes to where the RTDs go in private hands, does that change the whole need for this warehouse, or do you still need this warehouse if RTDs are gone?"
Stewart said, "The short answer is yes, we still need this facility because the volume of liquor sales is growing either way."
"The RTDs are, and I don't know the exact number, but it's around 200,000 cases a year, so that's not 10% of our volume. Liquor as a whole is growing, and even if we don't get this, we'll still need the new warehouse," Stewart added.
Alabama is one of 17 remaining alcoholic beverage control states in the United States.
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