Ocean City Today

Liquor store appeal set for next wk.

Hard alcohol addition as well as licensing quirk at center of challenge to sale
By Brian Gilliland | Nov 22, 2017

(Nov. 24, 2017) While the county government methodically deconstructed the Dept. of Liquor Control, the final nail in its coffin hasn’t been struck, as the sale of the remaining county store, Pocomoke Shore Spirits, has been held up for months because of a legal challenge.

This challenge is heading for Circuit Court, Wednesday, Nov. 29.

The Board of License Commissioners, the local branch of the state agency charged with awarding liquor licenses to applicants, ruled in June that there were insufficient grounds to deny the application of Kalpesh Patel to purchase the store.

Included in Patel’s winning $1.175 million bid for the store and its contents was a contingency requiring the county’s support for a beer, wine and liquor license. Previously, the shop could only sell wine and liquor.

However, the enabling state legislation for this type of license didn’t take effect until July 1, essentially giving Patel early access to a license, with the county’s blessing, that other vendors couldn’t even apply for yet.

All three license commissioners — Marty Pusey, Billy Esham and Charles Nichols — blamed the state law enabling the county exit from the liquor business for the trouble.

Residents and other businesses in the same shopping center as the Shore Spirits also objected to the sale, arguing the addition of beer sales to the store would harm their own businesses, which differentiated themselves from the county store by selling beer.

Two other businesses in the same strip mall as the Shore Spirits store have beer and wine licenses, but no liquor. One of the two, Newtown Market, was purchased after Shore Spirits had opened in 2012, and well before the county’s exit from the liquor business was underway.

The owner, Janik Patel, had also unsuccessfully bid on the former county store, and was considering adding liquor to her inventory, but was unable to do so until the law took effect.

The Newtown Market owner, represented by attorney Hugh Cropper, told the license commissioners in June the business would be hurt by undue competition by the now-privatized store, and was joined by several others, like Pocomoke City mayor Bruce Morrison, who saw no need for another liquor store in the first place.

However, competition alone is not enough to confirm or deny an application, and the request for the former Shore Spirits shop was approved by the board, but challenged in court by Patel.

Until 2014, Worcester County government had exclusive rights over wholesale access to liquor in the county. When the sitting board of Worcester County Commissioners decided in December 2015 to exit and shutter the Department of Liquor Control, two deadlines were approved: ending wholesale operations by Sept. 2016, and retail operations by July 1, 2017 to coincide with the end of the fiscal year.

However, since the board’s ruling is being appealed, the county had to develop a budget and retain staff while the fate of Patel’s bid is decided.

County Treasurer Phil Thompson proposed a budget of $1 million in July, which was accepted by the commissioners. Estimated expenditures for the year include roughly $791,000 in cost of goods sold and almost $150,000 in personnel. These costs, he said, would be completely offset by sales, with room to spare. The proposed budget reports an estimate of about $19,000 in income from operations, should things go to according to plan.

Thompson said in July he thought it was best to include the entire fiscal year in the proposal, since there is uncertainty as to when or if the county would be able to transfer the business to Kalpesh Patel.

Comments (0)
If you wish to comment, please login.