Ocean City Today

Privatized county liquor stores get licenses

Stores to remain open until deal formally closed; July 1 deadline might not be kept
By Brian Gilliland | Jun 22, 2017

(June 23, 2017) As the county enters the final phase of its exit from the wholesale liquor distribution business, two major hurdles were cleared this week as the Worcester County Board of License Commissioners (a state agency) awarded licenses to the successful bidders on the former county stores in West Ocean City and Pocomoke City.

The West Ocean City license, granted to Ankur Patel and Kailas Patel, who are not related, was granted without issue or comment from anyone opposed to the transaction.

The partnership submitted two bids for the property, one contingent upon the continuation of the lease, and the other without the contingent. From the county’s standpoint, the offer with the contingency was the most lucrative one: a total of about $550,000, including purchasing the store and its contents as well as relieving Worcester of its $130,000 obligation to the landlord through October 2018.

The backup bid included $50,000 for the purchase of store assets rather than nearly $63,000 and a markup on the existing inventory of 25 percent rather than the 40 percent in the previously accepted bid. In all, there’s about $50,000 difference in the accepted bids.

The landlord of the property decided to pursue a new lease with the new owners, so the primary bid was discarded and the secondary accepted.

Though the liquor board took issue with four previous violations at a store where Ankur Patel had ownership interest, it was determined that he had no direct hand in those violations. Patel stressed he purchased a point-of-sale system that would prevent future incidents by requiring an ID scan before allowing transactions to proceed, along with employee training to prevent any further violations.

The infractions were for selling to underage persons and occurred in 2014. Board chairman Billy Esham said the store had been visited four additional times since the violations and no infractions were reported.

As for the Pocomoke City store, despite complaints from neighboring businesses, residents and Mayor Bruce Morrison, the board decided it had no cause to deny Kalpesh Patel’s application for a liquor license.

Kalpesh Patel, of Berlin, successfully bid $1.175 million for the store and its inventory, which was first made public during an April meeting of the county commissioners.

Patel bid $950,000 for the real estate, furniture, fixtures and improvements, and the existing inventory for a 15 percent markup from county cost for the business. The inventory cost was slightly adjusted from the April 4 meeting when the bids were revealed. The first estimate of the inventory cost was $196,036, which was revised downward to $194,812.

The sticking point for the other businesses and residents was the addition of beer to the former county store’s inventory of wine and liquor. Beer was not sold at that location, but two other businesses in the same strip mall with the county store already did.

Commissioner Marty Pusey said competition alone is not enough to disqualify an application for a liquor license.

All three commissioners — Pusey, Esham and Charles Nichols — blamed the state law enabling the county exit from the liquor business for the trouble. Existing business owners cannot apply for the type of liquor license the Patels received on Wednesday before July 1 under the law.

Closing on the sales of the stores had been set for June 30, but the delay caused by deliberations in the Pocomoke City matter introduced the possibility of missing the target date of exit.

On Tuesday, on the recommendation of county staff, the county commissioners passed a motion to allow operations of the Pocomoke City store to continue past July 1 if necessary, to allow the closing of the sale.

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