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Wednesday, 08 August 2012 13:11

Jackson to assess potential for ABC profits

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Jackson County commissioners in the coming months will weigh whether to open a liquor store in Cashiers, outside Cherokee — or both — but the road to a decision will take a lot of number crunching.

Namely, Jackson County must decide whether it’s likely to sell enough booze to cover the overhead of an ABC store.

The town of Sylva now runs the only liquor store in the county. But, that could change following a countywide alcohol election in May. It passed with flying colors, giving the county the option of opening its own ABC stores.

The county has another decision to make as well: whether to create a joint ABC operation with the town of Sylva or do its own thing.

Sylva leaders have made their preference clear. They’d like Jackson County to join forces with the town rather than compete against it.

For now, however, commissioners have signaled they will create their own ABC board, primarily to serve as a study committee on the issue.

“I think part of establishing this board is to have the alcohol studies we want to have done. Do we want an ABC store in Cashiers or wherever?” said County Commissioner Chairman Jack Debnam. “Part of their charge would be to talk about the merger, if we are going to consider that.”

Commissioner Joe Cowan questioned whether the county creating its own ABC board would send the wrong message to Sylva.

“If we do this now, what perception does this give to Sylva?” Cowan said.

It could appear that county is forging ahead on its own rather than considering the town’s offer for a joint partnership, Cowan said.

“Is there a better communicative way to do this without making them feel left out? I don’t want them to think we’re just shoving it down their throat,” Cowan said during a discussion of the issue at a county meeting this week.

Debnam said Sylva shouldn’t perceive the creation of a county ABC board as a slight, however. The county could always merge its ABC board with Sylva’s later but would need its own board in place first.

“It is hard to do a merger unless we establish a board,” Debnam said.

The county could skip creating its own ABC board and simply form a joint ABC board with Sylva out of the starting gate, according to County Manager Chuck Wooten.

However, coming to the table with its own board already in place could give the county more equal footing in how a joint operation is structured.

“Nobody wants to do anything that would be harmful toward Sylva,” Wooten said. “But, the commissioners have to look at it from the whole county perspective.”

As far as analyzing the county’s options, that job could be accomplished by appointing a study committee rather than creating a full-fledged ABC board — and would be cheaper than a full-fledged ABC board.

Under state statute, ABC board members make $150 a meeting. For a five-person board, “it’s $750 every time they get together,” Wooten said.

But given the task they would be asked to do, a formal ABC board isn’t a bad idea, Wooten said.

“I think that adds some credibility,” Wooten said.

Thanks to a generous arrangement with the town of Sylva, Jackson County already makes a tidy profit on liquor sales. Sylva, which currently runs the only ABC store in the county, forks over 50 percent of its profits to the county each year. It has amounted to roughly $140,000 annually in recent years.

Jackson County must figure out whether it stands to gain anything by opening its own ABC stores in other locations in the county.

Additional stores would presumably cut into existing liquor sales at Sylva’s store — and thus cut into the share of profits the county gets. The county, in essence, would be competing against itself.

Of course, there would be some new liquor revenue to be gained. Some people might drink more if they could get liquor more easily.

But, the biggest potential lies with capturing business from across the county line. Currently, some people in Cashiers go into nearby Highlands to buy liquor rather than drive down to Sylva. That means a Cashiers store could potentially recapture some of the business lost to Highlands, which lies in Macon County.

Meanwhile, a liquor store somewhere on the outskirts of Cherokee could have even bigger potential. Cherokee is dry, except for in-house consumption at the casino, forcing people to drive into neighboring towns to stock up.

Bryson City and Maggie Valley likely get the biggest piece of that pie, but if Jackson County opened a liquor store on the outskirts of Cherokee, it would rake in that business.

Ultimately, the county will try to predict whether new stores would bring in enough new sales — not simply siphon sales away from Sylva — to offset the overhead for running new stores.

Sylva’s profit-sharing arrangement with the county was built in to Sylva’s ABC bylaws in the late 1960s.

Sylva offered up the profit-sharing arrangement as a way to curry favor with the county when the town opened its first liquor store. The town had to win support among voters before it could launch an ABC operation, and it likely wanted buy-in from the county to ensure a successful ABC election.

Sylva would have to get a special bill passed in the legislature to undo the profit-sharing agreement.

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