The state liquor board is modernizing its retail operations while voters consider whether to abolish its role selling alcohol.

By Melissa Allison

Seattle Times business reporter

MARK HARRISON / THE SEATTLE TIMES

The state opens the first of two specialty liquor stores on Wednesday. This one is located at 4100 S.W. Alaska St. in West Seattle. The stores are much bigger and carry double the variety of spirits.

MARK HARRISON / THE SEATTLE TIMES

Manager Molly Wheeler will preside over the new "premier" liquor store in West Seattle, set to open Wednesday.

One of the Washington Liquor Control Board's most profitable stores has been on California Avenue Southwest in West Seattle.

But the board closed the shop on Tuesday to make way for what it thinks will be an even bigger moneymaker around the corner.

Store No. 143, at 4100 SW Alaska St., opens today with almost twice the selling space of an average liquor store. It stocks about 1,900 different liquor products — double what is found in most other stores.

The new store has been in the works for about three years and is part of the board's broader effort to modernize liquor sales in Washington, including expanded store hours, new stores, a gift-card program and an online ordering program.

The so-called "premier" store debuts while voters consider whether they want to kick the state out of the liquor business and instead buy their booze from retailers like Costco and Safeway. Initiative 1183, which will be on November's ballot, is Costco's latest effort to sell liquor in Washington.

At the new store in West Seattle, seven flat-screen televisions show liquor commercials and short takes on subjects such as how to stock a bar.

A faux marble tasting bar at the shop will hold the first liquor tasting at a Washington liquor store this Saturday at 4 p.m.

No. 143 is unlike any liquor store Washington has ever seen, one of two such stores that are expected to bring the state an extra $1.3 million in revenue during this biennium. The second store will open next spring in a location that has not yet been announced.

The liquor board received $50 million in the state's most recent budget to pay for these stores and other modernization efforts. In the next three to five years, those efforts will generate $14 million a year in new revenues, said Pat McLaughlin, the board's director of business enterprise.

By contrast, I-1183 calls for new fees that could increase state liquor revenues by up to $42 million a year and local government revenues by as much as $38 million a year over the next six years, according to a state budget analysis.

The state would auction off its inventory and, if there's an interest, the "right to operate" any of the 164 stores it currently runs. New owners would have to get a license from the liquor board. The state owns none of the property from which it sells liquor.

The state's most lucrative stores are mostly in the Seattle area.

The West Seattle store that was replaced, Store No. 43, logged sales of $7.5 million in the fiscal year ended June 2010, and turned a profit of $837,996. Only eight state-run liquor stores earned more.

Nine stores did not make money in the fiscal year ended in June 2010, and eight of them were new stores that will take time to turn a profit, McLaughlin said. The ninth store is in Spokane, and was opened in an area where a major road was expected to be built but was not.

When stores are only marginally profitable, like one that currently operates in the Seattle neighborhood of Magnolia, the state often considers looking for a local entrepreneur to take over the business, he said.

There are about 165 such "contract" liquor stores in Washington, many in rural areas. Hardware stores, quilting stores and others receive commissions of up to 9.25 percent on liquor sales.

Under I-1183, they would be allowed to continue operating no matter what their square footage, as would anyone who bought those stores and got a license from the liquor board.

Kathryn Stenger, spokeswoman for the Yes on 1183 Coalition, said the opening of the new store in West Seattle "proves our point, that consumers want to have more choice and more selection."

Alex Fryer, a spokesman for the No on 1183 campaign, said it is better to have liquor stores offering that choice, because they have a better record when it comes to selling to minors than do grocery stores and other retailers that sell beer and wine.

The opposition campaign also is concerned about increased access to liquor. The state's analysis found that with I-1183, the number of stores selling liquor could climb from about 330 now to roughly 1,400 stores.

"There may be some monies going to the state and local governments, but that does not compare to the damage that will happen to our communities because of the problem consumption that will follow," Fryer said.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com
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