Liquor sales expand in Tukwila

Shoppers at Costco and other stores in Tukwila soon will find displays of spirits available to buy next to the wine and beer.

Voters approved Initiative 1183 last year to get the state out of the liquor business and privatize sales. That change becomes effective Friday, June 1, unless a lawsuit to stop the change is upheld later this month.

Costco is getting ready to stock shelves at its Tukwila store. The Issaquah-based company contributed nearly all of the $22 million spent in the state to get voters to pass Initiative 1183.

"If anyone has been in any of our locations outside of Washington, it'll be very similar," said John McKay, Costco executive vice president, in a phone interview about what customers can expect to see. "We'll have approximately 75 spirit items, including most of the name brands."

Costco also will feature about a half dozen of its Kirkland signature brand liquors, including vodka, scotch, tequila and a ready to drink margarita mix.

McKay said it's been a challenge to work with new distributors, figure out pricing and getting everything ready to go.

"But I feel certain when June 1 rolls around we'll be ready to go and fully stocked," McKay said.

Target, Walgreens, Bartell and Cost Plus are among the Tukwila stores that have received or applied for spirits licenses, according to state Liquor Control Board board records.

BevMo! and Total Wine & More, two chains that specialize in other states in large volume sales of spirits, wine and beer, also have applied for new licenses for potential stores in Tukwila. BevMo! started in the San Francisco area and now has 115 stores in California and Arizona that only feature spirits, wine and beer. BevMo!'s website includes job applications for new stores in Tacoma and Silverdale. The potential Tukwila site is at 17197 Southcenter Parkway.

Total Wine & More started in Delaware and has more than 80 superstores in 11 states. The company's potential site in Tukwila is at 300 Andover Park W.

McKay expects sales at Costo to go quite well, even with new competitors on the horizon.

"We sell a lot of everything but it should be comparable to the amount of volume we do on beer," he said. "In stores where we sell all three, it's pretty evenly split among beer, wine and spirits."

Hailom Ghebreab of Federal Way won the right at a recent auction to apply for a spirits retail liquor license at the Tukwila state-run liquor store. He put in the high bid last month of $110,100 for the store at 14227 International Blvd. The store had $4.4 million in gross sales in 2011.

Ghebreab said in a phone interview that he has lived in Federal Way for about 10 years but then declined to talk further about his plans for the store. His information with the Washington State Liquor Control Board listed Portage, Ind., as his hometown, even though he has a local phone number.

The liquor board announced the winning bids in April for the 167 state-run liquor stores that were part of an online auction concluded on April 20.

The sum of individual bids for the 167 stores totaled $30.75 million, with rights awarded to 121 individual bidders, according to a liquor board media release.

Stores must have at least 10,000 square feet to sell liquor under the initiative, but the state-run stores are excluded from that rule.

Initiative 1183 directed the liquor board to auction the state store properties at their current location. However, the state leases the properties, not owns, creating a unique circumstance for the auction.

Successful bidders earned the exclusive right to apply for a liquor license at the current location within its current footprint. All state store properties are below the 10,000 square foot threshold established by the initiative. Successful bidders will need to secure a lease with the property landlord. If they are unable to secure a lease, they may re-sell their right or request an alternative location within a 1-mile radius of the existing location.

Contact Tukwila Reporter Reporter Steve Hunter at shunter@tukwilareporter.com or 253-872-6600, ext. 5052.

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