New ordinance allows for more distilleries

Feb. 08, 2013 @ 11:46 PM

Incompatible laws between the city and the state may result in more liquor being sold in Gatlinburg.

The Gatlinburg City Commission approved a few items relating to retail liquor package stores and distilleries during its meeting Tuesday night, one of which deals with the number of stores that can legally sell liquor within the city.

The city restricts the number of retail liquor package stores within the city limits to six. That number used to apply to distilleries, too, but the commission passed an ordinance to establish a separate number limit to distilleries: four.

“This is an effort to preserve what we have, and also create a new category and put a limit on that,” city attorney Ron Sharp said.

So the city will allow up to six retail liquor package stores and up to four distilleries. The change resulted from conflicting laws enforced by the state and the city. The state allows cities to govern certain aspects of retail liquor package stores within its limits, including the number of how many can operate, but the state, through its Alcoholic Beverage Commission (ABC), has the right to grant licenses to distilleries without the city's consent.

The contradiction arose because the ABC had previously identified retail shops in distilleries (that sell alcoholic beverages produced on-site) as retail liquor package stores, which the city restricts in number, but the ABC granted licenses to distilleries that exceeded the city's restrictions.

After looking into this discrepancy, officials noticed that another ordinance would need to be amended to conform to the new distinction between retail liquor package stores and retail stores within distilleries.

Since 1979, the city has required that at least 1,000 feet separate two retail liquor package stores. That won't change, but it will now apply to distilleries.

In the 1980s, all retail liquor package store regulations were in one chapter of the Gatlinburg Municipal Code, but, according to Sharp, because of some changes in state laws in the ‘90s, the Municipal Technical Advisory Service (MTAS) split that chapter into two sections, one applying to retail liquor package stores and one applying to liquor by the drink establishments.

The 1,000-foot distance requirement somehow made its way into the liquor by the drink chapter, instead of staying in the retail liquor package store chapter where it belongs.

“Quite frankly in all these years … no one had noticed it,” Sharp said.

With the correction, the commission also ruled that the distance requirement will also apply to distilleries.

Currently only two distilleries, Ole Smoky Moonshine Distillery and Gatlinburg Barrelhouse, operate within the city, but now there's potential for growth, and that may be even more likely after the city passed another ordinance that eases one requirement for filing an application for a retail liquor package store.

The Gatlinburg Municipal Code previously required that a person be a resident of the city for at least two years prior to filing an application for a retail liquor package store. Now, the city conforming to the state law, the person only has to be a Tennessee resident — not restricted to Gatlinburg — for two years prior to filing an application.

“This takes it back up to where the state level, or the state requirement, prevails,” Sharp said.