’Burg votes down new distillery

Says it's too close to existing one, violates ordinance
Feb. 21, 2013 @ 11:59 PM

On the heels of passing several ordinances that would seem to make it easier for distilleries to operate in Gatlinburg, the City Commission voted down a certificate of compliance for Sugarlands Distillery Co. because it would be within 1,000 feet of Ole Smoky Moonshine Distillery – a violation of one of those new ordinances.

The ordinance — which passed second reading at the Tuesday night meeting — requiring retail liquor package stores within distilleries to be at least 1,000 feet apart is merely an amendment to the same requirement that has existed in Gatlinburg for regular retail liquor package stores since 1979, City Attorney Ron Sharp said.

The state’s Alcoholic Beverage Commission (ABC) had been telling the city that distilleries were considered “bottle shops,” not regular retail liquor package stores, and accepted bottle shop certificates while issuing licenses to retail liquor package stores. That changed.

“Gatlinburg doesn't have any ordinances on bottle shops, so none of this applied all that time until early December (2012), when they (ABC) told us that's not so, all these are liquor package stores,” Sharp said. “So we had ordinances regulating retail liquor package stores, they just never had been applying to distilleries.”

Sugarlands officials had applied for the certificate before the city was notified that of the state's new directive.

“When we started making noise that we wanted to do a distillery, Ole Smoky called the city and raised the 1,000-foot rule,” Sugarlands representative and local developer Ned Vickers said. “I was told that Ole Smoky couldn’t cherry-pick and have it both ways, and I was told that there were no issues with the radius and the number, because this is a different type of license.”

Company representatives expressed their concerns, since the two existing Gatlinburg distilleries, Ole Smoky and Gatlinburg Barrelhouse, did not have to comply with these ordinances and may have even violated the rules, according to Sugarlands attorney Lewis Howard Jr.

“The (existing distillery) businesses were not in compliance with a number of ordinances regarding residency of the owners, the number of outstanding licenses, excessive congestion, adequate off-street parking and a residence on an adjoining parcel,” Howard said to the City Commission. “Also, the city approved a certificate of compliance for a change of ownership in December of last year after it became aware of the fact that the ABC construed the bottle shop license to be the same as a regular retail package store license.”

Howard suggested that the city was trying to pick and choose which ordinances would apply in which instances. He also noted an inconsistency between this ordinance and another on the agenda. One ordinance states that distilleries are not considered traditional retail liquor package stores, but the distance-requirement ordinance states that they are.

Howard urged the commissioners not to pass the distance-requirement ordinance, citing it as “an improper and illegal action to control the location of a distillery by attempting to control the location of the retail operation within (the distillery).”

The commission then unanimously approved the ordinances and voted down the Sugarlands certificate of compliance on the grounds that it did not meet the distance requirement ordinance it just approved.

City officials were candid about why they voted down the certificate.

“My personal perspective is, I don't have a problem with six retail liquor package stores and four (retail liquor package stores in) distilleries, but I really feel it’s important to keep the 1,000-foot restriction between them,” Mayor Mike Werner said the day after the meeting. “We’ve spent years and millions of dollars to brand Gatlinburg as a family-friendly resort destination. If you start getting all these moonshine distilleries all along the Parkway, it really can hurt the brand that Gatlinburg is, and what we try to be.”

Now that the ordinances apply to distilleries, Sugarlands has an approved zoning permit to exist at the 805 Parkway location, but it can’t sell its product. Vickers said the distance from Sugarlands to Ole Smoky, front door to front door, is approximately 500 feet.

Sharp admitted that the figure of 1,000 feet might seem arbitrary, but noted that it was a decision city leaders made years ago. he said it’s worked so far.

“Back in the late ’70s, the city said, we don't want them all ganged up together; they said 1,000 feet is close enough,” Sharp said. “That's just what it's been so we wouldn't have a whole row of liquor stores next to one another.”

Vickers, on the other hand, believes the restriction is to keep any additional distilleries out of the main tourist area on the Parkway.

“The distilleries can come in, but not anywhere anyone wants to go,” he said.

The city has closed the books on the ordinances, but Vickers said Sugarlands may not be done with it.

“Our position is they don't have the authority to do what they're doing, but we're evaluating our options right now,” Vickers said. “Legal action is the last thing I want to do, but it’s certainly an option.”