Distillery bill in Legislature divides factions in Gatlinburg

Mar. 07, 2013 @ 11:27 AM

A bill making its way through the Tennessee General Assembly would take away the ability of municipalities to limit the number of retail licenses theycan issue or to set a minimum distance between the establishments — effectively preventing cites from enacting or enforcing codes similar to those recently passed in Gatlinburg.

House Bill 102 is sponsored by state Rep. Joe Carr, R-Lascassas. Its companion bill in the Senate is sponsored by Sen. Bill Ketron, R-Murfreesboro. Neither could be reached Friday for comment on this story.

Under the current law, the counties where distilleries are allowed were approved by the General Assembly. The new bill would change that law to make it legal to set up those operations in any city that allows package stores and liquor by the drink, or in unincorporated areas of counties “If any jurisdiction located within such county has approved retail package sales through referendum of voters and any jurisdiction located within such county has approved consumption of alcoholic beverages on the premises through referendum of voters.”

That would appear to mean that, because Gatlinburg allows the sale of liquor by the drink and package stores, distilleries would be permissible in the county under the new law. However, counties would have the option to pass resolutions opting out of that law. It would appear to leave the matter in the hands of the counties, without requiring them to come before the state.

Likewise, cities that allow retail package sales and on premise alcohol sales would be allowed to host distilleries, and would have the chance to pass a resolution removing them from the new law’s coverage.

A similar set of regulations would cover breweries that make beer with high alcohol content.

It’s a section concerning the special licenses that distilleries obtain to sell their product on site that would directly impact Gatlinburg.

“Any retail license issued pursuant to this subsection is not subject to the limitation of number of retail licenses issued by a municipality or county ... and is not subject to any distance requirement between retail licensees set by a municipality of county.”

That would do away with a law passed last month in Gatlinburg calling for retail licensees inside distilleries to be 1,000 feet apart. At the same meeting where the new ordinance was passed, the city commission rejected a license request from businessman Ned Vickers to sell liquor in his Sugarlands Distillery Co. location because it’s within 1,000 feet of Ole Smoky Moonshine Distillery.

State Rep. Dale Carr, who represents Gatlinburg, said he hasn’t had a chance to fully review the proposed legislation, although he’s aware of it and has read it. It’s in the state committee, which was separated this year from the state and local committee, and Carr is on the local committee.

He said he didn’t want to take a position on it yet because it could be amended any number of times before it comes before him for a vote.

However, he said he believed the original changes, concerning distilleries in general, were part of an effort to allow a distillery to open in Chattanooga.

Sen. Doug Overbey, whose district also includes Gatlinburg, said the bill has not reached any of his committees yet either so he did not want to comment on it.

Vickers, whose efforts to get a license to sell moonshine at his planned distillery were thwarted by a 1,000-foot distance requirement between stores, acknowledged Friday he lobbied to get the state to change the law concerning sales.

“I’ve been working on this for several months,” he said. “We have hired a lobbyist and for the past several weeks he has been involved in lobbying for this bill.”

Vickers says he believes the city “changed the rules in the middle of the game” when it ruled he could not sell moonshine at Sugarlands Distilling Co.

He has obtained a license to have the distillery, which would be located not far from the Ole Smokey location, but has indicated he doesn’t want to push forward until he finds out if he’ll be able to sell the product on site.

The state passed new laws dealing with distilleries a few years ago, he said, when the trend of opening small distilleries came to Tennessee. He believes the new bill would clarify the intent of the state, which he believes was not to allow cities to regulate the number of distilleries that could sell their own product or to limit their location based on distance requirements.

Gatlinburg City Attorney Ron Sharp said the city’s regulations, and its application of them in Vickers’s case, are based on its understanding that the on-site stores in distilleries fall under the rules for retail package stores.

The proposed bill would create a new classification for distilleries if it’s approved, he said. “(The new bill) is a change in the law if it passes.”

It would still let cities use zoning regulations to limit the areas where distilleries can open, he said, but it would not allow other traditional methods of controlling the location or number of the establishments.

The city initially understood the distilleries would fall under codes for bottle shops, he said, and didn’t apply the retail package store rules to Ole Smokey when it first opened.

It wasn’t until December when they realized the state was issuing them package store licenses, he added.

The Ole Smokey Distillery meets all distance requirements, but previously would not have been allowed to open because the city was already at its self imposed limit of six package stores. In the meantime, Ole Smokey’s owners also opened a second location, the Gatlinburg Barrelhouse.

After learning that, the city amended its regulations to allow for up to four distilleries to sell liquor, including the two existing ones, in addition to the six traditional package stores. The city decided to keep in place its requirement that all package stores, regardless of whether they’re in distilleries or not, be 1,000 feet apart.

Vickers has said he feels that leaves him severely limited in where he can locate his business, and he feels it’s unfair that the city didn’t apply the laws initially to Ole Smokey. He believes Ole Smokey’s ownership is trying to keep him from competing with their business.

Local attorney Joe Baker, one of the owners of the Ole Smokey distillery, said they aren’t trying to eliminate competition but they want other distilleries to follow the rules.

“We encourage competition. We encourage Ned to open in Gatlinburg,” he said. “We just want everybody to follow the same rules.”

He says he and his partners worked with city officials to make sure Ole Smokey met the proper regulations.

The Sugarlands distillery isn’t just close, he says, it shares a property line with his business and he doesn’t think they should be that close. Vickers has said they are about 500 feet apart from front door to front door.

Baker acknowledges he went to the city about the proposal to sell alcohol at the new distillery. “When we heard that (Vickers) wanted to violate that ordinance we did...express our point of view,” he said. “Certainly our position has been clear.’

He acknowledges he’s also made his opposition to the new bill clear at the state level. “We certainly have made efforts to make our opposition known to the (state),” he said.

jfarrell@themountainpress.com