Change in Orange code may hit mom-and-pop liquor stores

George Knightly’s children figured that, one day, they would inherit the family-owned liquor business their dad started 20 years ago. They’re not so sure now.

Orange County commissioners may repeal or change a rule that protects businesses like theirs — called package stores — by forbidding other liquor retailers from opening closer than 5,000 feet of an existing store.

“I see the end of our business pretty soon with this,” said Bryan Knightly, 34, who works in the five Knightly Spirits stores in the county.

George Knightly predicts Wal-Mart, Walgreens and other retail behemoths, some now holding liquor licenses in escrow, will muscle into an independent store’s turf if the distance rule is changed.

“It will kill us and others like us,” he said, adding that he thinks his business will lose its two busiest stores.

Other mom-and-pop liquor shops in unincorporated Orange fear they, too, will be hurt, especially those in top-shelf locations.

Many pleaded with commissioners during a recent meeting to rethink any changes, including shrinking the separation distance to as little as 1,000 feet. At that distance, a rival could open in the same plaza.

Those in favor of a change describe the existing rule as “anti-competitive,” arguing it protects some businesses at the expense of others. They also argue the lack of competition forces consumers to pay more for booze.

“I’m a business guy,” said Chuck Whittall of Unicorp National Developments. “I believe in competing in a fair marketplace, and they should as well.”

He pointed out the county doesn’t limit the number of dollar stores, fast-food restaurants, gas stations or groceries — only liquor outlets.

Whittall, whose company built the Orlando Eye, the 400-foot-tall wheel in the tourist district, wants to add a liquor store at International Drive and Sand Lake Road, but the rule forbids him.

“This should be market driven,” he said.

Whittall suggested he might ask Orlando to annex his entertainment complex into the city if the county rule is not changed. City code does not require separation. Liquor stores can be side-by-side in the City Beautiful.

Some county leaders, including Mayor Teresa Jacobs and commissioner Victoria Siplin, have said the liquor rule may need “tweaking.”

Established in 1956, the county’s separation rule survived a constitutional challenge that went all the way to the Florida Supreme Court in 2001.

Costco had sued because the rule — and nearby independent retailer Liquor Plus — prevented the wholesale giant from adding a package store at its members-only warehouse on South Orange Blossom Trail.

Except for Florida’s three dry counties, only Baker County near Jacksonville mandates more distance between liquor stores than Orange.

The rule was intended to prevent liquor stores from clustering in high-traffic areas. But it has also limited competition in Orange and so has made a state-issued license in Orange much more valuable than one in Orlando, Winter Park or neighboring Lake, Osceola and Seminole counties, all of which are less restrictive.

George Knightly, a founding member of the trade group Florida Independent Spirits Association, said a license in Orange County can cost $250,000 or more.

Shrinking the required distance between stores to 1,000 feet would match the rule separating a liquor establishment from a church or school.

Because of the rule, ABC Fine Wine & Spirits has often settled for “B” locations rather than its preferred sites, said Kurt Ardaman, a lawyer for the company, which operates more than 20 stores in Orange.

Changing the rule would punish ABC, founded in Orlando in 1936. It would face new competitors, said Jess Bailes, a vice president.

“Every grocery store has a liquor store now,” he said while addressing county commissioners recently. “It’s changed our world.”

Ted Edwards, who lost his re-election bid for commissioner in November, said he struggled with supporting a change that could hurt businesses which had played by the county’s rules for decades.

“I don’t think it’s fair to those who relied on it, but times are a-changin,'” he said.

Young Yim, owner of the only package store around the Orlando Vineland Premium Outlets, said he banked on the rule’s protection when he bought his license and its strategic location in August 2014.

He did not disclose how much he invested, but he told commissioners, “If you cut down the distance, we’re losing a lot, a lot of money.”

Both Walgreens and Publix, each of which have liquor licenses they could transfer from other Central Florida locations, own stores close to Yim’s package store.

According to records with the Florida Department of Business & Professional Regulation, the state has issued 99 licenses for package stores in Orange County, 49 of them in unincorporated parts of the county.

Bessam Maali, owner of Metro Liquors, said he was forced to close his small store on Kirkman Road when neighboring Wal-Mart opened a bigger one 50 feet away.

“They say the backbone of America is independent, family-owned stores,” he said at a county commission meeting. “Well, if you take ’em out, one vertebrae at a time, what happens is it’ll collapse.”