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Cities, projects seeking special alcohol permits likely must wait until next year

April 6, 2018

A handful of municipalities and the developer of a big downtown project won’t be getting the extra alcohol permits they are seeking any time soon, unless legislation resurfaces during next month's legislative special session.

Senate Bill 46—which calls for allowing the Indiana Alcohol and Tobacco Commission to issue additional alcoholic beverage restaurant permits to certain economic development areas—passed the full Senate 40-8 in early February and was referred to the House Committee on Public Policy, where it stalled and was never brought to a vote.

Standing to benefit from the legislation were Greenwood, Bargersville and Martinsville, all south of Indianapolis, as well as Munster in northwestern Indiana.

Supporters of the bill also slipped downtown’s Bottleworks project into the legislation in order to support a unique aspect of the $260 million mixed-use development—a 30,000-square-foot food hall with about 20 vendors.

“It’s frustrating, from the standpoint that I tried to work across the aisle and be as transparent as I could,” said Sen. Jack Sandlin, R-Indianapolis, and one of the authors of the Senate bill. “It just didn’t make sense to me.”

If legislation providing for more permits does reemerge during a special session, the Bottleworks project likely has the best chance of receiving them. That’s because the Bottleworks language from the now-dead Senate Bill 46 was inserted into House Bill 1104, which addresses various tax issues and could still be in play.

HB 1104 was among the bills that didn't get a vote in the last minutes of the General Assembly on March 15 as time ran out, said Rep. Ben Smaltz, R-Auburn, and chairman of the House Public Policy Committee.

“I don’t know, honestly,” he said of HB 1104’s chances of inclusion in a special session. “It’s going to be very focused; there are just a few items that need to be finished.”

House Speaker Brian Bosma has said he wants to keep the special session to one day.

Wisconsin-based Hendricks Commercial Properties is the developer of the Bottleworks project, which will restore large parts of the former Coca-Cola bottling plat at College and Massachusetts avenues. Plans call for apartments, condos, office space, a hotel, cinema and other attractions spread across 1.2 million square feet.

Vendors in the food hall would operate under a single permit, so they wouldn’t have to buy them separately, and would have a management agreement with the permit holder. An additional five permits would be available throughout the rest of the complex.

The setup would save vendors thousands of dollars (permits on the open market can cost up to $100,000) and likely would make it easier for Hendricks to fill the food hall.

“It’s something that’s important to us, and it’s important to the vendors,” said Isaac Bamgbose, Hendricks’ vice president of asset management. “And so our goal now is working within the confines of the law to make this work. I don’t know what the answer is, but we’re working on it.”

Bamgbose said Hendricks is confident it will “get it done” and expressed the importance of solving the alcohol permit issue, not only for his company but for vendors and other municipalities.

SB 46 also allocated five additional permits for Bargersville, five for Martinsville and 10 permits each for two economic development districts in Greenwood.

Greenwood Mayor Mark Myers doubts the south-side suburb has any recourse now but to wait until next year's legislative session.

“They say it’s going to a summer study committee, which means it still won’t go for a vote until next year, so that doesn’t help me out at all,” he said.

In Greenwood, the two districts encompass its downtown, where plans are under way to reinvigorate the city’s core, and the area along State Road 135 from Stones Crossing Road south to Whiteland Road.

Without the alcohol permits, development likely will not occur as quickly as Myers had hoped.

“All the building that’s going on, on State Road 135, this will hold it back, or hold it back from being leased,” he said.

Local officials say the alcohol permits are needed to accommodate development that’s been stymied under a state system that allocates permits based on population, as measured by a census that’s normally conducted every decade.

The lag is especially problematic for fast-growing communities. When a community hits its cap, the only way a business can obtain a permit is to purchase an existing one from a current permit-holder.

But privately sold permits can be expensive, costing up to $100,000. The state would have charged $40,000 for each permit that would have become available from the Senate bill.

It’s an issue legislators are beginning to confront more often, as growing cities and towns with no alcohol permits turn to the General Assembly for relief instead of waiting until the next census.

Both Sandlin and Smaltz say they favor a system where additional permits would be doled out by the state Alcohol and Tobacco Commission instead of the General Assembly. Smaltz last summer was named to the Alcohol Code Revision Commission, which is tasked with reviewing and recommending changes to Indiana’s alcohol laws.

“We are committed on the alcohol commission to review that and try to come up with a comprehensive solution to the permit problems that we have instead of [handing them out] piecemeal, hither and yon.”

 

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