When the Bryson City and Sylva ABC boards hammered out a profit-sharing agreement for liquor orders from Harrah’s Casino, there was widespread speculation the new revenue source would bring in big money.

But the reality, so far, has been different.

“It’s not doing anywhere near what people thought it was going to do,” said Bryson City ABC store manager David Maynard.

The Bryson City store does the ordering and records the revenue on its books, then passes along a share of profits to the Sylva ABC board since the Cherokee reservation lies in both Swain and Jackson.

Harrah’s Cherokee opened its first full service bar in May, placing a start-up order with the ABC store that bumped its monthly sales numbers up 50 percent from the year before.

But since then, mixed beverages sales to the casino have averaged between $6,000 and $8,000 per week.

“That sounds like a lot of money, but the state takes a good chunk of it. We thought it was going to be a whole lot more money as far as sales. I think everybody did,” said Maynard.

With the state, the Sylva ABC board, and the tribe all involved in the formula of alcohol sales to the casino, sales don’t exactly turn directly into profit.

“It has help us make an increase from last year as far as sales, but it hasn’t helped out the profits yet,” Maynard said.

By the numbers

A spike in the volume of liquor passing through the Bryson City ABC store is a direct reflection on the bottles of booze headed for Harrah’s Casino since alcohol was legalized there.

May 2010

Walk-in customers    $124,192

Sales to retail outlets    $91,857

Total Sales    $216,049

May 2009

Walk-in customers    $129,134

Sales to retail outlets    $11,965

Total Sales    $141,099

Just over a year ago, the members of the Eastern Band of Cherokee Indians voted to allow alcohol sales at Harrah’s Cherokee Casino and Hotel while the rest of the reservation would remain dry.

The controversial ballot measure pitted economic development proponents who saw alcohol sales as a necessary step in developing a world-class resort against opponents with moral qualms about alcohol, believing it would lead to social ills.

While the social impacts of alcohol sales at the casino are impossible to quantify, the effect on the casino’s bottom line has been instantaneous.

Meanwhile, Harrah’s Cherokee is in the midst of a massive $600 million expansion project that aims to position its brand as an international resort destination.

For general manager Darold Londo, the business’s aspirations made the addition of alcohol sales almost a requirement.

“We never really would have gotten to a resort definition without certain amenities,” said Londo. “Although it’s arguable whether alcohol was totally necessary, it’s brought us in line with our competitors.”

Londo also said the fears of alcohol opponents haven’t come to fruition.

“It has not created the problems that were anticipated by some tribal members,” Londo said.

To Jessica Nifong, 23, a tourist who stopped in to the casino while visiting Cherokee last week, alcohol is indeed necessary.

“I expect it. I think it’s part of the environment because it helps people relax,” said Nifong, who is from Winston-Salem. “I just assumed it would be there.”

So far this year Harrah’s Cherokee has recorded $1.3 million in alcohol sales, serving nearly 200,000 drinks to around 15 percent of its guests. The casino’s management estimates that guests who consume alcohol have contributed $5 to $10 million in gaming revenue during the same period.

The sale of alcohol has provided a quick revenue boost and evened the playing field, but it hasn’t brought in as much money as the management predicted.

See also: Casino impact on ABC sales not a windfall yet

Rolling out in a harsh environment

“The alcohol sales have been less than expected, and there are a number of reasons,” said Norma Moss, an enrolled member of the tribe who served for 10 years on the Tribal Casino Gaming board and recently took on the role of assistant general manager of resort operations.

Moss, who pushed hard for the ballot measure, said the casino’s slower-than-expected alcohol sales have to be seen in relation to what’s happening at all casinos around the country. The casino business is down like many other sectors of the economy, and alcohol sales in particular have dropped off.

Londo said that has to do with the consumer mentality.

“People out there, including me, aren’t buying that second glass of wine or that extra dessert,” Londo said.

Also, Harrah’s Cherokee spent 13 years attracting customers who didn’t need alcohol.

“By definition, we were serving a customer base for whom alcohol wasn’t a requirement,” Londo said.

Lastly, the rollout of alcohol sales has been gradually phased in, and it’s still not fully integrated into the business model.

At first, the casino introduced only beer and wine sales and only at its restaurants in October 2009. Beer and wine made it to the casino floor in December.

Liquor became an option in January, but mixed drinks didn’t really hit the floor until May of this year when the first bona fide bar opened.

In July, an entertainment lounge with a full bar, televisions and a stage came online. The lounge offers patrons the first environment designed with alcohol consumption in mind, a place you can listen to music or watch football only 20 feet from the gaming floor.

Roger Clarke, 74, of Ft. Myers, Fla., was shopping in downtown Cherokee last week. He’d been to the casino the night before and appreciated the new bar.

“I prefer having the option myself,” Clarke said.

At the same time, the gaming floor and casino entrance have been totally renovated. The new design scheme feels clean and modern.

Moss said the new HVAC system could handle the 100 percent transfer of circulated air, which means that even when people are smoking right next to you, you can still breathe.

In the meantime the gaming floor went from 3,400 games to 4,700 — 160 of the new additions are table-based.

Londo wants to see all of the casino’s features operating before he guesses at the impact of alcohol revenue on the business model.

“The whole process is still in its infancy. It’s still developing, but for the customer’s, there’s the impression of a full-service alcohol environment,” Londo said.

Gamers and walk-ins

The casino business serves two distinct client segments, casual walk-ins that form the retail customer market and loyal “gamers” who spend their money playing the odds.

According to Londo, the recession has cut deepest into the number of retail visitors the casino gets, but “gamers” are the ones who tend to drink, according to industry stats.

“It’s not 20-year-olds or 30-year-olds or 60-year-olds who drink,” Londo said. “It’s not females or Asians or anything else. But if you’re looking at gamers, they tend to be more likely to consume alcohol.”

The recession has unsettled gamers as a group too, because they were used to amenities like free drinks on the floor as long as they were gambling.

Londo said the Harrah’s Cherokee model didn’t support alcohol as a freebie.

“Some gaming customers have been used to getting the product free or at cost, and it was incumbent on us to introduce the product at closer to market price,” Londo said.

He believes the shift away from free drinks and food may be a broader paradigm in the industry.

Londo, sees alcohol sales as a defensive measure that will help the business hold its ground as the recession grinds on.

“It gives us a hook or a stickiness that from a defensive standpoint has allowed us to hold customers or keep customers,” Londo said. “It’s hard to quantify that because year after over year, organically, all businesses are off, including us.”

While revenue is up at the casino compared to last year, it is still down compared to pre-recession levels. Tribal members who supported alcohol sales hoped the new revenue stream would offset losses stemming from the recession.

Fifty percent of the casino’s profits go back to the tribe’s membership in the form of per capita payments. After years of growth, per capita payments dropped 11 percent in late 2008, and proponents of alcohol sales were hoping alcohol sales at the casino would help reverse that trend.

Creating a new brand

“If you look at Harrah’s casinos east of the Mississippi, the properties that continue to update and invest in the future seem to be holding up better than their peers to weather the storm and position themselves,” Londo said.

According to Londo, the Harrah’s operations in Hammond, Ind. and Atlantic City, N.J., have out-performed their peers, precisely because they’re still trying to grow at a time while industry giants like Mohegan Sun, the nation’s second largest casino, are still off.

Harrah’s Cherokee Casino and Hotel planned its expansion before the recession hit, but it began in earnest last year. By January 2011 the resort will boast the largest hotel in the state, 21 stories offering 1,108 rooms, 68 suites and 8 premium suites.

Moss called the new hotel tower, which sits in a valley surrounded by high peaks, the “miracle in the mountains” during its topping off ceremony in April.

In addition to the hotel, the newly constructed 3,000-seat concert venue opening Labor Day weekend will bring in acts like Hank Williams Jr. and Crosby, Stills and Nash. A 16,000-square foot spa will be the last element in the expansion to open in 2012.

The new amenities are all designed to create a resort feel for patrons. Cherokee already boasts a championship golf course and trophy fly-fishing water.

Londo said by expanding and including alcohol, the casino has been able to pursue branding partnerships with Paula Deen’s Kitchen and Ruth’s Chris Steakhouse.

Londo said so far, it’s been hard to track the impact of alcohol sales separate from the other pieces of the expansion on the business.

“It’s hard to say this one area is responsible. They’ve all helped us improve the package,” Londo said. “If it was an excuse not to come before, we’ve satisfied that.”

The customers’ experience

“The bottom line is customers expect to have alcohol in a casino environment, and it’s gratifying to know we can offer it,” Moss said.

But after more than a decade operating without alcohol, Harrah’s Cherokee has had to implement a whole new business model in the midst of a recession. If the climate wasn’t ideal, at least the expansion afforded the opportunity to create a building with the distribution and delivery in mind.

“The property was never set up to accommodate alcohol from the distribution standpoint so all of that had to happen, and it was timely because we were in the midst of an expansion anyway,” Londo said.

Now everything from distribution loading docks to plumbing to multi-game consoles in the bars make it possible to keep the drinks flowing. Londo said because most Harrah’s casinos have alcohol, the model was already there.

“The processes, the procedures and the know-how to implement it in the business model were readily available to us,” Londo said. “It has its uniqueness, but it’s not as challenging as you might think.”

One of the most unique elements of the business model is that it took a referendum of a sovereign nation to get the green light.

“The message of the referendum was that the membership wanted it and they believed it was necessary to the casino’s success,” Moss said.

Londo is less worried about alcohol sales than with how the overall economy is looking. He said there could be worse things than running a casino in a mountain valley situated between Charlotte and Atlanta.

“You take the good with the bad,” Londo said “There’s not a more beautiful place to operate a casino.”

By Michael Morris • Guest Columnist

The sale of alcohol has become a hot topic in Western North Carolina. In 2010, voters in Burnsville and Weaverville passed ballot measures approving alcohol sales, and last August voters in Clay County approved countywide alcohol sales.

Here in Jackson County, consumers have been able to purchase on-premises beer and wine in Dillsboro since 2005. In Sylva, the county seat, alcohol sales have been permitted in some form since 1967, and voters approved on-premises mixed beverage sales in 2006.

More recently, a Western Carolina University Public Policy Institute/Smoky Mountain News poll indicated that 56 percentof registered voters would support legalizing countywide alcohol in Jackson County.

One part of the county that has the potential to benefit from countywide alcohol sales is the area surrounding Western Carolina University. The university and its surrounding community is growing and expanding at a fairly rapid pace. With the expansion of the university, there is potential to attract business, expand infrastructure, and become a place that offers residents an enhanced array of goods and services.

Concerned residents of Jackson County may be fearful that alcohol consumption among the student population will increase, causing more alcohol-related illegal activity than previously seen in Cullowhee and surrounding areas. As a student at Western Carolina University, I am deeply concerned about the potential negative effects that legalizing the sale of alcohol will have on the student and non-students residents of Jackson County.

However, there are some real advantages to locating bars and restaurants within walking distance of the campus. I know too many students who make the dangerous drive between Sylva and Cullowhee, and on-campus establishments would make it possible to walk to a restaurant, have a couple of beers, then walk home safely.

Other areas in Jackson County may also benefit from the expanded sale of alcohol. Tuckasegee, Cashiers, and parts of Jackson County near Cherokee could attract restaurants that would normally not be interested in locating in an area without the option to sell alcohol.  These restaurants would enhance the quality of life in these communities and contribute to the county’s tax base.

Many locales within Jackson County are doing themselves a disservice by allowing or even pushing revenue away from their areas. It is likely that Jackson County residents also leave the county to purchase alcohol and eat at restaurants located just over the county-in Haywood, Macon, and Transylvania counties.

There are residents, however, who debate against alcohol sales by saying that the revenue generated would not be worth the funds it would take to increase law enforcement and deal with some of the social issues that come with alcohol and its users. If countywide alcohol comes to Jackson County, the county and the university should partner to implement an alcohol awareness campaign and collaborate on taxi and bus services.

In these tough economic times, it is worth considering countywide alcohol in Jackson County. If alcohol is to be legalized countywide, then it should be done in the most constructive and safe way possible.

(Michael Morris is a senior majoring in political science at WCU.)

Whether you’re a college student in Cullowhee or socialite in Cashiers, stocking up on beer, wine and spirits requires a trip into town. But a WCU Public Policy Institute/Smoky Mountain News poll shows 56 percent of voters in Jackson County support alcohol sales everywhere in the county, not just in Sylva and Dillsboro, compared to 39 percent who would be opposed.

This particular question polarized respondents more strongly than any other issue on the poll, which was conducted by the Public Policy Polling in Raleigh, one of the Southeast’s most respected polling companies. Only 5 percent of those polled were undecided. Most questions saw undecided numbers of around 20 percent.

The poll questioned nearly 600 registered Jackson County voters.

“It’s fascinating that so few people are unsure,” said Christopher Cooper, director of the Public Policy Institute at WCU. “It seems like the kind of issue, if it’s ever on the ballot, that would lead to a high voter turnout.”

The alcohol question sticks out in a poll where most of the questions address trust in government. Clay County — one of the region’s smallest and most rural — recently voted to allow alcohol sales countywide, so it seems to be an emerging issue in Western North Carolina, Cooper said.

Though the area has traditionally been conservative on alcohol sales, a lingering recession may have created more favor for the potential boost in tax revenues that widespread alcohol sales promise.

Jackson County Commissioner Tom Massie, however, doesn’t see the issue as pressing.

“I don’t have a whole lot of people stopping me in the grocery store, on the streets or calling me saying ‘We need alcohol sales,’” said Massie. “It’s not one of those things on my radar screen.”

Massie doesn’t see a trend toward acceptance in Western North Carolina, either. Clay County seems to be more the exception than the rule in the region, according to Massie.

“That’s got a whole lot more to do with tradition and deep-seated beliefs held by the populace,” said Massie.

Though Jackson County Commissioner Mark Jones said there is actually more acceptance of alcohol in general, the primary motivating factor for legalizing alcohol sales countywide is most likely financial at this point.

“It is a revenue-generator at a time when sales are down and economies are tough,” said Jones.

WCU sees opportunity

According to Cooper, the biggest supporters of countywide sales were men, liberals, the more educated and the young.

Those who face a long drive to get a six-pack of beer or a few bottles of wine resoundingly said “yes” to countywide alcohol sales as well. About 68 percent of Cashiers residents clamored for change in Jackson County’s alcohol policy.

Meanwhile, Sylva residents just barely supported countywide sales, with only 50 percent voting “yes.”

Though WCU Chancellor John Bardo was reluctant to comment on the results of a poll conducted by the university, he did say legalizing alcohol sales in the county would have a tangible impact on the college.

The main effect, Bardo said, would be the potential for a viable commercial environment around the university. For now, Cullowhee is short on restaurants and grocery stores, and the total ban on alcohol sales may be to blame.

“People want to be able to go out to eat,” said Bardo. “It’s part of the quality of life they’re looking for.”

Alcohol sales countywide might lead to higher tax revenues for local government, a better business environment in Cullowhee as well as a positive impact on student enrollment.

“More services make the university more attractive,” said Bardo.

Jones agreed that Cullowhee businesses would make a handsome profit if students weren’t forced to drive to Sylva to buy their alcohol.

Moreover, Jones cited the trend of more retired individuals moving to college towns for its culture and activities. Allowing alcohol sales in Cullowhee would enhance the area’s attractiveness to these potential residents, Jones said.

But Massie said the few miles drive to Sylva most likely isn’t a major problem for students at Western. He recalled the days Jackson County was completely dry, when students would make beer runs all the way to Waynesville.

“College kids, if they want beer, and it’s legal for them to get it, they’re going to get it,” said Massie.

Cashiers highly supportive

Commissioner Jones, who manages High Hampton Inn in Cashiers, constantly encounters guests who query him on the nearest place to buy alcohol.

“For convenience, I send them to Highlands [in Macon County],” said Jones. “I’m guilty as charged.”

With Highlands a lot closer than Sylva, guests and residents alike often opt for the quicker trip when they’re thirsting for beer, wine and liquor. Jones said he cannot gauge how many thousands of dollars in potential tax revenue Jackson County loses each year in the process.

Some businesses in Cashiers are allowed to sell liquor, but only if they are established as a private club. Because these venues are required to purchase alcohol only from a Jackson County store, every restocking requires a drive down the mountain to Sylva or Dillsboro.

“It would save a lot of time, gas and trouble and expense to have an ABC store [here],” Jones said.

Though Jones supports countywide alcohol sales, he said he would rather see citizens petition to put the issue on the ballot than for the commissioners to get involved.

Massie, too, said he’d like to see a vote by the people, though he did not have a strong opinion on the matter.

“I’m not a teetotaler so it doesn’t bother me one way or another,” said Massie.

Still Massie, Jones and Commissioner Brian McMahan said they are all concerned that Jackson County ranks in the top 10 in North Carolina for alcohol-related accidents.

Though towns benefit economically from alcohol sales, there’s always a price to pay. “The trade-off is what are the social problems and liabilities that come with the sale of alcohol,” said Massie.

“Any time you have alcohol sales, you’re going to have that problem,” said Jones, adding that part of the tax revenues from alcohol sales do go toward law enforcement and education.

For McMahan, having widespread alcohol sales would probably not be worth the risks. McMahan said he would neither support legalizing alcohol sales in the county nor putting the issue on the ballot.

“The present system works, and there’s no need to change it,” said McMahan.

Sylva not swayed

Cooper has two theories to explain why Sylva voters were more reluctant than others to welcome countywide sales.

Of the alcohol tax that stays locally, Sylva shares half of the tax revenue from alcohol sales with the county and keeps the other half.

Allowing alcohol sales everywhere obviously means fewer people driving into Sylva or Dillsboro to buy their beer, leading to a direct decline in the town’s revenues. Sylva voters might have taken that into account when a higher number of them opposed countywide sales.

Cooper’s other theory is that alcohol is already widely available to Sylva residents.

“If you live in Sylva, what do you care if there’s alcohol in Cashiers?” said Cooper.

Massie, who represents Sylva on the county board, has another conjecture altogether. While elected officials and town employees are well-aware of the alcohol’s impact on revenues, that’s probably not driving your average Sylva resident to vote “no.”

“Sylva has a concentration of some of the biggest churches in the county,” said Massie. “That’s what I’m thinking is the reason.”

“As academics, we’re pretty good at using rigorous methods to find things out,” said Chris Cooper, the institute’s director. “We’re not as good at showing our results.”

Cooper and his colleague, Gibbs Knotts, were interested in partnering with a media company to help disseminate the results of a poll measuring Jackson County political opinions and in turn instigate a larger conversation. They hatched the idea during the debate over tearing down the Dillsboro Dam. Because there were so many strong opinions on the issue, it was hard to get a feel for the sentiment of the majority.

“Most people like people who like them,” Cooper said. “Consequently they hang around people who think like them. The idea was to get a representative sample, so people could have some idea what others were really thinking about the issues.”

Smoky Mountain News publisher, Scott McLeod, saw the project as an opportunity to explore a partnership that could get to the crux of what is on readers’ minds.

“This is what good journalism and good newspapers are about,” McLeod said “We want to provide our readers with information about this region they can’t find anywhere else and present it in a way that’s interesting and useful. These polls and the subsequent stories we do will fulfill that mission.”

By combining accurate polling data and a platform for discussion, the first poll in the project is designed to create a baseline for Jackson County voters to discuss issues in the run-up to the November election. The project is called “Creating a Regional Policy Dialogue.”

“Anytime you can get people to discuss their views on government and on elected leaders, there’s a chance it will lead to better decision making and better leadership,” McLeod said. “Maybe a frank dialogue in the media about leadership and politics — one based on actual poll results from mountain voters — will contribute some solutions to some of our problems.”

The poll

Cooper contracted Public Policy Polling in Raleigh to conduct a random sample survey of Jackson County registered voters. The polling firm has had great results with its relatively low-cost phone survey method. SurveyUSA’s report cards rated Public Policy Polling the most accurate pollster for South Carolina, North Carolina, Wisconsin, Indiana and Oregon during the 2008 election cycle.

The Jackson County poll, which was administered through a computerized phone call, asked 11 questions. In the end, just less than 600 respondents from all parts of the county offered their views on questions that asked what they thought of county and federal government; whether alcohol sales should be allowed outside incorporated areas; and how they felt about Congressman Heath Shuler, Governor Bev Perdue, the TEA Party and their local school system. It also measured political persuasions and collected demographic data.

Some of the results were surprising, like the fact that 95 percent of the respondents had an opinion about alcohol sales outside of Sylva and Dillsboro.

Cooper is quick to point out what the poll results — which canvassed registered voters only — can and can’t show.

“We can generalize about voters in Jackson County, but we can’t generalize about the people in a broad sense,” Cooper said.

Voters are, in general, more educated, more liberal and older than the public at large. They are also the people most likely to engage in the political process.

“The downside is we’re not getting the opinion of a whole group who by definition are disenfranchised and disconnected from the political process,” Cooper said.

Knotts estimates that between 20 and 30 percent of Jackson residents aren’t registered to vote.

The poll functioned with a plus or minus 4 percent margin of error. Cooper said he only recognized one peculiarity in the results: more than 61 percent said they graduated from college, a larger percentage than normal for the voting public.

“We over-represented educated people, but it’s not because we called more, it’s because more of them answered the call,” Cooper said.

In the end, the survey provides a starting point for the discussion of what’s really on the mind of Jackson County’s voters. Past public opinion surveys in Western North Carolina have focused on the region so broadly that voters in Asheville or Boone have been lumped in with those from Cashiers and Whittier.

The newest poll hopes to lend badly needed specificity the conversation.

“We were very interested to see how it came out to, and I feel really good about the results,” Cooper said.

Reading the mind of Jackson County

Gauging public opinion can be a tricky proposition, but for the elected officials who run Jackson County, it can also provide a glimpse at what matters to the people who elect them.

County Commissioner Tom Massie is up for reelection in November, and he likes the idea of the poll.

“I think we genuinely need to know where there are issues of concern in the public, and people ought to participate more in their government at all levels,” Massie said.

Vicki Greene, director of the Southwestern Planning Commission, has conducted numerous polls in Western North Carolina aimed at getting information on how people are employed. Greene, who grew up in Sylva and Dillsboro, said it could be hard to get good, accurate information from people through an automated phone call.

“My initial reaction is it’s a waste of time, because I’d be real surprised if you can get somebody to stay on the line for seven minutes,” Greene said.

The poll called voters on the list six times before moving on to another name. The short duration of the poll and its touch-key response system limits the complexity of the questions, but it greatly enhances the chance that people will respond.

Greene acknowledged how important good data can be in informing the larger policy discussions that shape the region.

“Assuming the questions are asked in a neutral format, the results of the polls should be beneficial to elected officials in their decision making capacities,” Greene said. “When you do a random survey, you are getting the voices of folks that don’t often participate in the discussion.”

For Knotts, who helped design the list of questions, the poll is a starting place.

“We see this as a way to put some numbers out there and use them as a starting point for a regional dialogue,” Knotts said.

At a moment in history when the economy is still mired and approval ratings of government at all levels are low around the country, the Jackson County poll is a chance to find out why voters are so frustrated and what can bring them back to the table.

For Cooper and Knotts, gathering data is the best place to start.

“The goal is to get the word out there, get out of the academic silo and communicate data and empirical results to the people who make decisions,” Cooper said.

For Smoky Mountain News publisher Scott McLeod, the polling partnership is the first step in creating a broader regional dialogue around issues.

“I can’t recall there ever having been scientific polling data from citizens in the counties west of Asheville,” McLeod said. “If we can continue this project for a year and do a half dozen or so polls, we’ll have some great information about our region that no one else has ever made the effort to gather.”

The US. Forest Service has banned alcohol use at 11 recreation sites in the Nantahala National Forest.

The sites include: Balsam Lake Recreation Area, Big Choga Dispersed Camping Sites, Bristol Fields Campground, Cheoah Point Swimming Area, Dry Falls Recreational Area, Fire’s Creek Hunter’s Camp, Fire’s Creek Picnic Area, Jackrabbit Recreation Area, Pine Ridge Dispersed Camping Sites, Wayah Bald Tower and Picnic Area, and Whiteside Mountain Recreation Area. All sites are within the Tusquitee, Cheoah and Nantahala Ranger Districts.

Several sites have been vandalized in association with alcohol consumption. Law enforcement officials have been called out for related incidents. Broken beer bottles in streams pose safety concerns for barefoot children and adults in adjoining creeks. Cheoah Point Swimming Area is the only public, free swimming on Lake Santeetlah and brings large numbers of visitors.

For more information on recreation sites across the forest and Ranger District contact information see the Carolina Connections publication online at www.cs.unca.edu/nfsnc/recreation /connections/Connections2010.pdf or call 828.257.4258.

Buying alcohol will become a lot more convenient for residents in Haywood County.

For the first time in 43 years, a new ABC store will be constructed in Waynesville.

The second location will be situated behind Hardee’s on South Main Street and will be accessed off the entrance drive into Wal-Mart. It will likely capture traffic from all over the county, snagging a greater share of ABC profits distributed in Haywood County.

For now, the Waynesville ABC board is close to finalizing the deal but is still awaiting approval from the state ABC commission.

“Everything’s looking pretty good right now,” said Waynesville ABC Chairman Earl Clark. “It’s a real ideal spot.”

The property itself will cost between $450,000 and $500,000, according to Clark. The store, which will measure about 5,000 square feet, will cost approximately $500,000 to construct.

Waynesville’s original ABC store was built in 1967 and is far too small, Clark said. The ABC board has been anxious to build a new store for several years.

“Our store is just small,” said Clark. “We have no way of displaying and stocking like a lot of the larger stores do.”

With only two alcohol shipments each month from Raleigh and little storage space, it’s been tough for the store to replenish stock.

The convenience of neighboring Wal-Mart might increase revenues for the ABC board, but the Town of Waynesville and Haywood County might not see a payoff any time soon.

Town Manager Lee Galloway said the additional expenses of debt payment, personnel and utilities will scoop up much of the new revenue generated by the store for years to come.

“I do think because of the cost of the store and the personnel involved, the town’s revenues are going down, not up,” said Galloway.

Local governments will only realize the full benefit of the new store when it is paid off.

The town estimates that it’ll receive $94,000 from ABC profits this year. Last year, the town got $112,000, which was spent on law enforcement and alcohol education.

Alternatively, the Town of Maggie Valley has received no money from ABC’s profits in the last few years. A second ABC store was built on Dellwood Road there in 2009.

“We’ve been allowing them to keep the excess to help pay for the second store,” said Tim Barth, town manager for Maggie Valley.

The town annexed a satellite tract a mile outside town limits to get a parcel close to Waynesville, grabbing customers who’d usually travel to Waynesville’s ABC store.

The ABC board in Maggie set aside money years in advance to buy inventory for the new store and save up for the debt payments.

Maggie’s second store was successful in luring customers away from Waynesville’s ABC store, due to its strategic geographic location that’s closer to Waynesville than Maggie. Sales rose for the Maggie Valley ABC board in 2008-2009, but not enough to save the board from landing in the red.

According to annual reports from the town of Maggie Valley, the ABC board operated at a loss of $5,600 in the ’08-’09 year. In comparison, the board’s income from operations in the 2007-2008 fiscal year was a solid $72,479.

Revenues at both the Maggie Valley and Waynesville ABC stores will likely be adversely affected by alcohol sales at Harrah’s Cherokee Casino. Liquor sales at the casino started in late 2009.

Is privatization on the way?

Talks of privatizing liquor sales in North Carolina may hinder Waynesville’s plans for a second Alcoholic Beverage Control store.

The governor has appointed a committee to study reform of the ABC system, including the possibility of privatizing alcohol sales.

Calls for reform were sounded after it was discovered that two ABC staffers in New Hanover County were being paid a combined $350,000 annually. Meanwhile, liquor industry representatives had treated Mecklenburg County ABC board staffers to multiple lavish meals, with one tab totaling $12,700.

Earl Clark, chairman of the Waynesville ABC board, said his board would be hesitant to build a new store if the state decides to follow through with privatization and end the monopoly of ABC boards.

“There’s no doubt that it would affect us because we don’t want to do something that we’d lose money or the town would lose money,” said Clark.

Clark said though the system could use reform, privatizing the system would prove harmful for local governments that get a cut of the profits.

“I think that it would hurt the town and the county on their distribution,” said Clark

Harrah’s Cherokee Casino may soon serve alcohol on the gaming floor, after receiving an unofficial go-ahead from a state attorney.

The casino has already been offering customers beer, wine and mixed drinks at restaurants and lounges in its adjacent hotel. Bringing alcohol to the floor, though, will be the bigger moneymaker for the casino.

Harrah’s had prohibited players from downing alcoholic drinks on the gaming floor due to uncertainty about a state law that bans gambling at businesses that serve alcohol.

“We had to be clear on the law,” said Bob Blankenship, chairman of the tribe’s Alcoholic Beverage Control commission.

But according to John Aldridge, special deputy attorney general, Harrah’s would not violate any law by serving alcohol on the casino floor.

In a letter to the state ABC commission, Aldridge wrote that the state law only impacts businesses that allow illegal gambling.

Since an agreement with both the state and federal government allows gambling at Harrah’s in Cherokee, the law would not be applicable.

According to Blankenship, all that’s left in the process is the tribal council’s formal approval. Tribe members approved the sale of alcohol on casino premises, but nowhere else in Cherokee, over the summer.

It will take about a week for alcohol to hit the casino floor after the tribal council passes the measure, Blankenship said.

The recession has taken a toll on liquor sales at the ABC stores in Maggie Valley and Waynesville, in turn reducing the profits paid out to the towns.

Rather than curtailing their intake, customers are buying cheaper brands, according to Joy Rasmus, manager of the Waynesville ABC store.

“It is an easy thing to cut back on. It is a luxury item,” Rasmus said.

Meanwhile, fewer tourists during the recession hurt sales at Maggie’s main ABC store. Austin Pendley, the chairman of the Maggie ABC board, cited “the lack of full motel rooms” as the main factor behind a drop in sales.

Maggie Valley’s ABC store has noticed a further decline in business following the rockslide on I-40, which closed part of the interstate and discouraged travel.

“We could tell an immediate difference,” Pendley said.

That said, the rockslide occurred just when the tourist season was winding down anyway, making it difficult to determine what can be blamed on the rockslide versus the standard drop off Maggie sees this time of year anyway.

“There are too many variables this year,” Pendley said, adding that sales will pick up again when ski season arrives in full force.

Maggie is also bracing for a potential loss in ABC revenue with the advent of liquor at Harrah’s Cherokee Casino and Hotel. The hotel at Harrah’s began selling alcohol in restaurants and bars this fall, with hopes of eventually offering it inside the casino itself.

Maggie’s ABC store had been a favorite stop for those en route to Harrah’s.

“It will definitely have an effect. There’s no doubt about that, but to what degree I do not know,” Pendley said.

Maggie’s ABC store did a brisk business in miniature airplane bottles, which gamblers would tuck into their pockets and purses before heading over the mountain to the casino.

If and when Harrah’s begins offering alcohol to gamblers on the casino floor, Pendley expects a drop off in sales of airplane bottles.

Turf wars

In a tactical move to grow revenues, Maggie Valley opened a second ABC store this year aimed at capturing business from Waynesville. Maggie’s second store is on the outer fringes of town — more than a mile outside the town proper. Maggie annexed a satellite tract into its town limits to strategically build a new store between Maggie and Waynesville on U.S. 19 in Dellwood.

“Building store number two has been very gratifying,” Pendley said.

The second store likely pulled some business away from Maggie’s existing ABC store.

“We knew some portion would be siphoned from store number one. We don’t know how much,” Pendley said, citing the myriad variables at play this year.

Since Maggie’s new store opened, revenue at Waynesville’s ABC profits have taken a dive (see chart). While Maggie ABC revenue has grown by an additional $30,000 to $50,000 a month since the opening of the new store, Waynesville’s has dropped by a comparable amount.

The drop in revenue came as no surprise to Joy Rasmus, the manager of the Waynesville ABC store.

“We were expecting an impact, but we didn’t know how much,” Rasmus said.

Waynesville once captured a large share of the liquor purchases in the county by default. Residents from the county’s outlying areas come to Waynesville for their grocery shopping. While in the neighborhood, they would stop by the ABC store.

But Maggie’s new store — stationed practically at Waynesville’s doorstep — is snagging a share of what Waynesville once got.

It’s particularly true for those making a special trip from places like Lake Junaluska and Jonathan Creek.

“If you were just coming to town to buy alcohol, it is easier to stop at Maggie’s new store,” Rasmus said.

In response, Waynesville’s ABC Board is contemplating a new store of its own: one in the vicinity of the new Super Wal-Mart. Super Wal-Mart pulls in a huge volume of traffic, which Rasmus would like to capitalize on.

The current ABC store in Waynesville has been there since 1967.

“Absolutely we’ve outgrown it,” Rasmus said.

The Waynesville ABC Board is keeping an eye out for property to build on in the Super Wal-Mart vicinity, but there’s nothing concrete in the works yet.

“In a perfect world, it would be nice to keep two stores,” Rasmus said.

Opening a new ABC store isn’t cheap, Pendley said. There’s the cost of land and construction, but there’s also start up costs like shelving and a computer system. The upfront inventory cost to stock the store was “overwhelming,” Pendley added.

“We had no idea that there was going to be a recession or we probably wouldn’t have done it at this time, but we were too far committed not to go ahead with it,” Pendley said of the second store.

But Pendley is glad they did. The second store has already proven lucrative and will continue to pay off for the town, which reaps the profits from ABC operations.

“The whole purpose is to get more revenue to keep down taxes,” Pendley said of their mission.

While the addition of alcohol sales at Harrah’s Cherokee Casino and Hotel will undoubtedly be lucrative for the Eastern Band of Cherokee Indians, they won’t be alone in reaping a windfall.

Harrah’s will order all its liquor from the ABC stores in Sylva and Bryson City, which in turn will benefit the town’s coffers. The tribe does not have its own ABC store, and thus had to look to neighboring locales for its liquor.

Tension inevitably erupted between the ABC boards in Sylva and Bryson City at first, as each clamored at the chance to be Harrah’s supplier — and reap the profits and tax revenue off each bottle.

Typically, restaurants and bars buy liquor from the ABC store in their own town or county. In this case, however, the Cherokee Reservation straddles Jackson and Swain counties. Harrah’s itself lies on the Jackson County side, giving the Sylva ABC store de facto standing. But Bryson City is physically closer.

A compromise worked out between the Bryson City and Sylva ABC boards created a special joint board to exclusively handle alcohol sales to Harrah’s. They will share profits evenly.

N.C. Representative Phil Haire, D-Sylva, and Jackson County Commissioner Tom Massie encouraged the two ABC boards to work together.

“Half of something is better than 100 percent of nothing,” said Massie, adding that both counties would be affected by the addition of alcohol at the casino.

“We’re the ones that are going to have to deal with any problems coming from alcohol sales on the reservation, depending on whether they go east or west,” said Massie. “If we’re going to get the problems, we should get some of the revenues.”

Bryson City’s ABC board is admittedly doing most of the work, primarily since it has extra warehouse space to handle the added inventory, according to Laurie Lee, an auditor with the state’s ABC commission.

“The day-to-day work is handled by Bryson City,” said Lee.

Bryson City will order alcohol, provide warehouse space and take orders from the casino, according to Monty Clampitt, chairman of the Bryson City ABC board.

The Sylva ABC board’s only tasks are to “maintain the alcohol permit” for the joint operation and appoint members to Bryson City-Sylva ABC board.

However, both boards will advance $7,500 to cover initial start-up costs.

“The cost is almost nothing,” said Clampitt. “We have the warehouse space already. Labor would be provided by current employees.”

Alcohol for the casino will be stored in Bryson City’s old warehouse, while the new warehouse, built last year, will continue to be used for basic store operations.

The tribe plans to handle law enforcement, thus receiving the customary 5 percent of ABC profits designated for the local police station. The remaining profits will be split evenly between the Bryson City and Sylva ABC boards.

The two boards had been working on an agreement since September and finally signed a contract in mid-October. The state ABC commission formally approved the merger in mid-November, paving the way for Harrah’s to starting offering liquor drinks.

“I think this is a good compromise,” said Massie. “I think it benefits all involved.”

When asked about how much he expected his ABC board to profit from the expansion, Clampitt replied, “My crystal ball’s broken.”

For now, the takeover is going smoothly, according to all parties involved.

“It’s a new venture and we are proceeding as responsibly and carefully as we can,” said Charles Pringle, spokesman for Harrah’s Cherokee.