Outlet Liquors hopes to open this weekend

Pending a final inspection, the 22,000-square-foot liquor store, in the former Salvation Army building on Route 1, will be open for business on or before Friday, May 15, according to the decision of Commissioner John Cordrey. Appeals can be made within 30 days of the decision.

Outlet Liquors is owned by #1 BHOLE Inc., whose parent company is Highway One, owner of several bars and restaurants in Dewey Beach. The previous owners of Ocean Wine and Spirits, two doors down from the new location, formed BHOLE. BHOLE will move the liquor license from Ocean Wine and Spirits to the new Outlet Liquors.

Joseph Green, attorney for BHOLE, said he was very pleased with the commissioner’s decision and he hopes Outlet Liquors will be up and running by the weekend, pending final inspection by the state liquor inspector.

The new store has advertised itself as the “nicest, most unique liquor store in America,” with low prices, entertainment and wine tasting in its central lounge, five plasma TVs, marble bathrooms with chandeliers and a cigar center.

Outlet Liquors filed an application to move the license and expand operation. Shore Investments Inc., owners of the Ocean Wine and Spirits property but not the Outlet Liquors property, and 13 other signers protested the application, causing a public hearing Feb. 19.

John Sergovic, attorney for Shore Investments, said at this point he is consulting with his clients. He did not elaborate further on his views of the decision or future litigation strategy.

At the hearing, Sergovic made three arguments. First, that BHOLE violated terms of a lease agreement with Shore Investments, requiring BHOLE to operate a liquor store at the Ocean Wine and Spirits location.

However, Cordrey ruled that enforcement and interpretation of the language in the lease agreement is outsidethe commissioner’s jurisdiction.

Sergovic also said BHOLE falsely stated it has a legal right to move the liquor license. Cordrey’s office ruled that it did not find any false statements made by BHOLE.

Second, Sergovic argued that BHOLE was opening a cigar store within a liquor store, which is prohibited by state law. Floor plans for Outlet Liquors show a 47-square-foot humidor to be built within the store, but the commissioner’s office found this area was insignificant.

“This is not a cigar store, which sells mostly cigars, asking for a license to sell alcohol. Rather, this is a package store, which sells mostly alcohol, asking for a floor plan approval that includes a small area to sell cigars,” the commissioner’s office said.

Sergovic’s third argument was more complicated. State code says the commissioner cannot grant a liquor license to an establishment that is within 1,200 feet of another establishment. But there are exceptions, including a sale or transfer of ownership. The code says that a license owner can relocate a license to a location within 500 feet.

Sergovic argued that even though Ocean Wine and Spirits and the old Salvation Army building were physically in the same shopping center, they are legally subdivided into two separate lots, in addition to having separate owners.

However, the commissioner’s decision said, “It is undisputed that the proposed new licensed premises is less than 500 feet from the existing licensed premise, so this argument does not result in a denial of the request to move.”