Jackson ABC board set to buy Cashiers store
It’s been just over a year since the Cashiers ABC store opened its doors, but the store’s renting days are almost over. ABC Board chairman David Noland paid a visit to both the Jackson County and Sylva town commissioners last month, asking for their blessing on an owner-financed purchase deal.
“Nineteen years from now, whoever’s on the ABC board at that time would have to renegotiate a lease with either a new property owner or heirs to the current property owner,” Noland told county commissioners in a comment he echoed at the town meeting. “We (the current ABC board) wonder if that board at that time would not look back and say, ‘What was that board in 2015 thinking by not buying this property.’”
Currently, the ABC board is in year two of a 20-year lease for the 4,000-square-foot building on 0.93 acres. For the first year, rent was $24,000 per year, and years two through nine carry a $32,000 rent. The lease agreement gives the store a chance to renew for years 10 to 15 at a 5-percent increase, paying $33,600 per year, and provides another renewal opportunity for the final five years at another 5-percent increase, bringing annual rent to $35,280. By sticking with the rental contract, the store would pay $622,000 over 20 years.
Instead, the board plans to buy the building for the equivalent of $700,000 with a 4.16 percent interest rate, representing a total investment of $1,008,000 to own the property by the time the existing lease would end. The property’s appraised value is $635,000 — its tax value, set to go down when the county completes its revaluation this year, is $722,000 — but Noland said it makes sense to pay a bit more than the appraised value because they’re getting a comparatively low interest rate, due to financing the deal through the owner rather than through a bank. He also sees potential for the property’s value to grow over the coming years.
“Over the 18 years, we expect it in the Cashiers area to go up in value, especially that location,” he said.
The ABC store is directly across from the Cashiers Ingles, the go-to grocery store for most people in the area.
Noland, who brought with him the unanimous support of his board, met only encouragement from the Sylva and Jackson County boards.
“I think it’s a good business transaction,” said Sylva Mayor Maurice Moody, himself a member of the ABC board.
“In the long run, it makes sense to move forward with that purchase,” said Jackson Commission Chairman Brian McMahan.
The support was partly influenced by strong revenues from the store’s first year of business. The Cashiers store opened in June of 2014, two years after a referendum approving countywide alcohol sales paved the way for a liquor store to exist in an unincorporated area like Cashiers.
But uncertainty surrounded the potential success of a new store in Cashiers. One of the main concerns was this: Would a new store really mean an increase in revenue, or would the second location merely eat up overhead expenses while countywide sales remained roughly the same?
Thus far, the numbers have shown that concern unfounded. Sales in Sylva did drop some — decreasing $364,000, from $2.63 million in 2013 to $2.27 in 2014 — but overall, sales increased. Jackson County brought in $986,000 — nearly $1 million — more in ABC sales in the 2014 fiscal year, after the Cashiers store opened, than it did in 2013 with just one store.
Based on feedback from customers at the new store, Noland said, there are two main reasons for the increased sales. One, people in Cashiers had previously been going to Highlands in Macon County, not to Sylva, to buy their liquor. And two, those who are second homeowners and visitors had simply been bringing the alcohol with them across state lines.
“They have exceeded our expectations,” Noland said of Cashiers’ sales.
Of the $500,000 line of credit the county had offered the new store, the ABC board drew $233,000. Of that, $24,000 has been paid back and another $100,000 payment is on the way. In just a bit over a year, the store will have paid back nearly half its debt to the county.
Commissioners were happy with those numbers.
“It seems like they have the funds to pay for the purchase of the property, and I see no reason why they shouldn’t move forward,” McMahan said.