By David Greisman, email@example.com
10:29 AM EDT, May 15, 2012
The proposed liquor store adjoining the new Wegmans in Columbia wouldn't be the only such store owned by someone related to executives or employees of the supermarket chain.
But this shop would be different, opponents say, because not only would the majority owner be the husband of Wegmans' president, but the store would be in the same building. That combination of ownership and the location skirts Maryland law, opponents say, and raises questions about whether the store should be allowed.
"You're talking about a chain store, which is prohibited by law, a supermarket, prohibited by law, from holding an alcohol beverage license," said J. Steven Wise, a lawyer and lobbyist who works on behalf of the Maryland State Licensed Beverage Association. Wise is also representing The Kings Contrivance Liquor and Smoke Shop in Columbia and Glenwood Wine & Sports in Glenwood in opposition to the proposed liquor store within the Wegmans building.
"Whether that (store) is controlled by an in-state or out-of-state entity, we've got a problem with it being on the premises of the supermarket," he said.
That 9,800-square-foot store, tentatively named "Upstairs Spirits," "Upstairs Wine and Spirits" or "Upstairs Wine, Liquor and Beer," would operate on part of the second floor of the building that will house the grocery store in east Columbia off McGaw Road and Snowden River Parkway.
A May 1 public hearing on the store's liquor license application before the county's Alcohol Beverage Hearing Board included a lot of opposition testimony, most from nearby liquor store owners, but no decision on the license. The board plans to meet again June 14, just three days before the Wegmans grocery store, located off McGaw Road and Snowden River Parkway, will open.
The two liquor store owners are R. Michael Smith, a 63-year-old Ellicott City man who would own 10 percent of the store, and Christopher O'Donnell, a New York man who owns a corporation, registered in Delaware, that controls the remaining 90 percent of the shop.
O'Donnell is the husband of Wegmans' president, Colleen Wegman.
"Although he is married to Colleen Wegman, Chris independently invests his own funds and has no financial interest in Wegmans," Wegmans spokeswoman Jeanne Colleluori said in a statement provided to the Howard County Times.
O'Donnell is a venture capitalist who invests in start-up companies, she said.
"He knows that a liquor store located adjacent to a Wegmans is a good investment, since, through other companies, he owns two stores in other states," Colleluori said.
A Maryland law says supermarkets and chain stores cannot have certain kinds of beer, wine and liquor licenses.
But Smith said the law is not an issue.
"Everything that we've done is consistent with the letter and the spirit of the law," he said, noting that while the liquor store would be in the same building as Wegmans, it would not be part of the grocery store itself, though people would be able to walk through doors between them.
He chalked his opponents' concerns largely up to "their desire to avoid competition."
Situation not unique
This proposed liquor store would not be the only one in Maryland owned by a husband of a Wegmans' executive.
In Hunt Valley, Calvert Wine is located in the same shopping center as a Wegmans supermarket. While its liquor license is held by a local resident named Robert Seidel, who owns 1 percent of the store, the remaining 99 percent is owned by Brendan O'Hara, who is married to company executive Nicole Wegman, according to Baltimore County chief liquor board administrator Michael Mohler and a 2010 article in The Daily Record.
Colleluori said there are six liquor stores that are owned by family members of Wegmans employees and are adjacent to or adjoining Wegmans supermarkets.
Such an arrangement is not rare, according to Mohler. He used Olive Garden as an example, noting that a Baltimore County resident is required as the holder of the liquor license, though that person clearly doesn't own the restaurant.
Baltimore County recently passed legislation that will allow license holders to be Maryland residents, not just county residents.
Wise countered that the situations are not the same.
"The law has allowed chain restaurants over the years to hold licenses, and the laws for them are different than they are for package stores," he said.
Maryland also used to have a law on volume discounts that forced wholesale distributors to offer the same discounts, no matter the size of the store. That law is no longer around, Wise said, which would allow the bigger companies to take advantage and potentially squelch out the smaller competition.
"The ban on chain stores and supermarkets holding [liquor] licenses was there for that very reason — to protect the mom-and-pop shops," he said.