Gov. Bill Haslam says he’s likely to sign into law a bill updating the state’s 2009 liquor distillery statute despite questions raised about two real estate investments he has with a Knoxville developer who helped push the bill, reports the Chattanooga TFP. “It was passed by the Legislature,” Haslam said. “I don’t see any constitutional issues. I don’t think there’s a lack of clarity. I don’t know at this point and date why I wouldn’t [sign it].”
The bill was sent to Haslam on May 6. Governors have 10 days to decide what action to take. The governor can sign, veto or allow the bill to become law without his signature.
Haslam emphasized earlier this week the bill was not an administration initiative. And he said he didn’t know developer Ned Vickers was involved in the bill and a proposed Gatlinburg distillery, let alone discuss the matter with him.
“Y’all’s job is to ask questions, but it’s also your job to get the answer right,” the irritated governor lectured reporters about a news report on the issue.
He said previous investments he made with Holrob Investments, with which Vickers was associated, were placed in a blind trust he created when he became governor in 2011.
The Tennessean reported this week that before placing most of his holdings in the blind trust, Haslam listed 18 Holrob-affiliated investments on a disclosure. The newspaper reported he still has two. (Previous post HERE.)
Haslam said he can’t say for sure whether he still has the two investments because they’re part of the blind trust, controlled by a trustee.
East Tennessee developer Ned Vickers, who will be able to build a moonshine distillery in Gatlinburg thanks to legislation awaiting Gov. Bill Haslam’s signature, has worked with the governor on multiple private real estate deals, including at least one in Gatlinburg, according to the Tennessean. Vickers’ plan to open Sugarlands Distillery on the city’s main tourist drag had been denied by the Gatlinburg City Commission because it would share a property line with Ole Smoky Moonshine Distillery, violating its distance requirement.
But in a remarkable power play in the state legislature that turned Gatlinburg’s own lobbyist against the city and involved two prominent Republican lawmakers, Vickers managed to push a bill to overturn Gatlinburg’s ordinance and limit other local governments that want to regulate the burgeoning industry.
Critics say Haslam should have disclosed his ties to Vickers during the fiery debate in the legislature, and that his continued secrecy about his business investments stretches the limit on state ethics requirements for public officials.
But Haslam said he didn’t even know that Vickers was the co-owner of the proposed distillery until he was contacted by The Tennessean. Haslam said through a spokesman that his investment ties to Vickers are managed by a blind trust.
The bill, which Haslam has until May 16 to veto, sign or let become law without his signature… specifically takes aim at Gatlinburg (by exempting) distilleries from any local government’s distance requirements between liquor stores, as well as any limits on the number of retail licenses to sell packaged liquor.
Gatlinburg had wanted to prevent a concentration of stores selling liquor through its distance laws, city officials said.
…. Haslam has numerous ties to Vickers through a real estate firm called Holrob. On six different ethics disclosure statements dating back to his time as mayor of Knoxville, Haslam listed his stake in Holrob companies 49 times. On the 2011 form, Haslam listed 18 different Holrob-affilated investments, such as Holrob Gatlinburg and Holrob-HH Partnership.
Though his ethics statements do not disclose the magnitude of his investment in Holrob, Haslam told The Tennessean in 2011 that when he guaranteed a $5.5 million loan to a Knoxville developer, it was handled through Holrob.
Vickers said he was a developer at Holrob for more than 10 years. He said Holrob functions as a real estate investment fund for proposals brought to the company by individual developers.
“Holrob was an umbrella of a lot of different business entities,” Vickers said. “The way that we worked, the developers would bring deals to the company and the company would decide whether to invest in them or not.”
Vickers said Haslam does not have a financial stake in the proposed distillery, though the governor remains invested in at least two of his developments through Holrob — Holrob Gatlinburg and Holrob Henderson Chapel.
Vickers said he also sold his stake in a Gatlinburg Walgreens, located two doors down from the proposed moonshine distillery, to Haslam. He also purchased a property — across the street from the distillery — that he had co-owned with Holrob.
Vickers said he doesn’t see it as a conflict if the governor signs the legislation clearing the way for his distillery because their co-investments are through the blind trust that has managed Haslam’s investments since he took office in 2011. Vickers said he hasn’t spoken to the governor since a charity event in 2011.
(Haslam) is an owner of a couple entities through a blind trust … that are still part-owners, or minority owners, in a couple of real estate entitites that I own,” Vickers said, adding that he deals with the trustee of Haslam’s blind trust and not the governor. “I have absolutely no contact with the governor.”
….The bill (SB129) was sponsored in the House by state Rep. Joe Carr, R-Lascassas, who is raising money for a run against U.S. Rep. Scott DesJarlais next year, and in the Senate by Sen. Bill Ketron, R-Murfreesboro, a longtime champion of wine sales in grocery stores.
David McMahan, a prominent lobbyist for the state liquor store association, which opposes the wine-in-grocery-stores effort, helped raise support for the distillery bill. McMahan had been the city of Gatlinburg’s lobbyist but became an investor in the distillery and began to work on the opposite side.
McMahan said his concern was that Gatlinburg was trying to box out competition for the city’s existing distillery, Ole Smoky’s.
“At the time, we had no idea we would need any legislation passed,” Vickers said. “At that time, (Gatlinburg) was saying yes. And so we did include David in the project and, obviously, that’s turned out to be a very fortuitous thing.”
Reversing an earlier vote, the Senate Thursday concurred with a House amendment to a bill that clears the way for more liquor distilleries to open in Tennessee cities.
With approval of the House amendment, the bill (SB129) now goes to Gov. Bill Haslam for his signature. Two cities immediately impacted will be Chattanooga, where plans are afoot to build a whiskey distillery, and Gatlinburg, which will get a second moonshine distillery despite earlier disapproval of city officials.
Both chambers had approved the bill earlier, but the House had added an amendment that was rejected by the Senate.
Sen. Bill Ketron, R-Murfreesboro, said Thursday that he had not explained the amendment well prior to the earlier vote on “a bill that has been confusing from the get-go.” The amendment basically corrects a mistake in the Senate and assured that local governments can require distilleries to be located at some distance from churches and schools. It has nothing to do with allowing sales of alcoholic beverages on Sunday, as some thought previously, he said.
The vote to concur with the House amendment was 23-6.
After long and contentious debate Monday night, the House joined the Senate in approving legislation that clears the way for a new moonshine distillery in Gatlinburg and a whiskey distillery in Chattanooga.
The bill (SB129) also allows new distilleries to locate in other cities that have approved liquor-by-the-drink and liquor package stores. Under a prior law enacted in 2009, only county governments – not cities – were allowed to authorize distilleries.
Sponsor Rep. Joe Carr, R-Lascassas, said the measure originated with Chattanooga officials desire to have a brand called Chattanooga Whiskey, now made in Indiana, manufactured in its namesake city even though Hamilton County has not authorized distilleries.
It was expanded to allow a new moonshine distillery, Sugarlands, to locate in Gatlinburg, even though local officials have turned down its application and make what Carr called “cleanup” revisions to state alcoholic beverage laws. Gatlinburg already has Ole Smoky Moonshine Distillery operating near the site of the proposed Sugarlands distillery, which counts Nashville lobbyist David McMahan as a minority investor.
Thirteen amendments were filed on the House floor to change the bill. Only one was adopted, but that will send the bill back to the Senate for concurrence. The adopted amendment, proposed by Carr, says a distillery cannot be located within 2,000 feet of a church or school – unless the local government having jurisdiction decides to set a shorter limit. That is the same rule that now applies to beer sales, Carr said.
One of the rejected amendments, filed by Rep. Jeremy Faison, R-Cosby, would have had the effect of blocking Sugarlands by declaring local governments could reject a distillery application. Faison said the bills was influenced by “high-powered people who have a lot of money” and should not be “dictating” how many distilleries a town can have for “high-powered corn in a jar.”
“This amendment creates a monopoly in a particular part of the state. That’s a fact,” responded Carr, reminding colleagues that the Ole Smoky operators ran a newspaper ad charging that legislators were trying to “sneak through” a bill to curb local control over liquor.
Faison’s amendment was killed on a 55-28 vote. Other rejected amendments included one by Rep. Richard Floyd, R-Chattanooga, that would have prohibited distilleries and wineries from selling their products on Sunday.
The bill itself passed 57-31 with six lawmakers abstaining.
Legislation brought to help Chattanooga whiskey has become entangled in a Gatlinburg moonshine war.
A prominent Nashville lobbyist is already a casualty – at least in losing Gatlinburg as one of his clients.
The bill in issue (HB102) cleared its first hurdle Wednesday in the House State Government Subcommittee under sponsorship of Rep. Joe Carr, R-Lascassas, over the objections of Joe Baker, who operates Ole Smoky Moonshine Distillery in the Sevier County city. Gatlinburg officials are also opposed to the measure.
Baker, who was on hand for the subcommittee hearing, was roundly criticized by Reps. Ryan Haynes, R-Knoxville, and Kent Williams of Elizabethton, an independent, for newspaper ads saying lobbyists were trying to “sneak” the bill through the Legislature.
Baker said the ads were based on lobbyist David McMahan, who says he is a “minority investor” in Sugarlands, a proposed new distillery that hopes to open near Ole Smoky. McMahan had been signed as a contract lobbyist for Gatlinburg, but he and city officials agreed to terminate the relationship last month after mutually deciding his ties to Sugarlands posed a conflict of interest.
Haynes said the ads were “false;” Williams said they implied “I was trying to do something underhanded.” Baker said he apologized if legislators felt the ads were disrespectful.