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TTB Retail License in Multi Vendor building


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Originally posted topic to less pertinent forum - trying this one:

Seeking a lease in an historic location in Kansas City. All the buildings in the area a big 4-5 story brick buildings so the owners would like to lease to multiple vendors (zoning is all industrial). Potential site owner is hesitant about leasing to manufacture & retail distillery and not being able to use the other floors for say leasing to restaurant that has a liquor license.

My question is basically - if I own a building and lease to a distillery, could I also lease to a restaurant w/ a liquor license(on a different floor)? If I have no controlling interest in the distillery (ie. I just lease, no ownership) would the TTB restrictions prevent any other retail licenses for that location.


Any help or suggestions are much appreciated.



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  • 2 months later...

Hi Alex,

I see that you have not heard a response on this matter so I thought I would offer my experience in case you are still looking for a resolution.

In general, TTB is very strict about the arrangements they allow. They typically do not like granting permits to distilleries within multi-unit buildings. However, there are ways around this if you can show that the distillery and other building units are adequately separated. This usually means they need separate entrances and are completely blocked off from each other.

I would think there are ways to make this work in your case, it would just be very fact-specific and would likely involve a few measures required by TTB to ensure that the premises are adequately separated.

Let me know if you would like for me to connect you to some consultants in the industry that specialize in these sorts of projects and I would be happy to help.


James Niekamp

Niekamp & Associates, LLC

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This post just came to my attention. I missed it in June, but Mr. Niekamp's response brought it to the top of the list. I think I need to respond, because (1) my experience is different from Mr. Niekamp's, and (2) no one has addressed the issue of retail premises in the same building. I think by now it is probably a matter Alex has settled, in one way or another, but I’d like to address the issue anyway, since others may be concerned.

I will deal with the different experiences first.

I have probably been involved in 20 or more applications to establish a DSP in a building that houses other businesses. I have never seen a hesitance by TTB to grant permits to distillers within multi-unit buildings. I can state categorically that the collocation with other businesses within buildings like a strip malls has never been a problem.

For example, I obtained approval for a DSP in a condominium with mixed residential and commercial use. The approval came in the form of a private ruling by TTB, after full disclosure of all circumstances. I do not recommend that you plan a DSP in such a building without getting TTB's prior approval of the location, because the ruling my client has did not establish a broad precedent. Because it was particular to the circumstances, I don't want to get into that any further here. I simply want to say that it is possible.

Mr. Niekamp is correct about separation, but my experience is that standard stick frame construction always suffices as separation. If you protect your assets from theft by other than forced entry, and you damned well better do so, or you'll be trying to locate the copper from the still in the local junk yard where it was sold for scrap value, I do not think that you need to search for a further “way around” TTB’s rules. I think TTB has an open door to collocation, unless a residence is involved, and even there the door is not closed to all circumstances.

To demonstrate TTB’s flexibility, I also obtained approval for a distilled spirits plant located within the same building as a brewery of separate ownership, with no common principals. The brewery and DSP were located within the same warehouse “space,” with the brewery subleasing to the distillery, but were separated by a chain link fence that did not reach floor to ceiling and that had a gate that opened to allow delivery of bulk beer from the brewery to the distillery without leaving the building. Again, this was done with full disclosure to TTB. They may have been a bit reluctant, in this case, since they asked for photographs of the fence, but in the end they said okay. I’ve done other “collocations” of this sort and do not hesitate to assure clients that TTB is not going to object.

The advice on separate entrances is on point. The DSP must have an entrance from a public area and access to the other areas of the building cannot be through the DSP. An entrance from a hallway, which has access to a public area, and which is common space shared by tenants or owners, is acceptable public access. I would add a caveat that if the other areas contain residences, TTB is likely to require a separate entrance that is not shared, regardless of whether the shared access is through common space.

Where you may need advice is in navigating the waters that pass through local zoning, fire, water, and development codes. Very few consultants who offer services, as I do in 50 states, are familiar with local codes. Because the codes vary from place to place, in a seemingly arbitrary manner, I make no claim to such familiarity and I’m not interested in trying to understand them. Architect, builders, and even DSP owners, are better able to assist with local issues.

Next, my advice is always take care of those local issues first, because we can generally find a solution to federal issues.

To answer your specific questions. You state that it is an historical building. TTB used to require that you answer questions about historic locations. They no longer do. This is not a TTB issue. But be aware of the possibility of the National Historic Preservation Act affecting what you can do in a building that is eligible for historical status. This is something that the landlord and the developer should know about. Further, the fact that you are talking about a DSP, as opposed, say, to a facility that cans cat food, should not matter.

You then state, “Potential site owner is hesitant about leasing to manufacture & retail distillery and not being able to use the other floors for say leasing to restaurant that has a liquor license.”

This requires a little more careful parsing.

First, you will not have a distilled spirits plant from which you make retail sales. That is prohibited under federal law, not just regulation, and so is not something for which TTB can consider granting a variance. However, may, as I will explain below, make sales from an adjacent space, separated by walls or fencing, from the area you have described, on your application, as DSP premises. But the retail area will not be a part of the area you have described as DSP premises, because unless the specialist is asleep at the wheel, and the reviewers are also asleep, TTB is going to slam the door to that prospect. They allowed this in the past in some cases. They have become very strict about this now.

Assuming that standard walls separate the restaurant/bar and the DSP, whether the entity holding the DSP permit and registration operates the retail area or someone unrelated operates the retail area, TTB will not take issue with this. Think about the number of tasting rooms/retail sales spaces that are included in the area leased by a distillery, but described as being off DSP premise.

In summary, if you described an area as being part of the DSP, then it is. If you do not describe it as part of the DSP, it is not. The boundaries between what is included and what is exclude from the premises must be secure, but, setting residences aside, TTB does not care what is on the other side. If the bear went over the mountain to see what he could see, it could be a school, church, fireworks factory, Hooters, brewery, or indoor pole faulting facility. It would not matter. But if it were a pole faulting facility, TTB just might want those chain link walls to extend from floor to ceiling!

Again, excluding residences, for TTB there are no additional rules. As long as the retail area is not on DSP premises, is properly separated, and has separate public access, TTB has no problem, Even if TTB were reluctant to approve, there is no law or regulation on which they might lean to do so.

That is not to say that your landlord may not have reason for concern, since local laws and regulation that would prohibit a location like this are going to trump TTB’s lack of concern. Simply put, you must obey the strictest of the rules unless they are in direct and positive conflict, and I don’t want to get into that here, other than to say that direct and positive conflict occurs only when obeying one law results in violating the other. Location questions are not going to result in direct and positive conflict.

Finally, by your link, you make reference to the trade practice provisions of the regulations. I could try a lengthy explanation, but everyone is probably already nearly comatose reading this, so I’ll cut to the chase.

If the landlord is concerned about some statute proscribing him from leasing to both you and a retailer, there is no need for concern. TTB does not exercise prior restraint here because leasing to both is not, in and of itself, a violation of any provision of federal law and regulation.

What do we then make of the material to which you supply a link? The landlord has no reason for concern. First, the laws to which you link do not apply to him, only to you as an "industry member," that is, as a producer or bottler of spirits. In fact, under those federal laws and regulations, there is an absolute safe harbor for the landlord. Unless less the landlord uses the retailer’s lease in way that either induces or requires the retailer to buy your products to the exclusion, in whole or in part, of similar products offered for sale by others in interest commerce, there is no violation period. That is a mouthful and it is the string of elements TTB must prove that pretty much guarantees TTB is not going to want to spend much time looking at the trade practices of a craft distillery in St. Louis when it has far bigger fish to fry with the limited time it has available to make those sort of drawn out investigations. But remember, even if the landlord did impose this requirement, the law does not say that he cannot do it. It says you cannot do it. And since you are not the person leasing to the retailer, unless you and the landlord conspire, the landlord is home free. Further, even if you did conspire, the landlord would have to be have to be indicted under aiding and abetting or conspiracy statutes, which ain’t about to happen unless the Justice Department has gone bonkers. First, no one is interested in bringing these sort of misdemeanor cases into a federal courtroom. Second, Nobody is interested in bringing these sort of misdemeanor cases into a federal court room. Third, no on is interested ....

Explaining all of that to a landlord may be a bit of a challenge, but in practice the landlord has nothing to fear from TTB. N o law prohibits him from leasing to both and even if he does, I cannot think of any scenario under which TTB would get after him. I've got to add the caveat that this is not intended as legal advice, so if anyone has an concerns or questions, talk with an attorney who specializes in federal trade practice matters,

That is the federal side. Call the state ABC to make sure that they do not impose restrictive requirements on licensees. They are often concerned about things like the distance between a licensee and a school or church, and there are some strange “blue laws” and licensing rules out there. Only your state and local regulator can answer those questions. I’ll speak confidently about federal law. I will not pretend to speak confidently about local law.

I hope that this response has not been too long. Those who wade through it and have questions can contact me by personal message. I’ll gladly consult on particular circumstances, but I did want to try to give here what I think is a more or less definitive answer to the general questions Alex posed in his posting.

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  • 3 years later...

Hello Gentlemen. I’m a newbie here in the process of finding our location.  We are talking to the owners of a mall that wants to do a “food court” that is umbrella’d by their liquor license.  Will the TTB have an issue with us being within this area? We will have a separation but still have an open way to the tasting area. There will be a shared common space just outside the tasting area.  Any advice is welcome.

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The key is separation of the DSP from the retail area by a floor to ceiling partition and access to the DSP from a public space.  The retail area outside the boundaries of the properly separated DSP is treated the same as a shoe shop, restaurant or tasting/retail area that is appended to, but not a part of, the DSP premises.  Assuming you would sell in the food court, you would operate, in the retail area, a different business of the same ownership, i.e., tghe entity that owns the DSP would operate as a DSP within the confines of the established DSP premises, and separately as a retail liquor dealer beyond the confines of the DSP premises,.  .  That is true, or should be true, in  the case of every distillery that has a tasting room from which they sell and they are deemed to sell at the tasting room if they charge to tours or parking without a separate charge for the "free" tastings.  This goes back to the provisions of 26 USC 5178 and 27 CFR 19.54 and the liquor dealer regulations in part 31.

Those are the general rules and they are pretty ironclad, but specific circumstances do matter, so start with the above, but do not end there.

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