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Booze Biz Gets Thumbs Up
by Ron Davis

An attempt to stop a tenant of a Mississippi shopping center from expanding his business to begin selling alcoholic beverages has been a flop.

The shopping center is Colony Crossing in Madison, a Jackson suburban community. And the effort to prevent the sale of the alcoholic products began when the tenant applied for a building permit to improve the leased space. Upon learning of the tenant’s liquor-sales intentions, a group of other tenants of Colony Crossing objected to the application on grounds that liquor sales there would be detrimental to attracting a “family clientele” to the center. They also noted that a liquor store already operated at the facility.

Madison town officials at a subsequent hearing unanimously denied the tenant a building permit. They explained that the tenant did not have a permit to operate a retail liquor store at the shopping center. That was true, but a permit hearing had already been scheduled for a couple of weeks after the hearing. And the state tax commission at that time heard evidence, then shortly afterwards granted a permit to the tenant to allow the sale of alcoholic products.

The opponents of the tenant initially prevailed, however. When the tenant sued to force acceptance of the liquor-sales operation, a county court affirmed the denial of the building permit, explaining that the local officials’ decision was supported by substantial evidence. The court added that such denial was within the scope of powers granted to local officials and did not violate the tenant’s rights.

The tenant appealed. And a Mississippi appellate court reversed the county court, explaining, “We agree that had the tenant attempted to sell liquor from the leased space without the retailer’s permit, an illegal act would have occurred. However, [the tenant] gave no indication that it anticipated committing such an illegal act. Nor would it have been likely that the tenant could have committed such an act, as alcohol sold in a [liquor-sales] retail store must be purchased directly from the State Tax Commission…. Thus, we are unable to find a legally valid reason for the city of Madison’s denial of the building permit application submitted by the tenant. Additionally, based on court rulings, the city of Madison did not have the discretion to deny said building permit as the tenant had complied with all building codes and zoning regulations.” (Vineyard Investments, LLC v. City of Madison, 2009 WL 116986 [Miss.App.])

Decision: January 2009
Published: February 2009



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