KOTZEBUE, Alaska — "Jailhouse Liquor" is a hit.
The first liquor store in Kotzebue in more than 20 years -- the nickname comes from its proximity to the city slammer -- is making nearly twice as much money as expected and is on pace to bring $600,000 a year into city coffers.
"I got told one day that I was the most popular guy in Kotzebue," said store manager Tryson Ferguson, whose biggest sellers are 30-packs of Budweiser cans and $21.60 bottles of R&R whiskey.
The Kotzebue city manager calls the store a "grand experiment." Created by voters, it's owned and operated by the city. The government also runs a new distribution center, which tracks and taxes all legal alcohol shipped into the so-called "damp" community of more than 3,200 people in Northwest Alaska.
The new alcohol center is taking in about a quarter million dollars a month before expenses, Ferguson said.
It's too soon to say what the store means for life in Kotzebue, where bars have been outlawed for a generation, or surrounding villages. Police numbers show no major increase in many categories of alcohol-related offenses within the city. But some see evidence of more alcohol abuse.
"Before it opened up there was a lot of fear. Fear about what might happen and things getting out of control," said Chad Nordlum, a 36-year-old village planner for the Kotzebue-based Northwest Arctic Borough, who has shopped at the store. "It's actually been more mellow than you might expect."
One thing is for sure. Business is brisk, and other cities that wrestle with alcohol policy, as well as alcohol regulators, are watching Kotzebue to see what happens next.
A MODEL APPROACH?
Opened Aug. 25, the liquor store and shipping site are expected to make about $340,000 in profit by the end of 2010, city officials say.
(There's always a chance sales could drop off, or winter air freight expenses could chew into earnings, city officials note.)
The money comes from sales, $50 permits customers must buy in order to purchase alcohol and the $25 you pay every time you pick up any orders from Anchorage or Fairbanks.
Money from the alcohol site flows into city coffers, which pay for government services like police, road work and building upkeep.
"That's additional city projects. Additional donations to local nonprofits," said Ryan Cope, the finance director. Kotzebue's aching for a new fire truck, for example -- the current rig's ladder might not reach the roof of the town's newest hotel.
Exactly how the extra money will be used will be decided when the city writes Kotzebue's more than $6 million annual spending plan in the spring, said city attorney Joe Evans.
Already, some Kotzebue residents are eyeing the alcohol revenue as a way to slash the local 6 percent sales tax.
"If the liquor store revenue numbers show that the city could still operate efficiently with a reduced sales tax, I intend to start a petition to get the question on the ballot," said Alvin Werneke, who recently created an online survey asking people if they favored repealing or cutting the tax.
Most called for lower taxes.
DAILY LIMITS
When you walk into the Kotzebue liquor store, here's how much alcohol you can buy in a single day:
30 cans of beer.
One 750 ml bottle, or "fifth," of hard liquor.
Three liters, or four bottles, of wine.
The restrictions, crafted by a local alcohol control board, are placed on top of monthly importation limits enforced by state law.
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