The rumors are true, Big E’s (Ellersick Brewery) will not be running the beer garden at Tour de Terrace this year.
To Rick Ellerisck, owner of the brewery, there’s one reason that they won’t be at the festival this year: Mountlake Terrace City Councilmember John Zambrano.
Ellersick says that the whole ordeal was put in to motion when John Zambrano, who Ellersick says is a “sensationalist”, made accusations about Tour de Terrace’s finances at City Council meetings in March of this year. We covered the issue extensively here and here. In addition to Zambrano’s argument that Tour de Terrace was not a bona fide non-profit organization he insinuated that the proper taxes on the sale of beer may not have been paid:
[box]”I’m sure that for every schooner that is consumed in the beer garden, that the provider, probably thinking that Tour de Terrace is a non-profit, sold the commodity to Tour de Terrace at a a reduced exempt rate and yet the pour value of the particular commodity constitues revenue. And if he sells it to Tour de Terrace at an exempt rate then that means the burden of collecting taxes for the state rests with Tour de Terrace.” said Councilmember Zambrano at the Match 7th City Council meeting.[/box]
Ellersick says that Zambrano had no documentation to back up his claims and that there was no truth to them. Ellersick also claimed that Zambrano had inquired with the Washington State Attorney General’s office as to whether Tour de Terrace was a non-profit organization and while under investigation, the Liquor Control Board got involved.
The issue at hand is about the license that is required to serve alcohol at the festival. The license that is required for this type of event is called a special occasions license. A special occasion license allows a nonprofit organization to sell alcohol at a specified date, time, and place and Tour de Terrace has received this type of license for many years for the festival beer garden.
The way the beer garden has been run in the past is that Big E’s provided the beer and staffed the garden. Big E’s employees sold the beer, poured the drinks and provided security. Herein lies the problem. According to the guidelines of the license (WAC 314-05-030), alcohol manufacturers, importers and distributors are not allowed to provide services at the event unless it is a “beer or wine tasting exhibition or judging event.” I spoke with Lt. Rich Manoli from the Liquor Control Board and he said the purpose of this is to separate the retail part of alcohol sales from the non-profit event. Manoli said that in the past non-profit organizations have been taken advantage of by retailers or promoters of events. So even though Ellersick has said that all proceeds from the sale of the beer goes back in to Tour de Terrace, Big E’s staff would still not be allowed to serve at the beer garden, even if they were unpaid volunteers.
You may be wondering what has changed from last year to this year and why Big E’s has been able to run the beer garden at Tour de Terrace for many years. According to Lt. Manoli, who reviewed the license application, the Liquor Control Board had realized that these type of violations had been slipping through the cracks and the Board recently revised questions on the application to bring these types of violations to light. Specifically, the application now asks if breweries are involved in the event and how the money from the sale of the alcohol will be used. When Tour de Terrace Chairman Jerry Smith filled out the application, he specified that Ellersick Brewery would be involved and that after the beer was purchased and Big E’s employees were paid, the proceeds would go to Tour de Terrace. Rick Ellersick said that this money was generally used to pay for bands and equipment such as chairs.
Big E’s is very proud of the way they have been running the beer garden. According to Ellersick he does not know of any fights or DWI’s that have ever been associated with the beer garden at Tour de Terrace.
[box]”All you have is your name and your reputation,” said Ellersick.[/box]
Ellersick says that while his beer could still be sold at the event, he has decided not to sell his product to Tour de Terrace this year. Professionalism is very important to Ellersick and he said that since staffing of the beer garden is now out of his control he doesn’t necessarily want his beer to be associated with the event. Ellersick seemed confident that the Tour de Terrace beer garden featuring Big E’s ales would be back next year in one way or another.
While Ellersick puts the blame on Councilmember John Zambrano, Zambrano says that he never even contacted the Attorney General’s office. Zambrano says his main concern was about who has been paying the liquor taxes on the beer sold at Tour de Terrace. According to Rich Manoli with the Liquor Control Board the brewery (in this case Big E’s) is responsible for paying the liquor tax. He also added that the Board does regular audits on retailers and that they have not found any liquor tax related issues with Big E’s. Zambrano did admit to contacting the Liquor Control Board but only after Mountlake Terrace resident, Margaret Loiseau, contacted the Board inquiring about the liquor tax issue. Zambrano says that he contacted the Board two days after Loiseau “as a precaution to said complaint being filed on the bottom of someone’s to do list.”
[box]”My interest was spiked when the MLTnews story came out about the legitimacy of Tour de Terrace. Then after listening to the March 3, 2011 meeting, I picked up on Ellersick’s comments regarding the beer garden causing me to question who was paying the taxes on the beer. Thus, my inquiry regarding the Big E Brewery to the Washington State Liquor Control Board,” said Loiseau.[/box]
According to Manoli it was just the normal review of the application that brought the Big E’s staffing issue to light. While he did admit there was an email that went around about Tour de Terrace’s application, he said that it didn’t necessarily change his response, specifically that Big E’s could not be involved at the event.
Rick Ellersick and Tour de Terrace received the news from the Liquor Control Board on Thursday, July 14, just two weeks before Tour de Terrace begins on July 29. News quickly spread on Monday, July 18, when Seaun Richards posted the following on Facebook as the Red Onion:
[box]”It’s official. After 10 years Big E Ales will not be at Tour de Terrace this year. Thanx to Concilman[sic] John Zambrano, and his antics Big E had to pull out. There will still be a beer garden with Bud and Bud Light. We are looking for volunteers. When you see Councilman Zambrano I encourage you to let him know what you think of a local business being forced out of a 19 year tradition.”[/box]
Seaun Richards, a known close associate of Mayor and Tour de Terrace Chairman Jerry Smith, is running for City Council Position 7 against John Zambrano and Kim Michel. Our very unofficial straw poll on Facebook says this may be a very close race: Zambrano – 28%, Richards – 28%, Michel – 7%, Undecided – 41%. The primary on August 17 will bring the field down to the top two.
There is a long tradition of people getting together at the Big E’s beer garden at Tour de Terrace. Generally every night of the festival you can find impromptu Terrace class reunions from alumni who either still live in town or make a point of showing up to see old friends.
Unfortunately the Big E’s beer garden as we all know it won’t be happening this year.
A victim of politics? Maybe. Maybe not.
[box]”I hate politics, that’s why I make beer.” said Rick Ellersick.[/box]
We’ve been told that the festival organizers are working hard to provide an alternative. If so, I’ll be there. And I invite you to join me for a beer, let’s just keep politics out of it.
*We reached out to Jerry Smith for comments but were unable to meet with him prior to publication of our story. We will do a follow-up story in the coming week with comments from Jerry Smith and news about what we can expect from the beer garden.