Costco loses liquor store fight in CityGate

Source: democratandchronicle.com

Brian Sharp

September 8, 2016

A federal judge has thrown out Costco’s lawsuit that sought to block a CityGate liquor store from operating in the hopes the wholesale retailer could open one instead.

Costco planned to locate a liquor store inside or adjacent to its existing warehouse but was rejected by the New York State Liquor Authority last summer, records show. The state denied the application because there already were four liquor stores nearby, and a fifth –  CityGate Wine and Spirits – had been approved in CityGate a few months earlier. Costco had not opposed that store’s application, records show, but later sued to block the store from opening.

Costco is particular about which other tenants locate in the shopping plazas they’re in. The city, too, placed restrictions on use.

The lawsuit, filed in U.S. District Court, stated that the agreement that developer Anthony Costello & Son struck with Costco restricts retailers in the plaza whose primary business is the sale of wine, beer, spirits or other alcoholic beverages intended for off-premise consumption. The agreement provided two exceptions, designating one building on the East Henrietta Road side of the plaza (but not where CityGate Wine and Spirits opened) and a second site on the southern end of the property.

U.S. District Judge David Larimer, in a decision filed Wednesday, said the precise location of CityGate Wine and Spirits was immaterial. He continued that “it is apparent that Costco knowingly agreed to permit the development of a liquor store at CityGate. … In doing so, Costco ran the risk that this would adversely affect its own chances of obtaining a liquor license.”