Gene Kremer, general manager at WSLCB's new DC in Seattle, shares how he works within a government structure.

Modern Why did the state decide it needed a new liquor distribution center?

GK Our old building was built originally in 1947. It was facing repairs and updating expenses, while it had shipping volumes twice its original intent. The Board, with legislative support, began to examine alternatives.

Modern Where there other regulation factors that limited your decisions?

GK Yes. According to the legislative guidelines we had to keep our existing employees and could not exceed our then-current costs. A study revealed that renovating the old facility would cost $6 to 8 million not including the replacement of the old materials handling systems. The state felt the money would be better spent on a new facility. In 1995 the state legislature approved $30 million for the project.

Modern Did that come from tax money or other funding sources?

GK The state issued bonds to cover project costs and an ongoing liquor surcharge was instituted to pay for the project bond costs. Our state liquor system also makes a profit. The money generated, about $200 million in profits, goes back to the general fund. This is then split 50-50 between the state and municipalities.

Modern You opened the new facility in 2002. Why did it take nearly seven years to complete once the funding was approved?

GK The state had never done a materials handling system project like this before, so there were a lot of unknowns and a learning curve. There were a lot of people and agencies that had to be involved. The project required three bid attempts before the Board received an acceptable bid within the project's design and financial parameters.

Modern This building was erected on the same site as the old facility. Why was that done and did it contribute to the long timetable?

GK We did look at other sites, but could not find any that would fit our budget. The facility needed to be near the center of population, which is here on the western coast of the state. The existing site was the best for us when transportation, costs and other factors were taken into account. It did slow down the process, as we first had to rent space at another facility and then tear down the old building.

Modern How effective was distribution from the leased facility?

GK It was a manual process and involved a lot of lifting and extra handling. We were in the leased location from 1998 until 2001 when it was sold to a dot-com company. That forced us to move to another location for a year until the new building was ready.

Modern Why did the construction take so long?

GK A lot of that had to do with the bid process the state requires. Being a state agency, we also had to make sure we were meeting all of the requirements of labor laws and building codes.

Modern I imagine the detailed attention to regulation is a continuous part of your operations?

GK Yes, we have to follow the regulations set up by the Board, state and legislature. That is our mandate and how we do business. There are a lot of controls. We have to cover all of the bases, such as making sure we have proper permits, contracts, wage and labor issues, and deal properly with our unions. Whatever we do, we have to be responsible to the state. We owe it to the taxpayers.

Modern Has the new building met the state's expectations?

GK Our revenues are increasing and our service levels have improved. We have better communications with our vendors and our stores. But, we want to do even better—we have high expectations for ourselves.