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After the N.C. Alcoholic Beverage Control Commission chairman described a behind-the-scenes effort involving House Majority Leader Brenden Jones to steer construction of a huge state warehouse to a developer, Jones’ spokesperson said no legislation will move this year on the project.
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With the session nearing a close after lawmakers passed a $34.4 billion budget, there is no longer the time or money available to take steps toward building a 600,000 square foot warehouse that the ABC Commission has been seeking for the past three years, said Demi Dowdy, a deputy chief of staff for House Speaker Destin Hall who handles communications.
ABC Commission Chairman Hank Bauer has pitched a $310 million loan to build the warehouse, and last month the state Senate in a bipartisan vote approved the loan as part of a wide-ranging bill addressing alcoholic beverage concerns. A legislative summary shows the loan would be paid back out of existing liquor permit fees that would start at $34.1 million this year if approved.
“Since this is more than the state currently has available for this budget year, any conversations about a new warehouse would need to happen next year at the earliest,” Dowdy said in an email message last week.
Dowdy disclosed the end of warehouse negotiations in responding to a repeated attempt by The News & Observer to interview Jones about his role. Jones has pushed for a public-private option for the warehouse that Bauer has said would cost more than $500 million, with a private company owning the building.
Bauer, through a spokesperson, described a behind-the-scenes effort that included Jones wrongly claiming on the House floor last year that Bauer was seeking the public-private option followed by two meetings set up by a lobbyist for a subsidiary of a Florida developer seeking the project.
One of those meetings was with Jones, Bauer said, with the majority leader telling him that was the only construction method the House would approve. The second was with the developer, M Group Companies. Campaign records show people tied to the company and a subsidiary have made roughly $500,000 in contributions to state Republican candidates over the past four years, including $59,200 to Jones.
Bob Hall, a campaign finance watchdog, said what Bauer described had the makings of Jones strong-arming the chairman on behalf of the developer.
“The whole thing stinks,” said Hall, who has called on the authorities to investigate.
He and a state senator who said he supports the loan plan said the House dropping the warehouse this session appears to be about the chamber’s leaders trying to distance themselves from the controversy, and stick it to the chairman for going public.
“It sounds to me like Rep. Jones was trying to muscle through the proposal he preferred, not through a normal process, not where we could have conversations and debate about it in an open and transparent way,” said state Sen. Michael Garrett, a Greensboro Democrat. “And since he didn’t get his preferred solution to the challenge that the commission faces, then we’re just going to take our balls and go home.”
Garrett was absent for the Senate vote, where it passed by a wide 36-6 margin with no Democrats opposed.
Dowdy’s emailed response to questions sent to Jones, asking for his explanation of how he became involved in the warehouse talks, provided few details. It did not, for example, provide specifics about why Jones received roughly half of his campaign donations connected with M Group after the developer met with Bauer.
Dowdy said the ABC Commission gave four options for building the warehouse “including the concept of a public-private partnership.”
She said the options were given in an ABC Commission presentation. Jeff Strickland, an ABC Commission spokesman, said in response, “I don’t know where that claim comes from.”
Documentation the commission provided to The N&O shows it first sought money for the warehouse through the State Capital and Infrastructure Fund, which would have been paid back from permit fees, before seeking the loan. There’s no mention of seeking a public-private partnership involving lease payments to a developer.
Dowdy said Jones “has a long-standing record of advocating for policies that will save taxpayers money, and his position has been straightforward: where possible, North Carolina should exit the building business altogether and instead leverage public-private partnerships to deliver needed facilities more efficiently and cost-effectively.”
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Jones has not produced documentation showing how much that option would cost.
Jones added the public-private option on June 18, 2025, in a last-minute amendment to a House bill on construction efficiencies. “ABC Chairman Hank Bauer has asked for this,” he said.
Dowdy’s response makes no mention of Bauer asking for the amendment. Bauer has said he opposes the option because it would be much more costly.
“With the understanding that the ABC Commission presented this as an option for consideration, Rep. Jones felt he should move the conversation forward,” Dowdy said. “Therefore, he presented an amendment on the floor that gave the Commission the authority to consider the public-private option.”
Dowdy also said the loan plan would have “cost taxpayers more than $34 million in recurring revenue annually.”
Strickland called that claim “misleading.”
“It’s important to emphasize that those funds are generated by the ABC Commission through permitting fees, not taxes collected,” he said. “The Commission is simply asking permission to use money we already generate, not imposing any additional burden on taxpayers.”
As for the campaign money Jones has received, Dowdy said all contributions “have been lawfully received and publicly disclosed.”
“Like many legislators, he has received support from individuals and organizations across a wide range of industries, communities, and policy interests,” she said. “No contribution has ever dictated his position on an issue or any official action he has taken.”
After receiving Dowdy’s response, The N&O asked Dowdy to make Jones available for an interview. Jones, a Columbus County Republican, has not responded to the request.
North Carolina heavily regulates the sale of liquor, setting prices and controlling distribution. Some don’t want a new warehouse because they want the state to get out of the business and fully privatize, which is the case for the majority of states.
A visit to the 42-year-old warehouse in South Raleigh on Wednesday showed how bustling it is.
Nearly every shelf was stacked with boxes of bottled liquor. Trailers backed up to nearly all of the warehouse’s bays as workers zipped in and out with forklifts loading deliveries to roughly 450 ABC stores across the state or unloading pallets stacked with liquor from suppliers.
The warehouse is 200,000 square feet, but ABC officials say it’s too small, lacks conveyor belts and other automation, and was designed for a different time with a rail line on one side of the building that’s now abandoned. The commission rents space for overflow in Johnston County, and can’t stock many of the liquor products customers seek, ABC officials say.
A report the commission gave lawmakers in March said the inability to maximize liquor distribution is costing the state $132 million in annual sales.
That lost revenue will continue at least for another year with the House dropping the warehouse legislation this session.
“I think it’s well over three years, if I recall, that we’ve been having this conversation and debate,” Garrett said. “You know, we just need to move on at this point and give the commission the tools and resources they need to do their job in an efficient and effective way.”
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