The state's budgeting office has recommended that the Washington State Liquor Control Board not accept proposals from two companies that bid to take over its distribution center in Seattle.

The Legislature, looking for new revenue to help patch a hole in the state budget, last spring directed the Office of Financial Management (OFM) to seek proposals to lease the center, now run by the Liquor Control Board.

The board said it accepts OFM's decision, which "validates the efficiency of our existing distribution operations."

If one of the proposals had been accepted, the state would have continued to order liquor, set prices and sell it through state-run and state-contracted liquor stores.

The bidding took place while Costco Wholesale has promoted Initiative 1183, which would sell off state liquor stores and the distribution center and allow grocery stores to sell spirits.

The two contractors said in their proposals, submitted in September, that they would bring more money for the state. But the budgeting office said the proposals would have cost the state money over the long haul in exchange for fast cash now.

"Neither proposal results in net positive financial benefit to the state or local government or meets the best interest of the state," OFM Director Marty Brown wrote in a letter to the Liquor Control Board.

Neither proposal — one from Washington Beverage and the other from Washington State Beverage Logistics — provided enough assurance it could achieve its projected sales growth, Brown wrote. Without that growth, the state would be taking a significant financial risk.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com

This article contains information from Seattle Times archives.