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HomeMy WebLinkAboutPH April 26, 1979 ~ o¡ ANDOVER 168'5 ermt..,- Z/(q4, 1t. 7(¡, . A-"<, ?I("'''''M 55303 ~k..e (612) 755-5100 PUBLIC HEARDm - AffiIL 26, 1979 MINurES Pursuant to notice published thereof, a Public Hearing on the Andover Liquor study was called to order by Chairman Jim. Elling on April 26, 1979, at 7:34 p.m., at the Andover City Hall, 1685 Crosstown Boulevard NW. Anoka. Minnesota. Committeemen present: Jim Elling, Charlie Veiman, Jack Brock and Larry Retzlaff Also present: d'Arc:r Bosell, Paul Bertils, Byron Copley, Attorney William Haw1dns, Bob Palmer, Rev. Norman Valentine. and Mayor Jerry Windschitl Chairman Jim. F.111 ng opened the Public Hearing and suggested that he go over the different proposals of the Liquor study Advisory Committee using an overhead projector to layout the f'i~es for everyone to view. After presenting thelll. all cOl!IIIents. remarks and questions f'r0lll the audience would be heard. The first proposal would be a Municipal operation under a leased space arrangement. whereby the City would lease storage space or a building for the sole purpose of handling this. There would be 2500 square feet of building area. which would run approximate1y $1875 per month or $22,500 per year. It you included the fixtures (shelves, coolers, etc.) it would be around $30,000. To stock the Municipal !eased Space proposal would be approximate1y $25,000. Total would run $77.500. There would be no maintenence cost. The operation costs, which wOllld include the payroll (one manager. one full-time sales person and two part-tim.e sales people) $4~~~84 per year. The register processing would cost $120 per month or a total of $ 0 per year. Insurance would include the Drall! Shop Liability and an increase in the City's umbrella policy. from one to two million dollars. No money was shown in this proposal for bonds because the Committee felt that this project would probab1y be financed without bonds. The profit and loss part is based on the 389 operations that are in the State. The 1977 state Auditor's report reflected a 78% fi~e for the cost of you sales on a statewide average. Gross profit $55,000. maintenance and operating costs. $53.349 and a net profit of $1.651. Chairman Elling stateJthat this was a very pessimistic view. After some meetings with liquor store managers and independent wholesalers. the appropriate gross sales figure was $350.000. The Committee showed a figure of $250,000 allowing for the marked potential. This means that the first and second year figures ma:r be less than the original of what you would see. An example was given of Kemp's, a Municipal liquor approxilll&te1y 26' x 48' in size that did over $350,000 worth of business last year. The one thing pointed out about Municipal liquor is that it is not intended to be a IIIOney making operation. Municipal liquor is put into the city to control liquor, to regulate the price. The second proposal is a Municipal Off Sale, but having the City put up its own building. The Committee went about this by building a ficticious building. The building WClllld be a 50' x 50' one story concrete block building 12' high with a flat roof and on grade construction built in contol'Jllance with new building codes. At $13.00 and $18.00 peresq. ft. the building woùd run $45,000. The 100' x 150' lot to put the building on, $20.000. Utilities, which would include the sewer connection along with a well all installed and connected. $4.500. Parking and Landscaping came to $5,750. Fixtures include $30,000 previous1y plus $4,650 for the cash register. Initial stock of $25,000. Building security, $255 and contingencies of $13,515. Maintenance allowed for . ..~ - ,--- I Pu¡'lic Hearing - Andover "-oluor Study April 26, 1979 - Minutes Page 2 snow plowing or l1ÐWing of the lawn, $1,200 per year. Operatin¡: costs, which includes: a securitY' system, $456; gas, $720; telephone, $396; electric $2,800; register processing, $1,440; ~011, $48,884 per year. The insurance figure includes liabilitY', !ram Shop LiabilitY' insurance and is based on $250,00 per year gross receipts. The CitY' would have to finance this on II1IIÚcipal bonds ot $200,000 at 7% interest. Total insurance and bonds would run $19,857 per Y'ear. Gross sales, $250,000; cost ot sales (78%), $195,000; gross protit, $55,000; maintenance and operating, $74,633. New profit would be $-19,633. If it were gross sales of $350,000, ;your net profit wOl1ld be $1,700. The third proposal that the COIIIIIIittee looked at was a Municipal On and Oft Sale in a municipal building. Caution was advised on this proposal because ot the amount of insurance that goes with it. Again a ficticious building was set up. This time the size was 100 I X 100', one stor,y concrete ¡'lock 12 I high with a flat roof and on grade construction built in conformance with new building codes, $180,000. A cOl1lpanson would be the University Park Bar on University in Spring Lake Park. There would be one acre of land in a sewered area, $32,000. With utilities, parking & landscape, fixtures, initial stock, building securitY' and contingencies, the total would be approxiJllate]y $361,795. Because ot the larger building, maintenance costs would be $1,500 per year. Operating costs, which include building securitY', gas, telephone, electric, register processing, pIIJ'I'ol1, insurance and bonds came to a total of $127,154. A quite larger bond accounts for the difference here. Again gross sales totalling $250,000; cost of sales, $152,500; gross profit, $97,500; maintenance and operating, $127,154 giving you a net profit ot $-29,654. On gross sales of $350,000 the net profit is $8,046. The fourth proposal is based on private liquor. After talldng with local residents, the Committee reached the conclusion that the private liquor establish- ment be located in a general business district, shopping center or a limited industrial zone. A private should not exceed 10,000 square teet. An on sale should have restaurant facilities and seat a 1IIinimu!II of 100 people. The CitY' benefit troll private liquor would be the tax revenues. The on]y other benefit would be the license fees. They would be as follows: Otf Sale (grocer,y selling 3.2 beer) $100; On Sale beer and wine (Shakey's Pizza) $500; On Sale liquor (restaurant facilities with minimum capacity of 100) $3,500; Oft Sale liquor (maximulll size building limited to 10,000 square feet) $J50; On and Oft Sale (similar to Donatelle's arrangement where theY' have bottleshop with restaurant) $5,200. Chairman Elling conferred with Attorne:r Bill Hawkins on the legal number of licenses. Six On Sale liquor licenses is the 1IIa.Xi.Jmm¡ allowed bY' State law. The onJy way to change this would be for the CitY' to have a general election. The Comlllittee recommended one license for ever,y 3,500 people. The population right now is close to 9,000. There would not have to be additional police protection because there is adequate protection already until 3:00 a.lD.. If the CitY' were to go with the private, it would be recommended to have a lotter;y for the licenses. Perhaps one a year as the population increases. ~on Cople:r, 3723 145th A.enue - inquired it there would be a yearly renewal for the licenses or if' it is a one time deal. Chairman Elling advised that licenses would be a yearly fee. Paul Bertils, 436 - 22lst Avenue NW , Cedar - stated that Chairman Elling made the comment earlier about if' it was a Municipal, it would be for controlling the prices. Elling answered bY' saying that the prime idea of Municipal 1s not profit, but to control liquor within ycur CitY'. I Public Hearing - Andover _quor Study April 26, 1979 - Minutes Page 3 Attorney William Hawkins, legal Staff - Advised that the population is almost at 10,000 now and when a City attains 10,000, the State proTides that you must put out to the voters in the community whether or not they want to continue with the Municipal. This IlUSt be done within one year atter the last federal census or census established by the Minnesota Liquor Commission. Being so close to this figure already, Attorney Hawkins hoped that the cOlllMUl1ity would turn it down. It is something to consider he added. After opening and then the census, you llight just have to turn around and close it, although you could sell to a private license holder. Chairman Elling added though that the way it stands now, the Council could order a !tmicipal to be opened right now without an elecUon. Paul Bertils 4 a out contro sales. Chairman Elling further advised that there was some research done on market potential. In other words, how do you arrive at what the figures are blUled on. There WIUI a comprehensive plan done by Midwest, which states there are 2,216 households in the City of Andover in 1978. The Andover Mean Income (which is a 1970 figure, so it should be considerabJy higher) was $12,455. Portion of Income Spent on Liquor each year per household came to .0065. It you multip1y that, you come up with $180,000. The difference in this from the gross sales of $250,000 is based on business from surrounding areas, plus a Mean Income for 1979. Attornit William Hawldns le~ Staff - defined the Ih-am Shop Liability. BasicalJy it pro des that arr:r indrvid that is injured by someone intoxicated is entitled to sue not on1y the person that is intoxicated, but alBo the person who caused that individual to become intoxicated. So the liability stretches to the employee and also back to the employer. The City in dispensing either On Sale or Off Sale liquors would have to purcha.se liability insurance to caver such a thing. Chairman Elling added that the amount you pay on this liability insurance is based on your gross sales. Rev. Norman Valentine, 2937 Bunker Lake Blvd., Anoka - "AB a lllinister for about 20 years and counseling with different families, with being in home situations, with being in emergency rooms of hospitalB in both Canada dn the United States, I find many tillles that I have been called different t1llles of the morning in all is to deal with situations where liquor has been involved. Whether it's accidents, sometimes a death occurring and IIIIIIIY, ~ tillles it has been because of alcohol related situations. Battered wives, beaten children, husbands, the whole thing." Rev. Valentine feelB that Andover has a tremendous cOIll1lUnity. He recolII!I8nds as a father and as a pastor in representing his church, that Andover be kept the way it is. He is against outlets for liquor in the area. He sees DO reasan for an added responsibility for more problems. He believes Andover is doing well without liquor. "If people want it, let them go to areas that have it." The Rev. Valentine strong1y recommends that the City of Andover does not go forward with On and Off sale liquor. Public Hearing - Andover ...-quor Study April 26, 1979 - Minutes Page 4 Byron CopleY~l723 lh5th Avenue - asked the Committee it their study'inTolved the need of quor in the collØll1.U1it7. Chairman Elling answered b7 sqing that the charge from the Council was based on the number of licenses applied for or requests or inquiries as to liquor in the City. In order to be fair to these people, the Council recODlll8l1ded the Committee to look into, should we or should we not, and it so what would be the wa7 to do it. Copley asked it the Committee had reached IUI7 conclusions as a Committee. He stated that lIIost of the conversation related to what type of facility. Chairman Elling stated that the purpose of it was to give 70U nÅ“abers and dollars and the other would be citizens input. Byron Copley asked to be put on record as being qa.inst haTing liquor establishments of IUI7 type in Andover. His reasons are the same as Rev. Valentine put forth. Copley added by mentioning that he worked for 10 years with Mercy Ambulance and in the emergency roolll , and the national statistics out on alcohol and how they relate to accidents, aren't rea1l3' accurate. He believes they are based on on1;r what has been proven rather than actually what exists. He also believes just tall,"h'g about revenue and income froll! liquor and he realizes that the State would get a sizeable portion of it because of the tax on it, hut the figures are very clear that the expense to our society far exceeds anything that ve gain matar11;r. On that basis, it doesn't make business sense. As a final statement Byron s~, "If you had a choice to put something in your yard that would double your liability, would you do it as a responsible citizen?" d'Ar~sell. 2942 lBlat Avenue NWt Andover - First off d'Arc;r stated that the ttee reC'''''''';''nned liquor es ablishment be located in a general business district, shopping center or liDited industrial zone, and added that the cOllDllUl1ity is !!!Z limited in these areas. Specif'ical1y referring to Bunker and Round La.Ice Boulevard, d'Arc:r noted that it was the concern of all residents here of whether or not there would be liquor in that facility. They didn't want it. She believes that putting in an establishment in the area of l39th and Cross- town would ruin a residential area. !tmicipalif put on City property, would be off the beaten path. Revenue wise, looking at the figures, there is no revenue for the Cit7, there is a great deal of liability. d'Arcy stated persn"""7 that she is very against alcohol. She doesn't think it offers the comnmnlty anything but headaches and uked to go on record as saying that she 111 real1y opposed to it. Andover is a good coll!lllUD.it7 and she waald like to see it st~ that v~. Bob Palmer, 2540 lhoth Avenue - Bob felt that the communit7 needs a nice eating establishment. and he doesn't feel the City will get one unless we have liquor. He doesn't feel that anyone will be any safer on the streets without liquor in the community, because people will just go and get it wherever they' can. After seeing the figures, Bob is in favor of a Private type as opposed to !tmicipal. He is in favor of liquor in the area. The Public Hearing on the Andover Liquor Study was closed at 8: 20 p.m. Mary' H. Kiley Recording Clerk _.~ --~,~