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HomeMy WebLinkAbout6.b. Minutes of September 20, 2005 Special Council MeetingITEM #6 B ROSEMOUNT CITY PROCEEDINGS CITY COUNCIL SPECIAL WORK SESSION SEPTEMBER 20, 2005 Pursuant to due call and notice thereof a City Council Special Work Session was held on Tuesday, September 20, 2005 following the regular City Council meeting at 8:15 p.m. in the Council Chambers at City Hall. Mayor Droste called the meeting to order with Council Members Sterner, DeBetttgnies, Baxter and Shoe Corrigan present. Also in attendance were City Administtator Verbrugge, City Clerk Jentink, Police Chief Kalstabakken and Community Development Director Lindquist. DISCUSSION a. Regulation of Off -Sale Liquor Licenses, Limitation on Number of Licenses City Administrator Verbrugge reviewed the current city ordinance that controls the number of off sale hquor licenses for hquor stores in Rosemount. There are two off -sale hquor licenses approved at this time; Shenanigan's Wine and Spirits and Rosemount Liquor Mart. Mr. Verbrugge stated the number allowed is controlled by population, one license for every 6500 residents The population is determined by Metropolitan Council each year in May which happens to lag behind the actual population by about sixteen months. Rosemount's population on April 1, 2004 was 17,740. Mr. Verbrugge reported that staff had received two requests for amendments to the City Code for new off -sale liquor licenses. Staff has also received about seven inquires from business owners interested in retail sales of hquor. Mr. Verbrugge requested Council's direction to 1) keep the City Code the same; 2) amend the City Code to allow more than two off -sale liquor license by changing the population per capita requirement, or 3) amend the census data source to a city staff estimate; or 4) remove restrictions on off -sale liquor hcensmg and allow the open market to dnve the number of licenses. Mr Verbrugge advised if an amendment would be made increasing the number of off -sale licenses, City staff does not have any policy for fairness in assigning new licenses Even if a first- come -first- served basis would be in place, it would be possible two applications would be received the same day. Community Director Lindquist noted that City Council also has the authority to select which location for a liquor store is best for development in Rosemount. Mr. Verbrugge stated City Attorney LeFevere advised that cities have broad authority for restricting liquor for public safety concerns or to serve public purpose. Mr. LeFevere further advised Council must not base any changes on the competitive nature of the existing liquor establishments. Council Member Sterner requested additional information from staff prior to the meeting City Planner Pearson and Assi stant Planner Lindahl created maps demonstrating distance from existing hquor establishments from each other, schools, and churches. City Clerk Jentink prepared a comparison of the square footage of liquor stores m Rosemount to those of a Big Top hquor store. Police Chief Kalstabakken researched other coirunumnes' liquor restrictions and sought out studies related to alcohol issues within a community linked to the number of hquor providmg establishments All Council Members and involved city staff received this information. Council Member Sterner requested Council and City staff consider the locations of liquor stores in order not to saturate an area. He suggested the new commercial areas proposed by Akron Avenue and CR 42 as a possible location. Mr Sterner noted that the City of Burnsville uses a one -mile radius restriction and requires a stand -alone building. He suggested the per capita number could be raised and a radius restriction added. Mr. Sterner reported he spoke to a liquor store manager that said 1 ROSEMOUNT CITY PROCEEDINGS CITY COUNCIL SPECIAL WORK SESSION SEPTEMBER 20, 2005 10,000 residents per liquor store would usually support a liquor store operation. Mr. Sterner noted that the City of Hastings has removed the restrictions on off -sale liquor hcenses. Mayor Droste noted that nine communities (or 82 in the survey prepared by staff do not regulate the number of liquor stores. Mr. Droste believes no regulation may be the best policy to adopt. Mr. Droste stated he did not interpret any information to show crone is related to the number of hquor stores. Council Member Shoe Corrigan agreed with Mayor Droste that new opportunities for site locations have been made available and would hke to see the restncnons removed and let the market drive development. She would not support lifting limits on the Class A bar liquor license. Council Member DeBetttgnies stated that Lakeville, Apple Valley and Farmington do limit the number of hquor stores because they are municipally operated. Mr DeBetugnies stated he felt Council has two choices, to leave the City Code as is or open the market. He noted that the market dnves business enterprises. Council Member Baxter agreed with Mr. DeBettigmes. Mr. Baxter stated his first thought about the issue was that Rosemount does not need another liquor store. Mr. Baxter believed past city officials prepared the City Code with the idea there would not be more stores until the population increases. Mr. Baxter stated he was not in favor of changing the per capita requirement. Mr. Baxter requested staff to explain how the per capita was established. Police Chief Kalstabakken explained that the population of 6,500 per off -sale liquor hcense allowed time for development to occur. City Clerk Jentink concurred that the per capita count of 6,500 was used as a planning tool to ensure that the new commercial development adjacent to County Road 42 would not have a majority of liquor related businesses. Mr Verbrugge stated that the City of Rosemount held a municipal owned on -sale and off -sale liquor license at 14605 South Robert Trail until the mid- 1980's Mr. DeBettigmes stated that Mr. Dolejs purchased that business in 1986 which became Shenanigan's. Mr DeBetngmes believed the population of Rosemount was approximately 6,500 at that time and so it established that one off -sale liquor business could be supported by the population of 6,500. Todd Johnson, Steiner Development, commented that city staff population estimates would better fit the requirements for the per capita regulation than Metropolitan Council's delayed population estimates. Mr. Johnson stated that the variety of concepts associated with liquor sales are changing He reported that wine is very popular and a specialty wine store, Wine Styles, had considered 1,200 square feet in his mall. Mr Johnson subsequently selected a larger tenant, MGM, who was requesting 5,000 sq. ft. of space. Some retailers want to cluster and remain in close proximity to similar busmesses which could have worked for Wine Styles in Rosemount. Mr. Johnson believes that separation rules seem anti- competitive and that the population growth pattern will drive the commercial market. Fritz Dolejs, 12756 Demark Avenue, Apple Valley, stated he was in business in Rosemount for 19 years and in the liquor business for 40 years. Shenanigan's Wine and Spirits is a family run operation which employs 16 people The new store was built three years ago and was a major investment that was based on the population restricting additional hquor stores. Mr. Dolejs stated that neighboring cities have only two to four off -sale liquor stores. 2 ROSEMOUNT CITY PROCEEDINGS CITY COUNCIL SPECIAL WORK SESSION SEPTEMBER 20, 2005 Shawn Schumacher, 9370 Oriole Drive, part owner of Rosemount Liquor Mart agreed with Mr. Dolejs His business plan depended on the years of sales before competition would be allowed. Mr. Schumacher noted that if he knew the ordinance was subject to change the business plan would have changed. Mr. Schumacher emphasized that decisions and major investments were made based on the ordinance m place. Charles Christ, St. Paul, partnered with Mr. Schumacher to purchase the Rosemount Liquor Mart. Mr. Christ stated they have a five -year lease and would not be able to tolerate a 25% drop in customers. Mr Christ reported they are aware that a third store may be coming when the population allows and he believes the City Code should remain unchanged and continue to balance convenience, cost, and control. Paul Sedder, Eden Prairie, Minnesota, represented MGM Wine and Spirits. He spoke in support of changing the ordinance to allow a hquor store in the space available now in the Steiner development. Chris Holste also is interested in opening an off -sale liquor store using vacant property m Rosemount, the past site of Loch Pharmacy on Highway 3 and 145 Street West. Mr. Holste explored Rosemount for an investment opportunity and beheves there is a market for an additional liquor store at this time. Mr. Holste researched surrounding municipal hquor stores which have reported income and found that the current population can support sales. Mr. Holste reported that the City of Chanhassen allowed a variance for a development to obtain a hquor license and Mr. Holste suggested this may also be an option in Rosemount. Mayor Droste stated it is common for city officials to review and change ordinances. Mayor Droste opened the meeting for Council comments. Council Member Baxter examined changing the ordinance and noted that if acts of government affect people's hves to a compelling degree, then there has to be very good reason for change. Mr. Baxter stated that it is not good reasoning to have the population tied to the Metropolitan Council estimate, knowing it is 16 months behind. Mr. Baxter inquired if a third hcense would have to be issued when the population becomes 19,500 or higher Mr. Verbrugge and Mayor Droste stated an off -sale hquor license would have to be issued if an apphcation is submitted and it meets all the qualifications. Mayor Droste stated the business market is always changing. He noted the data City Council used at the time the ordinance was amended was comparing several communities. Municipal hquor stores have a very good revenue stream. The option of an open market for off -sale liquor hcenses was reviewed two years ago and Council decided not to remove the limits. Mayor Droste commented that retail business decisions should not be micro- managed by a population number that future City Councils will need to contemplate. Mr. Verbrugge reported that Ms Lindquist found in the City Council minutes that the per capita number of 6,500 was approved in the year 2000. Prior to that, off -sale liquor hcenses were limited to two. The per capita of 6,500 per off -sale license was a compromise of what staff requested and what council wanted The populanon in Rosemount was 14,500 m 2000 Mr. Verbrugge summarized it was a move toward less control and a way to increase the number of off -sale hquor licenses available as growth continued m the community. 3 ROSEMOUNT CITY PROCEEDINGS CITY COUNCIL SPECIAL WORK SESSION SEPTEMBER 20, 2005 Mr. Verbrugge led a discussion on distance separation. He presented the fact that the two liquor stores in Rosemount are less than one -half mile apart. Burnsville has a one -mile separation requirement, but it is a much larger urban community. Rosemount only has about 8 sq. miles of urban growth. If a separator distance of one -mile was used m Rosemount it would automatically push liquor stores out to the proposed commercial area on Akron Avenue or Highway 55 and County Road 42 and a grandfather clause would need to be considered for the existing operations. Police Chief Kalstabakken pointed out that a distance limitation was discussed m 2000, but a compromise was made by using only the per capita ]mutation Mr. Kalstabakken believed this was done to buy time while the CR 42 commercial area was developing. Council Member Sterner inquired how the population is established by Metropolitan Council. Ms. Lindquist reported that the building permit numbers are processed by a formula which allows a factor for vacancy and construction delay The City methodology is to track permits and then drop off three months The City uses the average household size with no factor for vacancy. Mayor Droste reported Rosemount estimates 3.04 people per household and Metropohtan Council estimates 2.96 people per household which pulled about 250 people out of last years population estimate. The federal census is taken every ten years, the next one is in 2010, with population results given one year later. Council Member Shoe Corrigan had concerns for the proximity of hquor establishment to schools and churches and wished to maintain the minimum of 300 feet. Council Member Baxter suggested adding one hquor store in January of 2007 and another in January of 2009, and then remove restrictions and go to an open market in 2011. Mr. Verbrugge recommended consulting the City Attorney regarding a phasing method. Mr. Verbrugge asked for guidance on how to select one off -sale apphcant if multiple applications were received. Community Development Director Lindquist reminded Council they would have the authority to select the best site that meets community goals. Council Member Shoe Corrigan commented on the 2005 Liquor Survey. Ms. Shoe Corrigan stated that an ordinance should be crafted that takes the City toward its goals. Council needs to deterimne the development and land use goals. Ms Shoe Corrigan pointed out that the hquor ordinance in the past might have been to buy time until development and land use opportunities were available. Ms. Shoe Corrigan stated that citizens have expressed to her that they want to keep their spending dollars within the community. She wished to make certain that more spending opportunities are available in Rosemount Ms. Shoe Corrigan believes that the City does not need to micro- manage liquor stores. She did think it would be reasonable to adjust the number of off -sale liquor stores m two years. Mr. Verbrugge will contact the City Attorney for additional information and report back to the City Council at the October work session. Pohce Chief Kalstabakken was directed to contact additional cures and find out how and why they have recently made changes to their liquor ordniance. Council Member Shoe Corrigan requested discussion on communication regarding the redevelopment for the downtown. Mr. Verbrugge agreed to add that to the October work session. Motion by Mayor Droste adjourned the meeting at 9:29 p.m. 4 The City Council's Agenda Packet is Clerk's File 2005 -38. 5 ROSEMOUNT CITY PROCEEDINGS CITY COUNCIL SPECIAL WORK SESSION SEPTEMBER 20, 2005 Respectfully submitted, Linda Jentink, City Clerk Recording Secretary