HomeMy WebLinkAbout2.a. Club Liquor Licensing4ROSEMOUNT
EXECUTIVE SUMMARY
CITY COUNCIL
City Council Work Session: October 13, 2010. ,
BACKGROUND
The VFW and American Legion hold club licenses and expressed a desire to remain classified as, clubs. At
the July 14, 2010 City Council Work Session the City Council, staff and representatives from the
Rosemount VFW and American Legion discussed the regulations for Club licensing. The license holders
asked that the City consider options for licensing regulations based on the actual operations of the VFW
and Legion. Based upon the feedback provided by the Rosemount VFW and American Legion and review
of the Club license regulations, the City Council directed staff to draft language for a Class C liquor license
option.
Liquor license regulations in both the City Code and Minnesota "state statute include definitions and
provisions specific to clubs. Clubs by definition are not open to the general public for the sale of alcoholic
beverages except for special events. Because of the limited access io clubs, a reduced license fee is charged
for a club liquor license. Events open to the general public require a temporary liquor license for the event
at an additional cost to the club. Clubs are limited in the number of events that can be held in a 30 day
period, also. In Rosemount, both the American Legion and the VFW hold club licenses. Staff is aware
that each of these licensees advertises dinners, bingo and other events that are open to the public.
Other cities have dealt with this licensing issue with clubs in recent years. Compliance with licensing
regulations can be attained by either operating a general on -sale liquor license or by obtaining a temporary
license for each event and staying within the allowed number of events annually. Locally, the American
Legion in Farmington chose to obtain a full license and is open to the public. The Brackets in Lakeville
also obtained a full license, primarily to host events in their banquet facility.
DISCUSSION
Staff met with the representatives from the American Legion and VFW to obtain further information-on,
the day to day activities. The information below is a summary of the data collected during the meetings:
Rosemount Legion:
• Average about 40% of sales in food and non - alcoholic beverages.
• Allow banquet room to be used for fundraising efforts — such as pancake and spaghetti feeds, steak
frys, etc. They do not receive any fees for hosting the space.
• Local groups such as the Boy Scouts and Unions hold meetings in the banquet rooms.
AGENDA SECTION:
AGENDA ITEM: Club Liquor Licensing
Discussion a.
PREPARED' BY: Amy Domeier, City Clerk
AGENDA NO.
Gary Kalstabakken, Chief of Police
ATTACHMENTS: None
APPROVED BY:
RECOMMENDED ACTION: Discussion only
BACKGROUND
The VFW and American Legion hold club licenses and expressed a desire to remain classified as, clubs. At
the July 14, 2010 City Council Work Session the City Council, staff and representatives from the
Rosemount VFW and American Legion discussed the regulations for Club licensing. The license holders
asked that the City consider options for licensing regulations based on the actual operations of the VFW
and Legion. Based upon the feedback provided by the Rosemount VFW and American Legion and review
of the Club license regulations, the City Council directed staff to draft language for a Class C liquor license
option.
Liquor license regulations in both the City Code and Minnesota "state statute include definitions and
provisions specific to clubs. Clubs by definition are not open to the general public for the sale of alcoholic
beverages except for special events. Because of the limited access io clubs, a reduced license fee is charged
for a club liquor license. Events open to the general public require a temporary liquor license for the event
at an additional cost to the club. Clubs are limited in the number of events that can be held in a 30 day
period, also. In Rosemount, both the American Legion and the VFW hold club licenses. Staff is aware
that each of these licensees advertises dinners, bingo and other events that are open to the public.
Other cities have dealt with this licensing issue with clubs in recent years. Compliance with licensing
regulations can be attained by either operating a general on -sale liquor license or by obtaining a temporary
license for each event and staying within the allowed number of events annually. Locally, the American
Legion in Farmington chose to obtain a full license and is open to the public. The Brackets in Lakeville
also obtained a full license, primarily to host events in their banquet facility.
DISCUSSION
Staff met with the representatives from the American Legion and VFW to obtain further information-on,
the day to day activities. The information below is a summary of the data collected during the meetings:
Rosemount Legion:
• Average about 40% of sales in food and non - alcoholic beverages.
• Allow banquet room to be used for fundraising efforts — such as pancake and spaghetti feeds, steak
frys, etc. They do not receive any fees for hosting the space.
• Local groups such as the Boy Scouts and Unions hold meetings in the banquet rooms.
• "Public" events include:
Karokee — Thursday, Friday, Saturday
Bar Bingo — Saturday and Sunday
Bingo — Thursday and Saturday
Texas Hold `em — Tuesday and Sunday
• At public events about 50% of the attendees are members.
• No "public" events on Mondays and Wednesday.
Rosemount VFW:
• Average about 20% of sales in food and non - alcoholic beverages.
• Hold weddings in banquet room on a regular basis. (In October there is a wedding every
weekend).
• Allow space to be used for fundraising efforts. They also teach flag etiquette'classes.
• "Public" events include:
Darts — Monday
Bingo —Wednesday
Food events' - Friday, Saturday
Weddings — Saturday
Football events — Sundays
• At,public events about 50% of attendees are members.
• No "public" events on Tuesdays and Thursdays.
Based upon the information provided at the meetings, staff prepared draft Class C liquor license language
for consideration. The proposed language would regulate the percentage of sales from food and non-
alcoholic beverages and the days the Club would be open and closed to the public. City Attorney
LeFevere has reviewed the draft language. Mr. LeFevere believed the language proposed would a
substantial change from the requirements of a Class A and B definitions. Under the Rosemount City
Code, there are two classes of on -sale regular liquor licenses. Class B licenses are available only to hotels
and restaurants where 51% or more of total revenues are derived from the sale of food and non' - alcoholic
beverages. Class A licenses are unrestricted as to the percentage of revenue derived from the sale of food
and non- alcoholic beverages. Only two Class A licenses are allowed to be issued per City Code.
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The proposed language for the Class C liquor license is as follows:
Class C licenses may only be issued to clubs as defined in Minnesota State Statute 340A.101
Subdivision 7. At least twenty five percent (25 %) or more of total revenues must be derived from
the sale of food and nonalcoholic beverages for consumption on the premises during hours when
the sale of alcoholic beverages is allowed. In the case of Class C licenses the establishment is
allowed to be open for the sale of alcoholic beverages to the public Thursday, Friday, Saturday and
Sunday. On Monday, Tuesday and Wednesday the establishment may only be opened to Members
and bona fide guests. All guests will be required to sign the guest book provided at the door of the
establishment providing such information as is required by the Chief of Police.
If the council determines that the cost of licensing, administration, and enforcement of another class of
licenses was likely to be lower because those operations had more of the attributes of a club and fewer of
the attributes of a commercial restaurant or bar, it could charge lower license fees for such a class of
licenses. Charging different license fees to these three classes of licenses could be based on a finding by
the City Council that the more an operation is like a restaurant with the iincidental sale of alcoholic
beverages, the lower the cost of enforcement, whereas the more an on -sale liquor operation is like a bar,
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the greater the costs of enforcement. Currently, the license fee for the Class B liquor license is $3,000 and
the Class A is $4,500. Staff-is proposing a license fee of $2,000 for the Class C liquor license. Staff
determined the fee based that the American Legion and VFW will be operating as a "club" on the slowest
days of the week for restaurants and bars. While three days is, 40% of time it would not be 40% of call'for
service because of slow days.
Staff is requesting further discussion related to the Club licenses and direction on potentially moving
forward with a new liquor license class. The current Club licenses expire December 31, 2010.
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