HomeMy WebLinkAboutMay 16, 1977 (2)OFFICIAL PROCEEDINGS
SPECIAL MEETING OF THE CITY COUNCIL
CITY OF COLUMBIA HEIGHTS, MINNESOTA
MAY 16, 1977
The Meeting was called to order at 9:47 p.m.
Roll Call: Logacz, Heintz, Norberg, Hentges, Nawrocki--present
Motion by Logacz, Seconded by Heintz to name Karen DeBruin secretary for the
meeting. Roll Call: All Ayes
STATEMENT OF PURPOSE OF MEETING
Mayor Nawrocki stated that the purpose of this meeting is to consider proposals
regarding the City's liquor operations. He noted that the information would be
presented by City Manager Watson and City Finance Director John Schedler.
DISCUSSION ON LIQUOR OPERATIONS
Mr. Watson noted that each Councilman had received a copy of a six page report
prepared by Mr. Schedler regarding projections on the proposed discount liquor
store.
Mr. Watson reported that he is conservatively estimating a five fold increase in
volume with this discount-type operation. Annual sales were projected at $2,500,000.
Councilman Hentges asked if anyone had discussed this proposal with Max Thomas, the
City's liquor store manager. Mr. Watson replied that Mr. Thomas is supportive of the
idea of beginning a discount type operation.
Mr. Thomas had accompanied Mr. Schedler and Mr. Watson wlhen they visited the
Depot, a discount liquor operation in Minneapolis. The projections and other
parts of the detailed study had been done by Mr. Schedler and Mr. Watson.
Councilman Hentges asked how much of the research was based on the liquor
operations study which had been conducted in 1975 by Real]_ Estate Research.
It was noted that some aspects of the study were taken into consideration in
doing the projections.
Mr. Watson stated that generally people will do their shopping where they can
buy the goods for the lowest price. He also stated that the City would have to
try to recapture part of the shoppers within the City and surrounding area to make
the concept work. He also pointed out that a discount type liquor operation is
based on the concept of selling goods at a lower mark up and larger volume.
Councilman Hentges brought up the subject of the effect of the Central Avenue
Urbanization construction on a new business on Central ~enue, such as the one
proposed. (The proposed site for the discount liquor operation was on Central
Avenue.) Mayor Nawrocki pointed out that Urbanization is scheduled as a two year
project. Councilman Hentges stated that he believes the construction period will
be a definite hindrance to the new business.
~{ay 16, 1977
Mr. Watson stated that he felt it would be difficult to predict the effect of
construction on Central Aw,~ue, as the entire street will not be closed all
at one time. The road will be travelable at all times during construction.
Councilman Hent~es suggested that Mr. ~,~atson check with t¼e '~innesota Department
of Transportation, since they do construction every year and would be better
able to jud,~e ~-he effect of construction on d~fferent situations, including
new businesses.
Councilman Logacz stated that the Council should proceed with the discount
liquor operation idea. He felt the City should offer people an alternative
to the usual municipal liquor set u?. He went on to say that people will shop
where the product is available at a lesser price. He stated that he would even
admit to shopping this way, and he told the Council that it was not a matter of
loyalty ('do your shopping 'in Columbia Heights~) but of economics.
He went on to say that, even if the operation fails, lit will still be better than
to have done nothing.
Mayor Nawrocki began to question the sales projections. He stated that
profitability depends on the amount of sales. If a business can't generate
enough sales to cover overhead, it is in trouble.
The market area for Columbia Heights municipal liquor operat!or~s as cited in
the Real Estate Research study was then discussed. This was noted as being:
Columbia Heights, upper Northeast ~inneapolis, and small portions of St. Anthony,
New Brighton, and Fridley.
Mr. Watson pointed out that the Council should not lose s~ght of the fact that the
Real Estate Research study was done considering a typical municipal liquor
operation, and not a discount type arrangement.
There was discuss]on on advertising and advertisement gimmicks.
Councilman Norberg asked if the sales projections were based on the area of the
present stores compared to the area of the proposed location for the discount
operation. ~{r. Schedler replied that Councilman Norberg was correct. Councilman
Norberg then stated that by doubling selling area~ one does not automatically
double sales.
Councilman Norberg commented that he prefers to base his investments on more
than on off chance.
There was -'~ome discussion on inventory for this type of op<~r~tion.
Dick Martin, 4032 Washington Street, st~-ted that many people in Columbia Heights
had voted to allow spilt liquor in the City because they felt the City would then
discontinue it's municipal operation.
He also stated that Liquor Store Manager ~ax Thomas should have been pre:4c~nt at
this meeting.
May 16, 1977
There was some discussion on the changes in the management of liquor operations
since Mr. Thomas was hired.
There was a lengthy discussion on anticipated expenses, as shown on page two of
Mr. Schedler's report. This was fo]lowed by a discussion of possible lease pro-
visions on the former National T building, the proposed site for the new operation.
Mayor Nawrocki suggested to the Council that this meeting be continued until 7:00 p.m.
on Thursday, May 19.
Motion by Heintz, Seconded by Hentges to continue this meeting at 7:00 p.m.
on Thursday, May 19, 1977.
Councilman Norberg questioned the purpose of continuing the meeting.
Roll Call:
Heintz, Hentges, Nawrocki--aye
Norberg--nay
Logacz--absent
Motion carries. The meeting was adjourned at 12:56 a.m.
Bruce G. Nawrocki, Mayor
Secretary