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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