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• • • WS — Item 4 WORK SESSION STAFF REPORT Work Session Item 4 Date: November 7, 2011 To: City Council From: Mary Divine Re: Tap Room License Ordinance Background The City Council has requested information regarding amending the City's zoning ordinance and liquor code to allow breweries in Lino Lakes that sell beer on premise. This request was made after passage of the "Surly Bill" in the Legislature this past session. The "Surly Law" changed Minnesota Statutes which previously did not allow breweries to serve beer on site because of a three -tier system that strictly separated the roles of alcohol manufacturers, distributors and retailers. The new legislation allows brewers to apply for a license to sell beer on site if they brew less than 250,000 barrels of beer annually (or if they are a winery that produces less than 250,000 gallons annually), provided that the municipality allows it. The impetus of this Surly Bill was the Brooklyn Center based Surly Brewing Co., which has proposed the development of a new brewery in Minnesota that would include a restaurant, beer garden and event center. The owner is seeking a site that could accommodate both a commercial and manufacturing facility, where semis can come and go with loads of beer. Marketing materials and an invitation to consider Lino Lakes were sent to the owner of Surly, Surly's real estate advisors, and other local breweries in June, August and September. 1. Lino Lakes Liquor Code State law allows for municipalities to establish a licensing process and fee to allow a state licensed brewery such as Surly Brewing Co. to offer their product on -sale at their brewery facility. The license is an On -Sale Malt Liquor Brewer Taproom License and the statute identifies the following criteria for issuance: • State issued brewer's license is required; • Issued to a manufacturer of beer and who can also be involved in wholesale sales; 1