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52 <br /> by the voters. The Stonehouse would not require an on-sale liquor license and would not count <br /> against the limit on licenses that may be issued by the City. <br /> Effect on Issuance of On-Sale Liquor Licenses on City's Liquor Stores <br /> Minnesota Statutes, Section 340A.601, subdivision 5, provides that the City may <br /> continue to own and operate its on-sale and off-sale municipal liquor stores if it issues on-sale <br /> liquor licenses. Therefore, the issuance by the City of on-sale liquor licenses to hotels and <br /> restaurants will have no effect on the continuation by the City of the ownership and operation of <br /> its municipal liquor stores or the Stonehouse, should it desire to continue the operation thereof. <br /> Licenses May Be Issued Only to Clubs.Hotels and Restaurants <br /> As mentioned earlier,Minnesota law restricts the issuance of on-sale liquor <br /> licenses by the City to hotels, clubs and restaurants. Minnesota Statutes, Section 340A.101 <br /> defines clubs, hotels and restaurants as follows: <br /> "Club. "Club" is an incorporated organization organized <br /> under the laws of the state for civic, fraternal, social or business <br /> purposes, for jntellectual improvement, or for the promotion of <br /> sports, or a congressionally chartered veterans' organization, <br /> which: <br /> (1) has more than 50 members; - <br /> (2) has owned or rented a building or space in a building <br /> for more than one year that is suitable and adequate for the <br /> accommodation of its members; <br /> (3) is directed by a board of directors, executive <br /> committee, or other similar body chosen by the members at a <br /> meeting held for that purpose. No member, officer, agent, or <br /> employee shall receive any profit from the distribution or sale of <br /> beverages to the members of the club, or their guests, beyond a <br /> reasonable salary or wages fixed and voted each year by the <br /> governing body." <br /> "Hotel. "Hotel" is an establishment where food and <br /> lodging are regularly furnished to transients and which has: <br /> (1) a dining room serving the general public at tables and <br /> having facilities for seating at least 30 guests at one time; and <br /> (2) guest rooms in the following minimum numbers: in <br /> first class cities, 50; in second class cities, 25; in all other cities and <br /> unincorporated areas, 10." <br /> 2 <br /> DORSEY & WHITNEY LLP <br />