Laserfiche WebLink
EHLERW <br /> & ASSOCIATES INC <br /> QTo: Mike Morrison, City Manager <br /> From: Jim Prosser <br /> W Subject: Stonehouse Liquor Store Analysis <br /> Date: August 22, 2001 <br /> Issue Statement: <br /> The City of St. Anthony Village currently operates both on and off sale liquor stores. The on-sale store <br /> building, Stonehouse, has recently been evaluated. The evaluation, conducted by SEH engineers, has <br /> determined that the building needs to be replaced. The City has requested an evaluation of the replacement <br /> cost and financial feasibility for replacing the Stonehouse. A major benefit derived from the Stonehouse <br /> operation has been the revenue derived from charitable gambling that occurs at the Stonehouse. The City has <br /> requested an evaluation of options to City operation of the Stonehouse that would permit continued source for <br /> charitable gambling. <br /> Background: <br /> The Stonehouse has been in operation since 1949. The 4500 s.f. facility provides a sports bar atmosphere with <br /> limited menu and occasional entertainment. A review of the past five years operation indicates that the facility iE <br /> producing marginal and diminishing profits from operations. Overall profitability is somewhat aided from rent <br /> revenue from charitable gambling and check cashing fees. Revenue from charitable gambling has been <br /> consistently strong, averaging in excess of$1 million gross sales annually. State law severely limits use of <br /> gaming profits for purposes outside of the charitable giving. Given its condition and liability issues it is likely th <br /> the building may soon be unsuitable for continued business operation. It is no longer financially prudent to <br /> invest in the building beyond minor emergency repairs. <br /> The Stonehouse site also includes the St. Anthony Village fire station and the 8,300 s.f. off-sale store, SAW <br /> The one half acre site is able to function in its current capacity only because of use of adjacent right of way for <br /> parking. Next to this site is a neighborhood shopping center and the recently purchased Custom Liquidators <br /> building. The City is evaluating the redevelopment potential for this general area. <br /> Analysis: <br /> Six basic options have been evaluated and summarized in the table below. The analysis has identified, but not <br /> fully evaluated, the policy issues of municipal operation of liquor stores. The City currently has authority to <br /> operate on and off sale liquor stores. If the city would decide to close the Stonehouse they would have the <br /> option of seeking voter approval to permit continued operation of municipal off sale and private operation of on <br /> sale liquor stores. The private on-sale stores would be subject to regulation and licensure (including <br /> appropriate fees, location and number of stores) by the City Council. If private on-sale liquor operations are <br /> permitted the Charitable gambling operations groups could seek agreements to permit charitable gambling from <br /> any new private on-sale restaurants. <br /> LEADERS IN PUBLIC FINANCE <br /> 3060 Centre Pointe Drive 651.697.8503 fax 651.697.8555 <br /> Roseville, MN 55113-1105 jim @ehlers-inc.com <br />