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To: Mr. Michael Mornson, City Manager <br /> From: Michael L. Larson, Liquor Operations Manager <br /> Subject: Preliminary Liquor Store Report <br /> Date: 3/25/02 <br /> Mr. Mornson, <br /> We are researching costs associated with the construction of a new Off-Sale <br /> Liquor Store to replace our existing .Off-Sale Store#1. The City of North Branch, <br /> Dougherty & Company and the Hennepin County Assessor provided the figures <br /> used forconstruction costs. Dougherty & Company provided the annual payment <br /> figures, and the costs associated with issuing a revenue bond. Dougherty & <br /> Company was used for the financing of Off-Sale Store #2. Traffic counts were <br /> provided by Hennepin County. We are using traffic counts for potential yearly <br /> sales figures that the new store may generate. <br /> Based on our research, the cost to construct a 9,000 square foot store would be <br /> approximately $900,000 to $1,100,000. This represents construction costs, <br /> interior fixtures and refrigeration. The cost does not include demolition of the <br /> current store or the Stonehouse Bar& Grill. We also assumed that there would <br /> be no land costs associated with this project. <br /> John MacDonald of Dougherty & Company provided an annual repayment figure <br /> of$100,000 to $120,000 per year based on a 20-year loan at today's prevailing <br /> interest rates. <br /> Traffic count research shows that Highway 88 experiences approximately 15,900 <br /> vehicles,per day at our intersection. Traffic counts on Southbound Silver Lake <br /> Road at 37th Avenue are 10,400 vehicles per day. Using strictly traffic counts for <br /> very preliminary sales figures, the new Off-Sale Store#1 has the potential to <br /> generate $3,100,000 per year, an increase of$1,000,000 per year over our <br /> current location. We are currently researching other methods for determining <br /> potential yearly sales figures. I will provide-you with those figures and <br /> methodology when completed. <br /> There are many cities currently constructing new Off-Sale Liquor Stores. I am <br /> monitoring their progress and I will update you on any new information when it <br /> becomes available. <br />