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City Council Study Session Meeting Minutes June 12, 2001 Page 5 1 Morrison wanted to review some of the operational information and a list of possible decisions, 2 issues, or concerns of which the Council needs to be aware. 3 Morrison highlighted a letter that he had received from Hennepin County that provided the City 4 with an appraisal of the property, stating the estimated value in the range between $500,000 and 5 $550,000. 6 Morrison provided the Council with a Stonehouse Staff Snapshot, which indicated that the 7 Stonehouse maintains a staff level of twenty to twenty-five employees. 8 Morrison illustrated that the Stonehouse makes money because of the charitable gambling, by 9 using a comparison between a Five-year Financial History for the Stonehouse Bar and Grill and a 10 Five-year Financial History, Profit from Operations. 11 Mornson showed that the Stonehouse Net Profits were significant to the City's General Fund in 12 1988, 1989 and 1990. He indicated that a review of City Council Meeting Minutes from years 13 past showed that the Council first became concerned with the Stonehouse in 1991 when the 14 profits dropped from $255,407 in 1990 to$176,135 in 1991. 05 Councilmember Sparks asked what happened after 1990 to cause such change. Mornson 16 indicated that the liquor laws changed, and competition increased in the Sports Bar Market, with 17 Champps, Applebee's, Joe Sensor's, etc. Mike Larson added that the Unysis building, and 18 buildings back in that area went through an extraordinary layoff process, and those employees 19 used to gather at the Stonehouse after work a lot. 20 Mayor Cavanaugh asked what happened to the Stonehouse profits from 1998 until now. Mike 21 Larson indicated that problems with equipment and building maintenance were the reason for the 22 profit decrease. 23 Morrison stated that this past year they had hired SEH to do an architectural Building Analysis of 24 the entire facility. The summary indicated that the entire building has outlived it's useful life, 25 and they recommended building new. 26 Morrison highlighted the Estimated Cost of Repairs and Improvements, which totaled$681, 750. 27 Morrison reviewed the Split Liquor Explanation which consisted of redeveloping the corner, 28 getting out of the on-sale liquor business, and staying in the off-sale operation because it was 29 making over$200,000 a year. He stated they would issue liquor licenses to certain restaurants to 30 come into the community. Morrison indicated that a referendum would be needed, unless they 31 got out of both the off-sale operation and the on-sale liquor operation. He indicated that they see •32 the City as heading in the direction of Split Liquor Explanation. 33 Councilmember Horst asked if other liquor stores could come in and control the off-sale of 34 liquor. Morrison stated that they could not do so under the Split Liquor Explanation.