Gleason offering land for liquor store to city for $1

(Update log 12/2 11:30 a.m.) One Northfield resident is concerned the City Council could dismiss a good opportunity for a new liquor store location because it would lie beyond the area specified in September’s request for proposals.

Virginia Gleason of Oak Street proposed to sell the city a nearly 50,000-square-foot vacant lot across from Target on State Highway 3 for just $1. Her son, James Gleason, also of Oak Street, helped his mother with the proposal and he said he wants the general public to know about the offer.

“Our family has been in Northfield forever and we made the offer because we’d just really like to get ‘er done,” James Gleason said on Monday.

The site, which has been for sale for about six years, does not appear to fulfill at least one of the minimum requirements set by the City Council and members of the city’s staff in September.

That requirement is that the property lie “in an area which is currently or proposed to be zoned C-1 or C-2 in the City of Northfield zoning code or located in a area zoned C3 within one quarter mile of an area zoned C-1 or C-2.” The property is zoned as C-3, which is a “gateway commercial district” and is nearly a mile* from the nearest C-2 district, which is the “downtown fringe district.” C-1 is the “downtown district.” (*I checked the zoning maps online again and it appears the site would actually be a little more than a mile from a C-2 district).

James Gleason said he learned by reading a Representative Journalism story online that officials began to consider five proposals via a scoring process two weeks ago and his was not among them. Gleason said city officials had yet to tell him whether his proposal had been rejected or to return his $1,000 “good faith” deposit.

Brian O’Connell, Northfield’s Community Development Director, said the City Council would still review Gleason’s proposal and that the proposal was still one of seven listed on a scoresheet that the council and staff designed to collect input from four knowledgeable groups of people.

The members of one of the groups, however, said on Monday that they scored only five proposals two weeks ago. Steve Engler and Victor Summa said Gleason’s proposal and another submitted by A.K. Kayoum were not on the list because staff members took them off. Engler and Summa represented the Economic Development Authority’s Infill Committee. Joel Walinski, interim city administrator, said he could not comment about how many proposals were on the scoresheets that Engler and Summa completed.

Gleason said he would not want to ask the City Council to make any decision that would result in a detriment to the city’s downtown. He said he believed building a new liquor store on the site his family proposed could be the most lucrative for the city.

Councilor Scott Davis, who represents the City Council at Economic Development Authority meetings along with Councilor James Pokorney, did not return a phone call or email message about the matter by Tuesday morning.

Update 12/2 11:30 a.m.: Griff Wigley uploaded a clearer version of the property map in the first comment below this story.

The images below show the five sites the Economic Development Authority’s Infill Committee rated two weeks ago. The first shows a lot on Water Street with two buildings, the second shows a lot on the “Q-Block” and a lot on the property across the street from the “Q-Block” where The Crossing residential building lies, the third building is on Division Street, the final photo shows a residential lot on the southern end of Water Street (Note 12/2 12 p.m.: the final photo is of a residence built in a Downtown Fringe district).

115 thoughts on “Gleason offering land for liquor store to city for $1”

  1. Can someone please explain the difference between off-sale and on-sale? I am not familiar with the terms.

    I come from a state where the only place you can buy hard liquor is from the state liquor store. Beer and wine can be purchased at the grocery.

    Can someone please enlighten me?

  2. John, yeah, those are definitely weird terms.

    ‘Off-sale’ means liquor that’s sold to consume OFF-site. So basically, liquor stores are all off-sale.

    ‘On-sale’ means liquor that’s sold to consume ON-site… bars and restaurants.

  3. This is what I think and/or have learned over the last few days re the liquor store discussion.

    1. There is no way that an off sale liquor license fee can approach the perceived $130k that the municipal liquor store contributes to the city general budget.

    2. The state limits the off sale license fee for municipalities outside the metro area to $560 per year.

    3. The city can determine the number of off sale licences that it will allow.

    4. Many cities use a formula of one off sale licence per 5,000 to 7,000 population.

    5. Given those ratios, Northfield would likely allow two to three licenses for a total fee of less than $2000.

    6. Private liquor operations would also contribute sales and real estate taxes – this math exceeds me.

    7. It appears that the state requires that off sale liquor establishments be located more than one mile from each other (See Scott Neal #90). I am not clear whether this is within each city, or if this would preclude a Northfield based private liquor store from being less than a mile from Firehouse Liquor in Dundas.

    Now, responses to a few specific comments or questions:

    John Thomas #101: “On sale” means you purchase liquor to be consumed on the premises. “Off sale” means you purchase liquor to be taken off the premises. This may be a strictly Minnesota designation, I’m not sure. The other thing that may be confusing to someone who grew up outside of Minnesota is the 3.2 designation. This applies to beer that contains less than 3.2 percent alcohol. Convenience stores, grocery stores, etc. are allowed to sell 3.2, but “strong beer” (over 3.2 percent) can only be sold at liquor stores.

    Norman Butler #93: In many rural communities, bars (pubs) are allowed to sell both on and off, so yes, it would be possible for the city to allow an establishment such as The Cow to sell off sale. Last I checked, the L&M in Dundas has off sale. This may have changed.

    William Siemers #92: This is be possible, but would set us back three decades or so. (See Ray Cox #99) In the early 70s, the muni was the only public establishment with an on sale hard liquor license (clubs such as the VFW and American Legion could also sell hard liquor). The bar was located on the upper level of the existing Muni with a separate entrance onto Fifth Street. Establisments such as the Rueb ‘n’ Stein were strictly 3.2 beer joints. As a practical matter, the liability of on sale is much higher than off sale; I doubt the city would/should take on this risk.

    I still question whether the city should continue to operate a liquor store. If it chooses to do so, I would suggest it mind its p’s and forget the q’s – parking, parking, parking and pricing, pricing, pricing.

  4. It looks to be a foregone conclusion that the city will have a muni. It seems it does contribute at least 130k a year to the revenue side of the budget…there is no way a private store(s) would contribute that much.

    I guess we won’t have on-sale, although I still like the idea of an upscale bar adjacent to the off-sale, but it’s clear that this would generate opposition from local booze purveyors…I don’t know about the insurance issue…there are a whole lot of muni off-sale/on-sale combinations around MN and insurance cost doesn’t seem to be stopping them. In any case it seems the voters have spoken on this issue.

    I think if we are going to do it…then let’s do it to make the most money possible. They should consider gourmet foods, gift baskets, accessories. Can’t have on-sale?…maybe a wine-bar that charges for regular tastings.

    I sense a frustration with the whole process here on LG, and in the community. But this frustration should not get in the way of picking the best site and then designing a state of the art store that will be both attractive and efficient. If that means hiring consultants/professionals to insure that outcome…so be it.

    The right design would, by decreasing labor cost, increase the bottom line considerably. (Firehouse, and Haskil’s in Faribault operate appear to operate with about half the staff of the muni). A beautiful, bright new store would undoubtedly bring in higher revenues.

    Wait… all this ignores the elephant in the room…Strong beer and wine sales in grocery stores. Every year the lobbying for this change in MN law will continue. I have no idea what the chances are for such a change…but if enacted, Northfield, might be throwing away alot of cash on this new store. Doe anyone have an idea of the odds of this change occurring?

  5. Maybe I missed something in my skimming of the comments here, so feel free to jump all over me if someone’s already answered this:

    Isn’t the reason the current liquor store shows “profit” of approx. $130k/year is because the building is paid for?

    Even allowing for possibly increased sales with a new larger store, debt service and taxes on the property would probably eat up most if not all of that.

    It’s not by any means certain that a new liquor store would add one penny to the city coffers. It’s much more likely that it will COST us money.

  6. This is fascinating. Where has this discussion been for the last three years? What happened to the critical need for a liquor store downtown to anchor the business community? Where is the importance of anchoring the south end of Division Street?
    Now that the city is close to a decision, there is a big push to abandon liquor sales. I never supported municipal liquor stores, but this turn of events is just very odd.

  7. W.S. #104 – The concept of offering gourmet foods at the Muni is wonderful. However, Minnesota does not make things easy, and it all ties in to the food sellers vs. liqour sellers battle.

    The liquor guys said “you can’t sell wine, strong beer or spirits.” The food guys said, “well, then you can’t sell food.” Thus, one cannot buy a bag of potato chips in a liquor store to enjoy with that bottle of real beer. It is possible, however, to buy a lime for your gin and tonic or a jar of olives for your martini. Garnishes are allowed I guess.

    This separation of chow and suds is why stores such as Byerly’s or Cost Plus will have attached liquor stores with their own entrances and checkout counters. I suppose the Muni could ad a cheese shop a la Surdyk’s in Minneapolis, but this further muddies the government vs. private enterprise issue. Would our supermarkets or Just Foods like to add the City of Northfield to their list of competitors?

    As to the ultimate resolution of the wine in supermarkets issue, I have no clue. Perhaps Ray Cox or one of our current legislators could chime in here.

    If the rules do change, I would not want my city to be heavily invested in the liquor business.

  8. Tracy…I don’t know if the muni pays taxes, but I doubt it. Re: debt service…since money is pretty much free these days (if you can get it), to me it is more a matter of payback. Cost of the land/building minus the sale price of the existing building divided by projected net revenue.

    So if the building/improvements/land are 2 million and the existing building sells for 600k and the projected improved net goes to 200k, the payback is 7 years. (These estimated figures are strictly off the top of my head).

    I suppose there would also be a loss in revenue from the property tax no longer collected on the building and/or land once it is sold to the city. But that would be somewhat offset by the property tax collected on the existing muni building once it is sold.

  9. I have some ideas. Tear down the liquor store building, replace it with state of the art Green building, sell organic freshly made on site juices and teas and honey based candy and cookies and order your alcohol online and have it delivered.
    Then, the extra revenues you get from all the people talking up your very prominently displayed green building with organic juice and honey treats building will bring in more revenue, make a lot of us anti alcohol- sales- by-govt people real happy and we will come downtown more and show our financial support, the cops and city employees can do other good work and everyone will live happily ever after.

  10. Cheers to that Bright !

    You might even get some top flight corporations thinking what exceptional thinking lets locate a 1000 employee factory there.

  11. OK, here’s one more set of thoughts.

    1. There is no philosophical basis for additional City investment in the existing Muni ($100,000 + to remedy OSHA violations) or a new location ($2 million +). The current debate is strictly about how to maximize revenue to the City.
    2. Rather than staying in the booze biz (a good biz, I recognize, and one I’m happy to patronize on a regular basis when I’m not drinking my own homebrew–one or two drinks a day as a health-enhancing measure!), the City gets out of the biz and turns it over to the private sector, perhaps in the following way:
      • Authorize (by council action) replacement of the Muni by private off-sale liquor establishments
      • Issue one (or two, or more if the market is there) off-sale license to a new off-sale only establishment
      • Issue one (or two, or more if the market is there) off-sale licenses to existing or new on-sale establishments (e.g. the Cow, Froggy Bottoms, The Rueb, Eagles, VFW, a new brew pub??? whoever)
      • Sell the existing Muni building once the new establishment(s) are up and running
      • Collect annual license fees and increased property taxes from new private off-sale establishment(s) and whatever private enterprise eventually takes root in the Muni building
      • Stop wasting time and money arguing about the issue

    Revenue to the City:

    1. Current estimated market value of the Muni building according to Rice County records: $394,000. Actual eventual sales price: anyone’s guess in today’s market.
    2. License fees (small change of hundreds or a few thousand max annually)
    3. Increased property tax revenues: perhaps on the order of $50K annually?
    4. Avoidance of payment of OSHA-mandated improvements and/or
    5. Avoidance of interest payments on debt for new building

    Additional benefits:

    1. Encourages entrepreneurship and private local investment
    2. Allows elected officials, staff, and civic-minded busybodies such as myself to dedicate time and energy to more productive civic pursuits
  12. All: This a.m., the Chamber Board, at my prompting, voted to have me draft a proposed position paper to present to the Chamber. The Chamber may decide not to publish a position paper. However, as a leader in a healthy business environment, I felt it our duty to see if a consensus exists regarding this matter.

    Anyone interested in providing comments can email me at gnl-david@qwestoffice.net. Preferences will be given to Chamber members, but no idea will be turned away. You may also call me at 645-4451 before 8:00 a.m. or after 5:00 p.m.

    David K. and Ray: I would be willing to strategize on this matter further in person.

  13. David L and Ray, I’d be happy to schedule a conf call or we can meet at my office if you wish. I’m meeting with someone tomorrow to discuss the matter as well.

    How is Friday afternoon? I’d enjoy collaborating with you to see if we can offer anything of value to the powers that be.

    david.koenig@charter.net, o)507-301-3149

  14. If the new building scenario continues: This is an excellent time to negotiate a real estate purchase, partiuclarly with one player offering the land for a buck. So any offers on the other properties should be of the lowball variety. Very low.

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