Loading...
City Council Minutes 03-26-2012 SpecialMINUTES SPECIAL WORKSHOP /MEETING — MONTICELLO CITY COUNCIL Monday, March 26, 2012 — 6:15 p.m. Mississippi Room, Monticello Community Center Present: Clint Herbst, Lloyd Hilgart, Tom Perrault, Glen Posusta, Brian Stumpf Absent: None Others: Tom Kelly, Jeff O'Neill, Randall Johnsen, Bob Paschke 1. Call to Order Mayor Herbst called the Special Meeting to order at 6:15 p.m. 2. Purpose of Workshop: Discussion of possible 2" d liquor store location Tom Kelly explained that staff had been asked to look into the possibility of establishing a second liquor store location. After checking out a few sites, staff requested a workshop with Council to discuss some options and get direction on moving forward. 3. Consideration of a second liquor store location Tom Kelly explained that he and Randall Johnsen have been looking into possible options for a second liquor store location. Brian Stumpf questioned why the City would want to purchase this store and turn it into a liquor store. Clint Herbst feels that the City should consider expanding in order to increase liquor sales at another location. Since the City is already in the liquor business and surrounded by other cities that have municipal liquor stores, this would not be taking business away from anyone else. He noted there is a concern that this site is too small, but he didn't think the City could justify spending more than $.5 million on a satellite location. Glen Posusta asked about cost to add more coolers and other things that would be needed to turn the building into a second liquor store. Randall Johnsen described the layout of Cruiser's convenience store and noted that the current layout is not conducive for a liquor store. Tom Kelly noted some changes that could be made to accommodate a second liquor store. Discussion concerned various options that might be possible for the store including coolers, shelving and cash register counter. Clint Herbst feels that this is a minimal investment for a second liquor store site. The cost is reasonable at $550,000 for a 4000 sq foot property plus a large parking area. He compared it to some of the surrounding land and what they are asking for those properties. He sees this as a quick way to get a second store in place before the summer traffic. Randall Johnsen commented that, although the space is limited, you would want to feature selected products and possibly sale items. Randall expressed concern about having large enough quantities on hand for such events as the wine tasting sale with the possibility of not having items which customers would want and thus turning them away. Special Council Meeting Minutes— March 26, 2012 Page 1 It would not be possible to carry the variety of inventory with the limited space compared to the 8800 sq foot layout at the current Hi Way Liquors. Clint Herbst spoke in favor of the Cruiser's location noting that there is space to expand and the ease of getting in and out. Clint Herbst also noted that a previous study that was done some years ago indicated that this area would be a good site for a second liquor store. Brian Stumpf commented that a liquor store at this end of town could possibly pick up customers who do not realize what exists at that end of town. Glen Posusta expressed concern about purchasing and opening a second store and not realizing enough income to make it profitable. Glen Posusta noted he might be willing to do this on a trial basis to see if it is profitable before they put too much money into it. Glen Posusta asked about staffing and management. Randall Johnsen said it would probably be managed between him and other staff. They would not need as many employees as at the current store; however, they might want to use some of the more experienced staff to start with. Eventually they would probably need a rotating staff of about five or six people. Clint Herbst said he thought it would be best to take everything out except the coolers and start remodeling from there. Randall Johnsen mentioned some of the other considerations would be delivery, stocking, and traffic flow. Tom Kelly estimated that it might be close to $300,000 to get the building ready. Brian Stumpf mentioned some concerns: security, lighting, signage, removing old gas tanks. Tom Perrault expressed concern about limited space, cost that might be incurred to remove tanks, drawing customers away from existing store, and possible expansion costs. Tom Kelly mentioned that there are some storage sheds in the back that would have to be removed. Pictures of the building site were passed around. Tom Kelly noted that it might be possible to do some remodeling at the back of the building to accommodate delivery trucks. There is no storage space to speak of inside so all deliveries would basically go out on the floor. Lloyd Hilgart said that he would want to see some more numbers before the City would move forward on this. He asked where the start tip funds would come from; Tom Kelly noted that would come from the Liquor Fund. Lloyd Hilgart said he would like those funds paid back after the initial investment. He also would like some figures on operating costs. Clint Herbst stated that he thinks the previous study that was done would probably look better now with the new interchange and added businesses in the area. Randall Johnsen pointed out that it will take some work to figure out the best layout and stocking for the space. Tom Kelly pointed out that the total value for the 2 lots is $611,000. Glen Posusta said he talked to Dean Hoglund and the sellers would take care of removing the tanks. Bob Paschke asked how long the tanks have been there. He suggested that they City might want to take a look at any possible leaks where there might be soil clean up issues. Glen Posusta said the City should include that consideration if an offer were to be made. It was also suggested that the sellers be responsible for removing the canopy structure and Special Council Meeting Minutes — March 26, 2012 - Page 2 the City could possibly take care of the paving after they check the soil for contamination. Jeff O'Neill asked if Council could think of any other site in that area that might be worth looking at. Clint Herbst reiterated that he thinks the Cruiser's site is the best deal for now. Tom Kelly pointed out that there are a few other lots that might be better for building, but it would take awhile to get a liquor store constructed. Dean Hoglund thought they could close and move the current tenants within 90 days, which would make it available around June. Lloyd Hilgart asked Randall Johnsen about the current business that Hi Way Liquors does. Randall Johnsen said they do about $4.75 million and realize a profit of about $600,000. Several council members commented that a liquor store at Cruiser's would probably draw different customers than the traffic that goes by Hi Way Liquors. Lloyd Hilgart stated that he is not opposed to considering a second store but he is concerned about the amount of business that would be drawn from the current store and the loss of discretionary funds for other uses. Tom Kelly pointed out the current status of the Liquor Fund and the option of issuing a revenue bond to fund the purchase and renovation of a new store. Clint Herbst asked if Council wanted to have staff continue to investigate this as a possible future endeavor. BRIAN STUMPF MOVED TO DIRECT STAFF TO CONTINUE INVESTIGATING THE POSSIBILITY OF IMPLEMENTING A SECOND LIQUOR STORE AND MAKE AN OFFER ON THE CRUISER'S PROPERTY CONTINGENT ON REMOVING THE GAS TANKS. CLINT HERBST SECONDED THE MOTION. MOTION CARRIED 4- 1 WITH TOM PERRAULT VOTING IN OPPOSITION. Tom Kelly said he will work on putting together more numbers on purchasing, renovations, and operations. 4. Adjournment TOM PERRAULT MOVED TO ADJOURN THE SPECIAL MEETING AT 6:51 P.M. GLEN POSUSTA SECONDED THE MOTION. MOTION CARRIED 5 -0. Recorder: Catherine M. Shuman Awl Approved: April 9, 2012 Attest: City trator Special Council Meeting Minutes— March 26, 2012 Page 3