There's going to be new municipal liquor store in Detroit Lakes, much larger than the existing liquor store, with many more parking spaces -and it's going to be located on the Burger Time site.
The City Council voted 6-3 Thursday to proceed with the estimated $3.9 million project and to go with the Burger Time site, which actually includes additional adjacent property, including the former coin laundry property and several privately owned parcels.
Aldermen Bruce Imholte, Ron Zeman and Al Brevik voted against a motion by G.L. Tucker to locate the new liquor store at the Burger Time site and move forward with construction plans and specifics.
The motion was seconded by Madelyn Sukke, who also voted for it, as did Tucker, Dave Aune, Jim Anderson, Jamie Marks Erickson and Dan Wenner.
Mayor Matt Brenk spoke in support of the motion, but did not vote, since he votes only to break ties.
Six votes were required to pass it, since the motion involved the expenditure of funds.
A cash cow for the city
The municipal liquor store, built sometime around 1970, has been a cash cow for the city, which this year transferred $468,000 of the store's profits to the general fund.
Those ongoing revenues will be preserved, even though the city will spend an estimated $3.9 million on the new liquor store, because annual sales are projected to be $1.5 million higher at the Burger Time location within four years.
That extra money will help pay off a bond the city will issue to pay for the new liquor store.
For the purposes of the architect's cost estimate, paperwork handed out at the meeting showed a 20-year bond at about 4 percent interest.
But the financing has not been finalized, and it's not yet known the length of the bond, type of bond, or interest payment.
"It depends on the best offer we get," said City Finance Officer Pam Slifka. "We don't know the final cost of the project, we need bids first." The city may decide to go with a lease bond from a local bank. Whatever funding mechanism is chosen, it will be tied to the liquor store and be used exclusively for that project, she said.
She does not expect the recent downgrade of the state's credit rating to result in higher interest rates for the project.
Best of five sites
A consulting firm, the McComb Group, put together sales projections for five potential sites in the downtown development area and on Highway 10 West, as well as the current liquor store location.
The Burger Time site had the highest projected sales - $7.5 million a year by 2015.
That compares to $6 million a year at the existing site, $6.2 million on Highway 10 West, and $6.6 million at two sites further from Highway 10 in the downtown development area.
"The No. 1 reason we're doing this is to enhance our revenue from the liquor store," said Brenk. State funding to cities is continually under attack or suffering cuts, and that makes additional liquor store revenue "all the more important," to fund city services and keep property taxes in check.
"The best data we have says we should put it on the Burger Time site,"
Brenk said.
Imholte was not convinced about the site. He believes it's too small and there will be a shortage of parking and problems with the location of the loading dock that make the Burger Time site the wrong choice in the long run.
"Sales will go up wherever we put it - we have a monopoly and a great liquor store manager, but this is not a good 40-year decision," Imholte said.
Zeman urged the council to consider keeping the liquor store in the current location - noting that the CVS Pharmacy is going in next door and those executives seem to believe it's a good retail location.
He believes there won't be room for expansion, and that a liquor store would be an affront to the veterans park, which will be located next door.
"I don't support $4 million for a new liquor store, (but if we do it) let's make sure this really is the right site," he said. "Let's not rush in, let's rethink it. Will we be able to move traffic in and out of it?"
No room to expand?
Brevik noted that when city officials first begin talking about a new liquor store 12-18 months ago, it was agreed that the site should be visible, accessible and expandable.
"Obviously the Burger Time site is the most visible (being right by Highway 10) but is it more accessible? And it certainly isn't expandable," he said.
Tucker disagreed. The site does meet all three criteria, he said: It's very visible from both directions on Highway 10, it is accessible (it's served by traffic lights) and it has the expansion built right in: The current liquor store has 7,000 square feet (about 3,800 square feet of retail space) the consultant recommended 10,000 square feet, the new design is for about 13,000 square feet, he said. "Expandability is not an issue - we are more than double the (retail) space and more than double the parking," he said. "I believe this site addresses all three (criteria)."
Lots of parking
The site will have 69 parking stalls, with access to another 12 public parking stalls nearby. By ordinance, the city is required to have 59 stalls for a 13,000-square-foot building, said Community Development Director Larry Remmen.
The Burger Time site is more expensive to acquire: The new liquor store will cost an estimated $1.7 million: land and building acquisition is estimated at about $963,000 - including $560,000 for the Burger Time building and land, about $15,000 more than its assessed value. Utility relocation will cost another $20,000, for a grand project cost of just over $3.9 million.
There is about a five-year payback period on the Burger Time site, as compared to other downtown sites, because acquisition costs are about $650,000 higher than the two other downtown sites under consideration.
(They are located at a site near Bremer Bank off Holmes and McKinley Avenue and a site off Frazee and McKinley. The sites considered off Highway 10 West were at the former Grover-Lindberg truck stop and a site off the access road into Walmart).
Prior to the vote, veterans park committee member George Peters asked the council to consider a different site, further from the veterans park.
Architect Paul Ringdahl was later directed to work with the veterans to make sure the new liquor store has minimal impact on the park.
