3. Chanhassen Bowl Liquor License.C
MEMORANDUM
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CITY OF
CHANHASSEN
690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
(612) 937 -1900 • FAX (612) 937 -5739
TO: Don Ashworth, City Manager
FROM: Todd Gerhardt, Assistant City Manager
DATE: August 8, 1996
SUBJ: Liquor License for the Chanhassen Bowl
On April 22, 1996, the city council approved the Chanhassen Bowl's liquor license with the
condition that Mr. Dahlin pay his May 15 property taxes. Mr. Dahlin was also instructed to
appear before the council again in three months to show the progress of paying his back taxes
and to demonstrate some effort to finish paying off the outstanding balance of taxes for an
additional 3 -month extension (see Attachment 1).
Staff has been advised by the Carver County Treasurer's office that the first half taxes for 1996
have been paid. The city council should also be aware that the HRA is concerned about the
' potential of losing $385,000 if the property should go through the tax forfeiture process:
Tax Forfeiture Proceeds /Distribution: Statutes are clear in that the dollars received
' from a tax forfeiture shall be redistributed to the city, county, and school district in
proportion of the amount that each are currently levying. The HRA would not be a party
entitled to tax forfeiture proceeds. Assuming that the forfeiture approximated the
' $465,000 currently being owed in back taxes, the city would receive a check for
approximately 17% ($80,000) of the $465,000 captured through the forced sale. If the
highest bid received for the property were half that amount, the amount of the check to
' the city would then be approximately $40,000.
To ensure that the back taxes are paid, the HRA endorsed the position of using the next 3 -6
' months to monitor Mr. Dahlin's efforts to secure private placement financing to pay back taxes.
If Mr. Dahlin is not able to secure a mortgage within this time period, the HRA would then
' consider a highly secured mortgage position against the property, if that were the only means by
which to ensure that the back taxes in fact were paid.
J
Mr. Don Ashworth
August 8, 1996
Page 2
RECOMMENDATION
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Staff would recommend granting Mr. Dahlin a 3 month extension with the condition that he
show progress in attempting to secure private financing to pay off the back taxes. '
ATTACHMENT
1. Minutes of the April 22, 1996 City Council meeting.
g:\admin \tg \chanbowl l .doc
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City Council Meeting - April 22, 1996
Councilman Mason: Well let's work something out as easily as possible.
Mayor Chmiel: I don't think we need a motion. You have direction.
Don Ashworth: Yes.
Mayor Chmiel: Okay. We can go from there. Thank you.
Lois Degler: Thank you.
REQUEST FOR RENEWAL OF ON -SALE INTOXICATING LIQUOR LICENSE, 581 WEST 78TH STREET,
CHANHASSEN BOWL, INC., DANIEL DAHLIN.
Don Ashworth: The city has received an application from Mr. Dahlin for a liquor license at the Chanhassen
Bowl. Most of the paperwork is in place and we assured that whatever is remaining will be obtained before we
would give that license. At issue is the fact that under city ordinances, or city ordinances basically state that we
will not issue a liquor license if the owner is delinquent in property taxes. The Council's probably aware the
Bowling Center did go through a bankruptcy action approximately 2 -3 years ago and just kind of pulling
themselves out that and then had kind of another slide backwards. They now appear to be, if they can make
this entertainment center work, they would be able to pay off back taxes, which is what they've told us, if that
entertainment center would go forward. Which then another key point there is the advice from the City
Attorney saying that the ordinance portion is discretionary back to the City Council. So you have the discretion
of saying you are going to follow that requirement, or if in a particular instance you feel that a waiver may be
warranted or you want to establish some other conditions as a part of approval. I guess I have a difficult time
seeing how denying the license is going to help out Mr. Dahlin or help out the city in trying to recoup the taxes
that are delinquent. So I guess I turn it back to City Council. I don't know how you want to go.
Mayor Chmiel: Okay. Anybody have any questions of Don?
Councilman Senn: When does the license actually renew?
Don Ashworth: The first of May.
Mayor Chmiel: Yes, I was going to see if they had any questions and then I would call. Mr. Dahlin, do you
have anything to add to what Don has said? If you would like to come forward. Please state your name and
your address.
Daniel F. Dahlin: Daniel F. Dahlin, 1889 Fairmont, St. Paul, Minnesota.
' Mayor Chmiel: Okay. Is there anything in addition that you may want to say to what Don has already
discussed?
Daniel F. Dahlin: No. As you know Don has been very cooperative and very helpful and thank you for the
' nice comments in the data here that I received. We are working on several offers to sell the property for the
taxes but we basically need some more time. Would appreciate your graciousness in letting us continue with
our license until this can be worked out.
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City Council Meeting - April 22, 1996
Mayor Chmiel: Okay, thank you. Is there any questions of Mr. Dahlin? I guess we have none at this time.
Colleen.
Councilwoman Dockendorf: All I can think of are two really poor metaphors. One is throwing good money
after bad and the other is shooting yourself in the foot if we don't extend... We'll never get the money. I guess
it only makes sense to renew it.
Mayor Chmiel: Okay, Michael.
Councilman Mason: I don't know that either one of those metaphors are poor but yeah. It certainly won't
happen if we don't. Whether I like it or not so.
Mayor Chmiel: Good. Mark
Councilman Senn: I guess for one thing, I guess I want to repeat my comment that I made effectively at the
time that we talked about the entertainment complex and the TIF and that is, how do we expect a property in
this kind of shape to turn around with a new mortgage on it, new investment and everything. Pay the mortgage,
the new mortgage and all the back taxes while the new taxes on higher value ... basic economic principles... I
agree with Colleen and Mike in the sense that I'm not sure where it gets us but I guess if we're going to do it...
every 2 -3 months, I don't want to see it back in here... don't want this to become an ongoing game... I think we
need to make it known that this is a short leash and also very short time period ... lot of extensions.
Mayor Chmiel: Yeah, I guess I have basically the same concerns that you mentioned. I want to see this all
work. I want to see everything go but I too want to see something tight on this in making sure that somehow
you bring this back to Council, even on a monthly basis knowing exactly where it's at. If there's something
there, fine. If not, that too. But it's one of those things that I had to quote from Steve's portion. That's
Councilman Berquist and he wrote me a few notes here and he said it's sort of staggering. He says how much
more rope do we provide someone. It reminds me of the fellow who I trusted who kept telling me it's coming.
It's coming_ We'll get it squared away. He ended up taking him for approximately $100,000.00. I want to have
it very tight.
Don Ashworth: I need a little clarification. Taxes are basically paid twice per year. And I can provide
hopefully a status report as to how they're doing with the entertainment complex. Is that what I'm hearing you
say or is it the tax issue?
Councilman Senn: Let me try on the tax issue. As far as May 15th goes, that payment better be made or this is
immediately revoked. So more or less there's no further going in the hole on back taxes. Okay. As far as
review period goes, I think we should extend the license for 3 months and to come back here in 3 months and
either there's something really to show us that this is about to happen or something like that, or there's got to be
some kind of a reduction of payment on the back taxes at that point to get an additional extension beyond 3
months. That would be my opinion on the taxes.
Don Ashworth: So you're saying the equivalent of first half taxes for 1996? Since he is so far in arrears,
anything you make on taxes will first be applied to the oldest tax that you owe.
Councilman Senn: That's why I said go no further in the hole.
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City Council Meeting - April 22, 1996
Mayor Chmiel: Okay, Roger.
Roger Knutson: I would just point out that you can't pay, technically you can't pay recent, you have to pay the
oldest ones first.
Councilman Senn: I understand. That's why I say no further.
Mayor Chmiel: Okay. Any?
Councilman Senn: I'll make that a motion if you want me to.
Councilwoman Dockendorf: I'll second it.
Mayor Chmiel: Okay. Motion's been made with a second. Yes.
Don Ashworth: I heard some discussion from the back.
Vernelle Clayton: Only because I told Gerry exactly what ... and was told otherwise.
Gent' Rummel: Mr. Mayor and City Council, my name is Gerry Rummel. Dan Dahlin's attorney. I called last
week, the County Treasurer's office on this and they said that the payment would first be applied to current
debts before you can pay any back. I was the same... that's what I was told by the County Treasurer's office.
Don Ashworth: ...that's really statute, right?
(There were a number of people speaking at the same time at this point.)
Don Ashworth: ...Councilman Senn's position is clear.
Councilman Senn: To be honest with you, I've heard that argument both ways. You know our company does
some things, work up work and I'll tell you if we paid current taxes and ... I mean there are exceptions to every
rule but let's not argue that. Let's deal with the issue. No further in the hole. If it goes further in the hole, it's
going to be revoked. The other...3 months. In 3 months you'd better be back here ready to perform...
Mayor Chmiel: Okay, motion on the floor with a second... those specific conditions.
' Councilman Senn moved, Councilwoman Dockendorf seconded to approve the request by Dan Dahlin for
renewal of on -sale intoxicating liquor license for the Chanhassen Bowl, Inc. for a period of three months on the
condition that he pay his May 15th property taxes and that he come back in that 3 month period and show
' progress for paying back taxes and be able to demonstrate some ability to finish paying that off within the next
3 months should another 3 month extension be granted. All voted in favor and the motion carried.
WETLAND NMGATION PROJECT FOR TRAIL CONSTRUCTION ALONG COUNTY ROAD 117;
' FILLING .13 ACRES OF WETLANDS AND REPLACING WITH .22 ACRES ON SITE, CITY OF
CHANHASSEN.
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