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Staff ReportCITY OF CMHASSEN 7700 Market Boulevard PO Box 147 Chanhassen, MN 55317 Administration Phone: 952.227.1100 Fax: 952.227.1110 Building Inspections Phone: 952.227.1180 Fax: 952.227.1190 Engineering Phone. 952.227.1160 Fax: 952.227.1170 Finance Phone: 952.227.1140 Fax: 952.227.1110 Park & Recreation Phone: 952.227.1120 Fax: 952.227.1110 Recreation Center 2310 Coulter Boulevard Phone. 952.227.1400 Fax: 952.227.1404 Planning & Natural Resources Phone: 952.227.1130 Fax: 952.227.1110 Public Works 7901 Park Place Phone: 952.227.1300 Fax: 952.227.1310 Senior Center Phone: 952.227.1125 Fax: 952.227.1110 Website www.ci.chanhassen.mn.us MEMORANDUM TO: Todd Gerhardt, City Manager w FROM: Karen Engelhardt, Office Manager? 1t: DATE: July 27, 2015 SUBJ: Request for Off -Sale Liquor License, Minnesota Fine Wines & Spirits, LLC dba Total Wine & More, 510 Lake Drive PROPOSED MOTION: "The City Council approves the request for an off - sale intoxicating liquor license from Minnesota Fine Wine & Spirits, LLC dba Total Wine & More at 510 Lake Drive. Approval of the license would be contingent upon council approval of the site plan, subdivision and PUD amendment; issuance of a certificate of occupancy, and final approval by the Minnesota Alcohol and Gambling Department." Approval requires a simple majority vote of the city council. This office has received a request for an off -sale intoxicating liquor license from Minnesota Fine Wines &Spirits, LLC dba Total Wine &More. The store would be located in a new standalone building to be constructed at 510 Lake Drive in the Villages on the Ponds development. The size of the proposed liquor store is 19,909 square feet. The property is zoned Planned Unit Development and specialty sales, including liquor sales, is a permitted use in this district. Liquor sales are also allowed in the Business Neighborhood (BN), Business Highway (BH), Central Business District (CBD), Community Commercial (CC), and General Business (BG) zoning districts. The corporate structure of Minnesota Fine Wines & Spirits, LLC is as follows: Class A Members Class B Members David J. Trone 5% MCT 2013 Trust 11.25% Robert L. Trone 5% JET 2013 Trust 11.25% IRT 2013 Trust 11.25% RJT 2013 Trust 11.25% SPT 2013 Trust 45.00% David and Robert Trone are the managing members of the corporation and the Class B members are Trone-created trusts that include minor children. The children are not involved in the business. State law is specific that liquor licenses may not be issued to persons under 21 years of age. The question was raised if Minnesota Fine Wines & Spirits is eligible for a license under this corporate structure. The city attorney has reviewed this information and is satisfied that the nature and operation of the trusts meets the intent of the state's statutory eligibility requirements. Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrow Mr. Todd Gerhardt July 27, 2015 Page 2 The Carver County Sheriff s Office has completed a background investigation on David J. Trone and Robert L. Trone (Managing Partners); George P. Mavrikes, John E. Trone and John Jordan (Trustees); and Dustin V. Koosmann (Operating Manager). The investigation included criminal history checks, driving records, and outstanding warrants. Additionally, record checks were conducted in Minnesota cities where Total Wine & More currently have active off -sale licenses, including Burnsville, Bloomington, Roseville and Woodbury. No negative comments were found. The companies owned and controlled by the Trones operate over 110 stores in 16 states and they have been in the liquor business for over 20 years. There is no indication of a pattern of violations of retail sales regulations such as sales after hours, sales to minors, or sales to obviously intoxicated persons. They recently received approval of a license in Maple Grove and have another one pending in Minnetonka. A public hearing notice was sent to all property owners within 500 feet of the proposed site. Staff has received many letters, emails, and documentation from a variety of sources as listed on the attachments. Haskell's has also submitted information from a study session in the City of Minnetonka on July 1, 2015 regarding off -sale liquor licensing. MGM has submitted a large packet of information including newspaper articles, law suits, and allegations of violations and illegal business activity by Total Wine. The applicant will be present to answer questions the council may have regarding this material. Regarding the comment about the proposed liquor store's proximity to St. Hubert Church and School, neither state law nor the city code have distance restrictions from churches or schools. BACKGROUND In 1994, Chanhassen City Code was amended to restrict the number of off -sale intoxicating liquor licenses allowed in the city to four. The restriction was put into effect after Byerly's requested a license in the General Business (BG) zoning district. Off -sale licenses were not specifically listed as a use in this district; however, specialty retail was permitted. It was the city attorney's opinion that liquor stores were a sub -class of specialty retail and thereby a permitted use. At the time, the council expressed concern that if they approved one license in the BG zone that a precedent would be set for other sites in the same zoning district. To eliminate that concern, the council amended the ordinance to limit the number of licenses to four. In 2005, Tara Clawson petitioned the city to raise the limit because she wanted to open a WineStyles store in Chanhassen. After surveying our Key Financial Cities, only two of the ten restricted the number of off -sale licenses. The council felt that the market would regulate the number of stores and therefore removed the restriction on the number of off -sale licenses altogether. The table below lists all of the current off -sale license holders in Chanhassen along with their approximate square footage and the year their license was approved by the city council. g:\user\karen\liquor\total wine\staff report.doc Mr. Todd Gerhardt July 27, 2015 Page 3 Name Approximate Square Footage Year Approved MGM, 7856 Market Blvd. 600 1992 Cheers Wine & Spirits, 530 West 79' St. 900 1993 Byerly's, 780 West 78' Street 300 1994 Century Wine & Spirits, 2689 West 78th St. 300 2005 Haskell's, 19900 West 78' Street 800 2009 Wine & Spirits at 7 & 41, 2401 Highway 7 300 2011 The Vintage, 8971 Crossroads Blvd., #160 500 2012 Historically, there were four other establishments that had off -sale licenses in the city, including the Pony Express Bar (discontinued off -sale in 1981), Pauly's Warehouse Liquors (closed in 1989), Pass -By Liquors (closed in 1997), and WineStyles (closed in 2008). Attached is an article from the July 12th edition of the Star Tribune regarding suburbs debating rules on the number of off -sale stores. The article included the number of liquor stores per capita in many of the suburbs: city No. of Stores Per Capita Hopkins 1 store per 2,200 residents Rosemount 1 store per 2,833 residents St. Louis Park 1 store for 2,800 residents Chanhassen - With current 7 licenses - If an 8th license is approved 1 store for 3,516 residents 1 store for 3,077 residents Bloomington 1 store for 3,600 residents Minnetonka 1 store for 4,280 residents Eagan 1 store for 4,400 residents Burnsville 1 store for 5,613 residents Brooklyn Park 1 store for 4,800 residents Plymouth 1 store for 5,284 residents Woodbury 1 store for 5,500 residents Maple Grove 1 store for 5,600 residents Columbia Heights (municipal) 1 store for 6,600 residents Blaine 1 store for 7,000 residents Richfield (municipal) 1 store for 9,000 residents Fridley (municipal) 1 store for 13,800 residents Brooklyn Center (municipal) 1 store for 15,000 residents Edina (municipal) 1 store for 15,800 residents Lakeville (municipal) 1 store for 19,520 residents Eden Prairie (municipal) 1 store for 20,300 residents g:\user\karen\liquor\total wine\staff report.doe Mr. Todd Gerhardt July 27, 2015 Page 4 RECOMMENDATION State law and Chanhassen City Code do not limit the number of off -sale liquor licenses allowed in the city. Additionally, it does not set store square footage minimums/maximums, or distance requirements from churches/schools or between liquor stores. Staff recommends approval of the off -sale liquor license requested by Minnesota Fine Wines & Spirits, LLC dba Total Wine & More at 510 Lake Drive. Approval of the license would be contingent upon council approval of the site plan, subdivision and PUD amendment; issuance of a certificate of occupancy; and final approval by the Minnesota Alcohol and Gambling Department. ATTACHMENTS 1. Location Map 2. Affidavit of Mailing Public Hearing Notice 3. Article from the Star Tribune dated July 12, 2015 4. Letter from the Minnesota Licensed Beverage Association (no date) 5. Letters from Brian Burdick, Burdick Properties, Inc. dated July 7 & 22, 2015 6. Letter from Jay Scott, Solomon Real Estate Group dated June 29, 2015 7. Email from Ed Vigil dated July 1, 2015 8. Email Mika Milo dated June 26, 2015 9. Email from Randy Rauwerdink, Venture Pass Partners dated July 1, 2015 10. Letter from Julie Roettger, Houlihan's Restaurant dated July 2, 2015 11. Email from Matt Mayben, Americlnn Hotel & Suites dated July 2, 2015 12. Letter from Tom Taylor, Burnsville Fire Muster & Community Event dated July 20, 2015 13. Email from Melanie Mertes dated July 20, 2015 14. Email from Jay Kronick dated July 21, 2015 15. Letter from James E. Slattery, Haskell's Wine & Spirits received July 15, 2015 including information from a study session in the City of Minnetonka regarding off -sale liquor licensing 16. Emails from Jason Kleinprintz dated July 17 & 21, 2015 and including additional documentation: a. Talking points in Total Wine & More b. City of Bloomington Proposed Findings of Fact, Conclusions of Law and Recommendation c. Memo from Larkin -Hoffman dated June 4, 2014 d. Table of Contents — Violation Documentation and Litigation Materials e. State of Arizona Information f. State of Connecticut Information g. State of Delaware Information h. State of Florida Information i. State of Georgia Information gAuser\karen\liquor\total wine\staff report.doc Mr. Todd Gerhardt July 27, 2015 Page 5 j. State of Maryland Information k. State of New Jersey Information l. State of Pennsylvania Information m. State of Texas Information n. State of Virginia Information o. Newspaper articles about Total Wine in various States p. Country Liquors, Inc. v. City Council of Minneapolis q. Letter from Sandra H. Johnson, City Attorney, City of Bloomington dated February 5, 2015 r. Article from Chanhassen Villager dated July 1, 2015 s. Article entitled, “The High Cost of Cheap Alcohol, Campaign for a Healthy Alcohol Marketplace” t. Article entitled, “Strengthening Alcohol Regulation: How to reduce the availability of cheap alcohol attractive to youth in your community” u. Article entitled, “2015 Issue Briefs for States” dated January 2015 v. Document citing court cases in Minnesota (no title/no date) w. Pacific Institute for Research and Evaluation, How Alcohol Outlets Affect Neighborhood Violence x. Supreme Court of Minnesota, Valerian L. Polman et al petitioners, Appellants, v. City of Royalton et al respondents y. Article from the Star Tribune, Total Wine uncorks booze battles in Minnesota, dated June 29, 2015 17. Email from Michael Clausen dated July 22, 2015 18. Due Diligence Report-Retail Services & Systems, Inc. et al and Total Wine & More with attachments (18-a through 18-g) 19. Due Diligence Report-David J. Trone, Co-Owner, Total Wine & More 20. Due Diligence Report-Robert L. Trone, Co-Owner, Total Wine & More g:\\user\\karen\\liquor\\total wine\\staff report.doc