Appointed Committees

LIQUOR ORDINANCE AD HOC COMMITTEE September 14, 2016 Page 1 Committee Members Present: Dean Frantsvog, Shaun Sipma, George Withus, Chuck Vennes, Wayne Whitty, Jesse Zwak Members Absent Chad Thompson Others Present: Kelly Hendershot, Kelly Matalka, Cindy Hemphill, Chief Olson, Chief Flermoen, Derek Hackett, Lisa Jundt, Josh Wolsky, Jill Schramm Chairman Frantsvog brought the meeting to order at 2:00 pm. Chairman Frantsvog began by explaining, the committee was appointed by the Mayor, at the direction of the Liquor and Gambling Control Committee to review the chapter of the code of ordinances regarding alcoholic beverages. He said the City currently allows 27 Retail Liquor licenses but has 28, due to an annexation of a property which already held a license. The City allows 23 Retail Beer and Wine licenses and currently has 22, leaving one available to purchase. All other types of licenses are for sale in an unlimited amount. The City Attorney described the main categories of licenses as the Retail Liquor and Beer, which the City restricts to one license for every 1,500 residents, as recognized in the most recent census; Retail Beer and Wine, which the City restricts to one license for every 1,750 residents, as recognized in the most recent census; and the Supper Club license, which is not limited in number but has several restrictions in its definition. Upon questioning, the City Attorney clarified the transferability of licenses. She said, the Retail Liquor and Beer license is defined as defeasible property to the owner and can be sold on the open market. It can be transferred between owners and the City would only require the transfer paperwork. The City is not an interested party in the value paid for the license and only collects the annual fee of $3,125 for the sale of liquor, beer, and wine. The Retail Beer and Wine license would not require a transfer as there are still licenses available to purchase. Committee member Chuck Vennes, asked how a license would be sold if another one became available from the City. The City Attorney replied, it would either follow the process of a sealed bid or could go to a live auction. Chairman Frantsvog asked the committee members for their concerns and the concerns they have heard from citizens. Chuck Vennes, owner of The Landing Bar and Bottleshop, stated the issue he was interested in looking into are the supper club regulations. He disagrees that a restaurant can operate as a bar without the investment required to purchase a liquor license. Wayne Whitty, owner of Ebeneezer’s stated, he doesn’t see a problem as far as license holders are 1|Page LIQUOR ORDINANCE AD HOC COMMITTEE September 14, 2016 Page 2 concerned and agrees with the current limits based on population. He continued by saying there is an association of license holders who meet regularly and discuss issues that affect their businesses. He said, there has been an increase in the number of supper clubs and believes it is unfair for supper clubs to pay the same annual fee without the initial cost for the market value of a license. He said his concern is that there is not a lot of advantage to having a Retail Liquor license. Jesse Zwak, owner of J.L. Beers stated, he has a Retail Beer and Wine license and he does not have any problems regarding the license itself. He said he would like to address the fencing requirements for outdoor seating. He then asked how the Minot ordinance compares to the laws in other cities, to which the City Attorney said, she can compile a document to provide that information at the next meeting. Mr. Zwak added, due to the limited number of licenses, the market value to obtain a Retail Liquor license makes it tough for a young entrepreneur to start a business. The City Attorney clarified, the annual cost of the license is paid to the City but the cost paid in the free market is determined by the transferee. Alderman Sipma stated, he understands there are two points of view and that opening up the market could diminish a valuable asset to the current license holders. He said the issues he wants to address include fencing requirements and more functional outdoor spaces downtown. He also wants to see more research on the advantages and disadvantages of capping the number of licenses. Alderman Withus would also like to discuss the caps on licenses as well as outdoor spaces downtown and the fencing requirements. He suggested allowing bars to stay open until 1:00 am on Easter rather than 12:00 am. Alderman Sipma then suggested changing the closing time for bars from 1:00 am to 2:00 am which is permitted by State law. Mr. Whitty and Mr. Vennes agreed they would not be against a 2:00 am closing time but it is not a big concern to bar owners. Chief Olson was called upon for his opinion on how changes would affect the Police Department. He stated, it is labor intensive to conduct compliance checks even with a compliance officer and the Police Dept. does not patrol as much as they could. He said he is not opposed to additional licenses but would like more personnel in order to be effective. He stated, his concerns are with minors in a licensed premises and what defines a separate room according to State law. Mr. Whitty said he would like to see a stiffer penalty to minors who disobey the signs which deny them entry to a bar. Chief Olson explained, it is a Class B misdemeanor and the City’s penalties cannot conflict with State law. The City Attorney added, there is a maximum penalty but the ordinance can include a minimum penalty as well. Upon questioning, Chief Olson explained, he does not see an enforcement issue regarding fencing but rather a Planning issue relating to the right of way as well as problems when defining the licensed premises. 2|Page LIQUOR ORDINANCE AD HOC COMMITTEE September 14, 2016 Page 3 Josh Wolsky came forward to share his ideas on the topic. He believes the limitation on the number of Retail Liquor licenses should be removed. He said the current license holders benefit from restricted competition. He brought up issues regarding catering services and their inability to serve alcohol due to the policies in the ordinance. He also suggested there be a penalty to establishments who receive consistent alcohol related calls to the Police Department. He said the committee should consider the regulations of areas beyond North Dakota when drafting changes and model new ideas after cultures worth copying. Alderman Withus left the meeting at 2:53 pm. The committee members agreed, Wednesdays at 2:00 pm will work with everyone’s schedule. In addition, an evening meeting will be scheduled for the convenience of the public once some issues are discussed and researched further. Alderman Frantsvog requested City staff compile a list of issues and report back to the committee. The City Attorney will research six different cities for a comparison to Minot’s regulations. Adjournment There being no further business, the meeting was adjourned at 3:02 p.m. Respectfully Submitted, Kelly Matalka City Clerk 3|Page