Red River Event Center off-sale liquor controversy
Akeley's position on the Red River Event Center's off-sale liquor store application is the hot topic of a special meeting to be held at 6:30 p.m. on Thursday, Feb. 22 at city hall.
A license application that was signed off by the county without prior approval by the city and called "illegal" by city attorney Steve Bolton was the topic of heated discussion at Wednesday's council meeting.
A dozen audience members came to listen and share their opinions in a public forum about the issue. Most who gave public comments were in favor of granting the license, with the most vocal opposition coming from Liquor Store Commissioner Bobbi Wosika and Liquor Store Manager Lacey Hitchcock.
Event center license at state level
The S & H Retail/Red River Event Center is owned by Maggie and Jeff Stacey and Brian and Sara Halik. Brian Halik and Jeff Stacey attended the council meeting to answer questions from the audience and the council. They thanked everyone who came out to see the renovated facility at the "Audrey's Purple Dream" event last weekend.
"Any non-profit we want to make sure it's clear that they won't be charged to use the facility for their event," Halik said.
"Our intent is to support the community," Stacey said.
Halik explained that they would like to have off-sale liquor seven days a week on the other side of the building to bring in additional revenue.
Bolton asked what procedural stage they are in now in the license application process.
"It's at the state level right now," Halik replied. "We don't have an alcohol license until the state signs it. It went through Akeley Township at December's meeting, then it went to the Hubbard County commissioners (Jan. 2, 2018) and then it went through the county attorney and everybody signed off and it went down to the state level and now it's at the House."
The bill was referred to the Committee on Commerce and Regulatory Reform Feb. 9.
Attorney says county acted illegally
Bolton said the county "did not have the authority to do what it did."
"Are you aware that Hubbard County did that illegally?" Bolton asked, referring to Minnesota Statute 340A.405 which states that "a county board may not issue a license....to a person for an establishment located less than one mile by the most direct route from the boundary of any statutory or home rule city that had established a municipal liquor store before Aug. 1, 1991."
"They signed off on it (the license application). Is there a law against that? I don't know," Halik replied.
"We were told by the Department of Alcohol that we would need to contact the House of Representatives if there is precedence on this case, which there is in two other towns. So it was forwarded to our District 2 Senator Paul Utke."
Exception for license being sought
Halik said they contacted Utke to see if an exception can be granted allowing them to obtain the off-sale license as was the case in two other Minnesota cities: Lakeville and Isle.
The Legislature is currently not in session, but Bolton said the city could contact Utke to let him know their position before the Legislature reconvenes.
"We're for the community," Stacey said. "We want to be good neighbors and for everything to work out. I know it's not an easy call for you guys."
Fighting for the Municipal Liquor Store
Municipal Liquor Store Manager Lacey Hitchcock said this issue isn't just about Akeley.
"I have to fight for the liquor stores," she said. "If this precedent is set, this will leave it open for liquor stores like the Firefly to do this to Nevis, and someone else could do it to Walker. It will affect our business. The event center is great, but it will affect other municipal liquor stores down the road. Also we just put $80,000 into our off-sale. This would set a precedent for this to happen all over the state."
"If we allow another off-sale less than a mile from the City of Akeley, it's going to affect jobs. It will affect our bottom line," Wosika said. " We can kiss the liquor store goodbye. There are plenty other off-sales in the area. We have six employees, and this would hurt us tremendously."
She pointed out that Nevis, Dorset and Walker already offer off-sale options.
"Why do we need another one?" she asked.
Liquor Store Commissioner Bobbi Wosika said that in Isle it was a much different situation because the city council was in favor of the decision due to their municipal liquor store failing.
Pros and cons debated
Council member Dan Riggs said that having another facility in town could actually benefit the municipal liquor store because people coming to events might also be liquor store customers. It would also bring more people to other businesses in town.
Wasika disagreed. "What if the liquor store doesn't survive?" she asked. "We have six employees." She said the off-sale provides half of what they make there. "You might as well kiss the liquor store goodbye and have your property taxes go up," she said. "I know damn well it's going to change it. It's going to hurt us tremendously."
Riggs said the liquor store doesn't contribute to the levy and said they "don't have any good numbers to go on" as to what the off-sale is bringing in.
"It's called free enterprise, and that's what the U.S.A. is all about," he said.
"I'm sure you've seen a rise in your on-sale business because the VFW isn't there," Halik added.
One member of the audience said she doesn't buy her off-sale in Akeley; she drives to Nevis. She knows others who go to Dorset Corner. "I'd buy it from them (Red River Event Center)," she said, declining to give the reason for her choice.
"In my opinion, if you let this (event center) go, it's like losing your school again," another audience member said.
Positive comments from those attending the hearing included what a nice job was done remodeling the event center, how beautiful it looks and how what the owners are doing for the community is great.
"Let's bring jobs and people back to our community," another audience member said. "Let's start making this community grow instead of making it stagnant."
"You're having trouble with growth," audience member Chuck Andress said. "That's something Akeley hasn't seen in a long time. I think you ought to take this chance and go with it. It's good for the community and without investment in your community it will not grow, it will die. That's all there is to it. The liquor store may lose a little, but isn't it worth it to keep an event center in town that provides free space to nonprofits?"
Another audience member pointed out that people coming to the event center may buy gas, stop at the antique shop, or even stop and have a drink at the Muni after they leave the event center.
A matter of survival for both
Bolton asked Halik if failure to get the off-sale license for the event center would be the "kiss of death."
Halik admitted the event center would "possibly go out of business" without off-sale income.
"We purchased the whole building, not just half a building," he said. "Of course, it will affect us. We paid $170,000 for that building and to be open only part-time and pay our mortgage, that's pretty relevant," he said.
"So it's vital for survival to you guys," Bolton asked.
Halik said "Absolutely."
"You'd probably acknowledge that the Muni is pretty relevant to the survival of Akeley," Bolton said.
Akeley Chamber supports event center
Akeley Chamber of Commerce President Kristin Fake passed out flyers to audience members and the council listing many "pros" the event center will contribute with a big question mark under the "cons" section and no negative impacts listed.
"This is the first viable business in Akeley in a very long time, other than the Dollar General, that's even come to our community," she said. "I do have the numbers, and the (municipal) liquor store contributes 10 percent of the office staff's wages, but probably use more than that to do bookkeeping, pay bills and do all of that. When was the last time the liquor store contributed money to the general fund?"
Mayor Brian Hitchcock said they haven't been contributing to the general fund during the past four to five years because they were putting money aside for the off-sale remodel. He said the Muni used to contribute $60,000 or $70,000 a year to the city budget.
After more discussion and questions about the liquor store remodeling, profits and inventory, he said these questions were "off subject," adding that if needed a special meeting about these issues could be held at a later date. He gave the floor back to Frake.
"The position of the Akeley Chamber of Commerce is that we welcome the Red River Event Center with open arms," she said. "This is a business that is going out on a limb to support the events of our community. All they ask for in return is to be given a chance to succeed."
Pros listed on the flyer included the following:
• Donated space and community support for events like Monday-night bingo, Lions fish fry, VFW meetings, Audrey's Purple Dream and more;
• A local venue for weddings and other events that bring people and revenue to town;
• Employment in the community and a local alternative for customers who currently purchase their liquor out of town; and
• Tax revenue to support the local community.
"Are we willing to risk the potential loss of a space like this for our community?" she asked.
"If the event center fails due to lack of this license, this becomes just another vacant building in Akeley. The Red River Event Center has the support of the Akeley Chamber of Commerce in moving forward with their off-sale liquor license. We would like to set the precedent that we are a welcoming community, one that believes that failures and successes should be based on the merits of the business itself. New businesses should be met with welcoming arms, especially businesses doing all they can to stimulate our local economy. We wish them the best."
Stacey concluded by saying, "I know it's a touchy subject, and I appreciate your time. It's not an easy thing. You guys are for your city, and I totally understand that. Our investment is for the community as well and we want to work together. We don't want to clash. No hard feelings. We're going to go with it and see what happens."
Where to go from here?
"You need to understand that the state law right now prohibits what you gentlemen are trying to do," Bolton said. "What you are asking to do is to carve out an exception. You're asking the state to make a special law for you."
The council tabled the item after discussing the possibility of a special meeting.
"If we sit and twiddle our thumbs and this gets pushed through, then we have no say if we're going to approve this or disapprove this," Wosika said.
"What Akeley does tonight is only persuasive to the legislature," Bolton said. "They can pass (the bill) whether the city is against it or for it."