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County approves exemption for Red River Event Center

After hearing public testimony, the Hubbard County Board approved special legislation that gives them authority to grant an off-sale liquor license to Akeley's Red River Event Center. County commissioners then approved the license application. A ...

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Jeff and Maggie Stacey and Brian and Sara Halik are the joint owners of the Red River Liquor Company in Akeley. (Lorie Skarpness/Enterprise)

After hearing public testimony, the Hubbard County Board approved special legislation that gives them authority to grant an off-sale liquor license to Akeley's Red River Event Center. County commissioners then approved the license application.

A public hearing about the matter was held Tuesday. Attendees filled all the seats in the board room.

The Red River Event Center is owned by Brian and Sara Halik and Jeff and Maggie Stacey. When their business opened this year, their plans were to have off-sale in a part of the building and call it the Red River Liquor Company.

In May, the Minnesota Legislature passed an omnibus liquor bill that made the Red River Event Center an exception to state law. The special provision was needed because the establishment is located within one mile of Akeley's municipal liquor store.

Sen. Paul Utke attended Tuesday's hearing, but did not make a statement.

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County Attorney Jonathan Frieden explained to commissioners that the legislation "only becomes effective upon the board passing it." Without the bill, "the liquor license would be in violation of the statute for this particular business."

Donn Sorenson, Akeley Township treasurer, reiterated the township's support of Red River's off-sale application. A petition in favor of the new liquor store drew 150 signatures from Akeley residents, he added.

He praised Red River Event Center for allowing local nonprofits to host burger night benefit dinners and keep the profits while paying no rental fee.

"We need the business in the community, and we like the people," Sorenson said.

Zachary Johnson, the attorney representing Red River, said, "It promotes economic growth and tourism in the county as a whole. The off-sale liquor license would provide offset funding for the nonprofit use of the space, so this is why it's necessary as a component of the business."

Johnson noted that special legislation would be required for each and every establishment that wishes to receive an exemption to the one-mile rule. "The granting of this license does not mean it would have to be granted in other situations."

Voices of opposition

Akeley City Clerk/Treasurer Melody Boettcher and Council Members Bobbi Wosika and Billy Krotzer spoke against the application.

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Boettcher said the Akeley muni has reported gross annual sales of $417,415. Over the last 14 years, net profits for the city have totaled $367,693, with the liquor store contributing $289,479 to the city's general fund. Those savings are available for major city projects should they arise, she said.

"The average annual contribution is $20,677 or the equivalent of 12 percent of the tax burden to our property owners," Boettcher said.

Within a 15-minute drive of Akeley, she noted there are currently already eight off-sale liquor stores.

"I have heard from other liquor stores in the state of Minnesota and Park Rapids, they have reported a loss of up to 22 percent in gross sales when another liquor store has opened near them," Boettcher said. "If the City of Akeley off-sale business were to take a 22 percent hit, on-sale business would not be able to support. We would not be able to pay the electric bill, wages. We'd be forced to close our doors."

Park Rapids Treasurer Angela Brumbaugh told commissioners how important Rapids Spirits is to city finances.

"In 15 years, we have $4.4 million in net income from our liquor store. Of that $4.4 million, we've expended almost $3.3 in other aspects of the city. Our liquor store is a huge (source of) revenue," she said. "If it wasn't for our liquor store, our levy would've increased 7 percent per year."

Park Rapids residents already have a high tax rate, based on tax capacity, Brumbaugh noted. The city tax rate was 73 percent in 2017, while the state average is 50 percent.

Liquor store proceeds have been used to purchase equipment and trucks, improve city parks, repair the library roof and other city projects.

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The decision

County Commissioner Char Christenson said she toured both the muni and Red River Event Center. While she feels the owners didn't do their due diligence, Christenson said she concluded that she cannot look at how this license approval would impact the county as a whole.

"I need to look at per community, and when I drove through Akeley yesterday, there are a lot of buildings that are falling down or empty on Main Street. This is a bright spot in the community. There are young couples here that are taking a risk by investing into the community, and I do find that as a plus," Christenson said.

County Commissioner Vern Massie said, "I'm pro-business. I wish everybody setting out here would start a business today."

Christenson made the motion to approve the law; County Commissioner Ed Smith seconded. The motion passed unanimously, 5-0.

Christenson also moved to approve the liquor license. It passed 4-0, with County Commissioner Dan Stacey abstaining.

The votes were met with applause.

Related Topics: AKELEY
Shannon Geisen is editor of the Park Rapids Enterprise.
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