5.4. SR 09-13-2004 - Laserfiche WebLink

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ST. PAUL PIONEER PRESS WWW.TWINCITIES.COM r-7--O'f APPLE VALLEY City eyes more liquor profit Council hopes to boost revenue at municipal stores BY LAURA YUEN Pioneer Press Wes Jacobson can pat him- self on the back each time he buys a bottle of zinfandel from Apple Valley's city-owned liqnor store. For every purchase, some of that cash goes to his city's parks and recreation pro- grams. But the real reason Jacobson stops by the Cedar Avenue cor- ner shop has little to do with civic-mtndedness and every- thing to do with convenience. "I live five or six blocks from here," he explatned, walktng out of the store tottog a bag of ice and hard lemonade. Serving a small radius of res- idents is not the way to create a cash cow - even if the city owns a local monopoly on sell- tng booze. The City Council is considering new strategies to boost revenue, such as addtng'a third liquor store and hirtng a consultant to recommend a new location. "What we don't want is another neighborhood store," Bonnie Shea, the city's outgoing manager of liquor operations, recently told council members. Clearly, Minnesota cities enjoy the money-maktng poten- tial of municipal liquor stores as much as their ability to control the distribution of alcohol. Liquor sales in Minnesota topped more than $240 million tn 2002, according to the most recent data available from the state auditor's office. In Apple Valley, the two strip- mall liquor shops had salos of about $5.5 million, according to the state reporl. It's not a small number, but city leaders speak a little enviously about the cash generated by next-door neigh- bor Lakeville. Sales from Lakeville's three stores totaled $9.5 million in 2002, beattng out the other 232 Minnesota cities that operated their own liquor stores. The money has helped pay for Lakeville's ice arena and land for its library. The city educates its residents about those bene- fits every chance it gets, said Brenda Visnovec, Lakeville's manager of liquor operations. The ongoing building boom. tn southern Apple Valley is trig- gering some of the city's Icon- cerns. It's likely that some of the new townhouse dwellers are fetchtng theit drinks from one of two Lakeville stores near Apple Valley's southern border, council members said. Lakeville's biggest money- maker is the sleek standalone shop near Interstate 35W and County Road 46. Visnovec says visibility from the freeway is unbeatable. City administrators picked that location after study- tng growth patterns and expect- ed retail and commercial devel- opments. The two strip-mall liquor shops had sales of about $5.5 million - not a small number. But city leaders speak a little enviously about -the cash generated by next-door Lakeville. But customers also appreci- ate the stores' unusual activi- . ties, such as organized tours of wtneries in Dakota County. About 30 percent of the cus- tomers who are members of the stores' wine clubs are from out- . side LakeviIle, Visnovec said. "It takes a whole lot of hard work," she said of her stores' success. "We are constantly evolving." Shea, Apple Valley's retirtng liquor store manager, said her shops are also putttng a premi- um on customer service and employee training. Location, she and others con- tend, appears to be the stores' biggest hurdie. The shop at Pilot Knob Road and Essex Avenue, for example, is "a disappotntment," said Council Member Tom Goodwtn. "It's convenient and well placed for that part of town. but it never m.adethe margins we wanted." Goodwin remembers when developers had plans to build a major grocery store tn that area. The city built the shop with visions of a bustlil1g shop- ptng center, but the grocery store project fell through. Today, the liquor store is, attached to a PDQ gas station and convenience store. Nearby bustnesses - a Domino's pizza jotn~ a small Chinese restau- rant - attract some traffic but are hardly major desttnations. And then there's the prictng. Shea said the liquor stores' prices are competitive with other stores, private or public. But Council Member John Bergman said he'll usually head to an MGM Liquor Warehouse to save a few bucks. . "If I need six bottles of wtne, I'll go to MGM," he said. Although city officials hope to increase revenue from the liquor stores, city parks and recreation programs have enjoyed steadily tncreastng pay- ments from the liquor fund. For 2005, city budgeters are recom- mending returning $400,000 from the liquor fund to the city, up $100,000 from this year. The council recently request- ed estimates for an outside con- sultant who could research staffing levels and recommend possible store locations. .~ Laura Yuen covers Apple Valley and Eagan. She can be reached at lyuen@pioneerpress.com or 651-228-5498. ~