Laserfiche WebLink
Item 5.4.B. <br /> <br />River <br /> <br />MEMORANDUM <br /> <br />TO: <br /> <br />FROM: <br /> <br />DATE: <br /> <br />SUBJECT: <br /> <br />Mayor and City Counc~_ <br />Pat Klaers, City Ad~ <br /> <br />July 22, 2002 <br /> <br />CIP - Westbound Liquor Store <br /> <br />In January 1997, the City purchased 1.5 acres of land in the northwest corner of the Highway <br />1 O/Joplin Avenue intersection for a future second municipal liquor store. Ever since this <br />acquisition, the City has had inquiries as to when the "Westbound" liquor store would be <br />constructed. In an attempt to help answer the question, the City Council authorized a <br />feasibility study. Dakota Worldwide completed the second liquor store feasibility study and the <br />results were presented to the City Council in early 2002. Questions about when a second store <br />should be undertaken were left unanswered and additional financial information is required in <br />order for the City Council to reach any conclusions. This issue was put aside until the budget <br />discussions, which are now underway. <br /> <br />Attached for your review is the Dakota Worldwide feasibility study and cover letter. The <br />executive summary of the feasibility study indicates that based on a 4000 square foot sales area <br />store, the first year gross sales are expected to be about $1.65 million and the sales at <br />Northbound would decrease by about $400,000 (page 2). This results in a net of about $1.25 <br />million in gross sales. By the third year of operation, the City will net about $1.87 million. <br />These figures would be lower if a state law was passed which allows the selling of wine in <br />grocery stores. On the other hand, I believe that a Westbound would be somewhat of a <br />catalyst for other commercial development out west along Highway 10, which in turn, may <br />help the total sales picture at a Westbound. <br /> <br />The feasibility study states at the end of page 2 that a profit/loss analysis and break-even pro <br />forma is needed in order to help determine if a store is financially feasible. The report goes on <br />to say that "If not now, Elk River should have sufficient potential in several years if <br />population growth continues at the expected rate, to be able to support a second store". <br /> <br />On Monday evening, Finance Director Loft Johnson and Liquor Store Manager David Powin <br />will be at the meeting to present some revenue/expenditure projections for Westbound liquor <br />store. Key figures in the financial projections from Loft and Dave will be the liquor sales <br /> <br /> <br />