5.1. SR 4-15-2002 - Laserfiche WebLink

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Raver MEMORANDUM TO: Mayor and Council FROM: Pat Klaers, City Administrator DATE: April 15, 2002 SUBJECT: Consider Feasibility Study for Westbound Liquor Store Item 5. I. On January 22, 2002, the City Council authorized Dakota Worldwide Corporation to complete a feasibility study for a Westbound Liquor Store. This feasibility study is attached for your review. Mr. Lynn Sage will be at the council meeting to make a presentation on the study. The report does not say...yes, the city should build Westbound; or no, the city should not build a Westbound; or that the city should wait XXX years to build a second liquor store. What the report does say is that based on a 4,000 sf. sales area store, sales in the first year are expected at $1.65 million, and the city can expect a decrease in the sales at Northbound by about $400,000 (page 2). In this manner, the feasibility report provides data for the city to consider and then leaves it up to the city to decide if, and when, a new store is "worth it" for the city of Elk River. The figures in the report are very important and if the projections are off slightly (either for the positive or for the negative) it could make a significant difference in the final conclusion. It is appropriate to hear the presentation and ask questions but to defer further consideration of the study until later in the year, quite possibly until the budget is discussed. At that time we can discuss how much is needed in sales in order to cover personnel, operating expenses, building debt, inventory, etc., at a second store and still generate a profit. We have some financial estimates available for Monday but the agenda is long and the Council may want to discuss the issue at a future meeting. Once this additional financial data is considered by the Council, then a decision can be made as to whether or not the city should proceed forward with a second store. One item in the report that surprised me was the market area that was used to analyze potential total sales for the Westbound Liquor Store. Going into the study, I thought that much more emphasis would have been placed upon the traffic on Highway 10 versus the market area that was looked at and used as a basis for this report.