The city of Lakeville is looking to expand its already lucrative municipal liquor business by adding a new location, making it the only metro-area suburb other than Richfield to have four city-run stores.
The new store, predicted by manager Brenda Visnovec to be the city’s highest-volume and biggest location, will be built at the intersection of I-35 and County Road 70.
Increasing sales are driving the need for more space, Visnovec said. While business has increased by 211 percent since 1995, floor space at all three stores has only gone up by 13 percent, she said.
“It’s a capacity issue,” Mayor Matt Little said. “Our business has grown a significant amount.”
On Monday, the proposal to purchase two lots near Harry’s Cafe on Keokuk Avenue will go before the City Council and is expected to pass. The idea has had unanimous support so far, Little said.
Adding a fourth store has been part of City Council plans since at least 2010. Buying the land now makes sense because costs will only go up as time passes and the area is built up, he said.
“It’s really an ideal location,” he added, because there’s a newly expanded Wal-Mart nearby and it’s right off the highway.
Visnovec added that the city studied potential areas to expand in 2010 and the current location came up as a strong contender. Also, having a store near the city’s borders with Credit River Township and Elko New Market, neither of which have municipal liquor, is a smart move, she said.
Tentative planning for the 12,000-square-foot store is already underway, but it could be two or three years before it is built, Visnovec said.
“I’m thinking that as growth continues in the south metro, that will eventually be our largest store,” she said.
The city used to have a fourth store near 175th Street and County Road 50, but it closed in 2000 because there was already another store within a couple of miles.
Little said the City Council is “kicking around” some ideas that will make the new location innovative and different from the others. It may have a beer cave, a refrigerated room just for beer, he said.
A growing business
Lakeville already has the state’s highest-volume sales among cities that have municipal liquor, according to the 2012 Minnesota State Auditor’s analysis. Edina, however, brings in more in net income because it sells more wine, Visnovec said.
And the business is growing steadily. Last year, Lakeville’s stores brought in $15.4 million, an increase of more than $1 million since 2011. About $1.3 million of that is net profit, which is put toward city projects, Visnovec said.
One recent effort paid for by municipal liquor was the fire station. The city was able to pay off $1.4 million in debt accrued when building it, which saved residents a lot of money, Visnovec said.
Recent areas of growth in the liquor business include craft beers and spirits. People are buying less alcohol today than in years past, but they are buying higher-quality, more expensive products, she said.
Visnovec, who started working at the city’s liquor stores 31 years ago as a clerk and stocking beer, attributes their ongoing success to holding lots of events and “continually educating the public and letting them know we’re here for control,” Visnovec said.
“Truly, the secret is just being connected with the community,” she said.
But Little has another hunch — he said Visnovec’s leadership has played a key role. “[She’s] the number one go-to person for cities when they’re trying to make their stores profitable,” he said.