For decades, Minneapolis has observed a separation of church and spirits, but the days of steeples warding off booze-serving restaurants could be numbered.

Council Member Gary Schiff wants to nix a city rule that prevents most restaurants outside of downtown from opening near houses of worship. It's one strand in a web of liquor regulations that govern businesses in Minneapolis, but Schiff says this one, in particular, explains "why there are so many vacant commercial storefronts."

"Businesses shouldn't have unfair rules placed upon them because a religious place of assembly is located nearby," he said.

His proposal gets its first airing Monday, but it's already generating debate among businesses owners and pastors about the consequences of loosened liquor restrictions.

"We don't want to walk out of church on a Sunday afternoon and look across the street and see people coming out of bars," said Duane Gagnon, chairman of the parish council at Saints Cyril and Methodius Catholic Church in northeast Minneapolis.

Though Schiff's change targets restaurants, a first-of-its-kind microbrewery and taproom could open across the street from St. Cyril's because the proposal includes a clause that allows breweries selling jugs of beer called growlers to locate near churches.

Under the current ordinance, businesses outside downtown cannot serve alcohol if they are 300 feet or less from churches and schools. That is, unless they are restaurants that make less than 30 percent of their money from alcohol and do not have a bar -- the city has 39 of these establishments. Schiff's amendment would eliminate the church provision, freeing up some storefronts for more traditional restaurants.

Backers of the change say it will not send bars into residential neighborhoods. Businesses with on-site drinking need to be surrounded by seven acres of appropriate commercial zoning -- with some exceptions -- and they must earn at least 60 percent of their revenue from food if they are within 500 feet of a residential property.

Additionally, the City Council already reviews liquor licenses on a case-by-case basis and takes input from neighborhood associations.

Several city officials said that the change is needed because churches are increasingly moving into mixed-use buildings. Citing one example, Council Member Elizabeth Glidden said a church is trying to move into the former Nokomis Lanes bowling alley in the Bancroft neighborhood.

"What if down the line there's a restaurant that wants to open in the strip mall that's next door?" said Glidden, who represents the area and supports the change. "I don't know that we would want to prevent that development opportunity because now there is a church in a nontraditional location."

Grant Wilson, the city's manager of business licensing, said the 30 percent alcohol limit is an unworkable business model for many restaurants. "It will give opportunities for a lot of things," Wilson said about the proposed ordinance change. "It will give landlords the opportunity to rent their vacant storefronts to places that can maybe survive."

The change has garnered the support of Hospitality Minnesota, the trade group for the state's restaurants. President Dan McElroy said the city's ordinance is "already fairly restrictive about where liquor licenses can be issued in residential areas."

Unique idea

In the Sheridan neighborhood, entrepreneur Rob Miller hopes to open a microbrewery that serves pints and sells growlers. It's an idea made possible by the so-called "Surly bill" that passed the Legislature this year.

There's one hangup: Saints Cyril and Methodius Church. Miller isn't signing a lease until he sees the outcome of Schiff's proposal.

"We really didn't think we were going to have to go down this road when we started," said Miller, who plans to call his business Dangerous Man Brewing Co. "But ... we have to now."

Miller pitched his business plan to the neighborhood group last month and left with a letter supporting Schiff's ordinance change. "Rob Miller's business is just a really good fit for Sheridan," said Sheridan Neighborhood Organization president Jenny Fortman.

The church was not as thrilled. When Miller met with the congregation and the board, they complained about people drinking close to the church and taking parking spots.

Just down the block, the owner of Anchor Fish & Chips, a popular northeast restaurant, backs the change and will have someone at Monday's hearing. Because of a nearby school, Anchor can't make more than 30 percent of its money from alcohol. Owner Kathryn Hayes said she could make a better profit if that limit were raised to 40 percent.

Schiff's change won't help Anchor, though Hayes hopes it will pave the way for challenging the school restriction. "We're kind of cynical and bitter about this law," Hayes said.

Brett Miller, minister of Southeast Christian Church in Dinkytown, said the law works well and wondered why churches are being targeted when they -- like schools -- often host children. Rev. Scott Stapleton, pastor at Grace Trinity Church in Uptown, said liquor proliferation will create more neighborhood problems that churches will have to address. "What I feel is we are going to pick up the pieces," Stapleton said.

But at Simpson United Methodist Church in the Whittier neighborhood, pastor John Darlington acknowledges that businesses on nearby Eat Street would not be able to make it without liquor. He believes restaurants can handle the change responsibly.

"As part of the Whittier Business Association, we have a level of trust in each other," he said. "That trust extends to however the ordinance frees restaurants around here as far as serving alcohol."

Eric Roper • 612-673-1732 Twitter: @StribRoper