A rise in craft brewing throughout the state has Burnsville leaders considering amending the city’s liquor laws, a move that could widen the market and increase competition for alcohol retailers.
Over the last few years, the City Council began receiving requests for off-sale liquor licenses from various businesses, such as brewpubs, gourmet food gift shops and upscale wine superstores — but there are none available.
The city allows only 12 off-sale licenses, which are already issued. That means businesses like India Palace, which is expanding to become a brewpub, would be unable to sell liquor for customers to take home. Specialty grocery stores such as Trader Joe’s and Whole Foods — the type of businesses city leaders said they’d like to attract — would also likely seek liquor sales.
Skip Nienhaus, economic development coordinator for Burnsville, outlined a staff study that compared the city’s ordinance with neighboring suburbs at Tuesday’s governance meeting.
“Everyone brews beer … We are seeing more and more businesses wanting to combine liquor and some sort of a gourmet sale [like wine and cheese],” Nienhaus said of the nationwide craft beer craze. “All of those would be hard for us under our current ordinance to have happen.”
The 12-license cap is based on the ordinance’s ratio restriction, which states there can only be one off-sale license per 5,000 residents.
In addition to the cap on the number of licenses distributed, Burnsville places a restriction on where liquor stores can operate. Businesses that hold off-sale licenses must be at least ¾-mile apart and inside a free-standing building.
An ordinance amendment in 2009 removed the free-standing building and geographic spacing requirement within the Burnsville Center retail area. Six stores now sell liquor in that zone: MGM, Costco, Haskell’s, Cub Foods, Byerly’s and Total Wine.
Haskell’s is expected to close at the end of January, which will free up one of the city’s off-sale licenses when it expires in June. City leaders must decide on a fair way to redistribute that license.
Burnsville’s City Council will consider amending the ordinance to accommodate new businesses. Options range from removing the license cap altogether to creating more specific licensing. For instance, the city could create a license for “accessory use” to permit alcohol sales at businesses like Trader Joe’s that specialize in products other than liquor. Growler licenses are also being considered for brewpubs and taprooms that sell popular 64-ounce bottles.
Frank Ball, of the Minnesota Licensed Beverage Association, acknowledged the popularity of the craft brew trend and its ability to drive tourism.
“[People] love Minnesota-grown brands. Our consumers love buying locally,” Ball said at the council meeting. “The people who live in Burnsville like to buy in Burnsville.”
The city’s Economic Development Commission voted this month to remove the 12-license cap, or consider creating growler and accessory use categories. The commission recommended an open market approach in all aspects of licensing.
But liquor store owners are fearful of oversaturating the local market with new competition and favor capping Burnsville Center to six licenses.
In neighboring Eagan, no such cap exists. The city issues between 15 and 17 liquor licenses a year, said Eagan City Clerk Christina Scipioni.
Dick Grones, of Cambridge Commercial Realty, said simply capping licenses was an arbitrary route.
“It’d be great if there was just criteria to approve somebody rather than just a line in the sand,” Grones said during the meeting. “It seems more logical and sensible, but sometimes I understand you do have to draw the line someplace.”
A second meeting on liquor licensing will be held Tuesday, Feb. 24 at 4:30 p.m. to gather public input on the matter.