Minneapolis businesses face a patchwork of city regulations

Some stores can't accept more than $2.50 in change, sell 40-ounce drinks, allow drinking games or keep pay phones, as a condition of doing business in Minneapolis. Others must serve food until 2 a.m., hire armed guards or offer free valet service.

For years, businesses and regulators have negotiated this patchwork of rules, depending on the wishes of neighborhood groups and concerns about security, parking and customers.

On Friday, the City Council voted to give itself the power to impose restrictions — such as limiting the hours alcohol is served, changing the maximum occupancy level and other means of preventing nuisances — on businesses that repeatedly violate regulations and can't reach a compromise with the city.

Officials stressed that they would take such action rarely and only for the most troublesome businesses. "I may never even use this new law in my career," said Grant Wilson, the city's manager of licensing and consumer services.

Some business owners, however, say that the ordinance is written too vaguely, that it could lead to uneven rules among similar businesses and that future changes on the City Council or in the neighborhood where a business is located could make enforcement unfair.

A trio of three-ring binders at City Hall holds records for more than 60 businesses with extra conditions negotiated in order to get or keep their licenses. The records offer a look at what it takes for some people to run a restaurant, store or bar in Minneapolis.

Consider Stinson Wine & Spirits, the first liquor store in the Windom Park neighborhood since Prohibition. Upon its opening last year, the city said it could not sell 40-ounce bottles of alcohol, lottery tickets or individual containers of alcohol for less than $3. The store also must close by 9 p.m.

"Not being able to do that … definitely keeps us at somewhat of a competitive disadvantage," Mays said.

Years earlier, regulators agreed that Central Avenue Liquor, 1 ½ miles away, could sell individual containers of alcohol as long as they were more than 16 ounces. But the licensing department came to owner Scott McCleary with another quirky rule: The store could not accept more than $2.50 in change from a customer, as a way to discourage panhandlers.

McCleary complained that the restriction is arbitrary. "Change is legal tender in the United States of America," he said.

At Pepito's, a south Minneapolis restaurant attached to a theater, liquor can only be served during showings that are R-rated and after 7 p.m. Parking constraints in the neighborhood led to an agreement that Pepito's offer free valet service.

Joe Senkyr-Minjares, one of the owners, said that for the most part, the city has been helpful.

But paying for valet zones, and roughly $10 an hour for as many as five valets on a busy night, "gets really expensive," he said, although the service also doubles as security.

In other areas, the city's Wilson said, citizens complained about 40-ounce bottles smashed on the ground and drug dealers congregating around pay phones, leading to limits on those for certain businesses.

The city cherishes neighborhood input because those residents "have to live and breathe it," Wilson said.

Many restrictions follow the city catching bars and stores serving alcohol to underage customers, most recently Crosstown Quik N Serve BP on Penn Avenue S.

The store agreed in December to have all employees take alcohol-server training, post signs to ban the sale of alcohol to underage people, do in-house compliance checks and use a calendar that shows the date when someone turns 21. Chicago Lake Liquors, Brass Rail, Rick's Cabaret and other establishments all agreed to take similar steps after they were caught serving underage people in recent years.

Regulators observed fights, marijuana smoking in the bathroom and a chaotic scene on 18-plus nights, especially at closing. Around that time, officials announced plans to strengthen city ordinances to give them more power to impose conditions on the licenses of troublesome bars, and Envy has since surrendered its license.

But the problem dates back years before that, said Scott Harris, a lawyer who has represented bars in disputes with the city.

One client was the now-closed Gabby's Saloon & Eatery, which the city fined $25,000, told to reduce its maximum occupancy by more than half and ordered to cease free-drink nights, among other conditions, to remedy complaints about customers who littered and caused a disturbance. The Minnesota Court of Appeals ruled in 2009 that the city went too far.

Now, Harris said, the city has given itself power it didn't have back then.

"It's going to be very unfairly used, I have little doubt about that, because [the ordinance is] just too vague," he said.