City amends liquor law
Everyone wants a piece of the pie, but only if it’s a big slice.
A few years ago, the Detroit Lakes Community and Cultural Center needed a more organized way of providing alcohol during events that they hosted, as well as at private events that individuals hosted in the facility.
So, the DLCCC implemented a Preferred Provider Agreement.
“The reason we did that is then we knew we had someone committed to taking all of our events,” DLCCC CEO Stu Omberg said.
“As opposed to, everyone likes to have the large events because they are larger bars involved. Very few of them want the small events because, obviously, there’s not much of a bar involved.”
This way, they were getting a “qualified, licensed, insured” liquor vendor at their events, he added. The vendor who signed on was Bleacher’s Bar & Grill, which is owned by Omberg’s son-in-law, Aaron Swenson.
With the agreement, though Bleacher’s was the preferred vendor, anyone renting the facility that had a relationship with another liquor vendor in town was welcome to have them get a license and provide that bar as well. The agreement was not exclusive for Bleacher’s.
Omberg said that those renting the facility contact Bleacher’s and work directing with them, not the DLCCC.
“Bleacher’s comes in and provides the service, and then we have an agreement for a commission that’s then paid to the community center,” Omberg said.
As other vendors have provided the bar over the years, Omberg said there have been issues. That includes commission not being paid, one provider convincing the wedding party to have the reception at their establishment instead of the DLCCC, and just the unwillingness to provide alcohol at the smaller events.
Yet the Preferred Provider Agreement was working fine until the city raised its liquor licenses about a year ago, City Administrator Bob Louiseau said.
The state allows a special liquor license price for municipalities. So when Bleacher’s, Sunlite, Holiday Inn and other liquor vendors would serve liquor at DLCCC events, they had to pay less of a fee, since the DLCCC is city-owned.
Minnesota Statutes 340A.404 (4) says the issuance of a special license to holders of a licensed by the “municipality or adjacent municipality,” Louiseau said.
So, the city complied and issued vendors within the city and Becker County the discounted liquor license — Becker County being the adjacent municipality.
Little did the city realize, the city code section 702 hadn’t been updated and restricted the issuance of those licenses to just vendors within the city limits.
Bleacher’s is located just outside the city line on County Road 22.
Louiseau said the city thought they were in compliance with the law, and since the DLCCC already had several events booked with Bleacher’s as the liquor provider, the city council made allowances for the county business to serve alcohol at those events.
A couple months ago, the city held a meeting, inviting liquor vendors in the city who had voiced their disapproval of granting the break in licenses to county establishments, too.
“Each one of them was able to bring up what their concerns were with providing service here because we don’t have storage for them, they have to provide their own ice, bring in all their stuff,” Omberg said. “They were concerned about the commission rate, you know, they brought up their concerns.”
The decision that day was for the DLCCC to send out requests for proposals.
The RFPs were sent out to 18 area vendors that had provided services to the DLCCC in the past few years, Louiseau said. Of those 18 vendors, 15 were in the city limits and three were in the county.
Of those 18 RFPs, one came back — Bleacher’s.
“If people aren’t willing to respond, the community center has a legitimate concern,” Louiseau said.
The council had decided that “if the DLCCC can’t find a vendor, the council will consider amending the ordinance,” he added.
“I could tell in that original meeting that even if there had been interest, there were still concerns on their part for multiple reasons,” Omberg said.
After no one responded to the RFP, the council was on board with changing the wording of the ordinance to include vendors within the county.
So at the February city council meeting, the council held the first reading to amend the city ordinance to allow the liquor licenses to any vendor in Becker County. A second reading will be held at the regular March meeting.
“The council tried to be fair,” Louiseau said. “We did a lot of research on this to see what our options are.”
Since no other vendors responded to the RFP, it left the city with amending the ordinance because “it’s not the city’s place to pick the vendor,” he said.
Louiseau added the community center could also get its own liquor license, but the state only allows it for live performances. So, another vendor would still have to get a license to provide alcohol during weddings, graduations and other private events.
“This is a unique situation,” he said.
Omberg said with the changes in the city ordinance, a new Preferred Provider Agreement has been signed with Bleacher’s, and it will run for two years. RFPs will then be sent out again to see if there is any additional interest.
Past practices with the DLCCC and commission percentage are two of the main factors in the decision, Omberg said.
And the contract is the same as always, in the sense that Bleacher’s is not the exclusive provider and others can be brought in for private parties.
“It’s been a long process,” Omberg said. “There were issues moving forward that we needed to come to a conclusion, and hopefully with the March council meeting we will have achieved that.”