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Cormorant Inn gets liquor license

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Detroit Lakes, 56501

Detroit Lakes Minnesota 511 Washington Avenue 56501

Largely satisfied with the results of an investigation by Becker County Administrator Brian Berg, the county board voted 4-1 Tuesday to grant a liquor license to the Cormorant Inn & Suites.

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The board had tabled the request two weeks ago, amid concerns about past zoning disputes and legal action involving the Cormorant Inn.

As Board Chairwoman Karen Mulari put it at the last meeting, owner Kevin Karel has a "track record" with the county that left most commissioners wanting further scrutiny of the liquor application.

On June 10, 2004, Cormorant Inn & Suites was cited with a misdemeanor liquor violation for allegedly allowing alcoholic beverages to be consumed on the premises without a license.

But Karel paid a $500 fine and had no further violations, resulting in the criminal charge being dismissed without a conviction, according to a letter from County Attorney Joe Evans dated Sept. 13, 2005.

The incident "does not prohibit the granting of a liquor license," Evans added.

Commissioners had expressed concerns two weeks ago about how a liquor license would affect Karel's financing with the West Central Initiative.

His attorney, Carl Malmstrom, submitted a packet of information in his defense, including a letter to Karel from the Initiative. It reads, in part:

"...As you know, West Central Initiative will not provide funding to a project that intends to serve alcohol. Hence, West Central Initiative funds would not be available for any future needs of Cormorant Enterprises, Inc."

But because the original business plan did not include selling alcohol, existing financing would not be threatened. "West Central Initiative has no provisions in our loan agreement or promissory note that would cause your loan to enter default status due to Cormorant Enterprises getting a liquor license and serving alcohol," the letter says.

Likewise, the Minnesota Business Finance Corp., informed by Karel Oct. 10 that he had applied for and received a liquor license, replied in a letter that "your SBA (Small Business Administration) loan has no conditions regarding obtaining a liquor license ... best of luck in your new addition to your business."

In summary, Berg said, Cormorant Township has recommended approval of the liquor license, the sheriff's office has no objections, the county attorney's office "sees no objection based on their limited review of the material," the auditor's office approves of all necessary documentation, the zoning administrator reports Karel has met all requirements of zoning laws, and the county administrator "finds no factual information to recommend rejection of application," Berg wrote in a memo to the board.

Under state law, the county board is required to consider the recommendations of the sheriff and the county attorney, consider the character and reputation of the applicant, and the nature and location of the business prior to granting a liquor license.

Berg said he interviewed Karel for 30 minutes and determined he is of good character and reputation, as a former owner of Advanced Business Telephone Co. who moved to Big Cormorant Lake from Moorhead in 1993. He was also a part owner of The Road House bar until he sold his interest in 2002 or 2003, but a separate corporation held the liquor license, over which he had no ownership.

Commissioner Bob Bristlin pointed out that the township, sheriff's department and auditor's office all had no objections to the application two weeks ago, when he was the sole commissioner to support it.

Commissioner Barry Nelson, whose relatives own a competing business in Cormorant, wanted it known that this was the first time the Cormorant Inn has applied for a liquor license.

Commissioner Harry Salminen cast the sole dissenting vote against the license.

"I'm making my decision based on character and reputation and past experience going through zoning," he said. "I do have some problems with that and I want to make it known so I don't seem arbitrary and capricious in what I'm doing."

In 2004, Cormorant Inn & Suites was at the center of a controversy over a modified conditional use permit, and even before then had earned the suspicions of some members of the county planning commission, who noted that the establishment had grown far beyond what the developer promised when he first appeared before the commission in 2001.

In his defense, Karel said he has merely adjusted his business plan over the years to meet the changing needs of customers.

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