HomeMy WebLinkAboutCity Council - 11/02/1976JOHN FRANE
• EDEN PRAIRIE CITY COUNCIL
.TUESDAY. NOVEMBER 2. 1976
COUNCIL MEMBERS:
COUNCIL STAFF:
7:30 PM, CITY MALL
Mayor Wolfgang Penzel, Billy Bye, Sidney Pauly,
Joan Meyers and Tim Pierce
City Manager Roger Ulstad; City Attorney Harlan
Perbix; Planner Dick Putnam; Finance Director
John Frane; Director of Community Services Marty
Jessen; Engineer Carl Jullie; Joyce Provo,
Recording Secretary
INVOCATION
PLEDGE OF ALLEGIANCE
ROLL CALL
I. APPROVAL OF AGENDA AND OTHER ITEMS OF BUSINESS
II. PETITIONS, REQUESTS & COMMUNICATIONS
A. Request for Public Hearing for liguor license for John S
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(Continued from October 26, 1976 Council meeting)
III. ORDINANCES & RESOLUTIONS
A. Resolution No. 1207, supporting the concept of Convenant L
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Centers.
Page 3231
8. 2nd Reading of Ordinance No. 348, changing the street nam
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Page 3223
Westgate (east) Addition.
IV. REPORTS OF OFFICERS, BOARDS & COMMISSIONS
A. Reports of Council members.
8. Report of City Manager
1. Summary of Municipal Liquor Report. Page 3233
2. Legal opinion from City Attorney on authorization to issue p
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Page 3237
off-sale liquor license.
C. Report of Director of Community Services
1. Raze Property - C6nsideration of purchase.
2. Nine-Mile Creek Improvement.
D. Report of City Engineer
1. Consideration of bids for traffic control and regulatory co
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E. Report of Finance Director
1. Clerk's License List. Page 3238
V. NEW BUSINESS
VI, ADJOURNMENT.
CITY OF EDEN PRAIRIE
HENNEPIN COUNTY, MINNESOTA
RESOLUTION# 1207
• A RESOLUTION SUPPORTING THE CONCEPT
OF LIFE CARE RETIREMENT LIVING CENTER
PROPOSED BY COVENANT LIVING CENTER OF
MINNESOTA INCORPORATED
WHEREAS, The City of Eden Prairie has reviewed the concept
of life care retirement living sponsered by the Covenant Living
Centers-Minnesota Incorporated, a non-profit Minnesota corpora-
tion, and,
WHEREAS, said city is aware the site selected for said housing
and health care project is located within Eden Prairie's Major
Center Area ( MCA ), a regional diversified center, and
WHEREAS, said regional diversified center ( MCA ), has been
reviewed and approved by the Metropolitan Council to be consistent
with the Metropolitan Development Framework Chapter and other
chapters of the Metropolitan Development Guide, and
WHEREAS, said city has planned for a wide range of services
to be provided within the Major Center Area including health care
and specialty housing which will complement the commercial, office
and service land uses existing and planned, and
WHEREAS, said city has planned for the specialty housing needs
of the community by adopting policies and ordinances encouraging
housing for low and moderate income families , elderly, handicapped,
retarded and other group housing needs, and
WHEREAS, the City of Eden Prairie has implemented said housing
plans by approving low and moderate income housing developments of
Briarhill and Windslope and Muriel Humphrey Residences for retarded
individuals, and
WHEREAS, said city believes that a full range of housing oppor-
tunities is important to the development of the city, and
WHEREAS, said city has preliminarily reviewed the Covenant
Living Center health care concept which will cooperate with the
Eden Prairie Health Center al.,. believes the elderly residents will
receive high quality health services, and
WHEREAS, representatives of Covenant Living Centers, Minnesota,
Inc., have presented their retirement living concept to many groups
including: Eden Prairie Planning and Human Rights Commissions, South
Hennepin Human Services Council and the Eden Prairie Ministerial
Association, and
Resolution 1207
NOW THEREFORE BE IT ABSOLVED, that the City Council of the
City of Eden Prairie supports theconcept of the Covenant Living Centers,
Minnesota, Incorporated s ' a non-profit corporation whose purpose
is to develop a life cote retirement community located in the
Eden Prairie Major Center Area for the following reasons:
a. That the proposed site is an excellent location
for such a housing project due to the proximity
to :.high quality urban services such as : shopping,
entertainment, medical facilities , social.
services, transit and other housing areas.
b. That the site's location across the street from
the Eden Prairie Health Center and Eden Prairie
Shopping Center will provide easy pedestrian
access to those services.
C. That the proposed site is adjacent to a major
open space/future recreation area of Purgatory
Creek.
d. That the project will provide further diversity
of Eden Prairie's housing opportunities.
e. That the proposed retirement concept will be a .
benefit to elderly residents and those residents
will contribute to the City of Eden Prairie.
ADOPTED by. the City Council of Eden Prairie this
19 .
day of
Wolfgang H. Fenzel, Mayor
ATTEST:
John D. Franc, City Clerk
SEAL
page 2
MEMO TO:
THRU:
FROM:
SUBJECT:
DATE:
Mayor and City Council
Roger Illstad, City Manager
Marty lessen, Director of Community Services/1J
Municipal Liquor Store
October 29,1976
In a memo dated September 24, 1976, we presented revised projections,
on a one year basis, concernino a potential municipal offsale liquor
store at the Prairie Village Mall. The revised projections for the first
year of operation showed a break even proposition or perhaps a net
loss of $200.00. The Council received and filed the report which
effectively, for the time being, tabled the idea of a municipal liquor
store.
Because of the communication received concerning the desire for private
offsale license, the Council has requested that the matter again be
placed on their agenda. By way of background information, we have
attached the September 24 memo and also a memo dated May 28, 1976.
Information on the September 24 memo is, in our judgement, fairly
accurate and the best data available at this time. The analysis of
municipal liquor store operations for 1975 showed a gross profit of
22.3% for 87 municipal offsale owned stores. The net income from
operations of all stores, offsale only, was 9.3%. We have projected
a solid 21% gross profit margin which is based on the input we received
from representatives of the liquor industry and we think reflects
accurately the impact of competitive pricing in the metropolitan area.
For example, Apple Valley has seen a 20.6% gross profit margin, Champlin
22.1%, Edina 19.4%, etc. These gross profit margins reflect the merchandising
philosophy of the municipality and the volume of business which they are
doing.
The same general terms and conditions are still available on a lease
arrangement for space at the Prairie Village Mall. We continue to view
this as a desirable location for a municipal offsale liquor facility.
Typically these types of centers desire very much to have an offsale
liquor establishment located there, thus their interest in a private offsale
location if not municipal.
Taking the six year projections made in the May 28, 1976 memo and
substituting a 21% gross profit margin for the 25% used for basis of those
projections, the following projection becomes appropriate:
Page 2
A 6 year projection follows:
1977 1978
1979 1980
1981 1982
Annual Sales $400,000 $430,000 $500,000 $600,000 $650
,
0
0
0
$
7
0
0
,
0
0
0
Cost of Sales $316,000 $355,500 $395,000 $474,000 $51
3
,
5
0
0
$
5
5
3
,
0
0
0
Gross Profit $ 84,000 $ 94,500 $105,000 $126,000 $136
,
5
0
0
$
1
4
7
,
0
0
0
Operating Expense$ 50,000 $ 55,000 $ 60
,
0
0
0
$
6
5
,
0
0
0
$
7
5
,
0
0
0
$
8
0
,
0
0
0
Net Profit $ 34,000 $ 39,500 t 45,000 $ 61,000 $ 61
,
5
0
0
$
6
7
,
0
0
0
Lease $ 17,200 $ 18,275 •$ 19,350 $ 20,425 $ 2
0
,
4
2
5
$
2
0
,
4
2
5
Debt for inventory
4 equipment $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17
,
0
0
0
$
'
NET TO OTHER $ t,20 $ 4,225 t 8,650 $ 24,575 $ 24,075 $ 46,
5
7
5
FUNDS
3q
MEMO TO:
THRU:
FROM:
SUBJECT:
DATE:
Mayor and Members of City Council
Roger K. Ulstad, City Manager
Marty Jessen, Director of Community Services A.J.
Municipal Liquor Store --Revised Financial Projections
May 28, 1976
Since the "first cut" ANALYSIS dated March 12, 1976 we have continued to
refine the numbers regarding costs and income. The following are now known:
1. Space can be leased in the Prairie Village Mall for $4.00/sq. ft. in
1977. Available is a 4,300 sq. ft. space immediately adjacent
to the Penny's Supermarket. Second year lease would be $4.25/
sq. ft. and third year lease $4.50/ sq. ft.
2. The cost of equipment and fixtures should be about $45-50,000 not
$65,000 as previously estimated. This is based on approximately
2,500 sq. ft. of sales area using fewer shelves than earlier estimated.
It includes cash registers, carpeting, etc.
3. Original inventory costs can be reduced to $25,000. Representatives
of the Ed Phillips & Sons Co. indicate that this will "fill the shelves"
and with 1 day delivery on most items will provide adequate stock.
4. The store size can be reduced from 6,000 sq. ft. as previously
suggested to a smaller size (say 4,300 sq. ft.) because of the smaller
inventory, one day delivery, etc.
5. The representatives from Ed Phillips and Sons Co. feel that we've
been more than generous in our Annual Operating Budget Personnel
cost estimates. They feel that these costs might be as much as
$15,000 less. (This estimate is based on a "working manager" who
sells a great majority of the time.)
6. Estimated sales should be in the range of $400,000-500,000+ per
year according to the Phillips representative. The super market
estimates annual volume of $4 million and an "industry figure" of
10% of an adjoining grocery store seems to be realistic. Up to 60%
of liquor store customers in this type of location are women thus the
correlation between the 2 sales volumes. Promotion of a Municipal
Store and how it benefits the community financial situation will help
attract the resident customer.
Municipal Liquor Store -2- May 28/76
Based on the 6 points above a revised financial projection can be made as
follows:
Annual Sales $400,000 (considered minimum)
Cost of Sales 8S00,000 '
. Gross Profit $100,000
Operating Expense $ 50,000
Net Profit $ 50,000
Lease $ 17,200
Debt for inventory & equipment $ 37,000 (first 5 years only)
Net $ 15,800
A 6 year projection follows:
19 1980 1981 1982
Annual Sales
Cost of Sales
Gross Profit
Operating
Expense
Net Profit
Lease
Debt for invent
ory & equiprnen
NET TO OTHER
FUNDS
$400,000 $450,000 $500,000 .$600,000 $650,000 $700,000
$500,000 $337,500 $375 , 000 $450,000 $487,500 $,§25 , 000
$100,000 $112,500 -$125,000 $150,000 $162,500 $175,000
$ 50,000 $ 55,000 $ 60,000 $ 65,000 $ 75,000 $ 80,000
$ 50,000 $ 57,500 $ 65,000 $ 85,000 $ 87,500 $ 95,000
$ 17,200 $ 18,275 $ 19,350 $ 20,425 $ 20,425 $ 20,425
-
t$ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000
$ 15,800 $ 22,225 $ 28,650 $ 47,575 $ 50,075 $ 74,575
3A 36
3677
MEMO TO:
THRU:
FROM:
SUBJECT:
DATE:
Mayor and City Council
Roger Ulstad, City Manager
Marty Jessen, Director of Community Services/1 J .
Municipal Liquor Store
September 24, 1976
1. The municipal liquor industry's profit margin is continuing to
shrink as result of competitive pricing. As a result a "solid"
21% Gross Profit margin is more likely than 25% as previously
estimated.
2. Gross Profit may be slightly higher because Eden Prairie is felt
to have a higher percentage of wine drinkers than "normal".
Industry standards compared to Eden Prairie might be:
Item Standard % of Sales Pen Prairie % of Sales
Spirits 45 50
Beer 40 30
Wine 15 20
Wine is the highest mark-up item.
3. Minneapolis and St. Paul try to maintain 1 Off .Sale Liquor License per
5000 population (men, women, 6, children).
4. Some discounts are available in the liquor distributing business. They
must be available to all retailers and no volume discounts can be given
for purchases in excess of 25 cases. - (The Minnesota Liquor Control
Commission People are not positive that this is not being violated.)
REVISED PROJECTIONS 9-20-76
Annual Sales $400,000
Cost of Sales $316,000 (79%)
Gross Profit _ $ 84,000 (21%)
Operating Expense • $ 50,000
Net Profit $ 34,000 (8.5%)
Lease $ 17,200
Debt for inventory & equipment $ 17,000
Net $ 200
rn OCT • t•I
W. HAMAN PERMS
HOWARD E. HARVAT
!WIN E. SIMONS
ROSS INONFINNIION
LAW OFFICES
Ftemmx. HARVEY. SIMONS &THORFINNSON
A PROTIPSINONAL ASSOCIATION
MAILJNO ADORES.:
P. 0. SOX 100
HOPKINS. MINNESOTA 11103415
OPPIC/Me
$7 TENTH ANS. SOUTH
HOPKINS. MINN.
930.4400
7821 MITDREM. ROAD
EDEN PRAIRIE. MINN.
041-0003
October 28, 1976
The Mayor and City Council
City of Eden Prairie
8950 Eden Prairie Road
Eden Prairie, Minnesota 55343
Gentlemen:
re: Municipal Off-sale Liquor
Licenses
At the Council meeting held on October 26, 1976,
the question was asked of me what action if any, would
be required by the City Council to permit the issuance
of private off-sale liquor licenses in the event it
should desire to do so.
It is my opinion that under the Statutes of our
state, the Only action required by the City of Eden
Prairie to enable the Council to issue off-sale liquor
licenses, would be to adopt an ordinance setting forth
the rules by which it would operate and issue licenses
pursuant to that ordinance. I find no statutory requirement for an election.
As was discussed at the Council meeting, it is true
that should the next Federal census establish that Eden
Prairie has a pppulation of 10,000 or more, the City
must, within one year after the effective date of the
census, hold an election to determine whether or not the
municipal off-sale operation should be continued.
Very truly yours,
W. Harlan Perbix
Attorney for the City of Eden Prairie
WHP/azd
, 9.13rn
CITY OF EDEN PRAIRIE
CLERK'S LICENSE APPLICATION LIST
November 2, 1976
Temporary Food Establishment License
.Eden Prairie Center Merchant Association
Food Establishment , Type A
McDonald's
These licenses have been approved by the department head responsible
for the licensed activity.
Rebecca Quernemoen, Deputy Clerk
3,9:31