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City Council - 10/04/2011 - WorkshopAPPROVED MINUTES CITY COUNCIL WORKSHOP & OPEN PODIUM TUESDAY, OCTOBER 4, 2011 CITY CENTER 5:00 – 6:25 P.M., HERITAGE ROOMS 6:30 – 7:00 P.M., COUNCIL CHAMBER CITY COUNCIL: Mayor Nancy Tyra-Lukens, Council Members Brad Aho, Sherry Butcher Wickstrom, Kathy Nelson, and Ron Case CITY STAFF: City Manager Rick Getschow, Police Chief Rob Reynolds, Fire Chief George Esbensen, Public Works Director Robert Ellis, Community Development Director Janet Jeremiah, Parks and Recreation Director Jay Lotthammer, City Attorney Ric Rosow, and Recorder Heidi Wojahn Workshop - Heritage Room II (5:30 p.m.) Acting Mayor Case called the meeting to order at 7 p.m. Mayor Tyra-Lukens was absent. I. LIQUOR LICENSE FOR RECREATIONAL FACILITY Getschow said the issue before Council this evening is the City code as it relates to liquor licenses. It was prompted by an application from a new business, WhirlyBall, entering the Twin Cities. WhirlyBall is a recreational activity looking to locate in Eden Prairie. When applying for a liquor license the applicant discovered, with the exception of bowling centers (also a recreational activity), rules for liquor licenses fall under restaurants with food sales needing to be a minimum of 50 percent of gross receipts. A similar issue presented itself several years ago when a bowling center came into town at which time the City code was revised to allow a liquor license for a bowling center when gross receipts for the recreational activity and food reached a minimum of 70 percent. Council needs to consider whether it is willing to change the City Code to allow WhirlyBall, similar to a bowling center, to have a liquor license. First it is important to discuss using the terminology “recreational center” rather than “bowling center” and to think about what impact that might have on the rest of the community. We need to be careful about what is allowable and not allowable City-wide. Nick Lambrecht of WBTC, LLC gave an overview of what WhirlyBall is about, what they are proposing to do, what the operation entails, and where they want to locate. WhirlyBall is franchise, and they would be a franchisee. WhirlyBall is a combination of lacrosse, basketball, and hockey played in bumper cars, except without the overhead grid. It is for anyone 11 years of age and up and at least 4 feet, 6 inches tall, and there is a referee on hand to determine rule violations. Lambrecht outlined how the game is played, details of the playing court and equipment, and features of the cars. He then showed a brief video clip of the game in action. Nelson asked what happens if somebody gets out of their car. Lambrecht said everything is powered by a switch, so the referee would turn off all the cars right away. The floor is harmless to players. CITY COUNCIL WORKSHOP MINUTES October 4, 2011 Page 2 Lambrecht showed a United States map of where existing WhirlyBall centers are located and a picture of an interior of an Illinois center. Most centers are located in the Midwest. WhirlyBall naturally thrives in colder areas because it is an indoor activity. Having spent much of his time in the area, Lambrecht is most familiar with the Chicago area centers stating those are the ones they’d like to emulate as they think they do a lot of things right and they are quite successful. Case asked for ballpark percentages in terms of how much revenue would be generated from the game versus food, alcohol, pool, etc. Lambrecht said what is projected based on the suburban Chicago centers is 60 percent WhirlyBall, 20 percent food, 20 percent liquor. There would be corporate and a la carte menus. While food and alcohol are ancillary to the business, they are a critical part of staying competitive. There are packages, court reservations, and walk-in play available with more than half of game revenue being anticipated from court reservations. Lambrecht reviewed rates for each of the options adding they are open to the idea of leagues. Case asked what the hours of operation would be. Lambrecht said Chicago centers are open from 11 a.m. to 1 or 2 a.m. depending on the night. He expects the center here would be similar, but probably not quite as late. Lambrecht showed a rendering of how they would use the space at 14675 Martin Drive, formerly the BakeMark building. In addition to courts, office space, meeting rooms, kitchen, and food/beverage area, there is room for a potential laser tag arena. Case asked what the breakdown was of the 70 percent required of bowling centers. Rosow replied the figure includes bowling and food sales. Case said in order to compare apples to apples, WhirlyBall’s game and food figures would need to be combined placing their projected non-alcohol sales at 80 percent. Rosow asked Lambrecht to review the WhirlyBall and food pricing. Nelson asked if there were other centers in the Twin Cities. Lambrecht said there were not and they would hold a five-year exclusivity over the Twin Cities metro area. If a second center is opened within those five years, they would hold perpetual exclusivity over the Twin Cities. Case asked if there were any competitors. Lambrecht replied there is one called Cyber Sport. It is roughly similar but uses different technology (battery- operated carts), is played on a smaller court, and is not as successful according to their research. WhirlyBall has a longer history. Nelson inquired about the profitability of the centers. Lambrecht said there are some that have gone out of business, but this has been attributable to their business model and location. Successful centers have focused on corporate events and that’s what they intend to do, as well. Centers opened in areas where population is 60,000-100,000 have failed. WhirlyBall recommends opening centers in areas where the population is at least 1 million. With 3.82 million people, the Twin Cities is a good location for a couple of centers. Other favorable attributes making this a good location are climate, demographics, an affluent population, and a strong corporate presence. Butcher Wickstrom asked about referee training and selection, what was anticipated in the way of eating/drinking prior to and after play, and number of tables. Lambrecht said referees would be trained and would explain rules of the game, how to operate the vehicles, and safety rules prior to play. It would be highly unlikely 11-year-olds would be CITY COUNCIL WORKSHOP MINUTES October 4, 2011 Page 3 playing with people of college age. There would be 12-15 tables with about 50 seats. They don’t envision people staying there all evening. Based on observation in Chicago, they anticipate people may come 20-30 minutes before their event and stay 20-30 minutes afterwards. Case asked if they would have a bar like Brunswick Zone. Lambrecht said they plan to have a small bar area with about 20 additional seats. Aho asked what the maximum number of people was they would expect to have at any given time and parking accommodations. Lambrecht said based on Chicago rental patterns, there are about four parties per month of 50 or more people. While it is possible to have parties of this size overlap, it is unlikely, so generally speaking he expects there would be less than 100 people at one time. There would be about 220 parking spots available; he is unsure where overflow would go. Case asked what the Council’s involvement would be if the City Code issue were not before them tonight. Getschow said if the business was a conforming use and met parking regulations and all other standards of the City Code, there would be no need for a plan review or land use approval. He can follow-up on any parking concerns and how other businesses on Martin Drive would be affected. Rosow reviewed the current code and what it might look like with potential revisions. There are tight restrictions around the definition of “bowling center”; bowling centers must have a minimum of 40 lanes. The current code language was driven, in part, by Brunswick Zone. “Other family recreational activities” in the first sentence of Section 4.01.Subd. 22 refers to activities at a bowling center rather than non-bowling recreational facilities. Fifty percent of the area must be dedicated to the recreational activity and be non food/alcohol-related. In addition, only a certain percentage (to be determined) of storage would be able to be counted toward the 50 percent area requirement. With the current proposed revisions, a center would not be able to have arcade games, darts, or billiards as its main or sole source of recreation. Aho asked if this would preclude a pool hall. Rosow replied yes. Nelson asked what the limitations would be questioning if the proposed language could open it up to laser tag, paintball, and facilities with a large dance floor and mechanical bulls. The latter would be close to a bar. Rosow said there are basically three options: 1) say no to opening it up to other recreational centers and leaving the language as is; 2) add WhirlyBall to the code adding a separate detailed section so it is on a level similar to bowling centers, and consider other centers/activities on an ad hoc basis one at a time; or 3) take a more generic approach by changing language to “recreation center” and allowing facilities that meet the 70 percent rule. The language is still being looked at because they want to avoid businesses that offer 50-cent drinks and overcharge for activities to meet the 70 percent. The intent is not to open bars. Case asked how facilities featuring billiards or arcade games, for example, could be denied legally. Rosow said liquor has been highly-restrictive. From 1968-2003, only restaurants, hotels, and fraternal organizations could hold liquor licenses. The State has used licenses as a privilege, not a right, and has issued a wide swath of authority to cities to regulate licensing. The City could choose not to allow any liquor licenses. CITY COUNCIL WORKSHOP MINUTES October 4, 2011 Page 4 Case said he was comfortable with what WhirlyBall is proposing and would like to see the code kept as contained and tight as possible. Butcher Wickstrom asked if there were any concerns from a police standpoint. Reynolds said there are no concerns as far as the business concerned. He had concerns earlier about how a large party of walk-in kids would be handled, but he feels comfortable now having reviewed the business plan with Lambrecht regarding unaccompanied minors and underage kids. The role police would play is in regards to alcohol-- making sure serving laws are being obeyed and people aren’t being over served. Whereas a bar at a bowling center might attract customers just for that feature, the WhirlyBall bar is partitioned off from the playing area and is smaller than what a typical bowling center would have. Butcher Wickstrom inquired how the 70/30 split would be regulated. Reynolds said the City has access to the books of any establishment with a liquor license. Receipts are reviewed and verified annually. Aho said he was excited and comfortable with the concept. WhirlyBall sounds like it will be a big hit. It would be best to make the code language more generic rather than targeted. Tightening it somewhat will help address concerns brought up tonight. Nelson agreed adding she would like to see language added so a general, non-party cover charge can’t be applied toward the receipts. Case and Butcher Wickstrom were also in favor of changing the code. Butcher Wickstrom said it was a good idea and Case agreed with going the more generic route. Rosow said one way to be protective is to maintain a minimum square footage requirement for facilities. Open Podium - Council Chamber (6:30 p.m.) II. TOM GOLLOGLY – UTILITY RATES Gollogly of 10954 Leaping Deer Lane lives in the Weston Woods Townhomes. He expressed concern over the discrepancy in new utility rates between single-family and multi-family homes. He thinks his rate should be dropped to the single-family rate of $5/quarter. Case asked Ellis to elaborate on storm drainage facility fees to help put things in perspective. Ellis stated he had visited with Gollogly earlier in the week. Customer classifications include single-family at $5/quarter, multi-family at $8/quarter (includes townhomes, condos, and apartments), and other categories such as office/commercial, institutional, and open space/parklands. Gollogly’s particular situation was looked at to determine if what he’s being charged is a fair rate. One way cities figure rates is to determine how much impervious surface is in each classification. About 13 percent of the City’s impervious surface falls into the multi-family category. If percent of revenue generated was compared to the impervious surface rate, multi-family is close to where it should be (11 percent) within a good margin of error. Revenue from single-family was a little low, and office was slightly higher. It would not hurt to bump up single-family rates to match revenue with impervious surface. Nelson said townhomes usually have a few more units per acre than single-family homes and they generally have shorter driveways, but they are significantly more like single- family homes than apartment buildings. Ellis said that was looked at, as well. The lot of a typical single-family home has about 22 percent impervious surface. Common property CITY COUNCIL WORKSHOP MINUTES October 4, 2011 Page 5 needs to be considered in the multi-family category. Between the internal road network, driveways, and rooftops, Gollogly’s subdivision consists of closer to 32 percent impervious surface. That being said, his subdivision has significantly less impervious surface for multi-family housing than Hennepin Village, for example, which is much higher at approximately 68 percent. Each subdivision is unique and they are categorized into broad groups, but it seems the multi-family rate of 11 percent is fair and right in line with where it ought to be when compared with the average amount of impervious surface in this classification. Case asked if the high-density single-family homes in Hennepin Village were paying single-family rates while their neighbors were paying multi-family. He also wanted to know how much the single-family rates should increase to even things out. Ellis said the Hennepin Village single-family residents are paying single-family rates and he recognizes there will be a variation in lot size between single-family homes. The rate could go up to $6 or $7/quarter. Case commented if the rates for single-family were to get close to multi-family rates, it might make sense to consider flattening the rate to $7 for both categories. While we want to employ the “fair share” concept, we also need to recognize there are different demographics in different types of housing. Senior housing has been pushed in Eden Prairie for the last 15 years, and we don’t want to do anything that would hurt a particular demographic. Nelson stated there are some inequities that need to get looked at a bit more carefull y, especially when it comes to neighbors side-by-side paying different rates. Aho agreed more research needs to be done and the issue revisited. Getschow said this could be part of the budget process in the next few weeks. Case thanked Gollogly for bringing this matter to the Council’s attention. III. ADJOURNMENT