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Lowering the Bar: City to Open Liquor Licensing to Small Restaurants

The Burnsville City Council has informally agreed to loosen liquor licensing requirements to make the process less daunting for eateries of the hole-in-the-wall variety.

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The Burnsville city council has informally agreed to make liquor licensing for restaurants more inclusive.

The measure is a bit of a change for Burnsville, which has taken a conservative stance over the years, said Mayor Elizabeth Kautz. Prior to 1988, for instance, the city required at least $1 million of investment in the restaurant before a full liquor license would be granted. This requirement still applies to restaurants and lounges attached to hotels or motels. 

However, the $1 million requirement proved to be an enforcement nightmare, said City Manager Craig Ebeling.

"As I recall, the ordinance was based on concern that we would have a proliferation of very small on-sale establishments, a storefront with focus on liquor and not on food, and that it would be a fight all the time. But we found the $1 million requirement to be administratively not doable," Ebeling told the council during a work session on Feb. 12. "What do you count as an investment? Do you count value of the real estate? What about fixtures? It just got confusing."

Square footage, by contrast, is not arguable.

Thus, for the last 25 years, the city has instituted a 3,500 square foot rule: A restaurant's total area must meet that minimum before they can put in a full bar. The threshold for beer and wine only is much lower, requiring just 25 seats total. However, the disparity has favored large restaurants like Porter Creek and Buca di Beppo over smaller establishments, like Giuseppe's, a petite Italian joint, or Nha Sang, which asked the council to reconsider the ordinance in December of 2012. Nha Sang, a small Tibetan restaurant off Nicollet, was expanding but still would not big enough to meet the minimum.

Nha Sang is not alone.

"A few (restaurants) could apply for (the license) if we lowered it or eliminated it," said City Clerk Macheal Brooks, who looked into the matter at the council's request. "Of course if we lowered it to 3,000 we could have another one come in and say I'm at 2,900 and ask us to lower it again."

Cursory research by City Clerk Macheal Brooks revealed that some neighboring cities do not have such a requirement, though some have established a minimum dining area size, minimum seating requirements, or use a minimum food-liquor sales ratio. Others premise their liquor licenses based on restaurant categories. In Eagan, a full service restaurant are allowed a full bar, casual dining establishments are limited to wine or beer only, and fast food can't have any alcohol at all.

Brooks outlined the council's options:

  1. The council could simply lower the square footage requirement, possibly to 3,000 square feet.
  2. Apply a 750 square footage requirement on the dining area alone (similar to Bloomington and Inver Grove Heights). 
  3. The council could emulate Eagan and mete out liquor licenses on the basis of restaurant categories, an option favored by city staff.
  4. The council could establish a seat requirement, which could be as low as 30 seats, as per state statute. 
  5. The council could tie the license to the percentage of food to liquor served.

The council was least keen on the "Edina approach," which involved tracking the percentage of food versus liquor sold.

"It's hard to quantify and they have to report to the state department. It becomes very complicated," Kautz said.

"That would be minding the business' business more than a government entity should," Council Member Bill Coughlin agreed.

Council Member Mary Sherry initially supported option 3.

"Tying it to restaurant categories, that kind of makes sense to me. That seems easier for me to define rather than something with hard edges like square feet or dollar amount," Sherry said.

Coughlin disagreed, pointing out that the categories would quickly become a matter of debate.

"What is full service? 'Casual' is very subjective," Coughlin said.

Ultimately, they settled on using a seat requirement, rather than square footage. The council tentatively agreed require restaurants to have a minimum of 30 seats in order to obtain a full liquor license.

More in booze news:

  • Effort to Lift Ban on Sunday Liquor Sales Faces Stiff Opposition—From Liquor Store Owners
  • Burnsville Man Faces DWI Charges After Crashing Car Into Liquor Store
  • Manager: Overheated Vodka Bottles Caused Freak Fire at Red Lion

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