VII.3. First Reading of Ordinance Amending Chapters 4 and 102 and Appendix A of the Hopkins City Code Regarding On-Sale Intoxicating Liquor Licenses and Experience-Based Entertainment; DomeierJuly 14, 2020 Council Report 2020-054
ORDINANCE AMENDING CHAPTERS 4 AND 102 AND APPENDIX A OF THE HOPKINS
CITY CODE REGARDING ON-SALE INTOXICATING LIQUOR LICENCES AND
EXPERIENCE-BASED ENTERTAINMENT
Proposed Action
Staff recommends adoption of the following motion: Move to adopt for First Reading Ordinance 2020-
1147 An Ordinance Amending Chapters 4 and 102 and Appendix A of the Hopkins City Code Regarding
On-Sale Intoxicating Liquor Licenses and Experience-Based Entertainment.
Overview
The purpose of amending the City Code is to support the sale of liquor for businesses aimed at providing
experience based activities. By adding “exclusive liquor stores” in our City Code, businesses would have
the option to serve liquor without the requirement to be a restaurant, hotel or bowling alley. Also,
businesses would not be required to have 50% of their sales come from food and non-alcoholic beverages.
Initially, staff referred to this license as a Special Entertainment Liquor License; however, state law only
authorizes the issuances of certain types of licenses. Instead, we are treating this as exactly what it is – an
on-sale license issued to exclusive liquor stores. Information about Exclusive Liquor Stores can be
https://www.revisor.mn.gov/statutes/cite/340A.412#stat.340A.412.14 under Section 14. The City Attorney
has reviewed the attached ordinance.
We currently have one business owner that is ready to pursue this license. The applicant has reviewed the
terms and conditions of the license and is in general agreement with the proposed ordinance. The
proposed schedule for this ordinance and applicant process is as follows:
First Reading: July 14, 2020
Planning Commission Public Hearing: July 28, 2020
Second Reading: August 4, 2020
Date of Publication/Ordinance Takes Effect: August 13, 2020
Applicant’s Liquor License Consideration: August 18, 2020
Primary Issues to Consider
No more than two on-sale liquor licenses may be issued to exclusive liquor stores, subject to
requirements:
1. The store must be located in the City’s B-2 zoning district. (Because the proposed ordinance
includes a zoning component it requires a zoning ordinance amendment. It is anticipated that the
public hearing will be held on Tuesday, July 28.)
2. The license may only be issued to an exclusive liquor store that offers live entertainment during
all hours of operation.
3. Intoxicating liquor may only be served to paid, ticketed customers while participating in a live
entertainment activity offered by the store.
4. Applicants must submit a business plan that includes a detailed overview of the activities that will
be provided to customers.
5. State law does not authorize exclusive liquor stores to sell intoxicating liquor on Sundays.
6. The proposed license fee for the license is $3,000 per year, July 1 to June 30.
Supporting Documents
Proposed Ordinance 2020-1147
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Amy Domeier, City Clerk
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CITY OF HOPKINS
COUNTY OF HENNEPIN
ORDINANCE NO. 2020-1147
ORDINANCE AMENDING CHAPTERS 4 AND 102 AND APPENDIX A OF THE
HOPKINS CITY CODE REGARDING ON-SALE INTOXICATING LIQUOR
LICENCES AND EXPERIENCE-BASED ENTERTAINMENT
WHEREAS, pursuant to Minn. Stat. §§ 340A.404, subd. 1(a)(7), 340A.101, subd. 10, and
340A.412, subd. 14, the City is authorized to issue on-sale intoxicating liquor licenses to exclusive
liquor stores that offer live or recorded entertainment; and
WHEREAS, pursuant to Minn. Stat. § 340A.509, the City may adopt regulations
governing the sale and possession of alcoholic beverages within its jurisdiction that might
otherwise be more restrictive than state law; and
WHEREAS, the City desires to attract groups of individuals to its central business district
area by allowing a limited number of businesses that provide experience-based entertainment
activities to sell intoxicating liquor to their customers for on-premise consumption, all within the
confines of the aforementioned statutory authority; and
WHEREAS, the City finds that authorizing the sale of intoxicating liquor to participants
of such activities will provide benefits to the downtown area, and that creating a licensing
mechanism to do so is in the best interests of the City’s residents.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HOPKINS
HEREBY ORDAINS AS FOLLOWS:
SECTION 1. Hopkins City Code, Part II, Chapter 4, Article II, Section 4-36(a) is hereby amended
by adding the double-underlined language and deleting the stricken language as follows:
Sec. 4-36. - On-sale licenses.
(a) Intoxicating. On-sale intoxicating liquor licenses shall be subject to the following:
(1) On-sale intoxicating liquor licenses may be issued only to hotels, clubs, restaurants,
bowling centers, exclusive liquor stores, and clubs or congressionally chartered
veterans organizations meeting the qualifications contained in M.S.A. § 340A.404,
subd. 1(a)(4). Not more than ten on-sale intoxicating liquor licenses may be granted
by the city.
(2) No on-sale intoxicating liquor license shall be issued to a restaurant unless the
applicant makes a bona fide estimation that at least 50 percent of the gross receipts
of the restaurant during its first year of business will be attributable to the sale of
food.
(3) Each restaurant granted an on-sale intoxicating liquor license under this section
shall attribute at least 50 percent of gross annual receipts from the sale of food. The
calculation for this requirement shall include only the food and beverage portion of
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any multi-service establishment. Financial records for the food and beverage
portion must be maintained separately from any other records. Additionally, "sale
of food" shall include gross receipts attributable to the sale of food items, soft drinks
and nonalcoholic beverages. It shall not include any portion of gross receipts
attributable to the nonalcoholic components of a plain or mixed alcoholic beverage,
such as ice, soft drink mixes or other mixes.
(4) The city may require the production of such documents or information, including,
but not limited to, books, records, audited financial statements, or pro forma
financial statements, as it deems necessary or convenient, to enforce these
provisions. The city may also obtain its own audit or review of such documents or
information, and all licensees shall cooperate with such a review, including prompt
production of requested records.
(5) In addition to other remedies that it may have available, the city may place the
licensee on probationary status for up to one year when the sale of food is reported,
or found to be, less than 50 percent of gross receipts for any business year. During
the probationary period, the licensee shall prepare any plans and reports, participate
in any required meetings, and take other action that the city may require to increase
the sale of food.
(6) The provisions of this section related to food sales shall not apply to any restaurant
having a city on-sale intoxicating liquor license prior to July 1, 1999 and will not
affect future renewals of such licenses. The provisions shall also not apply to new
licenses issued for existing restaurants due to sale or transfer of ownership, unless
the restaurant has been closed and without an on-sale intoxicating liquor license for
at least 90 days.
(7) No more than two on-sale intoxicating liquor licenses may be issued to exclusive
liquor stores, and such licenses shall be further subject to the following
requirements:
(i) An on-sale intoxicating liquor license may only be issued to an exclusive
liquor store that offers live entertainment in the form of “experience-based
entertainment,” as that term is defined in section 102-4 of the Hopkins City Code,
during all hours of operation.
(ii) An exclusive liquor store that obtains an on-sale intoxicating liquor license
may only sell intoxicating liquor to paid, ticketed customers while said customers
are participating in the entertainment activity offered by the establishment.
Intoxicating liquor may only be sold to each customer for a successive two -hour
period, although the experience-based entertainment activity may last longer than
that.
(iii) The city may establish a separate fee for on-sale intoxicating liquor licenses
issued to exclusive liquor stores, which shall be subject to any express fee limitation
contained in state law.
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(iv) No sale of intoxicating liquor for consumption on the licensed premises of
an exclusive liquor store may be made between 2:00 a.m. and 8:00 a.m. on the days
of Monday through Saturday or after 2:00 a.m. on Sundays.
SECTION 2. Hopkins City Code, Part II, Chapter 4, Article II, Section 4-55 is hereby amended
by adding the double-underlined language as follows:
Sec. 4-55. – License application.
(a) Every application for a license or permit issued under this chapter shall be on a form
provided by the city. The form shall be verified and filed with the city. No person shall
make a false statement on an application.
(b) Every application shall state the name of the applicant, the applicant's age, representations
as to the applicant's character, with references as the city may require, the type of license
applied for, the business in connection with which the proposed license will operate and its
location, a description of the premises, whether the applicant is owner and operator of the
business, how long the applicant has been in that business at that place, the name and date
of birth of the manager of the business, and any other information as the city may require.
(c) In addition to all other information required by the city, every application shall contain a
description of the premises, including the street address and legal description of the
property, and plans depicting the design of the premises where alcoholic beverages may be
dispensed and consumed. The plans shall show room dimensions and shall indicate the
number of persons intended to be served in each room. An exclusive liquor store seeking
an on-sale intoxicating liquor license pursuant to subsection 4-36(a)(7) must also submit a
business plan that includes a detailed overview of the experience-based entertainment
activities that it provides to its customers.
SECTION 3. Hopkins City Code, Part III, Chapter 102, Article I, Section 102-4 is hereby
amended by adding the double-underlined language as follows:
Experience-Based Entertainment: An establishment offering team or group entertainment
activities such as bocce ball, game shows, escape rooms, painting classes, cooking classes, axe
throwing, and arts and crafts workshops. Experienced-Based Entertainment uses shall not include
commercial recreation, bingo or other forms of charitable gambling, live music, karaoke, massage
therapy, arcade games, video games, hookah lounges, oxygen bars, spas, event centers, art
galleries, or adult-oriented businesses.
SECTION 4. Hopkins City Code, Part III, Chapter 102, Article VII, Section 102-214 is hereby
amended by adding the double-underlined language as follows:
Permitted Uses B-1 B-2 B-3 B-4
Experience-Based Entertainment X
SECTION 5. Hopkins City Code, Appendix A, which contains the City’s fee schedule, is hereby
amended by adding the double-underlined language as follows:
LICENCE FEES
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Intoxicating alcohol
On-sale exclusive liquor store $3,000.00 Per year
SECTION 6. The effective date of this ordinance shall be the date of publication.
First Reading: July 14, 2020
Second Reading: August 4, 2020
Date of Publication: August 13, 2020
Date Ordinance Takes Effect: August 13, 2020
By: ____________________________
Jason Gadd, Mayor
ATTEST:
______________________________
Amy Domeier, City Clerk