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CR 97-226 Liquor License App - MT BearsDecember 15, 1997 Council Report 97-226 LIQUOR LICENSE APPLICATION M.T. BEARS Staff recommends approval of the following motion: move to aoorove the liauor license application contingent on the criminal and financial investigations showing satisfactory results. This action will allow staff to issue a liquor license to M. T. Bears upon the completion of the investigations without further Council action. Overview When the applicant, Stone Creek, Inc. submitted an application for the renewal of their liquor license it was noted that 75% of the corporate stock changed hands. It was then determined that an application for a new license was appropriate. When more than 10 % of the Corporate shares change ownership, the City is supposed to be notified within ten days. State Statute requires that the issuing authority complete criminal background and financial investigations of all owners, officers, managers and any others that have a financial interest in the licensed premises. The new owners of Stone Creek, Inc. met with the City Manager and City Clerk on Monday December 1, 1997. Anew application and a list of additional information to submit were given to them. The application was returned to this office at 4:30 p. m. on December 8`h with additional information being submitted on December 1 1"' and 12`h. At this time, not all of the information necessary to conduct the complete investigation has been submitted. Primary Issues to Consider Criminal background investigation • Financial investigation ^ Violations of Liquor Law Suooortina Documents ^ Memo from Captain Liddy • Complete application available in the City Clerk's office v ~' l~CFi erry Obi aier, City Clerk Council Report Page 2 Primary Issues to Consider ^ Criminal Background Investigation As stated in Captain Liddy's memo, there is not, at this time, any criminal history that would be a basis to deny a liquor license to any of the principals. ^ Financiallnvestigation State Statute requires that a financial investigation be completed to assure that funds used for the purchase of the business have not come from sources that would violate State Statute. These sources could include any person who has been convicted of a felony, who has had a liquor license revoked, who owns or is employed by a brewery or manufacturer, and others named by statute. This investigation is continuing. More information is needed for completion. ^ Liauor Law Violations The present owners of Stone Creek, Inc. failed to notify the City of the change in ownership within the ten days required by State Statute. They have had ownership of the stock since the first of October, 1997. On October 10, 1997, employees of M. T. Bears were charged and pled guilty to consuming alcohol on the premises after the restaurant was closed. These two violations will be addressed administratively following policy guidelines. Alternatives 1. Approve the application upon completion of the investigation 2. Do not approve the application 3. Continue to a future City Council Meeting for more information Staff is recommending alternative one. POLICE DEPARTMENT Memorandum To: City Clerk, Terry Obermaier copy: From: Captain J. Liddy Date: 12f15/97 Subject: M.T. Bears -Liquor License Application As of 1211519'7 @ 12:15PM, the status of the liquor license application investigation is as follows: From a criminal investigation perspective, no information has been discovered which would prohibit any of the 3 individuals involved, James Harshe, Linda Harshe or Thomas Alexander, from obtaining a liquor license. As far as other aspects of the investigation, the Department has not been able to verify much of the information in the application due the fact that current documents have not been received from the principals. We are still waiting for legal documentation detailing who the owners and shareholders of the corporation are; how the ownership is divided between the 3 individuals; up to date lease and sublease agreements; sales & stock purchase agreements and several other pieces of documentation. Some of the information provided by Mr. James Harshe has also been difficult to verify. For example, James Harshe verbally claims to have been a police officer in New Town, N. Dakota in the early 1980's. Telephone contact with the City administrator of that city (who has been there since 1981), could not confirm that fact. (this was a position Harshe claims to have had in verbal conversations with several Hopkins officials but this was not included on the formal license application). Harshe also claims to have worked as an investigator/security officer for Metropolitan Medical Center and the Phillips Eye Clinic in Mpls. in the mid 1980s to 1990. We have not been able to verify this information as MMC is no longer operational. It should also be noted that the Phillips Eye Clinic is associated with Abbott Northwester Hospital and Phillips uses Abbott personnel for security. Mr. Harshe and Mr. Alexander state that since they took over personal management of M.T. Bears around November 1st, they have instituted a number of changes in both personnel and operations aimed at improving the reputation of the establishment and reducing the problems which have been apparent in the past. Again, at this time, there is no information available which would technically disqualify the individuals from obtaining control of this liquor license. The entire investigation is still incomplete pending receipt and verification of additional information.