CR 99-39 2nd Reading Ordinance 98-819 Amending the City of Hopkins' Liquor Ordinances
. February 25, 1999 Council Report 99-039
Second Reading of Ordinance 98-819
Amending the City of Hopkins' Liquor Ordinances
Staff recommends approval of the following motion: Move to continue the adoption
of Ordinance 98-81 9.
Staff is proposing that the City Council accept any comments or testimony
regarding the adoption of Ordinance 98-819 but defer action on adoption until the
March 16 City Council meeting.
Overview
The City Council approved Ordinance 98-819 for first reading on October 20,
1998. Since that time, the City Attorney, the Police Department and the Chemical
Health Commission have reviewed the ordinance. It was sent to every liquor
licensee in January. Two weeks ago another copy was again sent to every liquor
licensee along with a notice that it would be the on March 2nd agenda for final
approval by the City Council.
. An issue has arisen in regard to an on-sale establishment also holding an off-sale
license that the City Council will have to decide. Since the March 2nd date was
publicized, Council should allow any testimony regarding the ordinance. But staff
recommends the Council postpone action until it has had an opportunity to consider
the "combination" license issue and any other issues that might be raised at the
March 2nd meeting. This delay would not have any adverse affects.
Primary Issues to Consider
. Off-sale licenses in combination with on-sale licenses
. What are the major changes to the current liquor ordinance
. How will these changes effect the licensees
Supporting Documents
. Copy of the proposed liquor ordinance
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. Council Report 99-039
Page 2
Primary Issues to Consider
. Off-sale licenses in combination with on-sale licenses
Both the current liquor ordinance and the proposed liquor ordinance contain the
following section:
Subd. 5. Off-sale licenses. Off-sale licenses shall be issued to exclusive liquor stores and shall
permit off sales of liquor only. No off-sale license shall be issued to an establishment holding an
on-sale liquor license except those on-sale and off-sale licenses that in 1961 were issued in
combination to one holder and are presently existing in such combination. At any time hereafter
that any such existing combined on-sale and off-sale licenses are for any reason suspended or
canceled, no further re-issuance or renewal of such suspended or revoked licenses shall thereafter
be allowed or issued in combination.
This provision has been interpreted in several different ways over the years. The
most recent interpretation has been that if an on-sale liquor establishment is sold,
the new licensee will not be granted an off-sale license. The most recent example
of this was the sale of Archie's. There is, in fact, only one establishment, Mitch's
. Tavern, that has both licenses in combination.
At other times, however, on-sale establishments have changed hands and the new
licensee has been allowed an off-sale license.
Mitch Batinich, of Mitch's Tavern, is requesting that this part of the ordinance be
changed. There are three options for the Council:
1. Keep the current provision with the current interpretation. Mitch's would lose
the ability to sell liquor off-sale in the event of a sale of the business.
2. Allow all on-sale establishments to sell liquor off-sale should they wish. (An 011-
sale license costs $200 per year).
3. Amend the ordinance to state the sale of an establishment that currently has an
on-sale and off-sale license would not result in the loss of the off-sale license.
The police department is recommending against option number 2.
. What are the Major Changes to the current liquor ordinance?
3.2 malt liquor (Section 4, Subd. 1):
The present ordinance has two main sections, Intoxicating Liquor and Beer, Non-
intoxicating Malt Beverages, with a different set of rules for each division. The proposed
. ordinance combines the two into one, making 3.2 malt liquor on-sale, off-sale, and
temporary licenses a part of Alcoholic Beverages.
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Page 3
Restrictions on the types of liquor establishments (Section 4, Subd. 2):
The proposed ordinance contains language that would limit the issuance of new on-sale
liquor licenses to establishments that have 50% of their gross receipts from the sale of
food. This provision would only apply to new establishments that were not hotels or
bowling centers. It would not apply to renewal of current licenses.
Temporary Liquor Licenses (Section 4, Subd. 4):
In the present ordinance, Temporary Liquor Licenses are not listed as a type of license.
Even though the City has adopted the provisions of the State Statutes by reference, it is
required to list all the licenses that are allowed in the City of Hopkins. While the
approval and license for a Temporary Liquor License is done by the Commissioner of
Gambling and Alcohol, the City has to approve the issuance of the license and state
statute requires the City to list it in the ordinance.
Proof of Financial Responsibility (Section 4, Subd. 16):
In the present ordinance, application for an on-sale wine license is made in the same
manner as other licenses to sell intoxicating liquor (1200.15, subdA). Even though
state statute exempts on-sale wine licensees from carrying dram insurance unless their
sales are over $10,000, the City of Hopkins has required it.
. At this time, neither state statute nor city ordinances require liquor liability insurance for
3.2 beer, on or off-sale. In 1998, the City issued six off-sale beer licenses. Of the six,
three submitted certificates of insurance showing liquor liability insurance. In the
proposed ordinance, liquor liability insurance will be required for on-sale and off-sale 3.2
beer licenses. Of nine businesses that failed the liquor compliance checks in April
1998, two were off-sale 3.2 beer and two were wine. Of the three businesses that failed
the second round of checks, two were off-sale 3.2 beer. The business that failed both
checks is off-sale 3.2 beer.
Payment of Taxes and other Fees (Section 4, Subd. 17):
No License shall be granted for operation on any premises upon which state or city
taxes, assessments or other financial claims of the state or city are delinquent and
unpaid.
License Renewal (Section 4, Subd. 19):
The present ordinance has no sections dealing with renewals. The proposed ordinance
will give some structure to license renewals. In the present ordinance, there is not a
mandatory license renewal investigation. If a new person goes on the license, the City
has to investigate that person. This provision allows the City to set up a fee for the
investigation of new individuals named on the license application.
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Page 4
Transfer of License (Section 4, Subd. 20):
Under State Statutes, the City is obligated to treat any sale or transfer of stock as a new
liquor license in the area of investigations, information on the application, allowing
people to speak for or against such, etc. The licensee will be required to fill out an
application showing the new information, and an investigation will occur of the new
owner. The Council will then have to approve a new license.
Hours of Operation (Section 4J Subd. 26):
The hours of operation remain the same they are merely summarized differently.
. How Will These Changes Effect the Licensees?
Three licensees would be required to purchase dram shop insurance. The cost of
insuring $10,000 of sales in one year would be approximately $620.00 per year. A
lower amount of sales in one year would lower the cost.
Licensees would be required to submit information for new managers and for new
shareholders for investigation. They are required by statute to do so now, but we
cannot charge for that service. With the proposed ordinance, we can set fees for
. those services.
Alternatives
1. Continue the second reading of Ordinance 98-819 to allow further consideration
of the issues.
2. Instruct staff to amend Ordinance 98-819 to include one of the options
regarding the "combination" license issue and adopt the Ordinance for second
reading.
Staff recommends Alternative # 1 .
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. CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
ORDINANCE NO. 98-819
AN ORDINANCE DELETING SECTION 1200, 1205 AND 1210 OF THE
HOPKINS CITY CODE AND REPLACING IT WITH
A NEW SECTION 1200 - ALCOHOLIC BEVERAGES
In order to maintain consistency with the State Statutes governing the sale and
consumption of alcohol and to further insure the safety and well being of its
residents, the City Council of the City of Hopkins does hereby ordain as follows:
Section 1: Sections 1200, 1205 and 1210 of the Hopkins City Code are deleted in
their entirety.
Section 2: Provisions of the State Law adopted. The provisions of Minnesota State
Statute, Chapter 340A, relating to the definitions of terms, licensing, consumption,
sales, financial responsibility of licensees, hours of sale and all other matters
pertaining to the retail sale, distribution, and consumption of intoxicating liquor are
adopted and made a part of this ordinance as if set out in full.
. Section 3: That in addition to adopting State Statute, Chapter 340A, the following
terms and conditions are incorporated:
Section 4: Licenses Reauired.
Subd. 1. General requirement. No person, except a wholesaler or manufacturer
to the extent authorized under state license, shall directly or indirectly deal in,
sell, or keep for sale in the City of Hopkins, any intoxicating liquor without a
license to do so as provided in this ordinance. Liquor licenses shall be of eight
kinds: lion-sale", temporary "on-sale", "off-sale", "club", "on-sale wine", "3.2
% malt liquor on-sale", "3.2 % malt liquor off-sale", and temporary 3.2% malt
liquor on-sale.
Subd. 2. On-sale licenses. "On-sale" licenses shall be issued only to hotels,
clubs, restaurants, Bowling Centers and to exclusive liquor stores, which
exclusive liquor stores were in existence on July 1, 1999, and shall permit on-
sale of liquor only. Ten on-sale licenses may be granted in a year.
After July 1, 1999, no on-sale liquor license shall be issued to an establishment
unless the applicant makes a bona fide estimation that at least fifty percent of
the gross receipts of the establishment during its first year of business will be
attributable to the sale of food.
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. Each establishment granted an on-sale liquor license under this section shall have
the continuing obligation to have at least fifty percent of gross receipts from the
establishment during the preceding business year attributable to the sale of food.
For the purpose of this requirement, "establishment" shall include the food and
beverage portion of a multi-service establishment. Financial records for the food
and beverage portion must be maintained separately from the records of the
remainder of the establishment.
For the purpose of this section, "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.
The Council 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 Council 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.
. In addition to other remedies that it may have available, the Council may place
the license of any "on-sale" liquor licensee on probationary status for up to one
year, when the sale of food is reported, or found to be, less than fifty 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 Council may require to increase the sale of food.
The above provisions shall not apply to any business having an on-sale liquor
license prior to July 1, 1999 and will not affect the future renewals of the on-
sale licenses for such businesses. These provisions shall not apply to new
licenses issued for existing establishments, due to sale or transfer of ownership
of these establishments, unless the establishment has been closed and without a
liquor license for at least 90 days. These provisions shall also not apply to any
new on-sale liquor license for a hotel or bowling alley.
Subd. 3. On-Sale wine licenses. "On-sale wine licenses shall be issued only to
restaurants meeting the qualifications of Minnesota Statutes Section 340A.404.
Subdivision 5, and shall permit only the sale of wine not exceeding 14 percent
alcohol by volume, for consumption on the licensed premises only, in conjunction
with the sale of food.
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. The holder of an on-sale wine license who is also licensed to sell 3.2 percent
malt liquors at on-sale and whose gross receipts are at least 60 percent
attributable to the sale of food, may sell intoxicating malt liquors at on-sale
without an additional license.
Subd. 4. Temporary on-sale licenses. Subject to the approval of the
commissioner of public safety, temporary on-sale licenses shall be issued only to
clubs or charitable, religious, or other non-profit organizations in existence for at
least three years. A temporary license authorizes the on-sale of intoxicating
liquor in connection with a social event within the city sponsored by the licensee
and subject to restrictions imposed by the state liquor act.
Subd.5. Off-sale licenses. Off-sale licenses shall be issued to exclusive liquor
stores and shall permit off sales of liquor only. No off-sale license shall be
issued to an establishment holding an on-sale liquor license except those on-sale
and off-sale licenses that in 1961 were issued in combination to one holder and
are presently existing in such combination. At any time hereafter that any such
existing combined on-sale and off-sale licenses are for any reason suspended or
canceled, no further re-issuance or renewal of such suspended or revoked
licenses shall thereafter be allowed or issued in combination.
. Subd 6. Special club licenses. Special club licenses shall be issued only to
incorporated clubs or congressionally chartered veterans' organizations that have
been in existence at least three years.
Subd 7. Special license for Sunday sales. A special license authorizing sales on
Sunday in conjunction with the serving of food may be issued to any hotel,
restaurant, Bowling Center or club which has facilities for serving at least 30
guests at one time, and which has an on-sale license.
Subd. 8. 3.2 percent malt liquor, on-sale. An on-sale 3.2 percent malt liquor
license may only be issued to drugstores, restaurants, hotels, clubs, bowling
centers where food is prepared and served for consumption on the premises and
in bona fide clubs, and shall permit the sale of beer for consumption on the
premises only.
Subd. 9. 3.2 percent malt liquor, off sale. A 3.2 percent off-sale malt liquor
license may be issued to permit the sale of beer in the original packages for
removal from and consumption off the premises only.
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. Subd. 10. Exemptions.
a. Any person licensed to sell intoxicating liquor at on-sale shall not be
required to obtain a 3.2 percent malt liquor on-sale and may sell 3.2
percent beer at on-sale without further license.
b. Any person licensed to sell intoxicating liquor at off-sale shall not be
required to obtain a 3.2 percent malt liquor off-sale license and may sell
3.2 beer without further license.
Subd. 11. Temporary 3.2 percent malt liquor. A club or charitable, religious, or
nonprofit organization may be issued a temporary on-sale license for the sale and
consumption of 3.2 percent malt liquor. The issuance of such license shall be
made in accordance with city policy.
Subd. 12. Application for License. A person desiring any license for either on-
sale or off-sale of liquor, wine, or 3.2 percent malt liquor must file an application
in writing with the clerk in the form prescribed by the commissioner and with
such additional information as the council may require.
Subd 13. Payment. Each application for a license shall be accompanied by
payment in full of the license fee and the investigation fee. Each license shall be
issued for a period of one year except that if the application is made during the
. license year, then the license fee shall be one-fourth of the fee for each three
months or part thereof for the remainder of the license year.
Subd. 14. lnvestiqation/ Grantina of License. The council shall cause
investigation to be made of all representation set forth in the application. No
license shall be issued, or renewed if the results show to the satisfaction of the
council that issuance would not be in the public interest. Opportunity shall be
given at a regular or special meeting of the council to any person to be heard for
or against the granting of any license. After such investigation, the council shall
grant or refuse such license in its discretion provided that no off-sale, wine, or
club license shall become effective until it, together with the security furnished
by the applicant has the approval of the commissioner. The fee for such
investigation shall be set from time to time by resolution and shall be payable by
the applicant whether or not the license is granted.
Subd. 15. Refunds. No refund of any fee shall be made except as authorized by
statute.
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. Subd. 16. Proof of Financial Responsibilitv. No liquor license may be issued,
maintained, or renewed unless the applicant demonstrates proof of financial
responsibility as defined in Minnesota Statutes Section 340A.409 with regard to
liability under the statutes, Section 340A.801. Such proof shall be filed with the
commissioner of public safety. Applicants for liquor licenses to whom the
requirement for proof of financial responsibility applies include applicants for
wine and 3.2 percent malt liquor licenses with sales of less than $10,000 per
year. Any liability insurance policy filed as proof of financial responsibility under
this subdivision shall conform to Minnesota Statutes Section 340A.409.
Temporary liquor license applicants shall provide aggregate limits of one million
dollars.
Subd. 17 Payment of Taxes and other Fees. No License shall be granted for
operation on any premises upon which state or city taxes, assessments or other
financial claims of the state or city are delinquent and unpaid. Any existing
license may be suspended or revoked until such time that delinquent or unpaid
tax or assessment, or other financial claim is paid in full. At such time that all
delinquent or unpaid taxes or assessments or other financial claims are paid in
full, a revoked or suspended license shall be re-issued for the remainder of the
license period without additional application or payment by the licensee.
. Notwithstanding the foregoing, if the delinquent taxes, assessments or other
financial claims are against a landowner, and the licensee is a tenant of the
landowner and has no financial interest in the landowner, then the City Council
may, but shall not be required to, grant a license to an applicant so long as the
applicant is not delinquent on any taxes, assessments or other financial claims as
set forth herein.
Subd. 1 8. Postin~. Licensed premises shall have the license posted in a
conspicuous place therein at all times.
Subd. 19. Renewal of License.
1. Time for Renewal. Applications for renewal of an existing license shall be
made at least sixty days prior to the date of the expiration of the license. If
in the judgement of the City Council, good and sufficient cause is shown by
any applicant for his failure to file a renewal application within the time
prescribed, the Council may never the less receive such application.
2. License Renewal Investigation. All renewal applications, which reflect a
change of status, may be investigated for verification of the matters set forth
in the renewal application, which are updated since the last application. If at
the time of renewal, a change of the manager of the premises is identified,
the licensee shall pay a supplemental investigation fee which will be set from
e time to time by resolution and shall be payable whether or not the license is
granted.
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. Subd 20. Transfer of License. No license shall be transferable between persons
or to a different location. Any change in individual ownership or substitution of
partners will require application for a new license. For a corporation, a transfer or
sale of more than 10% of the shares will also require a new license. A transfer
of stock without prior council approval and an investigation is a ground for
revocation of the license
New licenses required under this section will require the full investigation fee to
be paid by the applicant. The license fee will be pro-rated according to Subd. 13.
Subd 21. Conditions of license. Subdivision 1. General rule. Licenses granted
under this section shall be granted subject to the following conditions of this
subsection, and subject to all other ordinances of the city applicable thereto and
to all regulations promulgated by the commissioner applicable thereto.
Subd 22. Conduct. Every licensee shall be responsible for the conduct of his
licensed place of business and for conditions of sobriety and order therein. No
licensee shall keep, possess, or operate, or permit the keeping, possession, or
operation of, on the licensed premises, or in any room adjoining the licensed
premises, any slot machine, dice, or any gambling device or apparatus, nor
permit any gambling therein, except that which is approved by state statute, nor
. permit the licensed premises or any room in the same, or in any adjoining
building, directly or indirectly under its control to be used by prostitutes or other
disorderly persons.
Subd. 23. Sales prohibited. No intoxicating wine, liquor or malt beverage shall
be sold or furnished for any purpose whatever to a person under the age of 21
years, or to a habitual drunkard, or to a person under guardianship, or to any
person obviously intoxicated, or to any of the persons to whom sale is prohibited
by statute.
Subd. 24. Character. A license may not be issued to a person not a citizen or
resident alien of the United States and a licensee shall be of good moral
character and repute. A license may not be issued to any person who shall
hereafter be convicted of any willful violation of any law of the United States or
the State of Minnesota or of any local ordinance with regard to the manufacture,
sale, distribution or possession for sale or distribution of intoxicating liquor, nor
to any person whose license under this section shall be revoked for any willful
violation of any such laws or ordinances.
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. Subd. 25. Additional conditions of intoxicating liquor licenses and the operation
of licensed premises. The following acts or conduct on licensed premises
deemed and decreed to be contrary to public welfare and morals and, therefore,
no on sale liquor license shall be operated, maintained or allowed at, in or on any
premises where such acts or conduct are permitted or tolerated. No licensee
shall employ, permit or encourage any person or employee in or on any such
licensed premises in or under any of the following circumstances:
a. while such employee or person is unclothed or in such attire, costume or
clothing as to expose any portion of the female breast below the top of the
areola, or any portion of the pubic hair, anus, cleft of the buttocks, vulva or
genitals; or
b. while such employee or person encourages or permits the wear or use of
any device or covering exposed to view which resembles or simulates the
breast, genitals, anus or other portion of the body above mentioned; or
c. while such employee or person permits or encourages any person to
perform or simulate the performance of sexual intercourse, sodomy, oral
copulation, flagellation, masturbation/bestiality or other acts prohibited by
law; or
. d. while such employee or person encourages or permits any person to use
artificial devices or inanimate objects to depict any of the prohibited activities
herein described; or
e. while such employee or person encourages or permits any person on the
licensed premises to touch, caress or fondle the breasts, buttocks, anus or
genitals of any other person; or
f. while such employee or person encourages or permits any of the behavior,
conditions or acts hereinabove set forth by any other person or persons.
Whenever the term "person" is used in this section, it is intended to mean and
shall include but not be limited to, any host, hostess, other employer or
employee, customer or spectator and all provisions of this section shall apply
equally to both sexes.
Subd. 26. Hours of operation. a. No sale of 3.2 percent malt liquor may be
made between 1 :00 a.m. and 8:00 a.m. on the days of Monday through
Saturday, nor between 1 :00 a.m. and 12:00 noon on Sunday.
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. b. Intoxicating liquor; on-sale. No sale of intoxicating liquor for consumption on
the licensed premises may be made:
(1) between 1 :00 a.m. and 8:00 a.m. on the days of Monday through
Saturday;
(2) after 1 :00 a.m. on Sundays, except as provided by section 4, subd. 7,
c. Intoxicating liquor; Sunday sales; on-sale. A licensee that holds a special
Sunday on-sale intoxicating liquor license may sell intoxicating liquor for
consumption on the premises in conjunction with the sale of food between the
hours of 10:00 a.m. on Sundays and 1 :00 a.m. on Mondays.
d. Intoxicating liquor; off-sale. No sale of intoxicating liquor may be made by an
off-sale licensee:
1. on Sundays;
2. before 8:00 a.m. on Monday through Saturday;
3. after 8:00 p.m. on Monday through Thursday and after 10:00 p.m. on
Friday and Saturday. An off-sale licensee may sell intoxicating liquor until
10:00 p.m. on December 31 and July 3, and on the day preceding
Thanksgiving day, unless otherwise prohibited.
4. on Thanksgiving Day;
5. on Christmas Day, December 25; or
. 6. after 8:00 p.m. on Christmas Eve, December 24.
Subd. 27. Evacuation of licensed Premises. No licensed premises named in an
"ON SALE' Intoxicating liquor License shall remain open for business more than
15 minutes after the closing time stated in section 4, subd. 26 of this Ordinance.
It is unlawful for a licensee or an employee of a licensee to permit any person,
other than a licensee or an employee, to remain on said licensed premises more
than 15 minutes after closing time. It is also unlawful for any person, not a
licensee or employee of a licensee, to remain on said licensed premises more
than 15 minutes after closing time. This subsection does not apply to any
restaurant as defined in MN Statute 340A.1 01, or to any premises holding a
"Club License".
Subd. 28. License Revocation or Suspension. M N Statute 340A.41 5, License
Revocation or Suspension, is adopted by reference.
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