Aproposal to reduce the distance requirement between wine-only shops and other off-sale liquor stores has been shelved until at least January 27. The Saint Paul City Council laid the matter over twice in December following a veto threat from Mayor Melvin Carter.

Saint Paul currently requires a half-mile distance between off-sale liquor stores in all but downtown where the distance requirement is 300 feet. The proposal brought forward by council members Jane Prince and Dai Thao would reduce the minimum distance from a half-mile to a quarter-mile.

Supporters say the change would help struggling small businesses add wine sales in a separate shop as some grocery stores already do. Opponents contend the change would cut into the sales of existing liquor stores and encourage big-box wine shops to open in Saint Paul.

The ordinance change has drawn opposition from liquor store owners and the Minnesota Licensed Beverage Association (MLBA). It has the support of other business groups, including the city’s Business Review Council, as well as several district councils.

Supporters say the change would help struggling small businesses add wine sales in a separate shop as some grocery stores already do. Opponents contend the change would cut into the sales of existing liquor stores and encourage big-box wine shops to open in Saint Paul.

The number of off-sale liquor licenses is capped by population in Saint Paul. The city has 50 off-sale liquor license holders. The maximum is 57. The city also issues wine-only licenses, but there are no off-sale liquor stores in Saint Paul that sell wine only.

Prince first proposed the ordinance change last year at the behest of Yoerg Brewing Company. The Dayton’s Bluff restaurant and brewery wants to add a wine shop, but it would be located less than half a mile from two other liquor stores. Prince has since heard from two other businesses owners who are interested in opening wine-only shops.

Saint Paul’s distance requirement was established to prevent the problems that have been cited when liquor stores are clustered together. Most Saint Paul suburbs that had distance requirements between liquor stores have since dropped them, according to Prince.

At this point, it is not clear whether the proposed change has enough votes to pass. Prince, Thao and council member Rebecca Noecker have spoken in support. Noecker said the change would help small businesses compete. In any case, the cap on the number of licenses means there only could be seven new licenses issued by the city, she said.

“I cannot in good faith sign such a significant policy change into law without a thorough review by city staff, who will ultimately be charged with administering the policy,” Mayor Melvin Carter stated.

Carter sent a letter to the City Council asking that the vote be delayed until the proposed ordinance change can be studied by the city’s Department of Safety and Inspections (DSI). More public testimony is needed, the mayor stated, because of the effect the change could have on the business climate, public safety and sales tax revenue.

“I cannot in good faith sign such a significant policy change into law without a thorough review by city staff, who will ultimately be charged with administering the policy,” Carter stated. If the measure was adopted by the council and then vetoed by the mayor, it would take at least five council votes to override the veto.

Prince said she was disappointed in Carter’s letter. She said she had been told by DSI staff to study the distance change, and that is what she and her staff did with the help of local district councils and business associations. DSI staff has indicated that it is not likely to have the time to study the issue until March, according to Prince.

The owners of 1st Grand Liquors, Haskell’s, Liquor Village, Lowertown Wine & Spirits, Morelli’s, Park Liquors, Perrier Wines and Liquors, Sharretts, and the Wine Thief and Ale Jail have all spoken out against the proposed change.

According to Nick Nadeau of 1st Grand Liquors, 918 Grand Ave., a similar ordinance change forced a Woodbury store he owned to go out of business. “Believe me when I say all this will do is make the pieces of the pie smaller in Saint Paul,” Nadeau said.

Luke Gulbranson, co-owner of Liquor Village, 2289 Ford Pkwy., said, “the main reason I purchased my business in Saint Paul is because of requirements that the city provided to protect small businesses.”

“This change will only be another nail in the coffin of many small businesses, including mine,” said Michael McCafferty, owner of McCafferty’s Fine Wine and Spirits, 1325 Randolph Ave. “I know the city is looking for ways to raise revenue, but this is absolutely not the way to do it.”

MLBA executive director Tony Chesak described the proposal as a “drastic response” to the temporary downturn in business caused by the pandemic. The MLBA has been in touch with its Saint Paul members, he said, and has not detected a demand for more wine stores. Another concern for liquor store owners is the possibility of more grocery stores adding separate wine shops, he added.

The Summit Hill Association (SHA), Payne-Phalen Community Council, Dayton’s Bluff Community Council and Saint Anthony Park Community Council all support the ordinance change, as do the Payne-Arcade and East Side Area business associations.

The SHA stated that it supports the change “in the spirit of supporting a retail mix that attracts more customers and benefits every business along Grand Avenue and in the city as a whole.” The SHA acknowledged the concerns raised by existing liquor stores, including the fear of large supermarkets forcing out local independent stores. However, the SHA stated, the market for wine shops is different than the market for full-service liquor stores, and the cap on the number of off-sale liquor licenses citywide will prevent all but a few new wine shops from opening.

— Jane McClure

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