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City will take a big-picture look at liquor store operations

Rather than moving its downtown liquor store to a new location, the Farmington City Council plans to take a step back and decide whether to stay in the liquor business at all.

Lately, council members and city staff have looked into purchasing a new location for the city's downtown liquor store. Now located at the northeast corner of the City Center development on Elm Street, the site is not as visible as city officials would like. Add on an annual lease payment of approximately $165,000, and city officials are looking for a new location.

In recent weeks, they had considered the purchase of the property on Elm and Fifth streets, where the Supreme Laundry laundromat is located. Council members took public comment on the proposition at last week's regular meeting. While the pros and the cons were about even, council members have abandoned interest in that site.

@subhead: Philosophy

@bodycopy:Before looking too far ahead to find a new location, council sat down in a workshop Monday to talk about the philosophy of being in the liquor business at all.

The city currently runs two liquor stores. Proceeds from liquor sales are used to cover funding shortages at the city's outdoor pool, Schmitz-Maki Arena and Rambling River Center.

"Philosophical wise, I don't like the idea of being in the liquor store business, but it's a huge part of our budget," council member Christy Jo Fogarty said Monday. "But without it, I don't know where we could come up with the funding to keep those doors open."

Her sentiments were echoed by other council members. For most of her term, Julie May has opposed city-run liquor stores. This week, she pointed out that if Farmington got out of the liquor business, it could open doors to bringing independently-owned liquor stores to town and invite other types of business to the community as well.

May questions what the city's budget would look like if it did not include operation of two liquor stores. The city sees a profit margin of less than 2 percent annually from the liquor stores. May argued eliminating lease payments, staff salaries and benefits and other operational costs from running the stores could ultimately benefit the city financially.

At the same time, she wants to "take a good, hard look" at the operation of the pool, ice arena and senior center to see if there is a way to pare down costs so those amenities are self-sufficient. If those amenities continue to rely on additional outside funding, May questioned whether the city should continue to run them.

Fogarty and council member Terry Donnelly both said the city should continue to run the ice arena, pool and senior center. However, Donnelly suggested the city bring in a consultant to find ways to make the liquor stores run more effectively.

"If it turns out we have to do A, B and C to be profitable and we don't want to do that, we shouldn't be in the business," Donnelly said.

The city is a member of the Minnesota Municipal Beverage Association. City administrator David McKnight plans to check with the MMBA to see if there is a consultant available to review Farmington's liquor operations.

Because council wants to do a larger-scale review of all of liquor operations, plus find out what would need to happen to get out of the liquor store business should they decide to, the city will look at extending the lease at the City Center site for one more year.