08-09-05 Worksession
CITY COUNCIL MINUTES
Richfield, Minnesota
Special Worksession
August 9, 2005
The meeting was called to order by Mayor Kirsch at 5:32 p.m.
Members Present:
Martin Kirsch, Mayor; Bill Kilian; Susan Rosenberg (arrived at 5:41 p.m.);
Fred Wroge; and Sue Sandahl (arrived at 5:35 p.m.).
Steven Devich, City Manager; Bruce Palmborg, Community Development
Director; Mike Eastling, Public Works Director; Bill Fillmore, Municipal Liquor
Operations Director; and Cheryl Krumholz, Recording Secretary.
Staff Present:
Item#1
City Manager Devich stated the City Council directed staff to seek appropriate consultants to
analyze options related to the City owning or leasing space for the Cedar Avenue Liquor Store and
potential locations due to the proposed modifications to the 66th Street/Cedar Avenue intersection.
Jim McComb, McComb Group, Ltd., presented the Cedar Avenue Store Location Analysis.
There was discussion regarding access to the store from four potential intersections:
A. Ryan Company location on NE corner off 66th Street/17th Avenue
B. SW corner of 66th Street/17th Avenue with traffic circle or traditional intersection
C. SE corner of 66th Street/17th Avenue with traffic circle
D. SE corner of 66th Street/17th Avenue with traditional intersection
Council Member Wroge asked about a roundabout intersection at the store's current location.
Council Member Kilian said the roundabout links to the Cedar Avenue bridge to encourage
traffic to not use Bloomington Avenue, which is a residential area.
Mr. McComb said this was the first he had heard about Bloomington Avenue traffic and that a
small number of customers use that route. He added that discussions he has had regarding
roundabouts indicate they breakdown at shopping center entrances and heavy traffic locations
because they cause congestion and gridlock.
Council Member Wroge said the reality is that traffic will increase with the shopping center.
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August 9, 2005
Council Member Sandahl stated no plans have been reviewed regarding access. The road
needs to be constructed right so traffic does not use residential streets.
Council Member Kilian stated a map indicates traffic flow onto 17th Avenue, not Bloomington
Avenue, when crossing the Bloomington Avenue bridge over Crosstown.
Council Member Wroge talked about left hand turns into and out of the liquor store. He said
the reality is that customers will find the Richfield liquor store and not go to Lake Street in
Minneapolis.
Mr. McComb stated some customers would be lost due to a change in traffic pattern.
Council Member Kilian asked about lost sales ending up at the other Richfield liquor stores.
Mr. McComb said the largest share would be picked up at Richfield Lyndale.
Council Member Sandahl asked about the number of current South Minneapolis customers
currently using the Cedar store who will by pass the Lyndale store on 54th Street/Lyndale Avenue in
Minneapolis to go to Richfield Lyndale store.
Mr. McComb said everyone has choices and it tends to be based upon convenience.
Bruce Dejong, Ehlers & Associates, presented the Cedar Avenue Liquor Store Cash Flow
Analysis. He explained the value analysis methodology based upon the McComb information.
Mr. Dejong said the analysis indicates ownership is better than leasing from Ryan Company.
He added that is a typical analysis result.
Council Member Wroge asked about the definition of residual value.
Mr. Dejong explained the old building residual value is as of right now with an inflationary ratio
which is then discounted back to the present value over 20 years. The new building is higher value.
Council Member Wroge said that assumes relocation of the store is better than the current
location. He asked about the breakeven point of keeping the current location versus a new building.
Mr. Dejong stated that had not been calculated but referenced the cash flow analysis.
Council Member Kilian said right now, one single store at one location is being discussed. He
stressed to not lose sight of the whole continuous plan for the area to be developed. The way to get
in and out of the site could change.
Mr. McComb explained the relocation parcel is larger than what is needed for the liquor store.
There could be additional retail space that the City could lease and earn additional revenues. The
Ryan Company lease for space is potentially two times what would be paid if it was owned. There
should be no trouble leasing space in that area.
Council Member Kilian said not to review just moving the liquor store, but rather than entire
development area so it's not done piecemeal.
City Manager Devich stated there was earlier discussion regarding leasing to other retailers.
Mr. McComb added that Ryan Company is not seeking individual retailers.
Council Member Kilian said leasing space for the liquor store is not a good idea based on
various standpoints but a 17th Avenue corner location is more difficult based upon the current
assumptions provided this evening.
Council Member Wroge stated there would be no control to prevent Target to sell wine and
liquor if the State legislature approved such sales.
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August 9,2005
Municipal Liquor Operations Director Fillmore explained that other stores may not offer full
personal services like the Richfield municipal liquor stores. If the liquor store is owned and must
close up, it is a big building that the City could sell.
City Manager Devich stated additional information would be prepared for and discussion at
another City Council Worksession. He added that it appears the City Council considers leasing the
liquor store as no longer an option.
The meeting was adjourned by unanimous consent at 6:26 p.m.
Date Approved: September 13, 2005
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Cheryl K umho
Recording Secretary