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TO:
Honorable Mayor and Members of the Common Council
FROM:
Mark Rohloff, City Manager
DATE:
September 24, 2024
SUBJECT:
Res 24-529 Approve Issuance of Combination "Class B" Beer/Liquor License (Begonias)
BACKGROUND
The city has a limited number of combination “Class B” liquor licenses that may be issued. Please find attached a summary of these licenses from City Clerk Diane Bartlett. At this time, there is one remaining combination “Class B” license available under the city’s quota. Additionally, there are ten (10) reserve licenses available at a cost of $10,000 and two other reserve licenses available in an area known as the premier economic development district (PEDD). Those licenses have a cost of $30,000. Reserve licenses are not in demand because of their high price tag. Therefore, applicants typically wait until non-reserve quota licenses are available.
As recently as two years ago, the city had eight quota licenses available. This made it fairly easy to issue combination “Class B” licenses because they were plentiful and were getting turned over at a rate that kept this type of license in good supply. The council had adopted a policy on dormant liquor licenses that helped free up these licenses. However, due to the demand for additional establishments that desire a combination “Class B” license, we are down to the one available license. Meanwhile, there are currently four applications requesting combination “Class B” licenses. Staff had hoped that some recent changes in state law would have freed up additional licenses, and I had directed staff to hold up consideration of any combination “Class B” licenses until that issue was resolved. However, any of the new provisions contained in that law cannot be easily resolved.
Council Member Larson had asked the Council about the need for us to issue all of our available quota licenses in order to place us at our maximum so that we can pursue options for cities that have reached their quota. One license was issued (to Flights) at a recent Council meeting. I agree with the strategy to issue all of our remaining quota licenses, with the understanding that we need to develop a rationale for issuing our remaining license when four applications are on file.
ANALYSIS
Municipalities use different methods by which they issue these sought-after combination “Class B” licenses. Many do it simply by the order in which the application was received. This works well when there is high turnover of the licenses so that everyone gets an opportunity to wait their turn in line for a license. However, this does not work well when the pace of turnover is inconsistent with the demand, as we are currently experiencing. Other communities target specific areas, such as a regional shopping area or a downtown area, in order to encourage economic development in a specific area, or to limit or target the concentration of licenses in a given area. Given the age of Oshkosh and the scattering of commercial areas throughout the city, this would be difficult to achieve as well.
Once our quota is reached, we can pursue other options that may make more licenses available for the three applications that cannot be issued at this time. Without bringing forward every applicant to make their case and lobby for the issuance of a license to them, staff has identified several criteria that it has used to assist Council in issuing these licenses. Staff is not placing a weight or priority on these different criteria. With that said, some of these criteria may have greater importance than others in each individual Council Member’s own opinion. Staff has combined these criteria to guide Council in understanding our recommendations.
The criteria that we have used for consideration are as follows, in no particular order:
Date application was received. There is an argument that the longer someone has had to wait for a license, there should be some consideration for that patience in waiting one’s turn.
An existing/open business. An existing business may have already proven itself and may be worthy of priority given its track record of business success. Additional consideration may be given for an existing business that already has some other type of license, such as a class B fermented malt beverage license or a class C wine license.
A development that is proposed to be built in a given period of time, such as 6 to 12 months. Additional consideration may be given to a business that already has a signed lease. It is not uncommon for these leases to be contingent upon receiving a combination “Class B” license.
Other information contained in the application, such as:
Number of days of operation per week, assuming that more days will result in greater economic activity.
Hours of operation, with the assumption that greater number of hours result in greater economic activity. Preference may be given to establishments that are open during later hours, rather than earlier hours, as alcohol consumption is generally greater in the dinner/evening hours and would result and greater economic activity.
Nature of business, reasoning that a business that relies on alcohol sales as a percentage of its business may be worthy of greater consideration than a business that simply offers alcohol sales as a secondary or complementary part of their business.
All of these criteria can be valued differently by different people. With that said, based on these criteria and the opportunities that will present themselves for the remaining applicants once our quota is reached, I recommend a combination “Class B” license be issued to:
Begonias on Oregon Street:
This is an existing building that is already equipped as a working bar. Of all the establishments on the application list, this is the next one in line that could be operational sooner and would begin generating business immediately. Begonia's is expected to open sometime in October. Their application has been on file since early 2024.
While the other applications are certainly worthy of consideration, in some cases, these establishments are open at different hours, or do not rely on alcohol sales as a significant part of their business. In one case, the application came in later and is not projected to open until later. For this reason, the applicant listed above seems best positioned to have an immediate benefit and economic impact on the city.
Please find enclosed the application for the recommended license. Please contact City Clerk Bartlett or me if you have any questions.
Attachments
Res 24-529_Updated
Application / Begonias_Updated
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