Alcohol Issue Put on Regular Agenda

Downtown merchants attending the Duluth City Council’s Monday (Nov. 28) work session indicated they may be willing to apply for a license and initially pay up to $250 or more to be able to sell or serve complimentary beer and wine to their customers on special and other occasions.

Under a proposed “Ancillary Alcohol Sales License” drafted by the city attorney, merchants would be allowed to sell or serve a patron either two six-ounce glasses of wine per day or one 12-ounce serving of beer/malt beverage per day. Also, the sale of alcohol sales could not account for more than 10 percent of the gross annual sales of the business. Hours would be limited to current regulations for sale of beer and wine in the city.

City Attorney Lee Thompson explained that even though the downtown merchants had proposed giving away the beer and wine to customers, it would be considered selling. Merchants could actually sell the beer or wine. If served complimentary, the “transaction” would have to be assigned a value, and merchants would have to keep records of the amount "sold." Their records would be subject to monitoring and auditing by the city.

Also, merchants would have to apply for state and city licenses to sell beer and wine and undergo a background check including fingerprinting. Business owners and their staff would have to take the city’s alcohol serving class, which they have agreed to do. The classes cost $20 a person. They would have to purchase the beer and wine from authorized wholesalers and pay excise taxes.

There is a onetime $150 application fee, and the license fees could be $100 or more. Asked if this would be worth it, Bobbie Flowers, owner of Luv for Art on Main Street, who would like to serve her customers wine during “sip and stroke” classes, said it would be to her. Several other merchants in attendance appeared to be in agreement.

A second proposed change would amend the brown-bagging ordinance to clarify that a business is permitted to possess, consume and serve alcohol at a private party in their establishment on four occasions annually. To qualify for the exception, the party would need to be closed to the public, not involve a fee for attendance, not involve any retail or commercial activity and not be designed to encourage or generate business. Allowing this to occur more than four times a year was discussed.

The proposed amendments to the city’s Alcohol Beverage Ordinance would extend these privileges to all the businesses in the city.

The city’s Alcohol Review Board had recommended the city attorney draft the changes following several months of discussion with the downtown merchants to try to find a way to allow them to legally serve beer and wine to their customers without applying for a regular beer and wine license that would cost about $1,500. The city only grants consumption on premises licenses to restaurants. Under the new license, the merchants would not have to meet restaurant requirements.

Thompson pointed out that merchants have a third option of hiring a caterer to serve beer and wine at special events. The caterer obtains the license, and the business pays the caterer a fee for the service. If the caterer is local, there is no additional charge to the business by the city. The business would pay the city $50 if an outside caterer were used.

Councilman Billy Jones said he supported giving businesses in the city the option of obtaining the new license. “My only question is the fee,” he said. The ARB has recommended a $50 annual city fee.

“We need to move forward with this,” Councilman Doug Mundrick said. He suggested placing the item on the agenda for the Dec. 12 regular city council meeting for action. In the meantime, he asked City Clerk Teresa Lynn to research whether the $50 fee would cover the cost of applying for the license and monitoring the businesses who obtain it, and if not, to recommend another amount.

The council agreed to put several other items that were discussed on the next agenda including adoption of a tobacco-free parks police in city parks and recreation facilities and approval of roof repair to the Red Clay Theatre. The council suggested extending the tobacco-free policy to the Duluth Town Green. In regards to the roof repair item, the council asked for additional price quotes.

A proposal by the Volunteer Community League to turn the alley near West Lawrenceville and Main streets into a community courtyard was referred to the city planning, public works and police departments to assess the possible need for additional lighting for safety. The league was asked to submit a revised plan. There was also a question as to whether a land disturbance study and permit might be required. The league has proposed to create the courtyard with community donations and volunteer labor.