Wayzata will soon revisit the question of where to relocate its municipal liquor and restaurant businesses as it faces the possibility of losing its current location when the Wayzata Bay Center is redeveloped, possibly in mid-2010.
The future of the muni - Wayzata Wine & Spirits and Wayzata Bar & Grill - has become a hefty financial and emotional issue in Wayzata.
"If the Bay Center moves forward we want to be in the position that the new place is going to be ready to operate so we don't have an interruption of business," said City Manager Al Orsen.
The city is planning a public hearing in late August or early September before considering four options.
Two are on Mill Street, which now serves as a parking lot and through-way parallel to Lake Street. Another site under consideration is currently wetland on the east end of Lake Street, near a railroad crossing, called the Eastman site. Leasing is also being considered, which raises the question of whether both sides of the business should be continued and kept together.
The last time the City Council seriously discussed the issue, early this year, the cost of building a new restaurant and liquor store in the same building was between $4 million and $5 million.
Orsen said the city is updating the cost projections for new sites with new information, and wouldn't say whether the new information would raise or lower previous cost estimates.
"I really can't comment at this point because it's in process," Orsen said.
The city of Wayzata makes about $250,000 annually in income from the muni. The majority of that comes from liquor store sales, but the emotional attachment residents have to the muni is more closely tied to the restaurant, which some say helps preserve the city's small town character.
However, others do not favor building a new building and question the city's role in being in the restaurant business. And residents near the Mill Street and Eastman sites have already objected to building at those sites.
Residents formed the Shady Lane Association in late July to oppose the Eastman site.
Wayne Larson, the group's president, said residents are concerned mainly with increased traffic and noise.
Larson said the group also takes issue with the cost of the proposals, as well as the fairness of building on a wetland that others couldn't build on.
"We'd just as soon that the city not fill in another wetland for the muni. And the Eastman site is actually a site that was originally donated to the city to remain as a wetland but they couldn't put that into the deed or the transfer because if they did there would be no tax" benefits, Larson said.
He doubted that the muni's yearly income could support payments on a more than $4 million building, he said.
"There's an awful lot of space in Wayzata that's no longer being used. There's a lot of potential lease space. That should really be looked at," Larson said.
Council Member Mary Bader maintains that although the muni is an asset for Wayzata, paying for a new building would be too risky given the modest profits of the restaurant.
She favors relocating the liquor store to the Colonial Square Shopping Center near where people buy groceries, and having the restaurant fill some of the city's vacant space.
Bader said the supposed synergy between the liquor store and restaurant is based on anecdotal evidence.
Orsen also said he
didn't have more than anecdotal evidence of the crossover between the two.
Some of muni's 35 employees work in both sides of the business.
"If we rented, and the business wasn't profitable," Bader said, "then we don't own a building. We just go out of the restaurant business. But if we build a building, and we don't make it in the restaurant business, which is a very risky business, then we're stuck with a building."
When it comes to business plans for a new muni, some in the city seem confident in the product currently offered.
Orsen the city does not need a detailed business plan for the muni, because the city is already in the business and knows it.
"It's going to be the same people, the same management team, the same product. It's just going into a new facility," Orsen said.
In 2007, a consultant the city hired to study and report on the muni recommended otherwise.
The report, available on the city's Web site, recommends "that a detailed operating plan and development strategy be developed" for the liquor store.
For the restaurant, it notes that "further refinement of the business plan to target a more typical 'food-centric' strategy" could increase profits, but would be a venture that includes increased risk.
The report also states that the restaurant's loyal customer base and good service would carry over well to a new location.
Mayor Ken Willcox minimized the risks of building a new building. He said it would be an asset that would be, in the long run, less expensive than renting space. And Willcox said it's not as though the city would be doing anything new.
"The risks of this business model not working are relatively less. I mean, it's not risk free. But also, at the end of the day, we have a very valuable property," Willcox said.
