How to keep a storefront empty

Policy — By on October 16, 2011 12:25 pm

The Star Tribune has (finally) caught on to the curious story of Dan Kerkinni, whose attempts to open a craft beer-oriented liquor store in Uptown has highlighted the complex and restrictive regulatory regime controlling liquor stores in Minneapolis. As you likely know by now, Kerkinni was first Bock-blocked by the City Council, with Council Member Meg Tuthill pushing through new distancing requirements to prevent Kerkinni’s store from opening at 26th & Hennepin. His second attempt to open the store, in a small retail space a block south at 27th & Hennepin, looks doomed to fail, as the young entrepreneur (and his brother Pierre) have been outmaneuvered by Kowalski’s Market, which has received land use approvals for a wine shop addition at their 24th & Hennepin grocery store.

Three quotes from the Star Tribune’s article stand out:

Grant Wilson, the city’s manager of businesses licenses, says the system “is working well” because “stores are located in all parts of the city and we do not see areas with an overabundance of them.”

This begs the question: what qualifies as an overabundance? Imagery of a new skid row on Hennepin Avenue seems pretty far-fetched. In much of the city, there may not even be additional demand for liquor stores. But in a dense, bustling area like Uptown, there appears to be an under-served market. After all, Kowalski’s would not have so quickly leaped into the fray if their analysts didn’t think the honey was sweet. Which brings us to the second quote of interest:

For some, like Hennepin-Lake Liquors owner Phil Colich, even 48 [liquor stores in the city] is too many. “It should be a mile between stores,” Colich said. “We’ve got too many liquor stores in the city of Minneapolis.”

And in a single quote, Colich effortlessly summarizes one of the key outcomes of the current regulatory regime — the de facto subsidization of existing liquor stores. Who can blame Colich for his perspective? The stricter the rules, the more money he makes (he is notorious for opposing Sunday sales as well, for much the same reason). Consumers lose out from the diminished competition, but this has been a trend in the liquor industry for decades anyway (see: Anheuser-Busch InBev).

What does all this mean for the fabric of our neighborhoods, commercial districts, and city as whole?

“If you take a look at the map … there’s virtually no spaces left in the city,” said Kerkinni, who hopes to open a south Minneapolis store specializing in craft beers and microbrews. The city has told him to start looking in the suburbs.

And that is precisely how to keep a storefront empty.

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19 Comments

  1. Janne says:

    I gotta say, I wish I could fulfill my craft brew cravings closer than Zips, mostly ’cause I don’t want to have to buy a car in order to access and haul the brew I prefer. It’s a bummer that the beer stores of my dreams appear to be St. Louis Park based. I’m pretty sure Kowalski’s isn’t going to meet MY needs (not to mention that they’ve treated me so rudely in the past that I strongly prefer to avoid spending money inside their walls.)

    Maybe the City just wants people to consume at restaurants and bars only?

  2. Nate S. says:

    I’m sure Phil Colich would retract his statement if he actually had to pay full retail price for liquor in his store. And when did the city’s manager of businesses licenses become a subject matter expert on urban development? I’m pretty sure he doesn’t buy his booze in Minneapolis either. I’m tired of having to walk 7 blocks and pay a hefty premium for booze since liquor stores in the city are few and far between.

  3. Cedar Phillips says:

    I laughed when I read that Phil Colich quote. Who can blame him? He has a good deal going. And like Janne points out, there is also the transportation issue; hauling bottles around gets to be complicated for those of us who don’t own a car, and Uptown, especially, has a lot of non-driving beer connoisseurs floating around.

  4. Nate says:

    The Hennepin-Lake Liquor owner is right in advocating for stricter licensing requirements. Otherwise, it’s likely he’d be put out of business. Hennepin-Lake Liquor has poor customer service, mediocre prices and a bland selection. Not to mention, it doesn’t take credit or debit cards, and don’t have an ATM machine. It reminds me of small town diners, one’s that refuse to innovate, revamp their business or even do basic remodelings that might attract new customers.

  5. Alex says:

    Thanks for continuing to report on this issue, Anders.

    I’m going to email Grant Wilson at grant.wilson@ci.minneapolis.mn.us (and cc my councilmember) to explain that Minneapolis needs to be worried about “underabundance” as well as overabundance.

    It’s pretty insane – in any economy, but especially this one – that the City is telling any business interested in locating here to “start looking in the suburbs.” Seems to me that the problem, though, more than the spacing rule is the 5-acre rule, which puts almost the entire city out of reach of liquor stores.

    • Anders says:

      The 5-acre rule described in the article is one I wasn’t previously aware of, and yeah, it’s unfortunate. What really gets my goat is how the 2,000 foot door-to-door distance requirement has absolutely zero relationship to the actual fabric of the city. Consider how many more people live within a 2,000 foot radius of, say, Hennepin-Lake Liquors, than do within the same distance of France-44 or South Lyndale. Should a regulatory department really be regulating land use? That’s what’s happening here.

      • Anders says:

        Clarifying: “regulatory department” meaning a division of local government that handles business licensing and that sort of thing. Should significant land use decisions be divvied up in a way that’s as complex and opaque as this example? This story shows how this system can hurt a neighborhood, rather than protecting it from perceived vice or social ills.

  6. brad says:

    The state should probably investigate Phil. Not accepting debit/credit cards screams of tax evasion. Rent seekers not even trying anymore.

  7. pat fleetham says:

    I would question if the City actually stated to the fellow he should look outside the city. This may not be factually correct and should have been verfied with the City staffer that alledgedly said it.

    Hey, but the headline is a ‘grabber.’

    I am confident this store front will fill up with some merchant seeking the affluent market of Uptown.
    Its not like there are a lot of empty store fronts in Uptown.

    • Anders says:

      I’ll give the Star Tribune the benefit of the doubt on that particular line. If it wasn’t verified, I’d think they’d phrase it more along the lines of, “Kerkinni said the city has told him…”
      In any case, this is a story of an entrepreneur trying to fill a market void (i.e. broad selection of craft beer along the Hennepin corridor), and being blocked by a perfect storm of ethically-suspect reactive legislation; outdated and unnecessarily complex regulations; and a more nimble and savvy corporation.
      But hey, that’s just my take.

  8. Nathaniel says:

    You nailed it: ” this is a story of an entrepreneur trying to fill a market void (i.e. broad selection of craft beer along the Hennepin corridor), and being blocked by a perfect storm of ethically-suspect reactive legislation; outdated and unnecessarily complex regulations; and a more nimble and savvy corporation”

  9. Dan Kerkinni says:

    Thank you Anders Imboden for the continuing updates, publicity and support you have given this story. It certainly has been an interesting and frustrating journey for me through all this. If you’re one who supports my business and wants to see a specialty craft beer store in Uptown, I ask to show your support by contacting members on the city council. You can also speak out publicly at the Regulatory, Energy and Environmental Committee meeting Oct 24th at 1:30 in room 350 at City Hall. Thank you once again!

    • Anders says:

      Thanks for dropping a line, Dan. I think many of us are frustrated by how this has unfolded, but I’m not sure what you’d specifically like from people at that Oct 24th hearing. While I wish it was your store, not Kowalski’s, receiving a license, they’ve followed all the rules. It’s the system itself that’s flawed, not their plans, at least from what I’ve seen. I am pleased to see that the wheels are in motion to eliminate the antiquated 300 foot distance requirement from religious institutions, but it looks like there will be another public hearing dedicated to that issue.
      Can you more specifically explain what you hope happens from the City Council at this point?

  10. Peter Kim says:

    Can anyone explain relationship between Gary Schiff’s ordinance and Meg’s ordinance?
    Looks like she was ok with Gary’s ordinance which contradict with her own. Maybe it was only liquor store in her ordinance?

    Also, city should counts all factors including high-way, major county road and buildings not just distance.

    We need a professional/trained policy maker who can see whole picture and consequences.

    • Anders says:

      Peter, my understanding is this: Schiff’s ordinance eliminates the 300 foot buffer between places of worship (e.g. churches) and breweries and restaurants. It’s a little more complex with the restaurants, because it has to do with what percentage of their business is food versus drinks, but that’s the gist. Meg’s ordinance switched that 300 foot buffer (for churches and schools) to being a measurement made between front doors to a measurement made between property lines, but for liquor stores, rather than breweries or restaurants.
      They are fairly distinct ordinances, but both have short term consequences besides their inevitable long term ones. Tuthill’s ordinance blocked a liquor store from opening at 26th & Hennepin and led the way for Kowalski’s to plan their forthcoming wine shop. Schiff’s ordinance will open the door for a brewery by St. Cyril’s church in N.E. Minneapolis, and could help some smaller restaurants as well.

      • Peter Kim says:

        Thanks.. That’s what I thought.
        One thing i don’t understand is that why some folks against liquor store?
        I would more worry about places where customers will drink.

        I think liquor store is more retail and as long as they provide parking, customers don’t get into trouble compare to bars and restaurant.

        Maybe i am getting this fact wrong but it is my opinion who lives a block from a very busy bar / restaurant and two blocks from very busy two liquor stores

    • Thatcher Imboden says:

      Peter, you are correct that Meg was a co-sponsor of Gary’s ordinance to remove the 300′ distance requirement from places of worship and breweries.

  11. Nate S. says:

    What’s you last name, Nate?

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