City rules require that neighborhood bar patrons eat more than they drink. But the standards are inconsistent.
As dust settles from the 2 a.m. bar-close debate, Uptown bars and restaurants are looking closer at city rules that require them to sell more food than drink, which some claim are unfair.
A city ordinance, in place since 1983, requires non-Downtown bars within 500 feet of housing to derive 60 or 70 percent of their revenues from food, not booze. Affected bar owners complain that many competitors don't have to meet this standard if it had a liquor license 20 years ago.
Minneapolis Liquor Inspector Ken Ziegler said the restrictions were put in place 20 years ago to protect neighborhoods from bar activity. He said the rule is designed to limit bars in neighborhoods and guard residents against noise and other alcohol-related problems.
Residential-area bar owners claim the licensing restrictions only cause financial hardships that, in one case, helped cause a bar to go out of business.
An Uptown problem
City Councilmember Dan Niziolek (10th Ward) said the situation has affected Uptown. Niziolek noted that the Smiling Moose, formerly located on the second floor of Calhoun Square, 3001 Hennepin Ave., never reached 60/40 sales compliance, so they just left town. (Smiling Moose management, based in Colorado, did not return calls for comment upon their closing.)
Wayne Kostroski said he's found meeting the standard at Bar Abilene, 1300 Lagoon Ave., difficult, too. "I try to keep food priced so people come back. People won't pay the same margins for food as they will for alcohol," Kostrowski said.
Kostroski, an experienced restaurateur who also owns Downtown's Goodfellows and Edina's Tejas -- which are unaffected by this law -- said if someone orders a burger and a few specialty drinks at Bar Abilene, it's almost impossible to maintain the 60/40 ratio.
Brad Bridwell, executive managing partner of Old Chicago, 2841 Hennepin Ave., said they've been able to make the cut, but every year it's a struggle and they're always on the cusp of falling below the standard.
How liquor licensing works
Ziegler and Niziolek said the 60/40 or 70/30 standard comes into play depending on how close an establishment is to housing.
Niziolek said a restaurant must adhere to the 60/40 food/liquor rule if it is located out of Downtown, its entrance is less than 500 feet away from residential property, and it is located in seven continuous acres of commercial developments. Ziegler said the 70/30 standard also applies to bars within 500 feet of housing, but also if they have an entrance less than 300 feet from a church.
There is an exception to the rule. Properties with an existing liquor license before the 1983 ordinance don't have to adhere to the sales ratios. Niziolek said Chino Latino, 2916 Hennepin Ave., was grandfathered in because the Rainbow Bar, which occupied their space before 1983, had a liquor license on the books.
He said a few other grandfathered properties include the CC Club, 2600 Lyndale Ave., Williams Pub and Peanut Bar, 2911 Hennepin Ave., Uptown Bar and Cafe, 3018 Hennepin Ave., and Liquor Lyle's, 2021 Hennepin Ave.
Stretching to 60/40
Kostroski said that during the past few years, he's tried many things to boost Bar Abilene's food sales and comply with the 60/40 rule.
He said the restaurant's menu was numerous times and began offering drink specials that encourages customers to buy food, too. Kostroski said they also added Saturday and Sunday brunch to try and get the food sales up.
Bridwell said the ratio requirement also affected his business. He said Old Chicago added cheap, late-night happy hour food to extend eating hours and boost food sales.
One option for boosting food sales would be to raise the price of food, but Bridwell said that's not an option, because it's just not fair for his moderately priced restaurant. "Why should I have to charge more for my food just to stay in business?" he asked.
Is it fair?
Bar owners said the grandfathered establishments have an unfair advantage because they don't have to alter their offerings or profit margins to meet the standard the newer bars do.
"It gives some bars just around the corner from us an advantage," Bridwell said.
Bridwell, who is also the president of the Uptown Business Association, said the rule also makes it hard for his business to participate in community events such as the Uptown Art Fair.
He said Old Chicago had bands in its parking lot during last year's fair, and it was popular; however, alcohol was the main consumable of choice, throwing off the restaurant's ratio.
Niziolek said the unfairness is clear and it's important to investigate ways to make more equitable for all. He also wants to see if the restrictions even serve their purpose of keeping the peace in neighborhoods with bars. Still, he said, there was no action currently planned.
Ziegler said that the licensing is fair because the bar owners know the rules when they apply for the license.
14 feet = lost revenue
Kostroski disagrees. He applied two years ago for a live entertainment license so he could feature a DJ and dancing at Bar Abilene, but was told by Ziegler that he was ineligible, because he was less than 500 feet from residential property and the 60/40 rule applied.
It turns out, however, that the 60/40 rule doesn't apply in Bar Abilene's case, as there was a miscalculation that was unnoticed until now. The restaurant is 514 feet away -- meaning Bar Abilene could have had dancing two years ago.
How did the screw-up happen? Ziegler notes that the city's GIS mapping system is only a year-and-a-half old; last month, he was analyzing data for the 2 a.m. bar-close ordinance and discovered the Bar Abilene discrepancy.
Kostroski said because of the 14-foot error he's out two years of revenue he can't get back -- but because he's adhered to the 60/40 standard, he's not sure exactly how much money he's out. "I shudder to think at this point what we missed, " he said. "It's probably significant."
*The city is reviewing Kostrowski's application again in mid-July and he hopes to have a DJ in house on Wednesday nights by late July. He said the DJ roster will be available at www.barabilene.com