Restaurants launch campaign to change licensing laws

Restaurateur Molly Broder hosts a strategy session at Terzo on how to free neighborhood restaurants from strict city charter rules. Credit: Photo by Michelle Bruch

For the past year, the sisters that own Kings Wine Bar at 46th & Grand have been audited by the city on a monthly basis. Their offense: not adhering to a condition on their license that requires 70 percent of sales to come from food and 30 percent from alcohol.

The owners are trying to fix it. They change the menu, promote brunch service, keep the kitchen open until midnight, and continually work with the city to make plans for compliance. But with a burger at $11 and beers at $6, a second round quickly tips the scale.

“People want good wine and craft beer, and it makes it hard to hit the numbers,” said co-owner Samantha Loesch.

Loesch is one of several restaurateurs who met at Terzo Vino Bar this month to strategize a way out of a licensing system that binds them to the city’s charter. The city grants charter wine licenses to restaurants that drop into residential neighborhoods and aren’t surrounded by seven acres of other commercial property. The law is designed to prevent bars from opening in quiet residential areas, and the licensees are held to ironclad regulations that can’t be changed by a majority Council vote.

“If I sell a $100 bottle of wine, I have to think about how many tables have teetotalers to make it work,” said Molly Broder, who operates Terzo at 50th & Penn. “It’s too restrictive in today’s world. … The only ones that are making the percentages are serving breakfast and lunch.”

Other rules require restaurants to serve alcohol to customers only when they order a full meal.

“People get upset with us when they’re told they have to order food,” said Molly Duffin, co-owner of Kings.

The City Council formally passed the charter amendment in 1997, following a voter referendum that allowed restaurants to serve alcohol outside of large commercial zones.

Former Council Member Steve Minn, who introduced the charter wine ordinance, said the momentum for change stemmed from restaurants like Broders and Pierre’s Bistro, who were looking for action on the issue. The ordinance banned separate bar areas and established the 70/30 food-to-beverage ratio.

“It made a lot of sense,” he said. “People were concerned about not having bars.”

The concern is not an old one. Last summer, neighbors of the incoming Crooked Pint Ale House at 40th & Lyndale worried about the pub’s future noise level and potential late-night hours. At a public meeting in May, the city’s Regulatory Services District Supervisor Pat Hilden laid out the charter wine license requirements to reassure neighbors it could not operate like a saloon.

“It allows restaurants in a neighborhood as an amenity,” he said at the time. “It’s not meant as a neighborhood bar.”

The owner later changed the Ale House name to Harriet’s, to further reassure people it would be a neighborhood-friendly establishment.

Exiting the city charter appears to be an uphill battle, based on the February strategy session attended by owners of about 17 restaurants including Tilia, Cafe Ena and Gigi’s.

The restaurants have a few methods to leave the charter. One is a 13-0 City Council vote. Council Member Elizabeth Glidden (8th Ward) said that’s unlikely, given that she knows at least one council member who would prefer to put a charter issue directly to voters.

The restaurants could collect 11,000 signatures before a potential April deadline to put the issue to referendum.

The referendum is risky, however.

Matt Perry of the Nicollet-East Harriet Business Association noted that whenever a referendum question deals with alcohol, voters uneducated on the issue are likely to vote against it.

Likewise, Minneapolis Charter Commission Chair Barry Clegg said voters tend to be skeptical of ballot questions that would change the city charter.

“If there is any organized opposition, it is very difficult,” he said.

The restaurants could also seek approval from the State Legislature to get out of the charter, followed by a majority Council vote. But the Legislature’s omnibus liquor bill could become controversial this year, as it has the potential to include Sunday sales provisions.

Dan McElroy, executive director of the Minnesota Restaurant Association, said legislative action to override the charter might also be a more sensitive issue this year, given the recent controversy over the charter override to build the Vikings stadium.

If the restaurants were unbound from the charter, they would rally with other venues that are working to amend laws requiring 60 percent of sales come from food and 40 percent from alcohol. Those rules apply to restaurants outside Downtown standing within 500 feet of homes.

City staff have spent the past year discussing the issue with restaurateurs.

“Almost all of the council members are interested in this one,” said Grant Wilson, the city’s Manager of Business Licenses. “We’re looking for something that will replace it. … We’re looking for operating standards.”

For example, if a restaurant patio is adjacent to condos, new operating standards could prohibit amplified speakers or require patio closure at 10 p.m.

Wilson said he needs new restaurant regulations, because it is very difficult to revoke a license.

A case in point is Champions at Lake & Blaisdell. Council members are currently considering a revocation of Champions’ license, based on an alleged failure to provide adequate security. The city has spent the past year in litigation with the Champions owner.

“We need to ensure that people who have restaurants in close proximity to residential dwellings don’t operate like saloons,” Wilson said.

Council Members Glidden and Linea Palmisano (13th Ward) told restaurateurs in February they support their efforts to get out of the charter.

“I’m in full support of the 70/30 law going away,” Palmisano said. “I love the food culture we’re creating in this city. … My own concern is in the event the ballot measure is not passed, it’s not something that we can pick up in the next Council cycle. … If it fails, it won’t be picked up for a very long time.”

To help their chances of success, the restaurateurs have already retained a lawyer. They’re considering hiring a coordinator and enlisting young door-knockers. Don’t be surprised to see waiters with clipboards collecting signatures, signs calling to “End Prohibition” in restaurant bathrooms, or new promotional videos on YouTube.

“We’ll keep the pressure on and keep it hot until we have change,” Broder said.