Detroit Lakes plans to open liquor store

DETROIT LAKES, Minn. — After hiring consultant Jim McComb to analyze where a liquor store would best suit Detroit Lakes, some council members didn’t seem to like his answer Tuesday night.

“This was probably the most complex (study) for a single location,” McComb told city aldermen during a special council meeting. “It’s a unique retail store.”

The McComb Group studied traffic patterns, looked at competing liquor stores, took a survey of customers and considered store square footage. It determined that building a new store on parcel C (Burger Time area) of the crescent district would be the best site for the city municipal liquor store.

Alderman Ron Zeman asked why there wasn’t hard numbers as to where the city would profit most.

“We have a diamond in the rough (with the existing location),” he said. “My main concern is the bottom line.”

McComb said the company wasn’t asked to look at those figures but that it certainly could.

City Administrator Bob Louiseau said the city wasn’t able to give the McComb Group costs for the crescent area when the study began because they weren’t available.

“If you are spending money, build a good building,” McComb advised.

McComb was asked to study three possible locations for the liquor store — Highway 10 West near Menards and Wal-Mart, the downtown crescent area, and remodeling and staying in the current location at Roosevelt Avenue and Frazee Street.

The chosen Parcel C is located where Burger Time is, and another parcel, D/E, was studied as a back-up option for the relocation. Parcel D/E is next to parcel C, but not as visible from Highway 10.

“Liquor is a convenience, like groceries, etc. You want it (the store) to be as convenient as possible,” McComb said. “Downtown is a better location than being west (of town).”

A parcel of land near Menards was ruled out because it isn’t convenient to access, and parcel D/E in the crescent district was ruled out because it isn’t visible from Highway 10.

Parcel C is both visible from Highway 10 and easily accessible at McKinley Avenue.

Zeman said that he has talked to several bankers in town who have said ‘you’d be a fool to even ask this guy to come in’ and look for a new location because of the current success of the operations, and that no other business in town has the return the liquor store does.

“You should ask your banker friends who doesn’t pay property taxes or rent,” McComb said.

As a municipal property, the liquor store is not required to pay property taxes.

Agreeing that Lakes Liquors is a big success, McComb said the store is about 7,000 square feet in size and does about $5 million in annual sales. The average Walgreens is 14,000 square feet in size and does $7 million in sales — a twice-as-large building for only a small amount more in sales.

He said according to sales per square foot, the liquor store could range from 5,000 square feet to 12,000 square feet, but he recommended a total space of 10,000 square feet — 7,000 square feet for retail and 3,000 square feet for back of the house operations.

The current building has about 6,000 square feet retail space.

“You can’t build a church for Christmas and Easter,” he said, meaning don’t build the building as big as the busiest month, July.

Alderman Bruce Imholte said he hears a lot of complaints about parking at Lakes Liquors. There are 35 spaces, some of which are taken up with people at the city offices above Lakes Liquors and some overflow parking from McDonalds next door.

“It’s a challenge,” Liquor Store Manager Brad MacMaster said. “It’s one of the weak spots of this location.”

McComb agreed that there are awkward left turns to enter the parking lot.

“If we fix our inconveniences and our bottom line goes away, what have we gained?” Alderman Leonard Heltemes asked.

McComb projects that that bottom line won’t go away, but rather a new store will increase sales because of its convenience.

He said if the city chooses to remodel, the sales won’t grow much more because the liquor store is working at capacity.

Aldermen asked city staff to work up a spreadsheet on cost of land, cost of building, cost of remodeling the existing building, revenue and the bottom line income for all scenarios and have it ready for the August council meeting.

Pippi Mayfield is a reporter at the Detroit Lakes (Minn.) Tribune, which is owned by

Forum Communications Co.

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