Citing “bad timing,” the Isanti City Council rejected an application from Coborns to sell 3.2 liquor in the Isanti store.
The vote on the request was split, with council members Jim Gordon and Paul Bergley voting in favor of allowing it and council members Dan Collision, Steve Lundeen, and Mayor Jeff Johnson voting against it.
Despite not approving the application, Johnson and other council members encouraged Mary Kruck not to give up and try again in another year or so, citing the pandemic and the current state of affairs in Minnesota with the protests over the killing of George Floyd at the hands of the police as the reasons for which they were not in favor of approving the application.
The fear is that Coborns would take business away from the municipal liquor store, as well as less funds coming from local government aid (LGA). Currently, the Isanti Liquor Store transfers an average of $350,000 to the general fund yearly, off-setting the tax rate for residents, according to City Administrator Josi Wood.
The liquor store currently generates approximately $45,000 yearly selling 3.2 and nonalcoholic beer, according to Liquor Store Manager John Jacobi.
“I guarantee you if we do pass this resolution, we are giving up profit back to the community, and that is what the liquor store is all about,” Jacobi said, while asking Coborns Manager Mary Kruck if the business was applying for the license in anticipation of the ability for grocery stores to sell strong beer in the near future.
“Our director of liquor has not given me that information,” Kruck said. “I can tell you that in the location where I did already have 3.2 in Princeton, and then there was another location that also had 3.2 beer, I can tell you that for us it was just an added benefit to the guests. I can tell you that I can’t get White Claw, which is what I prefer to drink, or Tito’s - I can’t believe I’m having this conversation - that I can’t get that at my store. I’m still going to come to you for that, I think this is just an option for our guests who are coming in for their brats and their burgers on the way up to the lake to have an added sale – they’re still going to come to you for everything that they can’t get. 3.2 guests are going to want the 3.2, but they are still going to come to you for their larger margins.”
Lundeen stated he was torn on the issue, noting the council had just passed a “business-friendly city” resolution, and now the council is contemplating denying a business an opportunity.
“I, personally, I don’t drink; I haven’t drank in 30 years; and I have come in and I have got stuff for my daughter and for my wife many times,” he said. “If I was to drink, I’m not going to buy 3.2 if I can buy hard liquor. Plain and simple; straight out. Coborns is going to have a problem with this, because they are going to be putting a lot of money and inventory into something that isn’t going to move that rapidly.”
He noted he does not see allowing 3.2 sales of liquor at the grocery store as something that would hurt the municipal liquor store. “My heart wants to say yes, but brain looking at this bottom line dollar amount saying no. But, as a person, as a council member or mayor, someone who’s representing the city, we have to look for the best interest of the city,” he added. “And, personally, keeping the liquor store selling their alcohol to them is the best interest for the city.”
Gordon stated he was behind allowing the 3.2 license for Coborns, given that, on principle, he does not believe cities should be in the liquor business.
Collison pointed out the council had been discussing the potential loss in local government aid funding due to the pandemic at recent meetings, noting the council was going ask some department heads to make cuts.
“Money raised through the liquor store goes directly back into the community so we don’t have to raise taxes. Or else we wouldn’t be doing it,” Collison said.
“If it was any other time, I would stand here and argue 110% give them that license, because we can always budget that change difference somewhere down the line,” Lundeen said. “I just feel this next year we’re going to get hit pretty darn hard and I think I have to agree with Councilman Collison. With LGA funds getting cut, I just, it’s a hard one to swallow. I appreciate every business we have in town, I appreciate what they do.”
Johnson told Kruck that he supports Coborns no matter what, and noted he spends a lot of his money at the grocery store. “I would love to say, thumbs up, let’s do this, but this is horrible timing. Let’s be honest, if this doesn’t work right now, I’d tell you not to give up,” he said. “I’d say – come back in a year or two, try it again, see what happens.”