The city council discussed different options for the Wayzata Bar and Grill, and Wine and Spirits during a workshop on Tuesday.
Aurora Yager, administrative services director, presented an analysis of the operations for the Muni’s bar as well as its liquor store component. The presentation included a breakdown of both operations’ financials year-to-year as well as a projection of what selling or leasing the space would return to the city.
According to Yager’s report, the bar and grill did more than $3.6 million in sales for an excess of 70-percent gross profit in 2019. The COVID-19 pandemic slowed things down in 2020 and 2021 but the gross profit of net sales remained at 68-percent or better.
The average benefit to the city from the bar and grill is $91,814 to the general fund and $139,730 toward capital improvements.
For wine and spirits, sales exceeded $3.4 million in 2020 and more than 28-percent gross profit of net sales. The average sales is more than $2.9 million at about 26-percent gross profit. Wine and spirits operations contribute an average of $83,956 to the general fund and $110,914 in transfers to the capital fund.
“Historically these operations have funded portions of other city staff salaries,” Yager said. “We’re hoping to determine if you feel comfortable continuing operations. Then we can talk about making the operations the best they can be. Or we can explore other options.”
The other options discussed for both sides of the Muni were leasing the space or selling the building. Yager created a five-year projection for the net cash the city would receive under each option. The option bringing the most net cash to the city is continuing operations on both fronts. The five-year total projection for the bar and grill is more than $1.5 million compared to $266,962 for leasing and $980,738 for selling. For wine and spirits, continuing operations tallies more than $1.9 million over five years.
“We still have our existing debt that we will be paying off,” Yager said. “Selling the entire property would get us an influx of cash but we are still paying off our bond payments.”
The city has owned or been involved in the operations of the Muni in some way since it was founded in 1947. This year marks the 75th anniversary of the Wayzata staple.
“I’d be interested in exploring another model and see an example of a contract Minneapolis has put together for something like (the Muni),” said Mayor Johanna Mouton. “This is an institution in town. I think it warrants really doing a risk/benefit analysis.”
“If it comes back and we take a look at a Minneapolis contract and all of the sudden we eliminate costs A, B, C, D — we step back and all of the sudden we’re making as much if not more money, that’s going to be a tough choice frankly,” Mouton continued.
The council was largely in agreement on continuing operations and finding ways to improve operations while still being involved with the Muni. Council member Jeff Buchanan was not present for the workshop.
Councilor Cathy Iverson said she would need more information to consider before she would entertain other options.
“I’d like to see some of the marketing activities that are planned and get my head better around that,” she said. “What are other liquor stores doing to entice people? I ask because honestly I don’t know what your strategy is. Including that in the packet would be very helpful.”
Council member Alex Plechash agreed with staying on the current path because the current model continues to work well for the city.
“There is a cultural aspect to this too,” he said. “This is Wayzata. This is our little place. You can’t discount that either.”
Council directed staff to continue operations of Wayzata Wine and Spirits and return with more data points on the bar and grill. The council will then discuss options for improving operations moving forward.
‘Open Street’ event discussed
In other business, the council weighed in on an idea to close Lake Street to Minnetonka from vehicle traffic from Friday afternoon to Monday morning. This would be done to open the Panoway district up for walking space and bicycle traffic.
City planner Nick Keiser said the city could bring in some amenities to the area during the street closure.
“We really want to focus on a more local, pedestrian, community deal to do activities down there,” he said.
The estimated cost of closing the street, providing traffic control and signage is about $2,000 per weekend. The idea comes from the Panoway District Committee. The committee would like to test the concept later this spring or in the early summer. It would also like to do a second event later in the year.
“I like the concept. I’m not opposed to it,” Plechash said. “If I had concerns it would be the obvious ones like traffic and the loss of parking. We have issues with parking as it is.”
Keiser acknowledged the concern over traffic, particularly as it relates to COV Wayzata’s ability to continue deliveries while the street is closed. COV is located at 700 East Lake Street on the corner where the proposed road closure would begin from the west.
The council members in attendance and Mayor Mouton voiced support for the idea. This item would return to council if it moves forward as council approval is required to close a city street.