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Nelson seeks to ease smoking ban's burden

St. Louis County would slice in half the cost of liquor licenses for bars and restaurants for two years under a proposal by Commissioner Keith Nelson.

St. Louis County would slice in half the cost of liquor licenses for bars and restaurants for two years under a proposal by Commissioner Keith Nelson.

Nelson said the measure is aimed at giving county-licensed liquor establishments a chance to adjust to a statewide smoking ban that begins Oct. 1.

"One of the things we heard loud and clear as we went around St. Louis County [at smoking ban hearings] is the devastating effect that the statewide smoking statute would have on the hospitality industry," said Nelson, who plans to make his proposal at Tuesday's board meeting in Duluth. "It's been proven over and over that this does have an impact. What I want to do is lower the fee that they pay to us, to allow them the opportunity to adjust their business. We might see some of them install food service or patios that would allow them to attract different clientele that would make their businesses viable."

Depending on the type of license, fees range from $950 for an on-sale Sunday license to $2,500 for a license that permits on-sale, off-sale and Sunday liquor sales, according to figures provided by the St. Louis County Auditor's Office.

About 70 businesses hold on-sale licenses approved by the county, contributing a combined total of about $84,000 a year toward the county budget.

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The measure wouldn't apply to businesses that operate under city liquor licenses.

Nelson said the proposal would be a small but important way to show liquor license-holders that county officials are concerned about their survival.

"We're saying to them, 'We want you to remain in business -- we want you to be a part of St. Louis County,' " Nelson said.

"It's a good proposal," said Kevin Matzek, director of government affairs for Hospitality Minnesota, a St. Paul-based association that represents about 2,000 restaurants, hotels, resorts and bed and breakfasts. "Every little bit helps, but whether a reduction in license fees would be enough, I don't know. It depends on the business. It depends on the clientele. If it's a working man's bar, they will see a reduction in sales and clients coming into the bar."

However, Commissioner Peg Sweeney, chairwoman of the county's liquor licensing committee, says Nelson's proposal might be an overreaction.

"I think we ought to be watching it," Sweeney said of the smoking ban's effect on businesses. "And I think we should let people know that we would be willing to look at it. But I don't think we need to be giving away the farm on this thing."

Nelson's proposal would cost the county about $42,000 a year in licensing fees for two years. If some businesses closed and the total number of on-sale licenses within the county dropped by more than 10 percent over the two years, the 50 percent reduction would take effect for a third year.

Sweeney said she would be willing to consider reducing license fees for an individual business, providing that the business could prove a loss of business.

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"I don't think it's fair to assume that everybody is going to be hurt by this," she said.

Andy Strom, owner of Timbers Edge Grill & Bar south of Eveleth, said a decrease in the liquor license fee would be a "good gesture by the county."

"For me, it would mean $550 a year and it would make a big difference," Strom said. "I know it's going to be a transition. I think you're going to find a lot of people who are going to say, 'To hell with it' and pick up a bottle and go home to drink [and smoke]."

Commissioner Steve O'Neil has been seeking increases in cigarette and liquor license fees for about two years. Some of those fees haven't been increased since the 1970s or 1980s, he said.

"I am open to listening [to Nelson's proposal]," O'Neil said. "Nobody wants to see anybody out of business. I want all these places to survive and do well. But as a rule, there's a brief time when the businesses that are heavily depending on smokers lose business, then most of them bounce back."

If liquor license fees were reduced, business owners could use the savings to acquire a food managers' license and add food service to their business, said Nelson, a member of the county's liquor licensing committee.

"The objective is to give them an opportunity to adjust," he said. "One business pays roughly the same [in] property taxes as 10 homes. We don't want to lose any of them."

LEE BLOOMQUIST can be reached weekdays at (800) 368-2506, (218) 744-2354 or by e-mail at lbloomquist@duluthnews.com .

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