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Wednesday, January 5, 2011
Limelight for NoMi Liquor Stores—How to Fail a Business Before it Opens
5:40 PM | 
Posted by
The I.I. |
This blog thread posted by the Irving Inquisition uses some explicit language, as well as depicting some aspects of life in North Minneapolis that some readers may find objectionable. Reader discretion is advised.
Limelight for NoMi Liquor Stores—How to Fail a Business Before it Opens
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| BJ's Liquors (crappy strip club), photo from John Hoff |
Take a stroll over to Broadway and Washington sometime. The first thing you will notice is BJ’s on the southeast corner. This miserable excuse for a business has been standing at this intersection for decades. While it may be miserable, it does make a lot of money; and now, it’s been sold for a large chunk of change and will be closed down.
So what’s the problem? There was talk for the longest time that French Meadow Bakery was going to move in. Many of us were excited to hear that when the news came. Unfortunately, that deal fell through.
Let’s put things into perspective. Last night, January 4th, the West Broadway Coalition hosted a meeting at the conference room in the local McDonalds to listen to a presentation made by developer, Mark Dziuk, and the construction manager of the BJ’s site, Don Gerberding. Mark was at the front of the room making the pitch and taking heat from the locals there. In attendance were WBC’s staff and a menagerie of representatives of neighborhood businesses and neighborhood organizations; a good mix of interests if you will.
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| Proposed floor plans being passed around, developer, Mark Dziuk, has the floor. |
The new property owner, Arriel McDonald, has decided that spot will now become a liquor store with a small restaurant attached in the old BJ’s site. Ah yes, about the BJ’s site; did you know they plan to renovate the BJ’s building and then build-to-suit the rest, attached to that building? Fascinating. The purpose for that endeavor is to avoid certain city requirements for parking and such. According to the developer, Mark Dziuk, the city would require them to build a facility that’s 27,000 square feet in size and have underground parking. Dziuk inferred that something like this will never happen at that site. Indeed, I’m forced to agree but for a different reason. You can’t fit a 27,000 square foot building on to that site, even if it was two stories.
I tried to go in with an open mind about the whole endeavor. I walked into the meeting only knowing that these guys want to erect a new liquor store. Why is that a problem? We have multitudes of liquor stores here in NoMi already, and two of them are on Broadway. What’s the logical use of building a third? When a concerned citizen pointed out the riff-raff issue of pan-handling caused by the now defunct Jug Liquor, Dziuk fired back stating, “You don’t have a neighborhood here. You have an island…” Not exactly the loving feeling we were hoping for; hard to appreciate a dig on the neighborhood.
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| Proposed design of 219-229 Broadway. |
The committee didn’t have to ask how this new outfit would differentiate itself. Dziuk proudly claimed that they would be a Wine & Spirits shop, NOT a liquor store. “We’re doing Surdyk’s of the North!” One person in the audience responded to that statement by asking about the cheese shop. Unfortunately, Dziuk’s response was to say that there will be no cheese shop because of the restaurant. Remember French Meadow and how that deal fell through? That was supposed to be the restaurant. According to Dziuk, French Meadow wanted to setup a cheese section. It’s really quite hard to say whether there will be a cheese shop or not, but it appears that McDonald, Gerberding, and Dziuk are betting the farm that French Meadow will move in and handle that piece. A simple fact remains; you can’t be “Surdyk’s of the North” without a cheese shop.
When it appeared that the committee didn’t buy Dziuk’s answer on differentiation, he went on to explain that the store wouldn’t carry certain brands or products; UV and Night Train, for example. Dziuk went on to say that this was to appeal to a different demographic. Uh oh, did he just say “different demographic”? Oh dear, you can’t say things like that in NoMi meeting because there’s always somebody waiting in the wings to unleash the race card; more on that later.
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| Here's an above view of what the structure will look like. Insufficient parking in my view. |
What about impact to local business? I’m not exactly exuberating sympathy for NoMi’s local liquor stores. I do think that capitalism has a way of working competition out naturally. However, selling booze is one of the few retail enterprises that can make money around here in this market. So what will happen if you open up a mega booze shop? “We’re never gonna go head-to-head…”, so says Dziuk while directing his comment at the Merwin Liquors owner. I don’t have to be in the liquor business or even the retail business to know that comment was total bullshit. Of course they will go head-to-head. Merwin and BLO will feel the brunt of the onslaught.
Someone asked Dziuk how much all of this was going to cost. While he refused to give a specific dollar figure, he did say that it would cost approximately $150 per square foot. Now if you look at the site plan, you can see that it’s probably about 8,000 square feet on the ground floor perimeter. Consider that BLO is only 2,000 square feet—says owner, Dean Rose—this new site will have the now empty restaurant and liquor store on the ground, and offices up above. The second story appears to be almost the same size as the ground floor, minus the end of the building near the parking lot entrance on Broadway. So let’s say we have 8,000 on the first level and 6,500 on the second level, we’re looking at approximately 14,500 square feet. At $150 per square foot that comes to $2,175,000. That’s just to build the structure. That doesn’t account for décor on the inside or the parking lot on the outside. Plus, you have to figure in for leakage, scope creep, and all kinds of cost over-runs. Realistically speaking, Arriel McDonald’s Fantasy Liquors project will cost about $3 million dollars. Someone asked how this project was being funded, and the answer they got was SBA loan.
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| Embattled real estate developer, Mark Dziuk. |
Wait, what about the logistics? Look at the picture of the floor plan again; not very many spots to park your car in this lot. Ah hah, a light bulb moment! No wonder the city would require underground parking if this building was going to be done right. Merwin and BLO have significantly larger parking lots than this, and they don’t share space with offices or a restaurant. What about snow removal? How’s that supposed to work? There’s no room to dump it anywhere without losing more precious parking. Dziuk expressed his sincere desire to move forward with this project, and said that the old BJ’s section would in no way ever revert to being a strip club. The question that brought that matter up came from a resident referencing the 10th Inning fiasco. Yes, it is a strip club; Dziuk is one of the owners. Dziuk refers to the 10th Inning as a “Restaurant with benefits…” and NOT a strip club. Dziuk can call it whatever he wants, far as I’m concerned, the 10th Inning is as much of a strip club as this wine & spirits shop is a liquor store.
An audience member commented on Dziuk’s financial failure of Le Parisian on Lyndale. Dziuk replied that the project was a success, but he had not foreseen the mortgage crisis looming. This project is where Dziuk personally lost $6 million of his own investment in the project. There was another problem here as well. Dziuk had tried to get Trader Joe’s to move in on the ground floor of the Le Parisian, and was unsuccessful without getting a zoning variance for the wine and beer, which Trader Joe’s is known for. Dziuk tried to get the variance so that he could have his liquor store within 2,000 feet of Hums, which is across the street from the Wedge. Naturally, residents and businesses in Whittier bitterly fought this endeavor and Dziuk lost on both the business and real estate fronts. Dziuk commented about his exploits in Whittier, “That neighborhood could have turned the corner.” Ironically, Whittier isn’t exactly a neighborhood with dilapidation issues; “turning the corner” isn’t what comes to mind when I think of that region of the city.
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| Master Construction CEO, Don Gerberding, presents his case. |
Sensing the tide of victory was turning against their cause; Don Gerberding usurped the floor, got up and took his turn at addressing this ravenous committee. He emphatically stated that other parts of the city were able to have these amenities, so why couldn’t North? To answer that question we’re going to have to reveal some dirty laundry; this blog’s specialty.
Gerberding used a social engineered message to make headway with the committee. “I live in South Minneapolis. But I work in North. I’m here 10 to 12 hours a day.” Fair enough, doing business with locals is preferred; assuming they are who they say they are.
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| Le Parisien; originally built to be condos, turned into rentals due to the mortgage crisis. |
It was time for the liquor store advocates to leave so that we could discuss the matter amongst ourselves. City planner, Tom Leighton, was present. Committee members pressed him for answers. Since this site is zoned light industrial, what other non-industrial uses could it be? He responded with; gas station, car lot, and liquor store. Several others re-engineered their questions about zoning, but the perception I got was that the city’s perspective was to swing for the foul post and build the liquor store. An elderly gentleman sitting in the corner commented on the liquor store and Dziuk’s use of the word “demographic”. His perception was that to not carry brands like UV and Night Train, was essentially a dig at the African American community. He went on to say that there were a lot of code words being thrown around, but essentially it all tied into not serving the African American community. Well, it wouldn’t be a NoMi meeting without a little racism. (Sigh) Admittedly, Dziuk’s choice of words when saying “demographic” was erroneous. The reference to that had been to the pan-handlers at Washington and 94 running into Jug Liquor to purchase the cheapest swill for sale. As for the gentleman hung up on demographics, I have to ask this. Is he aware that he just insulted the African American community by inferring that they only drink the cheapest swill on the shelves? An irony, considering the owner of said construction site, Arriel McDonald is African American. Besides, I know plenty that don’t including some close drinking buddies, so maybe it’s time to catch up with the times; it’s 2011, not 1971? Referring to a different “demographic” in regards to Fantasy Liquors, means “up-scale”; customers that are willing to spend more money on a better product.
Let’s sum up where we’re at with all of this. A small business loan is to be used to rehab BJ’s and build this extravagant new structure. The developer’s background is ambitious, yet morally casual, is prone to high financial risk, and has failed in the past. The owner appears to be loaded with cash, yet wants to open a retail business that’s guaranteed to fail due to market saturation and inadequate parking.
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| The firm tasked with the fiduciary responsibility of revitalizing West Broadway. |
The guy sitting next to me wrote on a piece of paper, passed it to me and it said “Capitalism vs. Socialism?” He had previously made comments in the meeting about letting these guys do their thing to see what happens. I’m inclined to agree and indeed, Capitalism is a wonderful thing. It serves as a vehicle for empowerment, profitability, and progress. However, Capitalism is also wasteful. Case and point, adding a multi-million dollar liquor store in a location that’s ill-suited for it; in a saturated market that cannot sustain it. I wrote on the paper “Bad Taste vs. Sensibility” and passed it back. The recipient shook his head in agreement, because at the end of the day does embarking on an endeavor to build a liquor store when the community doesn’t have an appetite for it make sense?
In the end the committee voted 10 to 3 in favor of writing a letter to support redevelopment of the BJ’s property, leaving out any language supporting construction of a liquor store. It should also be known that Tom Leighton did back track the following day and sent out a list of acceptable alternative businesses that could function in the I1 industrial zone where BJ's currently sits.
Industrial
Certainly a range of industrial businesses would be allowed
Office
Office uses are allowed, which includes high-end higher density Corporate headquarters type office, but would also encompass such commercial services as professional services (tax accountants, legal services, architectural services, etc.) and clinics such as medical, dental, or chiropractic. Don’t underestimate the value of higher density office uses because they add daytime customers for the West Broadway Business District. This would expand the neighborhood residential market that already exists.
Other Commercial
Other commercial options, including retail, are limited by design. They include:
Art Gallery
Art Studio
Building material sales
Child care center
Contractor’s office
Day labor agency
Farmer’s market
Liquor store, off-sale
Motorized scooter sales
Neighborhood electric vehicle sales
Office supply sales and services
Photocopying
Gas station
Automobile rental
Automobile sales
Car wash
Indoor recreation area
Hotel
Radio or television station
Commercial laundry
Dry cleaning
Food and Beverage
Catering
Coffee shop
Nightclub
Restaurant
Educational, Social, Cultural Facilities
Vocational or business school
Club or lodge
Community center
Church
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17 comments:
Is this the same Arriel McDonald that played Basketball for the U of Minnesota? I will assume that it is and he also made millions of dollars playing in Israel and other overseas locations. Thanks,Arriel, for building another liquor store in this community and adding to its misery. Oh yea i forgot..you played for Clem Haskins.
What are UV and Night Train? Let's try some. Thanks for the drinks last night, II!!
Nikki,
Those are bottom shelf booze. Malt liquor and vodka n' stuff. Far as trying them goes... Let's not and say we did; they're nasty.
Wild Irish Rose,M/D 20-20.Bali Hai' Muscatel, White Port, Night Train,Silver Satin, Thunderbird and Cisco. All fortified Wines marketed to people of color and will be sold at the liquor store that will be built at that corner. It is way too bad that Mr. McDonald will be contributing to this continual pushing of poison that is "Harmless". Really, Arriel, i wish you would do better because you are one heck of a smart guy who can invest wiser. To compete with the other poison pushers you WILL have to sell these brands and you know it. It's a fact, you will only have to open up a decent restaurant for that spot to be a revenue producer.Anonameass 7:43 would have been alright except for the last sentence because that team was the shiznit!!
Coffee Shop / Art Gallery / Wine Bar! Cater to clients of Master Development, all those industrials along 2nd Street, Coloplast, condos nearby, not to mention everything north, south and east of there. Maybe a Lunds type grocery with a deli and dine in area?
That's sure a long list of possibilities though!
A few things:
First, the whole "you don't have a neighborhood, you have an island" quote was actually a good point, expressed poorly considering the audience. You've got a site that's bounded by the highway and the river, and surrounded by an industrial sector. You do not have the typical foot/bike traffic that many of the alternatives to a liquor store would look for. You do, however, have one of the busiest intersections around.
I didn't take that statement as a dig against a community so much as a blunt fact.
I think you were incorrect, I.I., to state that the developers "are betting the farm" on French Meadows. At this point, French Meadows is not in the picture and that seemed clear to me.
I also don't care one bit about the 10th Inning aspect. This site cannot be a strip club once BJ's is done operating, and the 10th Inning is in the warehouse district where strip clubs are located. It's legal and zoned properly for what he wants to do. The 10th Inning is just a red herring in the debate about what to do here, in my opinion.
I was glad, though, to hear tough questions asked about the developer's past business dealings at Le Parisien and Trader Joe's. And I wasn't satisfied with his answers either, which boiled down to "Those would have succeeded if they hadn't failed."
So what do all you self annointed neighborhood activists want? Again you rant with no specific, and I mean specific ideas. Let's hear from you folks!
@ Anon 9:42,
You have selective memory. Remember that part where I said we were really looking forward to the French Meadow bakery?
I think we would be game for just about any sort of business that we don't currently have.
Also, Anon 9:42, the proposal before us isn't open-ended. It's about whether residents, businesses, and other community stakeholders want a very specific building design and use (restaurant, liquor store, office space). It is entirely appropriate for people to say "we don't want the liquor store and we don't have a specific alternative ready yet." There is a lengthy, but limited, subset of uses for this property given its location and zoning as well. I'd like to see a discussion from residents and stakeholders about what we'd like to see from that list and why it could be successful in NoMi.
And what, specifically, do you mean by the term "self annointed (sic) neighborhood activists"? I've heard that bandied about before with no real definition of what that means and how one becomes active and "annointed." Care to clear that up for us?
See, it does not feel so good to be called names, even though these are much more passive than ones I have seen you and other ranters call residential landlords. My point is is that French Meadow, for good economic reasons, chose not to come here. Ok move on. What's the next best idea???? As I understand it, nobody elected you to represent the interests of "all" the people up here. Need to see your specific ideas and who all agrees with you.
I was excited to have something replace BJ's.
Now...not so much.
Annointed simply means that you may have a ticket to the big show, but cannot leave the peanut gallery. You get annointed by those in the peanut gallery because they do not have the drive to help folks out personally but love to tell others how to do it. That would be the walk the walk thing. Wok wit yan, walk this way,and i always figured that we can walk it out,(refrain) we can walk it out(think Beatles). WHO? Screw the naysayers and keep up the good work.
Arrrgh,
The captain says, mates that take thee personal time and energy and get involved with their community like thee II, be exercising their freedom of association and engagement in a public process. Thee "self anointed" be backwash from them that cower from the light of open debate!
While the 10th Inning issue isn't directly relevant to this site, it speaks to the intentions of the "Chief Developer and General Manager", Mark Dzuik. This man who bankrupted his La Parisienne project describes a strip club as a "sports bar with benefits". Now he is describing a liquor store wedged between the freeway and a recycling plant a "Surdyk's of the North". Remember, once a liquor license is granted, it's for life and when it no longer becomes economical to not sell low end vodka, you can rest assured plans will change. As certain as I am that 10th Inning will be a tittie bar, this joint is going to be yet another liquor store for the north side.
There is a public hearing on this issue at 4PM on Monday. If you can't be there to testify, be sure and write city council.
At what point does Surdyk's get to argue their brand is being diluted?
When this topic came up on my blog, and I heard naysaying about how the liquor store wouldn't be something nice, I thought it was just negative carping.
Now, not so much.
My idea: tear down the strip club. And then...
Well, tear down the strip club.
I for one would like another liquor store option on the Northside. There are a lot of brands you can't get without going to NE or into Robbinsdale. Regarding the parking issue- I know from past experience that you can find sidestreet parking in this area within a 1-2 block radius, and the site is pretty well served by public transit options.
I think us Northsiders (and many NIMBY neighborhoods throughout Mpls) often shoot ourselves in the foot with this type of dialogue/activism and fail to see the bigger picture:
"What, business owners and developers actually WANT to invest on the Northside? Pump millions of dollars into the community on projects that could actually create some jobs and economic development? Wait a minute- SOMETHING sounds fishy here....we better do our best to come up with shoestring arguments against this and try and railroad it at all costs- THAT will send a great message to all of the other local business owners and developers who already don't want to touch North Minneapolis with a ten-foot (or mile?) pole!"
Thanks a lot for sharing your insights. I like how you described that factor in your business.
office space
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