Jill Schramm/MDN Bar owner Tony Mueller speaks to the City of Minot’s Alcohol Ordinance Review and Rewrite Committee Monday. Committee members from left are Jon Hanson, Kevin Black and Brett Tinnes.

A Minot city committee’s decision Monday to pursue removal of the cap on the number of liquor licenses is getting an unfavorable reception from many in the local beverage community.

The proposal of the Alcohol Ordinance Review and Rewrite Committee includes provisions that committee members included to protect existing license holders, although those licensees say that won’t be how it plays out.

“When we started this committee, we wanted to make this the most pro-growth, pro-entrepreneurship committee that we can. This is an avenue to do that,” committee chair and city council member Paul Pitner said of cap removal.

However, bar owner Tony Mueller questioned whether economic development would result from lifting the cap because the volume of business doesn’t change; it just gets spread more thinly over more businesses.

“You can open 10 more bars and, in my opinion, what that is going to mean is 10 more bars are going to suffer,” he said.

The committee called for the drafting of a proposed ordinance that would:

– Eliminate the cap on retail liquor licenses.

– Set a minimum of $100,000 to $125,000 on the city’s price for a license.

– Require potential purchasers to first seek to buy a license from an existing holder before purchasing from the city.

– Allow existing license holders a one-time transfer. Newly purchased licenses would not be transferable.

– Separate on-sale and off-sale liquor licenses by creating an off-sale only.

“We need to make a recommendation that does two things. Number one, eliminates the cap and, number two, honors the existing retail liquor, beer and wine holders,” said committee member Kevin Black, who made the motion to draft the ordinance, which will come back for committee review next month. A meeting was tentatively set for Oct. 14.

Owners of alcohol establishments are holding some of their opposition to present to the Minot City Council when it acts on the recommendations of the committee. Following the meeting, they questioned whether the cap deters new business, noting that existing licenses currently are for sale to anyone wanting to start. They added that having a minimum price helps, but the lack of transferability is not acceptable.

Jon Hanson, a bar owner and committee member, said he hasn’t made up his mind regarding keeping or lifting the cap.

“I think we have work to do on the committee yet,” he said. “I’m, hopefully, trying to be as good a representative of license holders as I can be. Again, I don’t have an opinion because I don’t think we have laid out clearly what preservation of value is going to look like.”

Casting the only vote against the ordinance proposal, he raised concern about the lack of transferability after a single transfer. In cases in which a family member takes over or inherits a business, that would end any further transfers, he said.

Hanson also opposed a reduction in the minimum price until all current license holders are no longer operating establishments.

Even at $125,000, a minimum is a huge barrier for entrepreneurs to enter the market, said Black, who recommended the minimum gradually step down over time.

Committee member Brett Tinnes said it appears the many different license types created over the years have been an attempt to get around the cap that just affects the retail liquor category of licenses.

“This is why I’m in favor of removing the cap, because it’s going to prevent this from continuing to happen, but we also protect the value of the cap at a high value,” he said. “I don’t know if the step down is the right idea because that’s kind of going against us protecting that value, I think, for current owners. I would be in favor of sticking to a minimum and holding that value.”

The cap is tied to Minot’s population. Following the 2020 census, the city added four new liquor licenses for on- or off-sale. Those licenses were sold at auction, with minimum bids set at $100,000. They sold for between $100,000 and $210,000.

The discussion on eliminating the cap is part of the committee’s broader comprehensive review of the city’s alcohol ordinances that began in January.