Future of liquor store in question

The St. Hilaire City Council is weighing its options with regard to the future of the St. Hilaire Liquor Store. The municipal liquor store, which includes a bar and grill, has operated at a loss for the past seven years.

by April Scheinoha

    Over the past seven years, the St. Hilaire Liquor Store has operated at a loss. Now, its future is up in the air.
    “The city has been struggling to keep the business profitable since 2009,” said Mayor Brandon Kisch. He attributed the problems to high overhead costs and unpredictable on-sale liquor sales.
    The city of St. Hilaire operates the St. Hilaire Liquor Store, which includes a liquor store, bar and grill. On Tuesday, March 29, the council held an informational meeting regarding the future of the liquor store. About 25 people attended the meeting, which was held at the St. Hilaire Community Center.
    “We want transparency,” said Council Member Barb Bohm. “We want you to know what we’re thinking, and we want to know what you’re thinking.”
    Retaining the business, selling the entire business or selling the on-sale portion of the business were seemingly on the minds of attendees.
    “If you don’t know what to do, then you should sell,” said Ron McKercher, a patron of the liquor store.
    At least one attendee noted it would be difficult to find a new owner since the liquor store isn’t profitable now. Other bars are for sale in the area, and some have been for sale for years. In the event someone purchases the liquor store and decides to sell it within five years of the initial sale, the city wouldn’t be allowed to buy it back.
    Other factors are in play as well. If the city were to sell the business, there would be more taxable real estate in the city. The city would also have the profits from the sale of the building.
    No decision was made at the meeting. The time frame for a decision is unknown, but, according to Council Member Bernie Huot, the council needs to quickly make a decision.
    The council is looking into all of its options. “We have a lot of homework,” Kisch said.
    The matter is expected to be discussed further at the next St. Hilaire City Council meeting Monday, April 11 at 7 p.m. at the St. Hilaire City Hall.
    From 2009 to 2015, the liquor store had a total loss of $79,499. The largest loss was $21,383 in 2011.
    Over the past 10 years, the liquor store’s largest profit was $27,806 in 2006. During profitable years, the profit was transferred to city coffers.
    Between 2009 and 2015, gross sales were also inconsistent but averaged $429,000. Last year, gross sales were $421,827, a decrease of $67,147 compared to 2009.
    The city has used the liquor store’s savings to cover the deficits. As of Tuesday, Kisch said the liquor store had $36,997.58 in savings and $116,833 in a CD. Its checking account contained a little more than $35,000. Last month’s inventory was valued at $22,000.
    “Our biggest problem isn’t inventory. It’s management,” said Council Member Ken Wiggs. He referred to the need for trustworthy managers.
    Five managers have been employed at the liquor store since 2009. Two were fired, and the others resigned. The city is currently seeking a new full-time manager. A full-time bartender, who is filling in as the manager, and 11 part-time employees also work at the liquor store.
    As with other businesses, the cost of employment is rising. Kisch said that the city needed to entice college students to drive from Thief River Falls to work part-time at the liquor store.
    The city is also required in certain instances to contribute money toward a liquor store employee’s retirement fund through the Public Employees Retirement Association. City Clerk Margaret Peterson said those contributions were required if an employee was paid more than $425 in a given month. That number was modified Jan. 1, 2015, to $5,100 per year.
    The city has undertaken many steps to increase business. Kisch said the liquor store has been open on Sundays in the past. A manager bonus was instituted and tied to profits. The liquor store has hosted DJs, Friday fish frys and Sunday bingo. Currently, it’s hosting a 10-week Texas Hold’em Poker tournament. The liquor store has also assisted with the Thanksgiving Ball, a block party and the Vintage Snowmobile Show.
    During that time frame, numerous improvements were made to the building. The St. Hilaire Community Club donated funds to assist with some of those improvements. The Community Club sells pulltabs at the liquor store, providing $200 per month to the city for that opportunity.
    The council also tried other changes at the liquor store. It tried eliminating the sale of food. People complained, Kisch said. Pizzas were also the only food option for a time.