Liquor sales at Elk River’s two municipal stores rank eighth in state

by Joni Astrup

Associate editor

Elk River’s city-owned liquor store operation ranked No. 8 out of 209 in the state in 2010 gross sales.

Northbound Liquor, located along Highway 169 in Elk River, is one of two city-owned liquor stores in Elk River.

That’s according to a new report by the Minnesota State Auditor’s Office titled “Analysis of Municipal Liquor Store Operations.”

Gross sales at the city of Elk River’s two stores — Northbound and Westbound — totaled just under $6 million in 2010. Net profit was $730,091, which far exceeded the state average.

The average net profit of municipal liquor operations was $204,124 in the metro area and $68,375 in Greater Minnesota.

The range went from a net loss of $97,585 in Howard Lake to a net profit of $1.3 million in Edina.

Elk River’s net profit of $730,091 was the seventh highest in the state.

Elk River has been in the liquor business for years with Northbound Liquor. The city built a second municipal liquor store — Westbound — in 2005.

Dave Potvin manages the city’s liquor operation.

“Dave and his staff definitely operate and maintain an impressive operation,” said Elk River City Administrator Cal Portner. “Our locations, along two prominent highways, are an advantage. However, the attractive facilities and knowledgeable staff provide a service not found in many other liquor operations.”

Portner said the entire Elk River community benefits from the liquor operation as the proceeds have been used to offset the use of property taxes to fund numerous city park improvements, to purchase city equipment, to general fund operations as well as provide a significant contribution to a new public works facility.

Minnesota cities were originally authorized to own and operate liquor establishments as a means of controlling the sale of alcohol, according to the state auditor’s report.

“For many communities in Greater Minnesota, municipal liquor operations provide access and convenience in areas that might be unable to attract a privately-run establishment. In addition to these functions, profitable municipal liquor operations have provided another source of revenues to supplement traditional tax and fee revenues,” according to the report.

Other findings from the report:

•The top 10 city liquor store operations in 2010 by gross sales were Lakeville, Edina, Eden Prairie, Richfield, Apple Valley, Columbia Heights, Saint Anthony, Elk River, Brooklyn Center and Fergus Falls.

•The combined net profit of all municipal liquor operations in Minnesota totaled $21.74 million in 2010, a decrease of .9 percent from 2009.

•Forty Minnesota cities reported net losses for 2010, compared to 38 cities in 2009. All 40 cities with losses were from Greater Minnesota.

•During 2010, Minnesota’s municipal liquor operations reported a 15th consecutive year of record sales totaling $313.5 million. Total sales increased .7 percent over 2009.

•Municipal liquor operations located within the metro area are considerably larger and more profitable than their Greater Minnesota counterparts. Although only 19 of the 209 Minnesota cities (9 percent) that own and operate municipal liquor stores are located in the metro area, they represent 37 percent of the total sales and 37 percent of the net profits of municipal liquor operations. Sales by all metro area operations averaged $3 million in 2010, compared to average sales of $969,139 for all Greater Minnesota municipal liquor operations.

Gross sales: How area liquor operations compare

Ranking  City                Gross sales             Net profit         Type of store

8.              Elk River       $5.95 million         $730,091         off-sale only

22.           Anoka            $3.59 million         $149,476           off-sale only

26.          Rogers             $3.12 million        $226,550           on- and off-sale

27.          Big Lake         $3.11 million         $253,511            off-sale only

36.          Princeton       $2.54 million        $209,193            off-sale only

Source: Minnesota State Auditor’s Report “Analysis of Municipal Liquor Store Operations”