On a 4-2 vote Jan. 14, the Ramsey City Council approved a lease amendment with a former councilmember who owns a liquor store that must be demolished whenever a Highway 10 interchange is completed at Armstrong Boulevard.
Former Councilmember Jeff Wise and his wife Deann are now tenants of the property that the Wiser Choice Liquor Store sits on at 14590 Armstrong Blvd.
The council on a 5-2 vote Feb. 26, 2013 agreed to purchase the store, the building fixtures and the land for $940,000. A two-year lease commenced March 1 with the Wise’s M & W Holding Company, LLC.
The amended lease the council approved Jan. 14, with Councilmember Randy Backous absent, still retains the Feb. 28, 2015 ending date and 90-day termination clause for both sides, but Wise is no longer required to purchase city-owned land or an existing Ramsey liquor store when he relocates whenever the yet to be fully funded Highway 10 interchange is constructed.
“I’d much rather stay in Ramsey,” Wise said. “I have a 14-year history here. I have an established client base. The Wiser Choice name is worth more here, but I want to have the ability to have a Plan B.”
According to a city staff report, Wise must pay $3,440 per month for leasing the property. He must also pay the full $9,619.56 in 2014 taxes even if the store closes before the end of the year, although the monthly lease payment would go away after any 90-day termination notice period has passed.
The timing of the Highway 10 and Armstrong Boulevard interchange obviously plays a huge role in this story. Gov. Mark Dayton recently released a list of proposed projects to be funded by the state bonding bill and no funding for the interchange was included.
Wise has accused the council of playing politics throughout this process. In a previous interview with ABC Newspapers, Wise said the original closing date for the city to purchase the liquor store, fixtures and land was supposed to be Feb. 18, 2012. He had planned to build his new store on a site next to McDonalds and a gas station during the Sunwood Drive reconstruction project.
However, Wise was a councilmember in 2012 and it was pointed out in October 2012 that a state statute makes it illegal for a sitting councilmember to buy from or sell land to the city.
The closing date was subsequently delayed until Feb. 26, 2013 when Wise was no longer on the council. He lost his bid for re-election in the primary for the at-large seat to which Councilmember John LeTourneau was elected.
Councilmembers Mark Kuzma and LeTourneau voted against the city’s purchase of the Wiser Choice store Feb. 26, 2013.
At the time, LeTourneau said that it did not make sense for the city to purchase the property when funding for the Highway 10 interchange was still not guaranteed.
On the other hand, Councilmember Chris Riley said the property was the last piece the city needed for this interchange.
LeTourneau and Riley were the only ones who opposed this lease amendment at the Jan. 14 meeting.
Riley said both sides were represented by attorneys during the long negotiation process, so he does not see any reason to make changes now.
“The way I see it, nothing has changed,” Riley said. “I am not sure why the city would consider changing this agreement when it was fully negotiated. Both sides got something they wanted out of the deal.”
LeTourneau said what has changed is time and he said a tenant has found themselves in a position of dire straits because they may not have been reacting to their needs on a timely basis.
“It seems to me what’s happening is a crunch around time and there’s been a request for us to accommodate that loss of time,” LeTourneau said. “I’m not comfortable with that because I think someone made a choice to do whatever they were going to do with their business and they find themselves kind of under the gun now and it’s exposing us to a greater liability that I’m not interested in being exposed to.”
A couple of days after the Jan. 14 council meeting, Wise expressed his anger about Riley’s and LeTourneau’s comments because of how it portrayed him and his business.
“I feel like I was slandered,” he said.
Wise said his business decreased by about 35 percent during the Sunwood Drive reconstruction last year. He also spent $27,700 on attorney fees in the negotiations with the city, which he felt took longer than they should have.
According to Wise, he may have gone bankrupt had he been able to construct his new store on his first preferred site in The COR next to the McDonalds and gas station that have yet to be developed.
City Administrator Kurt Ulrich has told the Ramsey HRA that the McDonalds development is progressing toward a closing date. There is still no purchase agreements in place for another gas station.
Wise said a grocery store and gas station are the top two ideal businesses for a liquor store to be located by so that traffic is consistently coming in.
Wise is trying to bring another gas station next to his new liquor store and McDonalds, but he was surprised to hear that Casey’s is interested in developing on the east side of The COR on the corner of Sunwood Drive and Ramsey Boulevard, he said.
Mayor Sarah Strommen said the proposal staff brought forward “protects the city from a rent and tax standpoint” because they still have to pay all 2014 taxes and the 90-day termination clause has not changed.
The only thing that changes is Wise does not have to purchase city-owned land or an existing Ramsey liquor store.
Strommen said this was a complicated “double negotiation” to be discussing the purchase of Wise’s existing liquor store while talking about a requirement that his new store must also be in the city, so the council wanted to separate these issues. However, the requirement still made it into the lease.
“I think this requirement defeated what we tried to do in the beginning,” Strommen said.
Councilmember Jason Tossey wondered why this requirement even got into the lease since the city’s purchase of the Wiser Choice Liquor Store and Wise’s search for a new site were supposed to be separate negotiations.
“I’d hope he want to stay in Ramsey. Who wouldn’t,” Tossey said.
Eric Hagen is at firstname.lastname@example.org