Capping beer, liquor licenses

State and local alcohol laws limit where Mitchell residents can knock back a drink, but they may also be slowing business growth within city limits. On Tuesday, RR Enterprises, Inc., which operates the Village Bowl, presented its intentions to ex...

In Mitchell, the city limits the number of liquor licenses allowed while business look for ways around the city's standard application process. (Republic Illustration)
In Mitchell, the city limits the number of liquor licenses allowed while business look for ways around the city's standard application process. (Republic Illustration)

State and local alcohol laws limit where Mitchell residents can knock back a drink, but they may also be slowing business growth within city limits.

On Tuesday, RR Enterprises, Inc., which operates the Village Bowl, presented its intentions to expand its future operations, but first it needed both an on-off sale malt beverage and wine license. Because of the city of Mitchell's self-imposed cap on the number of on-off malt beverage licenses, the Village Bowl found itself appealing to the Davison County Commission to make use of a loophole in the law.

According to Mitchell City Ordinance No. 2060, which was updated in 2002, there may be no more than one license to serve malt beverages - like beer - for every 1,000 people within the city of approximately 15,000.

Twenty on-off sale malt beverage licenses were renewed in June, including some which were grandfathered or annexed into the list, leaving no additional licenses available. That meant Village Bowl was left to take the roundabout approach to acquiring the licenses.

"This is actually the only way that I can get licenses to be able to expand my business," said Steve Brinkman, representing RR Enterprises, at Tuesday's commission meeting.


So RR Enterprises applied for the licenses at a property adjacent to city limits, deciding not to hide its intentions to have the licenses annexed into the city of Mitchell to be used at the Village Bowl.

The decision to grant the licenses was not made during Tuesday's meeting, but the applications put a spotlight on the city's self-imposed on-sale malt beverage license cap.

According to Mitchell Finance Officer Michelle Bathke, state law does not limit the amount of on-off sale malt beverage licenses, but the city took advantage of its ability to implement a limit.

Although Brinkman told The Daily Republic on Thursday he had no issue with the city's ordinance, he told the Davison County Commissioners on Tuesday that "his hands are tied" to expand the Village Bowl's operations without the additional licenses.

If RR Enterprises is granted the licenses, it will require Mitchell City Council approval to annex the property on North Ohlman Street into the city limits of the same city that imposed a cap on malt beverage licenses just 14 years ago. The hearing on the applications will be held at the Oct. 18 Davison County Commission meeting.

While City Councilman Steve Rice said he would need to do more research on the on-sale malt beverage ap before stating his opinion on the matter, as the cap was imposed before he took office in 2012, he acknowledged it's conceivable the cap could hinder business growth in Mitchell city limits.

"There's that possibility," Rice said on Friday. "Because we haven't been asked recently, I don't know if it's stopping anything right now."

Rice said the cap on malt beverage licenses hasn't arisen during his time on the council, and he couldn't say with certainty why the ordinance was passed. But, Rice said, the usual argument on alcohol-related issues is one crowd saying "We don't need more alcohol" and the other asking "Is it hampering business?"


Whatever the reason for the ordinance's implementation, Rice said it's difficult to determine whether more local business owners would apply for on-off sale malt beverage licenses if they were available.

"That's a catch-22 type situation where they're not going to ask, because they know there's a cap or there's a cap so they're not going to ask," Rice said.

But regardless of RR Enterprises forthcoming approach to working the system in an effort to avoid the license cap, Davison County Deputy State's Attorney James D. Taylor said RR Enterprises' current approach doesn't meet the legal standard for acquiring an application.

Taylor said RR Enterprises needs to provide a site plan for the land bordering city limits in the event it's not absorbed by the city, even if the business was truthful about its objective.

"Well, that's all well and good, but my advice to the commission is you still have to look at the suitability of the location, because we don't know if the city is going to annex that property," Taylor said Thursday.

Regardless of what the county ultimately decides in respect to the two RR Enterprises applications, Rice suggested the malt beverage cap may be worth reconsidering.

"It might be good to discuss it again, especially in the light that the county's being asked," Rice said. "Times change. Things change."

License loophole lifts local business


While one city law has potentially limited some local businesses from expanding, another has helped a new business venture overcome state restrictions.

According to a spokesperson with the South Dakota Department of Revenue, South Dakota Codified Law 35-4-11 limits the amount of on-sale liquor licenses in a municipality to three licenses for the first 1,000 in population and one license for each subsequent 1,500 in population. However, the number of licenses cannot be less than the total number allowed on July 1, 1981.

In accordance with state law, Mitchell has 24 retail liquor licenses. And while OverTime Steakhouse & Sports Bar has one of those licenses, allowing it to serve a variety of liquor at its flagship location, it could not acquire a liquor license for its recently opened OverTime Event Center located across the street.

Without a liquor license available, owner Sean Moen was able to take advantage of the special event alcohol licences allowed by the city of Mitchell.

"With these special event licenses, it allows businesses like ours to grow," Moen said Thursday. "We wouldn't be able to do what we're doing now if we had to go out and purchase another $180,000 liquor license, it would not be in our budget for what we're doing."

But the lack of a liquor license at the 550-person banquet hall has forced Moen to lose out on a couple of events.

"The only problem we have is we lost two events that we surely could've had, but I didn't have enough time to go through the city to get the special license request, because you have to have two readings," Moen said. "There's not enough time to go through the City Council to get that license approved for that particular event."

While the special event license has benefitted Moen's business, a provision proposed this spring would have severely sapped his new business venture's potential.

When updating the city's liquor control code, a 20-special event license limit was initially proposed, but Moen's attorney, Taylor, was able to convince the council to raise the limit to 200 in one calendar year.

"Even with that 20, we never would have been able to function here," Moen said.

Mitchell's mixed support of alcohol sales

Just as the city caps malt beverage licenses while offering a special event license loophole, the city's history with other alcohol-related laws has been a mixed bag.

In June 2014, Mitchell voters decided to approve the sale of wine on sidewalks in the historic downtown district by a 60-40 percent margin.

However, 2010 was not as kind to Mitchell area drinkers.

In 2010, voters struck down a proposal to allow Sunday liquor sales by a 56-44 percent margin. Currently, businesses with off-sale liquor licenses, like grocery stores, can only sell malt beverages on Sunday.

What To Read Next
Throughout the county party election season, stretching from mid-November to the end of January, delegates have succeeded in changing the makeup of key county parties, like Minnehaha and Pennington.
Members Only
“In our industry there aren’t a lot of young people in it. I like the fact that there are a lot of young people in agriculture here,” he said of the Mitchell area.
Members Only
After the departure of longtime superintendent Marje Kaiser and the hiring of Dan Trefz, who recently resigned, advocates say the specialty school needs help from lawmakers to reach its past heights.
Over the past year, the city has been mulling over bringing a secondary water source to Mitchell – a move Mayor Bob Everson said is aimed at positioning the city to grow.