A revised alcohol ordinance received an initial look by the Minot City Council Monday, with formal action expected in coming weeks.

The ordinance makes changes to various provisions related to establishment operations and adds annual meetings between city staff and license holders to promote compliance. The key item, though, relates to finding a path forward to potentially remove the cap on the number of retail licenses, said council member Paul Pitner, who chaired the ordinance review committee.

“When it came to removing the cap, this was a very sensitive topic. It was a roadblock to the committee doing its work at times,” Pitner said. “We didn’t take the decision lightly. At one point, the committee actually paused the discussion on this topic and offered it up to city council to make a decision whether or not they had an interest in even removing the cap.”

The council retained legal counsel, which resulted in an opinion that the city has the right to remove the cap without compensation to current license holders and faces minimum risk of losing a lawsuit.

In delivering the revised ordinance, the review committee left it up to the council whether to leave the cap in place, remove it without compensation or remove it with compensation. The committee offered two options for compensation.

One proposal would set the city’s price for a retail liquor license at $5,000 and raise the annual renewal fee from $3,125 to $5,000. For current license holders, the renewal fee, including any future increases, would be waived for 20 years. The city would pay each current license holder $25,000 from the city’s economic development fund in exchange for a release of claims against the city.

Another proposal would set the city’s minimum fee for issuing a license at between $100,000 and $150,000. Current license holders would have first rights to sell their licenses to an interested party before the city would issue a license. All current license holders also would receive a one-time renewal fee waiver, allowing them to transfer their licenses one time for no issuance fee. Licenses purchased from the city or transferred from a current holder would no longer be transferable again but would go back to the city upon nonrenewal.

“In my opinion, competition is economic development,” Pitner said. “I think this is an opportunity to remove the oligopoly, the exclusive nature of a small market, and give this asset back to the citizens and the entrepreneurs in the community.”

“I understand that there are concerns about how this will affect the ones that are there and the competition that comes into it,” Blessum said. “That’s every business in town and every business in this country. We all face that.”

He also noted the value of licenses is high because of restrictions put in place by the city, so the city may need to spend money to fix the problem.

Regarding the use of economic development dollars to pay license holders, questions were raised about whether that is an acceptable use of those funds under city ordinance and whether the option might be acceptable without the $25,000 compensation.

Finance Director David Lakefield said city ordinance is somewhat vague regarding the city’s economic development activities that receive a share of sales tax dollars. Whether paying $25,000 to compensate license holders is economic development would need to be reviewed, he said.

Pitner said the $25,000 was included as a good faith cash buyout, but the council has the ability to make adjustments to the compensation framework provided.

Council member Rob Fuller said his concern is that current license holders will remain whole under any plan adopted.

“That’s my concern – doing the right thing by the community and the people that have already invested here,” he said.

Blessum also said his concern is existing license holders, but he noted there were no guarantees that the license would remain at purchase value over time.

“For me, this is an effort to make it as right as we can,” he said.

Council member Scott Samuelson said it is not realistic for the city to make every license holder whole. He added many have been in business for a long time, making money off that asset.

The council will take up the ordinance on first reading at a future meeting. Two readings are required. The council indicated it plans to encourage license holders to provide input before final passage.