Wedge vs. Trader Joe in Minneapolis

Mark Dziuk is hoping Trader Joe's will be the anchor tenant in a large commercial and residential project on a busy block of Lyndale Avenue South. The problem is Trader Joe's won't sign on unless the store is allowed an adjacent wine and beer store, but state law prohibits liquor stores within 2,000 feet of one another in Minneapolis and St. Paul. Hum's Liquors, a neighborhood icon for the past four decades, is practically right across the street. If Dziuk wins the exemption to the state law, it would be the first in Minneapolis. It could open the gates to a flood of other grocery stores seeking their own exemption to allow their customers the convenience of buying a gallon of milk then stepping next door for a bottle of chardonnay.

"This is an 'Old Boy' ordinance," Dziuk told the Whittier residents and board members. "It's 70 years old and the people who wrote it are dead." Dziuk previously tried and failed to get the statute struck down at the legislature. Now he's hoping legislators will create a special zone--to include only the address of the proposed Minneapolis Trader Joe's store--where the law doesn't apply. He's already won the support of the Minneapolis City Council, which narrowly voted in favor of the exemption. And even though the next move is in the state's hands, Dziuk knows he'll ultimately need the support of nearby residents before he ever breaks ground.

One neighbor, the Wedge Co-op, a Whittier institution for 35 years, is dead-set against the idea. Co-op representatives say the liquor law exemption would give Trader Joe's an unfair competitive advantage.

"We never asked for (a liquor license)," said Wedge General Manager Lindy Bannister. "Hum's is right across the street so we know we'd never get one." Bannister insists the Wedge is not against competition, as long as everybody plays by the same rules. "The Wedge is not going away," she said. "They won't put us out of business. But if (the liquor exemption) goes through, it will mean we will have to operate very differently." She said she and others at the store don't know yet how they would react to the new Trader Joe's.

The Wedge is known for its bulk lentils, grass fed beef, gluten-free bread, and produce plucked from fields in the same time zone. It started in a Franklin Avenue basement during the 70s natural foods craze. The store now has 14,000 members who each pay a one-time fee of $80. For that, they get a say in store operations, they receive a newsletter and they can take advantage of certain in-store discounts. They also get what's known as patronage rebates based on how much they spend. More than three-quarters of the store's shoppers are members. Last year, the Wedge awarded some $100,000 in grants to various local groups like Youth Farm, The Women's Environment Initiative and the Food Shelf.

Trader Joe's, on the other hand, is a $7-billion company based in Monrovia, California. Its origin goes back to the 1960s, but the chain is now owned by German billionaire Theo Albrecht. The company has mastered the retail game of wrapping cheap, pre-packaged food in a cheery, tropical theme decor. One big draw for Trader Joe's is its ultra-low-cost Charles Shaw wines, known affectionately by fans as 'Two-Buck Chuck' (after taxes and other costs it goes for a little over $3 a bottle in Minnesota) that most people find surprisingly drinkable.

The possibility of a corporate behemoth alongside small, locally-run Lyndale shops like Treehouse Records, Rudolph's Barbeque, and the Leaning Tower of Pizza rubs local resident Soren Sorensen the wrong way.

"This destroys local businesses in an area that has a lot of local color," Sorensen said, referring mainly to the handful of merchants who would be displaced because the buildings they are in would be demolished to make way for the development. "I think City Councilmembers have gone way overboard," advocating for Dziuk's plan while other small shop owners are left in the cold, he said. Sorensen is an activist who lives a block away from the proposed development. He said he's knocked on every door in the neighborhood at least once and follows local issues closely. He wondered why he's only hearing about the project now. "I feel ambushed on this," he said. "If I didn't hear about it, the bulk of the residents don't know about it."

The plan has also attracted the attention of some heavy hitters. The Minnesota Licensed Beverage Association Director Frank Bell said the requested exemption is no small affair. "Liquor laws are not to be taken lightly," he said, countering developer Dziuk's contention that the 2,000 ft. distance rule is old and obsolete. "They have an impact on neighborhoods...Hum's Liquor store will be impacted," by this exemption he said. Bell said there are at least 13 other sites in the city where the Trader Joe's store could go and not need a liquor law exemption. He also warned that if Trader Joe's got a liquor law exemption, other stores would try to do the same. "It's the camel's nose under the tent," he said.

Still others thought the prospect of a nationally-recognized name in the neighborhood would be a good thing. "I don't usually shop in Uptown," said Lisa Lowman. "But if Trader Joe's came here I would shop more in the area."

The neighborhood's City Council Member, Robert Lilligren, said the exemption should go forward, then the project can be judged on its merits. "I'm not wedded to any particular outcome," Lilligren said. "But if we don't get the exemption we can't have the discussion." Lilligren noted that other councilmembers have worked to try and bring Trader Joe's to their wards. "It's generally considered to be a good thing," he said.

Developer Dziuk already has a somewhat checkered track record in the area. The proposed Trader Joe's site is next to a mixed-use development he constructed named Le Parisien. The housing market plummeted during construction so Dziuk was forced to offer the project's condominiums as rental apartments. Retail spaces included in the project remain vacant. Dziuk filed for Chapter 11 bankruptcy at the end of 2006. He said he emerged from Chapter 11 in October, but tax records show he is delinquent on property tax payments on at least six of the residential units and three other properties.

The liquor law exemption is not yet scheduled for House and Senate committee meetings at the legislature.

Art Hughes is a freelance journalist in Minneapolis, who has previously reported for Minnesota Public Radio.

Art Hughes

Art Hughes (email art@adhughes.com) is a freelance journalist in Minneapolis.