City Council questioned new business arrangement
Alibi Drinkery, the Lakeville bar and restaurant that defied a state order to remain closed to indoor service during the height of the COVID-19 pandemic in November 2020, attempted to regain its liquor license with new owner Jose Colon III, but city staff will be recommending denial of the license at the City Council’s July 6 meeting.
City Administrator Justin Miller said on Wednesday that some false statements were made during the review process, which included a public hearing when the City Council members didn’t grant Alibi Drinkery a license during its June 21 meeting.
Among the sticking points were that former owners Lisa Zarza and Ricardo Baldazo were being retained on the Alibi Drinkery payroll as “consultants,” that the lease agreement says that Zarza and Baldazo will be designated by the tenant to operate the business and the structure of the new Alibi Drinkery LLC.
Consideration of the liquor license approval was continued to the council’s Tuesday, July 6, meeting due to the outstanding issues.
When Miller read a portion of the signed lease agreement that said: “it is understood that Lisa Zarza and Ricardo Baldazo will be designated by the tenant to operate the business,” Colon responded: “I will be operating the business. I’ll have to take a look at that lease again. … That is not how I understood it.”
At that point, Council Member Luke Hellier made the motion to continue the public hearing.
Council members’ questions reflected skepticism about the business arrangement from the outset of the liquor license’s consideration for Alibi Drinkery, which has been closed since the end of May.
Zarza said in April that she would be selling the business along with Froggy Bottoms at Alibi in Northfield.
Colon, who is a Lakeville resident, said keeping Zarza and Baldazo as consultants for up to one year is due to his lack of experience running a restaurant. He said he would consult them on matters such as relationships with vendors and people in the community.
He said he has hired Michelle Rene, who has been Alibi’s general manager since it opened, to keep everything status quo.
Council Member Michelle Volk asked Colon why he would keep the name of a business that has caused division in the community, noting later in the meeting the volume of email the council received in regard to Alibi’s actions.
Colon said he felt there was still huge support for the business on Facebook, and that Alibi is a name that Lakeville knows.
He acknowledged the “controversy” of how the previous owners kept Alibi open to indoor service during the pandemic, which gained state and national attention and led to a lawsuit and the suspension of its liquor and food licenses.
Colon told the council that if such pandemic-related mandates were to come down, he would follow them “to a T.”
He said his first and foremost concern is for the safety of people, including employees and customers.
Council Member Joshua Lee said the lease agreement appears as if Colon is a proxy owner just so the business can get a liquor license back.
Council Member John Bermel asked who the officers of the corporation are, to which Colon said he was the only officer.
During the public hearing on the liquor license, Angry Inch Brewery owner Jon Erickson told the council that he saw the sad breakdown of a positive environment in downtown Lakeville when Alibi ignored state law and continually placed profits over the health and safety of the community.
Erickson had a front row seat to the controversy Alibi generated last year, as Angry Inch Brewery is located next door. Both businesses were subjected to vandalism Jan. 3.
Erickson said he would like to profess his belief in the future of Colon’s company, but he is concerned about Colon’s relationships with the Baldazo family.
The lawsuit and suspension of Alibi’s food and liquor licenses by the state of Minnesota aren’t the only controversies Baldazo and Zarza have faced.
A few months before Alibi opened in defiance of the executive order, Baldazo was charged in September 2020 with two counts of first-degree attempted murder and two counts of first-degree assault after shooting at Burnsville police officers.
Baldazo and Zarza, also owners of Froggy Bottoms at Alibi in Northfield, had their liquor license renewal denied by that city council’s split vote in April. The decision meant the business could not legally serve alcohol. Council action came after Northfield Police Chief Mark Elliott recommended not renewing the license based on her noncompliance with the governor’s order and because of the preliminary suspension of her Lakeville liquor license.
“Zarza is not an eligible person to receive a liquor license under applicable law since she is not a person of good moral character and repute,” Elliott wrote in the report. “Further, this investigation has revealed that it is not in the public interest to issue the requested liquor license to a person who has willfully and intentionally violated state and local liquor licensing regulations, state executive orders and district court orders, and was not truthful in a sworn affidavit submitted to a reviewing court.”
Speaking to the Northfield council during a public hearing, Zarza said she did not follow the executive order because she deemed it “unconstitutional,” adding she didn’t feel the governor’s decision was based on proven evidence. She framed her argument as coming out of concern that people’s basic rights were being eviscerated.
Zarza said after Walz’s November order, Alibi had to lay off 45 employees.
Alibi Drinkery was found in contempt Jan. 5 in Dakota County District Court for willfully violating a Dec. 31 temporary injunction that required it to close for indoor dining through Jan. 10.
In its Jan. 5 ruling, the court found that there was preponderance of evidence that the bar intentionally and purposefully disobeyed and violated the court’s order, according to a release from Minnesota Attorney General Keith Ellison’s office, which filed on Dec. 17 a lawsuit against Alibi after it opened for indoor food and drink service Dec. 16 along with several other businesses as part of the Reopen Minnesota Coalition effort. On Dec. 16, Alibi was packed with patrons, many of them unmasked and not following social distancing, actions that were proven to increase the spread of COVID-19.
Walz banned on Nov. 18 indoor dining and drink service as COVID-19 new hospital admissions increased 80 percent in the state in the two weeks prior to the ban. The state went from about 2,400 new cases daily on average at the start of November to averaging nearly 7,000 at the time of the ban. The ban was an attempt to curtail the spread of the coronavirus, of which the state reported 7,000 outbreaks June 1 to Nov. 17, and 3,200 were reported at bars and restaurants.
A court trial in the state lawsuit against Alibi was scheduled to begin July 12.
Zarza and Baldazo opened Alibi Drinkery in Lakeville on Dec. 31, 2017, in the former Heavy Metal Grill space. Alibi Drinkery received its first liquor license in January 2018 under the name Lionheart LLC. The city of Lakeville last approved Alibi’s liquor license in June 2020, with an expiration date of June 30, 2021.
Tad Johnson can be reached at email@example.com.