Wayzata business leaders gathered Wednesday morning at City Hall for an early discussion on a potential 1% food and beverage sales tax, a concept the city is exploring as part of a long-term funding strategy to maintain public safety and park operations. The session was part of a renewed effort to engage business owners before any legislative request is made.
Mayor Andrew Mullin opened the meeting with a frank acknowledgment of past mistakes. “Nobody likes to be taxed. Nobody likes to have their ticket price increased,” Mullin said. “But my hope is that when you listen to Mr. Parkhill and you listen to our staff, you understand sort of how we might use those funds.”
He added that the city’s previous attempts to pursue such a tax “just didn’t do a very good job of actually talking to people,” noting that some businesses only learned of it “at the Capitol, which is not the right way for the city to conduct its business.”
City Council Member Jeff Parkhill, who has served since 2022, emphasized the impact of visitors on local infrastructure. “We have an estimated 5,300 people who are employed in Wayzata. We only have 4,500 residents,” he said. “Ninety percent of the credit card swipes at our restaurants… are from people from outside [Wayzata].” Parkhill described the tax as “very much a scalpel versus a machete — we are hitting the people who are benefiting from our community.”
City Manager Jeff Dahl explained the financial rationale, citing estimates from the Minnesota Department of Revenue that a 1% food and beverage tax could generate approximately $720,000 per year. “That’s about 10% of our current property tax levy,” Dahl said. “It’s a significant impact that could dramatically offset or reduce what we have to levy in property taxes.”
The city outlined a proposed breakdown of how the funds would be used:
- The majority would go to public safety operations, including police staffing.
- A portion would support maintenance of public parks, such as Panoway and Klapprich.
- Approximately $50,000 would be set aside annually for business retention or promotion, with staff seeking business input on how to shape that support.
- Another $50,000 could be earmarked for future park capital needs.
Deputy City Manager Aurora Yager emphasized transparency, noting that this meeting was part of a broader engagement process that included a March business council discussion and a follow-up session for residents on May 15. Yager clarified that the city has not submitted any formal request and that a state-imposed moratorium remains in effect through the end of 2025. Even if lifted, multiple steps would be required: a city council vote, legislative approval, and potentially a public referendum, meaning any implementation would be unlikely before mid-2027.
Reaction from Restaurants
Angel Luna, partner at 6Smith, expressed cautious support for the proposal. “The 1% makes sense. We’re supportive. We just want to make sure that the money is used correctly,” he said. Luna recalled his first city meeting in 2014, when Wayzata was actively trying to establish itself as a destination. “There was nothing going on. Now you have it,” he said. “Restaurants have had a big impact on the city.”
Luna raised one concern from previous discussions: whether the city had used outdated sales data from 2021 — when restaurants were still operating under COVID-related capacity limits — to estimate the tax’s revenue potential. “Back in the day we were using sales from 2021 when we were still at 50% capacity,” Luna said. “We were doing $9.75 million — now we’re at $13 million. Is that 1% really an accurate number?”
Mayor Mullin and staff acknowledged the need for better data, but noted that even conservative projections indicate that most of the burden would fall on non-residents. Mullin also responded to concerns about using tax proceeds for parks, describing conversations with state legislators that changed his view. “I had a very similar point of view before I started talking to some of the legislators at the Capitol,” he said. “Our bonding request was framed by our Democratic senator and Democratic House representative. The argument for Republicans is spending money for jobs. The argument for Democrats is making it a regional destination for open space… That was an education for me.”
Destination Promotion
As part of the discussion, City Manager Jeff Dahl asked business owners to consider how a portion of the proposed revenue—approximately $50,000 annually—could be reinvested to support the local business community. He invited suggestions on how those funds might be used for marketing, business retention, or other initiatives that benefit restaurants and retailers, suggesting possibilities like supplemental funding for the Wayzata Area Chamber of Commerce or broader promotional efforts.
Dahl emphasized the opportunity to strengthen Wayzata’s brand as a regional destination, a vision first articulated more than a decade ago and now central to the city’s identity. “We want to hear your wish list,” he said, noting the city’s interest in strategies that enhance foot traffic, sustain downtown vitality, and reinforce Wayzata’s appeal to both residents and visitors.
License Payment Timing Changes
To address prior concerns, city staff also logged a request from earlier this year to re-time annual liquor license payments so that they align with seasonal cash flow — potentially moving the due date from slower winter months into peak summer revenue periods.
In closing, Mullin invited further input, “We’re not saying this is the only way to do it. If you have better ideas, we’re all ears.”
The next session, focused on resident perspectives, will be held Thursday, May 15 from 5:30–6:30 p.m. at City Hall.
Editor’s Note: As discussions continue about how to promote Wayzata and support local businesses, it’s worth noting that Wayzata.com—by name, design, and purpose—already functions as a digital front door to Wayzata. With trusted editorial content and a growing regional audience, it offers a ready-made platform for consistent, high-quality promotion rooted in Wayzata’s brand identity. We believe there’s meaningful opportunity for the city, the Chamber and the business community to align around a shared strategy—and we welcome the conversation, while fully maintaining our journalistic integrity.
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