Spicer restaurant may close by summer's end

SPICER -- This could be the last summer Melvin's on the Lake in Spicer is in business.

Owner Dave Baker said rising property values, the building's size and increased competition have forced him to look at other options for the restaurant and bar on Green Lake.

As he sees it there are three options: sell the property to a developer who will build housing with a restaurant space, sell the property to a developer who will build only housing, or sell it to someone who would continue running the restaurant as is.

Baker prefers keeping a restaurant on the lake.

"I feel a real responsibility to the community to keep this open," Baker said.

But he said, as it is now, he can't operate the restaurant past this summer. In the three years Baker and his wife, Mary, have owned the property, the restaurant hasn't made a profit, he said. Their losses are less each year, but they are "enough to know our well's going dry," Baker said.

Baker has received offers for the Melvin's property over the years from residential developers, but he has rejected them.

Now, he and a local developer are discussing possibilities for the property after Baker approached the developer about building a residential development that would include a restaurant. He declined to name the developer.

The property has not been sold, but the developer has made an offer that will expire in six to eight weeks, Baker said. He declined to say the offer's amount.

If the property is sold to a developer, Melvin's would be torn down this fall, Baker said. The restaurant has 30 employees in the off-peak months and 80 in the summer. They know about the possible changes, but Baker hopes they can be retained if a restaurant remains there.

The Melvin's on the Lake building has been in Spicer since 1917 when it was part of the Green Lake Country Club. The building has been a restaurant since 1983 under different owners. It's the only restaurant in Spicer on Green Lake.

The value of Melvin's 175 feet of shoreline continues to rise each year, just as lakeshore property values continue to jump across the state. The land's value alone has increased more than 46 percent since 2003 to be at $770,500 last year, according to Kandiyohi County assessor records. Including the building, the property's market value was $880,100 in 2005.

Baker said his property taxes have increased about 20 percent each year.

The Spicer City Council agreed in 2004 to reduce the valuation on the restaurant building to alleviate Baker's property taxes somewhat so that the building's value has actually declined.

The building's size and age have been a detriment to business as well, he said. The building, which is 12,000 square feet, needs costly upgrades and utilities have been expensive, he said. The Bakers already have invested $100,000 to renovate the building, he said. A building half its size would be more suitable, he said.

One of the most enjoyable parts of owning the restaurant is seeing a family who can't afford lakeshore property enjoying a meal on the lakeside deck and playing on the beach, Baker said.

"They have a piece of it for two, three hours, and it's the greatest thing in the world," he said.

Keeping a restaurant on the lake, however, will likely take some involvement from the city, community or another developer, he said. The developer has determined that it wouldn't be economically feasible to include a restaurant in the development without another party involved, Baker said.

Baker and the developer have spoken with the Spicer Economic Development Authority about some options, he said.

One option would be for the city to purchase the restaurant portion of the residential development and then lease it to an operator, Baker said. That's similar to what the city of Glenwood did when it rebuilt the Lakeside Ballroom on Lake Minnewaska after it burned down in 2003. City officials and Baker plan to visit Glenwood to see how that worked, he said.

Glenwood owned the ballroom before it burned, and more than half the cost to rebuild was paid for with insurance. A fund-raiser generated $456,000 before the new ballroom opened. The city bonded for the rest of the costs, which are being paid off through the operators' lease.

Spicer EDA Director Jean Spaulding said the EDA is looking at options, but hasn't reached a decision. The issue hasn't come before the City Council.

Such a development would likely need variances, she said. The height restriction in the shoreland district is 25 feet. Melvin's doesn't have enough parking for its size and relies on the adjacent county lot for overflow parking.

But there will be economic and lifestyle impacts to the city if Melvin's closes, she said. Baker is looking for community input about the restaurant's future.

"How important for the people of this community is a restaurant on the lake?" Spaulding said.