Housing and Zoning Committee Regular Business Meeting – August 18, 2026

Chair Jamal Osman called the meeting to order at approximately 6:31 PM. A quorum of six members was present (Councilmember Rainville was initially absent but joined later). The agenda was amended to add a public hearing on a proposed ordinance amending Title 13 regarding rental hall licenses (LIMS file 2026-00864). The meeting included a consent agenda, two public hearings, a discussion item on a liquor license for Rain nightclub, and a receive-and-file item on data center regulation research.

Consent Calendar

• Approved one liquor license approval (item 3).
• Approved four liquor license renewals (item 4).
• Approved seven gambling license renewals (item 5).
• Referred item 6 to staff (ordinance relating to Minneapolis Public Housing Authority and Accountability).
• Set a public hearing for September 8, 2026, to consider an event center license ordinance (walk‑in item from Councilmember Schaefer).

All consent items were approved and the referral and public hearing were set on a single motion that carried unanimously.

Public Comments & Testimony

Dress Code Posting Requirement Ordinance (public hearing) – Three members of the public testified:

• Howard Dodson Ward II (Ward 2 resident) spoke in favor, recounting instances of African American men being denied entry to a Northeast bar based on an unpublished dress code. He stated that the establishment had admitted to having a sign taken down because people said it was racist, and described the dress code (no sweats after 8 p.m.) as selectively enforced against BIPOC patrons.
• Robin Russell (Ward 9 resident) spoke in opposition, arguing that anecdotal evidence does not justify a new ordinance when existing civil rights protections cover discrimination. She raised concerns about double jeopardy, potential risk to business licenses, and questioned whether the ordinance is a red herring from the real issue of keeping social spaces safe from gun violence.
• Melek (Ward 2 resident) spoke in favor, citing personal experiences of selective enforcement and emphasizing that posted dress codes give transparency and agency to marginalized groups (low income, Black women, queer, disabled people).

HUD Consolidated Annual Performance and Evaluation Report (CAPER) (public hearing) – Matt Bauer presented a summary of the report. The public comment period runs through August 25, 2026, with submission to HUD planned for August 29. No members of the public spoke during the hearing.

Discussion Items

Dress Code Posting Requirement Ordinance – Councilmember Chavez introduced the ordinance, co-authored with Warren, Payne, and Wansley. The ordinance requires establishments with dress codes that sell liquor to post the code conspicuously near the entrance to prevent “velvet rope discrimination” (using dress codes as a proxy for race, gender identity, etc.). Modeled on a Houston ordinance (2025), health‑and‑safety requirements (e.g., no shoes, no shirt) are not affected. First violation results in a written notice; second violation carries a $200 administrative citation, with doubling fines for subsequent violations and potential license revocation. Effective date would be January 1, 2027. After public testimony, several councilmembers expressed support, citing personal experiences of discrimination. Councilmember Chowdhury noted sociological studies showing Black men are denied entry at higher rates than white peers in identical attire. Councilmember Chavez referenced a high‑profile case in a downtown Minneapolis bar and her own experience of being denied entry due to a rainbow‑patterned pouch. Councilmember Warren emphasized that if a business has a dress code, it should be posted; otherwise, “don’t worry about it.” Chair Osman added that selective enforcement based on appearance or culture is unacceptable in a modern society.

Rain Nightclub Liquor License Renewal – Julianne Lynham (Director of Economic Policy and Development) reported on an incident on June 13, 2026, where nine people were shot outside Rain Nightclub (2901 Hennepin Avenue). Business licensing held a settlement conference with the owner, found their security plan in order but needing updates. The owner updated security and business plans, and the precinct inspector signed off. No nexus between the business and the shooting was found; the incident stemmed from an individual dispute. 311 calls mainly concerned livability issues (unhoused individuals, daytime drug use). 911 calls since 2024 included narcotics, suspicious persons, fights. The uptick in calls was partly due to encouraging the business owner to call 911 proactively. The bar does use off‑duty officers but none were present that night due to a speed enforcement detail. Councilmember Rainville supported renewal, acknowledging the owner’s cooperation. The motion to approve the license renewal carried.

Data Center Regulation Research Presentation – Dwight Miller (Legislative Research Oversight) provided a detailed overview of a report on data centers in Minneapolis. Key points:

• Data centers are the digital backbone of the internet but vary widely in size and type (enterprise, colocation, cloud, hyperscale, edge).
• Regulatory control is limited at local level; most authority over electricity, water, and environmental permitting lies with the state (DNR, MPCA, Public Utilities Commission).
• Minneapolis has eight known data center buildings, mostly downtown, smaller and co‑located compared to national hyperscale facilities.
• Water capacity: The city’s treatment system can produce 110 million gallons per day (average annual demand ~55 million, peak ~85 million). A 25‑30 million gallon daily surplus exists. The Sleep Number building’s data center increased water usage from 334,000 to 3 million gallons per month, but Public Works does not anticipate system‑wide strain.
• Electricity: Xcel serves Minneapolis; Minnesota has a relatively green grid (~33‑40% renewable, with 33% federal data). State law requires 100% carbon‑free electricity by 2040. Data center operators must pay for necessary grid upgrades.
• State tax exemption for data centers resulted in approximately $7.4 million in lost local sales tax revenue since 2012.
• CPED’s proposed zoning changes create a standalone data center definition, limit them to downtown D2/1 and D2/2 districts (requiring conditional use permits), set a 175,000‑square‑foot white‑space limit, and propose an overlay district outside downtown allowing applications in RM3, CM1‑4, PR1‑2 zones (including industrial parcels near Little Earth, Roof Depot, East Lake Street, Hiawatha Avenue, and Bloomington Avenue South).
• Councilmembers raised concerns: Councilmember Chavez stated the overlay district could allow data centers on Lake Street and environmental justice zones like the Southside Green Zone, calling it “devastating.” Councilmember Payne questioned the inconsistency of promoting water conservation for residents while permitting data centers. Councilmember Chowdhury highlighted that local government cannot regulate cooling systems or megawatt usage, making state advocacy critical. Councilmember Chukwu (via staff) noted that commercial/industrial sector energy use drives climate emissions and that square footage is an outdated metric for energy intensity. Councilmember Schaefer suggested examining multi‑use data centers for revenue and property tax burden shifts. Councilmember Rainville underscored the need for public education to counter misinformation.

Key Outcomes

• Dress Code Posting Requirement Ordinance: Passed on a roll call vote of 7‑0 (all members present including Councilmember Rainville who arrived after moving in). Motion carried and ordinance moves forward.
• Rain Nightclub Liquor License Renewal: Approved unanimously on a voice vote.
• HUD CAPER Report: Approved and filed.
• Data Center Research Presentation: Received and filed; a legislative lab is scheduled for August 26, 2026, for further discussion.

Future steps include: The dress code ordinance will be on the September 8, 2026, agenda for public hearing and final adoption. The data center regulatory proposal is still under development, with a 60‑day public comment period underway. Councilmembers committed to continued dialogue on overlay district locations, water conservation messaging, tax revenue implications, and state‑level advocacy for stronger controls on energy and water usage.