What Should Restaurants and Bars Pay For Their Use Of Public Property for Outdoor Dining?

[T. Zealie Van Raalte has written the following on the issue of charging private businesses to use public city-owned sidewalks and parking spaces for outdoor dining.]

For a start, it’s unfortunate that the ” fairness ” issue seems to have been overlooked in any discussion/plan for an Outdoor Dining strategy. The city stakeholders can’t offer ALL restaurant owners an attractive opportunity for additional capacity. It’s a fact that not all restaurant locations lend themselves to taking advantage of utilizing “public property” for this purpose.

Thus, in many cases, the only option for some restaurant owners who want to grow their business by increasing their capacity (number of tables) is to “rent” additional space from a private landlord (if available) at market rates.

The argument that the current Outdoor Dining program pays for itself and then some is a limited one and extremely short-sighted. Yes, a “basic permit fee” has finally been developed to cover the associated labor costs incurred by the PWD. There is also obviously some incremental sales tax collected because of the increase in capacity. However, the level of any incremental sales tax achieved doesn’t compare to the potential total revenue the city should receive with an appropriate “user fee.” This fact demonstrates the clear “opportunity cost” to the stakeholders…lost revenue.

It’s a fact that most municipalities that make public space available benefit from such rental income for the privilege of using public property. They have a realistic and fair “total fee” structure. Our city has failed to even begin the process.

For argument’s sake, how much would a restaurant owner be willing to pay for the incremental capacity that they have enjoyed in the past IF they were informed that the privilege would no longer be available for free? Would they offer “nothing?  Most likely not.

If the “free option” was no longer available, they certainly can appreciate better than anyone what revenue they would be passing up. They would not be happy. Thus, it’s likely that they could be convinced to embrace an incremental fee structure where they could still benefit.

This should be a WIN, WIN opportunity for both the restaurant owners and the city stakeholders. In the past, some restaurant owners were really the only winners. The stakeholders have not realized the potential for this much-needed revenue opportunity.

It’s really this simple… finally, develop and implement a strategy to set the tables so there is a WIN, WIN situation for our entire community.