At the Feb. 16 City Council Study Session, the Council discussed waiving public sidewalk lease fees for restaurants with open air dining permits, providing financial relief to a struggling sector. To ensure there is no inequity between restaurants participating in the OpenBH program and restaurants operating with standard open air dining permits, the Council unanimously supported the retroactive waiver of fees associated with open air dining permits for use of the public right-of-way. The waiver will extend for the duration of the pandemic, plus an additional year.
According to Assistant Director of Community Development, Ryan Gohlich, about 100 restaurants in the city have Open Air Dining Permits. The city charges restaurants operating with that permit a monthly fee of $1.50 per square foot of open-air dining area, if there is a railing or barrier, and $1.04 per square foot for an open-air dining without a railing or barrier. The fees are collected on an annual basis, and the permits are approved for a five-year term. Alternatively, restaurants with outdoor dining permits that have been approved through OpenBH–a program that allows businesses to temporarily expand their services to adjacent areas such as parking lots and the public right of way by acquiring a Special Event Permit–are not subject to sidewalk fees and may be renewed each month.
“I’m supporting this 1000 percent,” Councilmember Lili Bosse said. “When we have thriving restaurants, it helps the retail, it helps the offices. You know people who are working or shopping, they often go to our restaurants and it creates the vibrancy and the walkability that we want to see in our city. As we have learned, we actually have 100 of these permits and 140 last I counted of the OpenBH permits, so I definitely think we want to bring this into equal standing.” Bosse noted the overwhelming support from the community in favor of the OpenBH program as well as outdoor dining options generally.
Each year, the city collects approximately $140,000 from sidewalk lease fees associated with outdoor dining permits. At the onset of the COVID-19 pandemic, the city suspended the collection of sidewalk lease fees to provide relief to struggling restaurants whose operations have been disrupted or halted due to Public Health Orders.
“It’s not a ton of money,” Councilman Julian Gold said. “I really do believe that for fairness, we should suspend the collection of these fees, certainly for a year and perhaps longer. I’m 110 percent in favor of suspending this, at least to the end of the restrictions and to apply a free year.”
Since restaurants have only recently been permitted to resume in-person outdoor operations, the city has not yet resumed collecting lease fees. Therefore, the loss of revenue to the city resulting from the waiver of these fees is already reflected in the most recent budget.
“It’s my hope that both for OpenBH and the open-air dining that the restauranteurs do improve that space and make it look really nice, which will really encourage us as a council to continue this program,” Mayor Lester Friedman said. “I think that reinvestment in those spaces is critical. I do understand the cash constraints right now in terms of operating a business, but I think there’s also safety concerns that we need to be aware of.”
Staff will return with a resolution for the Council to vote on memorializing its direction at a future date.