Fullerton Council sets a monthly lease for public patios, but at what cost?
On May 15th, the city unanimously voted to adopt a three-tier leasing structure in regards to outdoor dining encroachments on public space and the public right of way. According to this structure, restaurants without a license to serve alcohol will pay 30 cents per square foot, while businesses with beer and wine licenses will pay 60 cents per square foot. Restaurants with liquor licenses will pay the full 90-cents-per-square-foot rate that had been suggested to the council when the subject had been raised initially.
In 2008 the city council directed a revocation of all public dining permits, which forced restaurants Ziings and Revolucion to temporarily stop providing these services to the public. Then the city relaxed restrictions on patios and allowed places like new businesses Les Amis and Rialto to use their outdoor space for dining.
Three years after the revocation, the council introduced a new set of outdoor dining guidelines and a leasing structure set at 90 cents per square foot. This rate, set by the city, is based on the average market rate for indoor property leases within downtown Fullerton ($1.80 per square foot). After deciding that the rate was too high, the city decided to charge 50% of the market average (90 cents). A small exception has been made to businesses with unfenced patios under 100 square feet where they will be exempt from paying the monthly lease. However, those businesses will still be responsible for paying the processing fee currently set at $572 to secure against property liabilities. Currently Rialto Café is the only business that can benefit from this exemption.
The reduction, however, was not enough to dismiss the concerns of small business owners that this lease targets. Les Amis' owner, Jinan Montecristo, had done her own investigation into the cost of outdoor dining and stated to the council that the information provided through the city report was inaccurate in regards to rates charged by other municipalities. She favored an annual permit system similar to the method used in Pasadena. According to Montecristo, Pasadena charges an annual permit according to location, traffic and visibility of the business. She alleged that the highest rate charged to a specific business is at an annual rate of $1,361.00 ($113.42 per month). Under the three-tier structure, Montecristo will pay 30 cents per square foot. Les Amis' patio, which is roughly 800 square feet, will cost its business approximately $240.00 per month.
Before the resolution had been passed, Montecristo pleaded that the city should try the annual rate structure for two years before moving forward with monthly leases. "This is not the time. Everybody is suffering hardships. We've gone through a lot. I understand that the city needs money, and I want to do my best to help in any way that I can, but don't ruin small businesses. That's not going to help anybody. It's just going to make it worse for [business owners]. It'll probably close some of us down, and it's not necessary."
Public speaker Sean Payton mentioned that the city should be looking to other municipalities with successful outdoor dining and charging about the same price. He cited Brea, Huntington Beach and Orange as cities to follow.
Initially, councilman Dick Jones motioned to continue the discussion in order to find a better solution, but after receiving no backing from fellow council members, he rescinded his motion as "the parliamentary thing to do." Councilman Bruce Whitaker then stepped in and expressed caution over "the annexing of public space." The concern was that if absolutely no value was placed on public property, that private businesses would have a free-for-all by expanding their private property. However, not a single business had made the recommendation that the city charge absolutely nothing for the use of public property. They were insisting on a more reasonable rate. Whitaker connected the argument as he made veiled references to Tuscany Club, which had operated outside of the sanctions of the city in 2003 when it constructed a full addition to its business despite being permitted to only build an open-air patio. The action of this one particular business has caused the city government to react negatively to all other businesses that wish to expand legally.
Due to the frustration of the council over having to discuss the issue throughout multiple meetings, the council denied looking for other viable solutions and began weighing the three options suggested to them. Eventually, it came to adopt the three-tier system. In an odd twist, councilman Don Bankhead first had to clarify that this vote would not interfere with a stand-alone leasing agreement between the city and Tuscany Club before he could officially support the motion to adopt the new leasing structure.
The issue of public patios will not be entirely wrapped up by the city council until June 5th, when the council decides whether to cut the $572 processing fee in half. Although if it is simply that easy to cut the cost in half, what is the city basing its cost on?