Dear City Council,
Im in favor of the street-side dining and, more broadly, very appreciative that the City worked creatively and collaboratively with local businesses to help the struggling businesses and our community during the pandemic. Thank you.
However, I read about the Citys (long overdue IMO) proposed rents for this public space, and it strikes me that the amounts are materially below market for such spaces.
The City is transferring significant public value in the form of parking spaces, road access and inconvenience, and sidewalk congestion to a select few private businesses in the form of increased revenue-producing space for these restaurants. The select restaurants who are the beneficiaries of the Citys support have increased their revenue-producing spaces by 50%-100% (based on casual observation), and I suspect a look at sales tax receipts would show the increased revenue that this additional space has given these businesses.
Has the City worked with professionals to determine what the fair market rent for such premium outdoor dining spaces should be? In my experience, the very low flat rate structure that is being proposed is not how market rents would be calculated.
In addition to the obvious transfer of value from the public to these businesses noted above, other reasons that the City should charge fair market value include:
1. Its Not Universal
Many restaurants in the City are unable to avail themselves of this additional, outdoor dining simply owing to their location. Other restaurants in the City that do have outdoor dining on private land must pay FMV for their space, so are at a competitive disadvantage to the ones being subsidized by the City. Basic fairness would suggest the City shouldnt be picking favorites and providing them an economic advantage over other similar businesses in the City.
2. The City Has Already Been Very Generous
As far as I understand, these restaurants have received over three years of free space in which they have erected virtual indoor/outdoor dining rooms. This has been very economically beneficial to these select businesses.
3. Liability
The City has opened itself up to a new source of liability as the lessor of these spaces. Accessible/ADA and general liability lawsuits would name the City as a defendant and it should be compensated for this additional risk its now taking on, even if indemnities are in place.
The City has recently raised the idea of increasing TOT taxes to visitors of our town in order to increase its revenue. Before raising taxes on anyone (let alone on local hotels that are still operating well below 2019 levels of revenue), the City should charge a fair market value for the publics assets that have been converted to private usage.
Thank you,
Greg
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Greg Alden
