City to charge businesses for outdoor dining

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City to charge businesses for outdoor dining
Photo/Cody Mello-Klein A parklet in front of Fontaine Caffe & Creperie.
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By Cody Mello-Klein | [email protected]

Alexandria’s government relaxed the city’s outdoor dining policies during COVID19 shutdowns, and restaurants responded by creating parklets that have literally blossomed with flowering plants, tents and festive lights.

The parklet policy enabled some eateries to create outdoor dining for the first time, while others greatly expanded their capacity. Restaurant owners say the parklets have been a boon and at times a lifesaver for their businesses during the last two years.

Now, the city is making the parklet program permanent. The shift involves regulating and charging fees for these parklets, and Alexandria business owners are not happy with the changes.

City Council approved a fee structure for the program during Tuesday’s legislative meeting but pushed back the start date for the fees to Oct. 1, instead of the proposed date of July 1.

When the pandemic started, Alexandria, like many communities across the country, looked for creative solutions to ease the economic damage to local businesses. One city strategy was to introduce parklets, which are parking spots that have been adapted by businesses for use as an outdoor retail or dining area or just as public space.

Many business owners jumped at the chance. By the end of 2021, there were 37 parklets established by businesses, with three more contemplating setting one up with the start of the permanent program.

The city had been considering a parklet program pilot in 2019 and had received signoff on a two-year pilot from the Traffic and Parking Board in February 2020, right before the pandemic hit.

Initially, the program restricted parklets to public uses, but the onset of the COVID-19 pandemic in March 2020 resulted in the city expanding the program to include commercial uses, allowing restaurants and stores to expand their operations outside at a time when indoor operations were shuttered.

City Council approved a permanent parklet program in October 2021, and the TPB subsequently approved a new set of parklet requirements in November 2021 that established specific parameters for the location, design and maintenance of parklets in the permanent program.

The temporary parklet program is set to end on March 31, but the city is proposing an extension until June 30 at Saturday’s public hearing. Council’s decision to delay the start date for fees until Oct. 1 could result in a further extension of the temporary program on Saturday.

According to Katye North, division chief of mobility services, the more stringent requirements are designed to ensure the needs of various city departments, from the fire department to stormwater management, are being met now that the parking spaces could potentially be permanent outdoor dining areas. North also said the design requirements aim to create a more unified set of standards for what businesses provide in their parklets.

“What you see now is a variety of very makeshift to some more sturdy platforms. I’d say that’s the biggest change between what you see now versus what we’ll see going forward, is having these more substantial platforms so we have that level connection from the sidewalk and that ADA access, which we feel is important moving forward,” North said.

In terms of design, the permanent program includes regulations for emergency access, ADA compliance, lighting, heating, landscaping and the materials used to create the parklet platform. Parklets must now also include a platform that is flush with the curb and include a three-to-four-foot-tall barrier around all edges of the parklet except the side facing the sidewalk.

With the shift to a permanent program, the city proposed a new annual parklet fee for businesses that want to continue using parking spaces for commercial use.

According to the city, the new fee, which is based on how much parklet space a business uses and where in the city it is located, is meant to compensate for the revenue lost from the removal of a metered parking space.

In some ways, this is not a new concept in Alexandria. Some restaurants, such as Vola’s Dockside Grill, already pay the city a fee for the private use of city-owned property along the waterfront. However, the fee would impact many more businesses than just those located at the foot of King Street.

The fee structure charges businesses in popular commercial areas, like along King Street, about $3,000 per parking spot per year, while businesses in other commercial areas of the city, such as Carlyle, would pay about $2,000 per spot. Businesses in “equity emphasis areas,” such as Arlandria, would pay $1,000 per spot.

The city estimates that the average revenue brought in by a metered parking space in commercial areas outside King Street is $2,000 per year. Meanwhile, in the 100 block of King Street, the city estimates average annual revenue generated from a single meter is $5,000 per year and $3,000 per year for streets adjacent to King Street. These calculations are based on pre-pandemic numbers.

If all 37 of the current parklets became permanent, the revenue generated for the city would be about $151,000 per year, according to rough estimates from the city. However, Max Devilliers, a city planner working on the parklet program, said it is “highly unlikely” that every business currently in the program will continue to participate. 

For comparison’s sake, the FY2023 budget just proposed by City Manager Jim Parajon is $829,900,000, meaning revenue from the parklets would be 0.02% of next year’s budget. On Tuesday, council also approved staff’s recommendation for a 50% reduction in the fee for the first year of the permanent program, bringing estimated city revenue from the program to about $75,500, without the impact of the fee delay factored in.

Several aspects of the permanent program, including the cost and process involved with designing parklet platforms, have raised concerns among members of the local business community, but the proposed fee has received the most criticism.

Stacey Wharam’s restaurant, Fontaine Caffe & Creperie, is located at 119 S. Royal St., off of King Street. With four parking spaces, Wharam would pay $12,000 annually for her parklet fees, which she argued is a steep price to pay at “the height of a supply chain and inflation and labor problem.”

“We are all struggling enough as it is,” Wharam said. “… Our margins are tight. Our supply chain issues are resulting in costs of products like we’ve never seen before. It’s $75 for a case of limes right now.”

The total cost to restaurants and retailers would actually be considerably higher, as costs to design and build platforms that comply with city requirements, plus other costs associated with the new city regulations, could make this an expensive proposition for restaurants.

According to city staff, the estimated cost of building a platform could range between $5,000 and $10,000. Each business would have one platform that runs the entire length of its parklet. The first-year 50% fee reduction is meant, in part, to balance the steep upfront cost many businesses will have to take on if they want to continue with the program, staff said.

“The intent of the reduction is to try to acknowledge that this is a new fee program and that there will be some buildout costs for businesses that are looking to participate in this program,” Alex Block, a city planner in the mobility services division, said on Tuesday. “We want to acknowledge that and give a chance to ease into the program.”

Wharam said should the fee become cost-prohibitive and prevent her from providing outdoor dining in her parklets, she risks losing staff members who rely on the tips provided by customers, most of whom are eating outdoors.

Despite her concerns, Wharam said she wants to find a solution that works for both the city and local restaurants. Mike Anderson, a partner in Homegrown Restaurant Group, shared a similar sentiment.

“I don’t think it’s unfair that the city wants to charge for [parklets] out there. I think they’re asking for too much,” Anderson said.

Between the city’s 5% meals tax and business license fees, Anderson said the cost of operating a restaurant in Alexandria is already high.

Despite the 50% reduction, Wharam pushed back on the concept of an annual fee altogether, instead arguing in favor of a monthly fee based on a set percentage of sales.

“If you do that and we report monthly and we pay monthly, then in months like January where we’re completely dead, there’s no outdoor dining, we’re not penalized. And for the months like July where we’re crushing it, they get a little more revenue,” Wharam said. “This way I don’t have to stroke a check for $12,000 where it’s really going to harm me.”

North said a percentage of sales-based approach presents some administrative challenges for the city.

“I think this is our first attempt at these fees, and we’re going to see how it goes, and that doesn’t mean it can’t be adjusted in future years if we have to,” North said.

In lieu of getting rid of an annual fee, Anderson said he’d like to see the city set up a grant program that restaurants can use to improve their parklets and outdoor dining spaces, something several members of council also proposed on Tuesday.

“Maybe some of these funds that are going into paying [for the parklets] can be funneled back in via some sort of grant that we can use to make our patios even more customer and pedestrian friendly,” Anderson said.

The fee is not the only piece of the permanent program that has raised some eyebrows in the business community. The specific design and maintenance requirements have also left some business owners scratching their heads.

Parklet platforms will need to be even with the top of the curb to provide access for customers with disabilities. However, the platform also needs to provide enough space for proper drainage to take place in the gutter pan. For business owners, that means the platform must be designed so there is two feet of clearance from the curb for the gutter pan while still maintaining a platform surface for people to walk on.

That leaves a two-foot space underneath the platform that needs to be cleaned out daily and could present a potential rodent problem if every piece of trash isn’t cleaned out, Wharam said.

“Rats don’t need a big opening. Let’s talk about the rat that’s under there and what happens when my customer sees it,” Wharam said. “The city doesn’t have a plan in place other than to tell us to clean it daily.”

Devilliers said the city has discussed this issue and stressed the need for businesses to adhere to the maintenance requirements laid out in the program. Those requirements include regular sweeping and cleaning of the parklet space and platform – as well as underneath the platform – removal of debris or trash and pest control when necessary. Like with any other permit issued by the city, inspectors will regularly examine parklets and can issue a violation if a business is not properly maintaining the space.

On Saturday, council will vote on a potential extension of the temporary program. First-year permits and the new fees will take effect on Oct. 1 and last until Sept. 30, 2023.

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