Should West Palm increase fees for sidewalk eating in downtown? It's a complicated issue
WEST PALM BEACH — A scheduled vote to increase city fees to sidewalk cafes in downtown West Palm Beach and elsewhere was postponed this week after city commissioners expressed concerns about the fairness of the proposed ordinance.
City staff had recommended passage of a revised fee schedule that would have required downtown merchants to pay $5 per square foot for placing tables on sidewalks in the public right-of-way, plus a $200 application fee and an annual renewal fee of $50. In Northwood Village and other communities, restaurateurs would pay $2.50 per square foot.
The issue is somewhat pandemic related because while the city has had a sidewalk café fee ordinance for at least 15 years, many eateries brought tables and chairs outside during the pandemic, and fees have been suspended the past two years, Development Services Director Rick Greene said.
The proposed fees would uniformly apply to businesses regardless of size and hours of operation, and would have gone into effect Oct. 1. The revenue would be earmarked for maintenance and repairs to the sidewalks.
“I have concerns about those businesses that are only open a short amount of time each day or aren’t serving the high-end meals,” said Commissioner Christy Fox.
She and other commissioners agreed a fee is appropriate. But they maintained that an establishment using public space for a good portion of a day — say, a restaurant with a lunch and a dinner menu — ought to pay more than a lunch-only eatery that has less impact on the property.
“I like having it tied back to the costs to the city,” Fox said.
“We’re just coming out of the pandemic,” said Commissioner Joe Peduzzi. “If we can do something to make sure these restaurants stay here for a while, then that’s what I think we need to do.”
What are the sidewalk restaurant fees in other Palm Beach County cities?
West Palm Beach’s fees are in line with those of other cities, officials contend. Lake Worth Beach’s nine businesses with active sidewalk café permits pay a $7 per square foot fee. In Delray Beach it’s $4.75. Miami Beach charges $20 per square foot, and in Miami it’s $11.50.
In West Palm, a casual restaurant with 10 seats and serving only lunch would earn about $131,499 annually, the West Palm Beach Downtown Authority estimates. With 25 seats, that restaurant would make $328,500. Higher-end restaurants serving lunch and dinner and having the same number of seats would have revenues of $590,388 and nearly $1.5 million respectively.
West Palm Mayor Keith James argued that the proposed fees are so nominal that fairness isn’t an issue. On average, they would be between $1,000 and $2,000 a year, Greene told commissioners. For example, Greene said, a restaurant using 304 square feet of public space downtown would pay $1,520 at $5 a square foot, plus the $200 application fee for a total of $1,720. Northwood merchants would pay $760, plus the application fee.
“It’s a no-brainer,” James argued. “I haven’t seen any business that’s left Clematis Street because of the fee that we are charging for sidewalk cafes.”
Some details weren’t shown in the perceived revenue estimates, cautioned the DDA’s executive director Raphael Clemente. The estimates are per seat revenues across an entire establishment whether inside or outside, he noted.
Clemente added that “restaurants make a lot of money, but they have very high costs. However, on an annual basis, additional seats are additional revenue. It’s hard to come up with a reasonable fee that’s equal and fair to all.”
The city's sidewalk café fee ordinance has come with a $150 application fee.
An amended sidewalk café ordinance was passed by commissioners in March 2021, but they asked planning staff to recommend fee revisions to reflect different market conditions between downtown and Northwood Village.
Some of Northwood Village’s merchants would like the latest proposed fee structure to assess them seasonal fees to reflect the fact that they have far less traffic than downtown. Downtown business owners objected too, contending that some of them are still recovering from lost income during the pandemic, and noting they already were dealing with higher downtown parking rates that went into effect in May.
How a proposed three-tiered structure would work for restaurants
In July, the city received an alternative three-tiered fee structure proposal from Rodney Mayo, who owns businesses there and represents downtown merchants. It would base the fee on the number of seats and has no square-foot component. At 50 or fewer seats, it would assess an annual fee of $250. Between 51 and 149 seats, it would be $500 and if more than 150 seats, $1,000.
City officials and the DDA scheduled an Aug. 8 Zoom meeting with downtown merchants to discuss this further and none participated, Greene said.
The city then notified them of the most recent City Commission meeting and the fact that the merchants’ proposal would come up. Mayo sent an email saying they were aware of today’s meeting. None attended.
“I wish there were some merchants here to speak to this, Clemente told commissioners. “Some of the merchants I spoke to had no problem with this, while others obviously expressed their opposition to it.”
Commissioner Cathleen Ward said, “I’m kind of shocked that if this is a big deal … why aren’t they here tonight?”
Mayo responded that he’s been working on the issue for 2 ½ months and already met with four of the five commissioners, including Ward, and sent numerous emails outlining his group’s position. “All four [commissioners] agreed that our proposal made sense.”
As for the Zoom call, he said city staff rejected six dates over a two-week period that worked for his group, but chose one instead when he was out of town.
“The way they are doing this by the square foot is so complicated,” Mayo said. “First, they’re going to have to survey every spot. The thing they have not addressed … is right now most of the restaurants are setting up on their neighbor’s sidewalk. Every restaurant I know spreads out at night.
“To me, this [proposed ordinance] is a way to prevent that and they just haven’t told anyone what they’re going to do.”
Of cities he has looked at with sidewalk café fees, it’s about 50-50 between those who use a square-footage model and others that charge only a flat or tiered fee, Mayo added.
After more than an hour of discussion, commissioners directed staff to return around late October with potential changes to the fee structure to include an adjustment for downtown eateries that are open for lunch only, and a reduced seasonal fee for those in Northwood Village.
Palm Beach Post Staff writers Jasmine Fernandez and Jorge Milian contributed to this story.