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Council extends outdoor dining and parklet program

By SARA HALL

City Council unanimously approved extending the outdoor dining and parklet program during a special meeting this week. 

Council voted 5-0 on Wednesday to extend the program for two years, but to revisit the fee schedule after just one year with the objective of at least covering the loss parking revenue from the parklets. The action also approved a fee structure for the outdoor dining temporary use permits.

While much of the hour and a half discussion focused on how the program has helped local restaurants, the real conversation should be about the locals who eat out and love the parklets and promenade, said Councilmember Peter Blake.

“Locals having places to eat and enjoy themselves, which gives us the spice of life,” is an important part of this program, Blake said. “In reality, this is a humanity issue. This is an issue about people going out and enjoying themselves. When we opened up the parklets, we not only helped some restaurants, but we actually helped the residents come out who were cooped up in their houses.”

Parklets are allowed with temporary use permits under the outdoor dining and retail display program that council established in 2020 in an effort to support businesses affected by the COVID-19 pandemic. Permits granted under the policy run through December 31, an extension council approved earlier this year.

Parklets are dining areas within a parking lot or on-street parking spaces that are meant specifically to allow restaurants that lack private parking lots, commercial spaces, or sufficient sidewalk space to create outdoor dining areas. 

To date, the city has approved outdoor dining at 22 locations (listing The Hive and the Promenade as single locations with multiple businesses within that location receiving TUPs) and nine parklets, reported Senior Administrative Analyst Jeremy Frimond during his presentation.

Council extends outdoor dining

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Photo by Mary Hurlbut

Outdoor dining at the Promenade

Assembly Bill 61 authorizes local jurisdictions to reduce the number of required parking spaces for existing businesses that provide outdoor dining through Jan. 1, 2024. AB 61 also extends the ability of the Department of Alcoholic Beverage Control licensees to provide alcohol service to outdoor dining areas authorized by COVID relief measures until July 1, 2024.

Considering AB 61’s timeline, city staff recommended a two-year extension of the outdoor dining and parklet programs. 

The two-year option was a point of concern during the discussion on Wednesday.

The two-year extension isn’t warranted, said Councilmember George Weiss. It would be more appropriate at just one year with a review to possibly extend it again at that time.

“It’s very difficult to take something back when you’ve given it (away),” Weiss said. 

TUPs can be revoked at any time, Frimond noted. If circumstances change in the future, the program extension can be revisited and modified as council sees fit.

Another concern was that the fee structure recommended by city staff (and ultimately approved) was not adequate considering fair market value and the potential loss of revenue. 

The restaurants seem to be doing very well and have bounced back from the pandemic, Weiss noted and questioned if they needed the extra assistance if not paying fair market value was fair. 

“I’m looking for equity here,” Weiss said. “I love outdoor dining and I’m for the parklets, but I think people have to pay their fair share for them.”

It’s not a market-rate fee at this time, Frimond confirmed.

“The reason for that is because we still are, and this program is, still under the umbrella of COVID and providing relief to businesses,” he said. “Albeit, the COVID landscape of today is very different than six, nine, 12 months ago, there aren’t currently any mandates restricting indoor dining, but the reality is that these businesses are still facing lots of challenges from a multitude of directions, be it supplies (or) staffing. And also, there’s a significant portion of the public who would likely not visit restaurants if there wasn’t an outdoor dining option.”

A number of restaurants were significantly impacted by COVID, some completely shut down, City Manager Shohreh Dupuis pointed out. Many are still dealing with challenges, including the cost of supplies or the lack of employees, a complaint several restaurateurs echoed during public comment.

The fee, which is low simply to cover administrative costs, is temporary, Dupuis said. If this were to become permanent, staff would conduct a complete fee analysis.

Also, there’s not a blueprint for a fee structure for this type of use, Frimond added. 

“We’re very much at the forefront of that,” he said. 

As he was developing it, Frimond reached out to other cities to find out what other jurisdictions were doing. He found three key options being pursued: No charge, a base or flat fee, or a per square foot rate. He elected a hybrid of the two fees, a combination of a base rate plus square foot rate.

A base rate of $1,000 annually is applicable to all outdoor dining on public property and private property where the location is not designated in the original conditional use permit for the business. 

In addition to the base rate, a rate of $7 per square foot will also be charged annually for outdoor dining on public parking areas. 

The four restaurants with designated dining decks on the Promenade will also be subject to both fees. The fee structure will be implemented beginning July 1, 2022.

Council extends parklets

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Photo by Mary Hurlbut

Parklets in downtown

There was also some concern about the loss of parking in downtown.

Although after studying the average utilization during enforceable parking hours, staff found that there’s no significant impact to parking attributed to the parklets and outdoor dining options, Frimond said. 

The parklets don’t use a big percentage of the overall parking opportunities downtown, Blake pointed out.  Returning such a small fraction of parking spaces won’t improve business, he said, but keeping the outdoor dining intact will.

With approximately 3,400 parking spaces downtown (about half are public and half are private) and the parklets are taking up 16 spaces, it’s a little less than half a percent of all the spaces being used by the outdoor dining program, confirmed Community Development Director Marc Wiener.

The city has also worked with private surface lot owners on agreements to convert the space into public parking, Frimond noted. 

“This is an ongoing subject that we’re working on and trying to explore additional options to continue to alleviate parking in the downtown and, quite frankly, throughout town,” he said. 

Staff is also working with businesses to ensure converted spaces are utilized, another concern raised by councilmembers and some residents. 

Councilmember Toni Iseman noted seeing the parklets on Ocean Avenue almost empty. In some cases, the sidewalk is wide enough for a table, she said, so the parklet area could be still be utilized as parking spaces.

“We are working to increase the utilization of those decks,” Frimond said. “We are not hiding the fact to any of these businesses that if they are underutilized, they will go away in time.”

Although it’s premature to remove any just yet, he said. But they will start to explore different options, including possibly moving the dining space to the sidewalk or removing it altogether, if there is not an improvement. 

More than a dozen people spoke during public comment, the majority of them local restaurant owners who favored keeping the parklets and outdoor dining. Several noted how much the programs have helped keep their restaurants afloat during the pandemic.

Marine Room owner Chris Keller said outdoor dining has been a huge benefit, even though the restaurant is one that hasn’t fully utilized the parklet. He reminded the council that the Marine Room was closed for 18 months and when they did reopen on June 15, they were short-staffed. 

“We’ve had challenges galore from day one,” Keller said. “I kind of feel like we’ve now gotten our footing and we’re in a good spot.”

He also noted that they will soon be opening up an early morning coffee bar. They partnered with a local roaster, Jedidiah Coffee, with owner Steve Munsey confirming the deal when he spoke later during public comment. Munsey noted how helpful a parklet in front of Marine Room would be for his artisan coffee shop.

Thomas Carson, owner of Wild Taco, said they don’t have an outside patio to utilize and the parklets have helped the business tremendously, particularly because the buildout ended up costing almost double what they were expecting. 

“We opened into a global pandemic,” Carson said. “(The parklets) basically saved our business throughout the summer.” 

They used the parklet as much as possible during summer, he added, noting that crowds often come in waves so someone might see it empty one minute but 10 minutes later it’s packed. 

He suggested testing the parklets out further to see how they’re utilized through winter and in the near future. 

“If for some reason they don’t work, I’m all for change,” Carson said. 

Council extends parklets Slice Pizza

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Photo by Mary Hurlbut

A dining parklet in front of Slice Pizza on Forest Avenue

Cary Redfearn, who owns Lumberyard and Slice Pizza, praised the city and councilmembers on how they handled the pandemic, including providing the parklets. 

“The pandemic obviously devastated the restaurants. And I can tell you that the parklets, at Slice Pizza, saved a number of jobs. I don’t know what we would have done without it. It really helped us,” Redfearn said. “It saved my business. It saved 60 jobs during the height of the pandemic.”

They’re using the outdoor space to its fullest extent, especially during summer, he added. 

With so many guests still feeling uncomfortable sitting indoors, the parklets allow them to continue to serve, he said. 

Customers love the outdoor dining option, Redfearn noted, a comment repeated by several restaurateurs, including one who estimated that 80-90% of guests want to dine outside. 

Although there was a lot of support for parklets and outdoor dining from restaurant owners, a few residents voiced some concerns, including that the two-year extension was too long given the uncertainty of COVID.

A one-year extension might be a better idea, suggested John Thomas. With increasing vaccination rates and the pressure from the business community, there may be enough progress with COVID that within a year many businesses may return to “something approaching normal” and the city may want to recover some of those lost parking spaces. It would be simple enough to add another year extension if needed, he pointed out. 

“It’s easier to extend a year than to cut back early,” Thomas said. 

Anne Caenn, president of Village Laguna, said they support an extension of the continued use of public parking areas for dining, however the two years is excessive because they don’t know how long the pandemic will last. She suggested a six-month review and another extension if appropriate.

“We are optimistic that California’s continued efforts to increase vaccination rates will result in a return to pre-pandemic lifestyles much more quickly than two years,” Caenn said. 

It’s also a concern that a two-year extension will build expectations that these dining areas should be permanent.

“They have served their purpose during the pandemic emergency, but in addition to reducing the parking opportunities and parking revenues, they unfairly benefit a few businesses at the expense of others,” Caenn said. 

They should be phased out, she added. Any loss of parking in downtown is a problem and the need for more parking will only increase in the future.

Another issue is the consideration paid to the city for private use of public property, Thomas said. It’s about the adequacy and appropriateness of the fees.

“It is incumbent on the city, if it is allowing exclusive, private use of public property to a few fortunate restaurants, that the amount charged represent fair consideration for the use so that there can be no question of fairness or proper use of public property,” Thomas said. 

He suggested charging the restaurants the same amount they are paying their landlords per seat. Based on recent averages, it’s a dramatic difference between fair market value and the city’s fee structure.

It’s also unknown about how much revenue will be generated from this fee versus the lost revenue, Thomas added. 

“I am sympathetic to some of the concerns that these restaurants have said,” Thomas added. “So, I’m not saying you do this immediately, but I think it would be appropriate that this be phased in over some period of time so that this does not just become some kind of boondoggle.”

 

Shaena Stabler, President & CEO - Shaena@StuNewsLaguna.com

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