Council OKs market rate fee structure for outdoor dining in Downtown
By SARA HALL
City Council this week unanimously approved moving forward with a market rate fee schedule for outdoor dining programs on public property in Downtown.
Councilmembers voted 5-0 on Tuesday (May 16) to direct staff to return with the market rate approach, or a modified version of the option as it seems appropriate, for their consideration at the June 13 meeting when council adopts the budget for fiscal year 2023-24.
The vote also extended the Promenade on Forest’s coastal development permit and temporary use permit for three years (to January 2027) while staff proceeds with the preliminary design, entitlement and permitting process to convert the Promenade to a permanent pedestrian plaza. It also extended the outdoor dining and parklet program’s TUPs for an additional three-year term (to January 2027) while staff addresses the requirements for outdoor dining on private and public property to become permanent.
Mayor Bob Whalen made the motion following about an hour of discussion, primarily focused on the fee structure. It’s still a temporary timeframe, he noted, and suggested an appraisal be conducted before the second year.
“We could look at this for a one-year solution,” Whalen said.
They could include a provision for consumer price index adjustment or something similar to allow it to grow, confirmed Jeremy Frimond, assistant to the city manager.
There are also other aspects to consider, Whalen added, like the spaces are fully serviced with utilities and the overall experience and increased pedestrian traffic increases sales tax, as staff pointed out. Noting some public comments that the fee structure doesn’t take other costs into account, like additional policing, Whalen also noted that those aren’t charged to businesses elsewhere in the city.
“That would mean every business would get assessed for general costs that we have, which makes no sense,” he said. “What we’re looking at here is recovering the direct costs, which are the parking revenue loss and the maintenance costs. I think this approach does that.”
By doing nothing tonight and holding off on an updated fee structure, the current calculation would continue, which is far under market value, noted Councilmember Alex Rounaghi.
“To me, that wouldn’t be serving the fiduciary interest of the taxpayers,” he said. “We’re the landlords in this situation, so it makes sense for us to do market rate.”
There will also be some closures during the renovation, so restaurateurs are not going to be able to take advantage of that momentum, Councilmember Mark Orgill added.
“I don’t think that what staff has done is inappropriate considering that this is a temporary solution and we’re going to come back for the bigger picture,” Orgill said. “I think it’s fair.”
Also, a majority of residents enjoy the Promenade, added Mayor Pro Tem Sue Kempf. It’s OK to spend money on projects that people like, she said, comparing it to funding parks without getting any revenue back. But in the case of the Promenade, it does help the overall economy, she noted.
“It’s a good solution,” Kempf said.
Although not everyone on the dais was on board with the fee rate.
“There is a gift of public funds here that’s gone on for three years,” said Councilmember George Weiss.
The city built the Promenade, provided private spaces for the restaurants at a very low cost, and now it’s being renovated by the city.
“Meanwhile we lost a tremendous amount of revenue for Forest Avenue,” Weiss said.
Weiss ultimately agreed to the market rate structure with the one-year appraisal plan.

Click on photo for a larger image
Photo by Mary Hurlbut
The city is working to make the Forest Avenue Promenade permanent and this week approved a fee structure for outdoor dining
Council approved the Promenade TUP and CDP, as well as the outdoor dining TUP program, in May 2020. The parklet program was approved later that year. At meetings in 2021, permits for both the Promenade and outdoor dining (including the parklets) were extended through January 2024. Council’s action this week extended the permits for the programs again, this time for three years.
“That’s going to give us time to get the entitlements for the permanent Promenade and then also to commence construction and complete the project,” said Community Development Director Marc Wiener. For the parklets, the three-year extension will “give the city time to evaluate what amendments need to be made to our zoning code, if any, to allow it. Also, to evaluate whether it can be addressed through the parking master plan.”
Currently there are 16 restaurants participating in the outdoor dining program, with seven of those businesses operating parklets on public property (not including the Promenade restaurants). Currently, there are 59 public parking spaces and 54 private parking spaces being utilized by the programs. There are approximately 3,000 parking spaces in the Downtown, about half of which are public, Wiener noted, so the outdoor dining is utilizing approximately 3% of the total supply.
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