Iowa City Council considers new regulations for outdoor dining, could lower fees to help restaurants
Restaurants wishing to offer outdoor dining on Iowa City's sidewalks could soon get relief on the fees they pay as the City Council looks to revamp its regulations.
On Tuesday, Iowa City staff recommended the council overhaul the policy to create "major" and "minor" designations for outdoor cafes. Under this proposal, the city would differentiate between larger, more complex operations and smaller, bistro-style cafes that take up less room.
This recommendation is a step toward a request by the Iowa City Downtown District to lower or reduce fees for sidewalk cafes, but does not go as far as that entity wanted.
"We do believe that our current pricing model is fair. It's a fair way to assess it when you have cafes of varying sizes, complexities and also recognizing that they are profiting from the use of the public right-of-ways," Assistant City Manager Rachel Kilburg said.
Several restaurant owners showed up earlier this year to ask the City Council for changes to the city's sidewalk café policy. The Downtown District, the self-taxing, Self-Supported Municipal Improvement District, conducted its own study and asked the city to consider reducing fees for all outdoor dining structures and differentiating between major and minor cafes.
This proposal could lead to the city reducing fees for "minor" cafes if the council approves the changes at one of its next meetings. A restaurant serving alcohol would not be able to be designated as a minor café.
Another impactful recommendation that the city will consider is waiving the one-time deposits intended to encourage owners to make any necessary repairs caused by installation of their café fencing or raised platforms.
City staff also recommended expanding the zones that sidewalk cafes can be used in, and suggested adding the Riverfront Crossings District and the Towncrest and Old Towne Village areas. A staff memo also suggested exploring ways to encourage more restaurants to use sidewalk cafes in the winter.
While city staff did not recommend a permanent reduction or eliminating the current sidewalk café fees, Iowa City does waive them for businesses along the routes of construction projects, like the Dubuque Street work that begins in 2023.
The city also is making the closure of a block of North Linn Street north of East Market Street a permanent practice.
How would city code and revenue be impacted by these changes?
A sidewalk café is a temporary, outdoor area located on a public right-of-way used by a restaurant for additional seating and service, as defined by Iowa City Code.
The Iowa City sidewalk café fee structure is currently:
$5 per square foot for sidewalk cafés located directly on the public right-of-way.
$10 per square foot for sidewalk cafés located on a structure or platform on the public right-of-way or street.
$10 per square foot for a sidewalk café utilizing an elevated planter in the public right-of-way.
For cafés located on the street, there are additional fees, such as $12 for daily parking. Cafés using city electrical outlets pay $45 a year as well.
A memo to the City Council states that the average size of a café is 355 square feet for an annual cost of $1,775, but this has increased in recent years. The average size of a sidewalk café in 2022 is 410 square feet for an annual cost of $2,050.
Kilburg said the fees total about $84,000 in revenue and go into the city's general fund, helping city efforts such as cleaning the Ped Mall and doing maintenance of the central business district.
"While sidewalk cafes are a great amenity, they do, of course, require more staff time and resources to clean, maintain and repair the downtown," she said.
Bird and the Iowa City Downtown District sent the City Council a letter in March asking it to reduce patio fees by half; simplify the process so that businesses can have a multiple-year permit; and allow high-investment patios to stay up year-round. She pointed to challenges restaurants are still recovering from because of the COVID-19 pandemic such as reduced hours of operation, labor shortages, inflation and higher food costs.
Iowa City waived all sidewalk café fees for 2020 and 2021 to “support businesses throughout the COVID-19 pandemic."
The staff memo compared Iowa City's sidewalk café fee policy to other Big Ten cities. Bloomington, Indiana, and Minneapolis charge fees on a per-seat basis rather than by square footage, but the other cities generally charge the same or less for sidewalk cafes.
Champaign, Illinois, charges as little as 50 cents per square foot, while New Brunswick, New Jersey, does not have a fee but restricts outdoor cafes to a single street.
In Iowa, Ams charges a flat annual fee of $35 for businesses that operate a sidewalk café. In Cedar Rapids, there is a $50 application fee and $10 lease fee.
City Manager Geoff Fruin said there will have to be an ordinance change to address some of the recommendations to alter city code and then how to implement regulation.
"We'd like to do that this fall, well before folks are starting to renew (permits) for next spring," Fruin said.
City Councilors receptive to changing sidewalk café regulations
The City Councilors were generally receptive to making changes to the fees and regulations for sidewalk cafes. Janice Weiner and Laura Bergus voiced approval for getting rid of the required deposit, suggesting doing so could reduce barriers for business owners.
"Anything we can do to simplify this going forward ... would be great," Weiner said.
More: Iowa City's newest bar The Green House merges plants and cocktails for an indoor 'oasis'
Mayor Bruce Teague said he was worried about changing the fee structure, but was open to the suggestions that city staff proposed, like relaxing regulations to encourage more outdoor cafes to open in the winter. Teague pointed out that the city will be looking at other ways to alleviate the burden on downtown restaurants that pay these fees.
Councilor Megan Alter was more open to reducing the fees for all sidewalk cafes than her peers. She said she thought about how these restaurants do make a lot of money on the weekend, but she goes downtown now and sees them struggling and reducing hours and days they are open.
"Restaurants are not coming back for myriad reasons, but that truly is going to impact them in terms of how to survive in the long term," Alter said.
Alter proposed reducing the fees to $3 per square foot for sidewalk cafés located directly on the public right-of-way and $7 per square foot for sidewalk cafés located on a structure or platform on the public right-of-way or street. The other Councilors did not wish to go that far.
Also on Tuesday, the City Council:
Approved the first reading of an ordinance to rezone 518 Bowery St. to be used as a coffee shop.
Approved the first reading of an ordinance to rezone more than 27 acres along Camp Cardinal Boulevard for a multi-family development called Cardinal Heights.
More: In Iowa City, developers face challenges building along Camp Cardinal Boulevard. Here's what's next.
George Shillcock is the Press-Citizen's local government and development reporter covering Iowa City and Johnson County. He can be reached at (515) 350-6307, GShillcock@press-citizen.com and on Twitter @ShillcockGeorge
This article originally appeared on Iowa City Press-Citizen: Iowa City Council considers fee changes for outdoor sidewalk cafés
