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Manhattan Beach Waives Outdoor Dining Usage Fees Through Labor Day

Jul 08, 2021 09:10AM ● By Jeanne Fratello
The Manhattan Beach City Council has agreed to waive parking space and outdoor usage fees for restaurants through Labor Day. The council approved the motion, 5-0, on Tuesday night.

As approved, restaurants that are using parking spaces or sidewalk right-of-way spaces for outdoor dining would not need to reimburse the city. The waiver would extend through September 7, the day after Labor Day, which is also the deadline the city set for the temporary outdoor dining spaces to come down.

(A set of pier-adjacent dining decks will come down by July 19 to make room for police and safety crews in advance of major summer events.)

One context for Tuesday night's discussion was a comparison with 15 other popular Southern California cities, complied by the Manhattan Beach Chamber of Commerce and the Downtown Manhattan Beach Business and Professionals Association

The comparison showed that Manhattan Beach is the only city among the 16 that has charged permit fees for the outdoor spaces. Additionally, at least seven cities have waived the right-of-way fees through at least December 31, 2021. Areas of the city of Los Angeles such as Venice and Playa del Rey are granting unlimited extensions after September 1.

Manhattan Beach Mayor Suzanne Hadley said that any effort to charge restaurants before Labor Day for the use of space would be "a little Scrooge-like."

"Do we really want to be - not only the only city to charge permit fees - but do we really now want to be the only city that would charge any amount of money before September?" asked Hadley.

Gift of Public Funds? 

The main consideration for when the city needs to start to charge for the spaces is when the "free" spaces would constitute a illegal "gift of public funds" to a private entity. The city is experiencing revenue losses due to the use of those spaces that could at some point be considered a "gift" to private businesses.

Manhattan Beach Traffic Engineer Eric Zandvliet reported that the city is currently taking a revenue loss of approximately $735,000 each year due to 78 public metered parking spaces being utilized for outdoor dining. However, an increase in the parking meter rates to $2 per hour is estimated to generate an additional $750,000 per year to compensate for the lost parking meter revenue.

Yet for those spaces, the city is also losing potential parking citation revenue of approximately $101,000 each year.

Additionally, the city will lose approximately $114,000 annually from allowing restaurants to use non-parking space "right of way" portions at $3 per square foot per month.

Furthermore, the city's staff report noted that Manhattan Beach has incurred undetermined additional costs from supporting the outdoor dining program. These costs include expenses such as extra public services for trash and maintenance, modifications of streets to accommodate dining areas, code enforcement, traffic control, law enforcement presence, sign installation, creation of custom signs, and staff resources diverted from other work initiatives to support the program and the City Council Ad-Hoc Committee.

Manhattan Beach City Attorney Quinn Barrow noted at the meeting that California Governor Gavin Newsom has encouraged cities to come up with programs for outdoor dining, and the California Department of Alcoholic Beverage Control (ABC) has relaxed rules for serving alcohol.

Implicit in both of those messages, said Barrow, is that the state is encouraging support of businesses, and thus any advantages gained through this support would not be considered a gift of public funds at this time.

"We haven’t reached that point yet. The businesses still need the help," said Barrow. "I don’t see the gift of public funds right now, but at some point it will be."

Supporting Small Businesses

At the meeting, there was further discussion about how best to ensure support and fairness, especially for small and locally owned businesses. 

Some City Council members pointed out that the aid given to restaurants is not universal across the board in Manhattan Beach. Councilmember Richard Montgomery cited examples such as The Hangar Inn, which expanded outdoor dining into its own parking lot and did not get special exemptions from the city.

"We have twelve new restaurants in our mall," added Montgomery. "They have no concessions, they have no meters, no one’s giving them a hand. They opened in COVID, and they got no help from the city."

Furthermore, Councilmember Steve Napolitano questioned why places such as Uncle Bill's Pancake House were continuing to be charged for the sidewalk right-of-way space (as they had been before the pandemic) while other restaurants who had opened those spaces during the pandemic were not charged at all. 

"That’s consistently inconsistent and equally unequal," he said.

Speaking out on behalf of small businesses was Andrew Goldstein, the landlord/owner of the building that housed the now-vacant Coffee Bean & Tea Leaf, as well as Culture Brewing Company.

Goldstein said that Coffee Bean & Tea Leaf, a national chain, left without notice, "in the middle of the night" and continues to pay rent on the empty storefront - in contrast with the small and Southern California-based Culture Brewing, which was in touch with him every week throughout the pandemic and has been active in hosting community events.

"These large corporate entities have the money to pay rent in Manhattan Beach. But they don’t have the invested interest in the community," he said. "We want businesses that invest in this town and the people who live here. And that frankly doesn’t happen with these large companies. I believe we need to invest in our small businesses not only with our own cash but also with the policies that we put in place in the city."

Goldstein continued by calling for the city to dedicate COVID relief funds to supporting its small businesses. "By not supporting our small businesses, we run the risk of having landlords put commercial tenants here that are financially viable but don’t invest in our community," he said. "If we don’t support and nurture our small businesses through city policies, how long will it be before we have stores, restaurants, and bars that you can find anywhere?

Making Permanent Outdoor Dining Spaces?

Left outside of the discussion was the question of whether any of the new outdoor dining spaces could be made permanent.

Hadley emphasized that Tuesday night's conversation was strictly about the temporary pandemic-necessitated dining adjustments, and that a larger discussion about expanding outdoor dining was yet to come.

"This is not the camel’s nose under the tent for making this free forever. There’s no hidden agenda here," she said. "The temporary decks will come out, and then it’s a whole new discussion for permanent."

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