|Staff has completed amendments to Division 8-03-002 of the Flagstaff City Code. Currently this Division is called “North Downtown Business District Encroachment Policy”, and it will be renamed as “Sidewalk Cafes, Sidewalk Vending Carts, and Other Permitted Encroachments”.
The amendments to this Division are based on some of the provisions in Division 8-03-002 which have been kept, as well as ideas from a variety of other cities, including Portland, OR, Seattle, WA, Salt Lake City, UT, Minneapolis, MN, and Redwood City, CA. In the narrative below, staff will describe the principal sections and provisions of the proposed draft ordinance.
Reorganization of the Division. This Division has been reorganized so that, for example, the definitions and appeals sections have been consolidated and certain sections have been rearranged so that the document is more logically organized. The definitions are also arranged alphabetically. A new definition for "license rate" to replace the term "lease rate" has been added, as has a definition for "public way or public right-of-way".
Illustrations. The Division includes illustrations to make it easier to understand key terms, such as “area of operation” and “clear pedestrian zone”.
Applicability. The proposed standards apply to all commercial zones in the City except for the Suburban Commercial (SC) Zone. This is an important difference from the current standards which apply only to the downtown area, currently designated as the Commercial Business (CB) Zone. The proposed ordinance, therefore, would allow business owners in the Southside neighborhood or elsewhere in the City to apply for a sidewalk encroachment permit.
Types of encroachments. The amendments provide standards for three types of encroachments. Permits for sidewalk cafes and sidewalk vending carts encroachments will be administered by Comprehensive Planning and Code Administration Program staff. Staff from the Development Engineering Program will continue to manage the encroachment permits required for work by public and private utilities in the right-of-way, driveway construction, and trash dumpsters placed in the right-of-way when there is no room on a property for them during construction.
Application fee. The amendments contemplate that all applications for sidewalk cafes and sidewalk vending carts will be required to pay an “application fee” to cover the administrative costs of accepting, reviewing and issuing a permit by staff. As changes to the City’s fee schedule are required by Arizona law to be posted to the City’s website for a minimum of 60 days before Council action on the fee, Council consideration of this application fee will be scheduled at a later date when amendments to the City's Fee Schedule will be submitted to the Council for review and approval.
Annual lease License rate: At the March 18th meeting, Council asked staff to develop clearer terminology than the term "lease rate". Staff suggests that the term "license rate" is more applicable to refer to the cost per square foot for the use of public sidewalks, while the term "annual total cost" refers to the total amount paid annually for the use of the sidewalk The amendments to Division 8-03-002 also contemplate an annual lease rate, the purpose of which is to compensate the City for use of public sidewalks for commercial purposes. The need for the license rate arose when it was realized that sidewalk cafes located on Heritage Square were required to pay a license fee for the use of this public space as part of their lease agreements, whereas all other restaurants that had established seating areas on the sidewalks elsewhere in downtown were not required to pay for the use of the sidewalk.
Staff studied the methodology used by other US cities, including Seattle, WA and Corvallis, OR for establishing a defensible procedure for calculating an appropriate license rate that is fair and reasonable to business owners and that reasonably compensates the City for the use by private individuals of its property. As discussed at the March 18th Council meeting,
Staff recommends that a single aggregated rate will be applied City-wide rather than establishing separate fees for different areas of the City. Staff created a matrix to analyze the property values of the parcels historically associated with applications for sidewalk cafes and sidewalk vending carts (see attached). Twelve such parcels were identified, including Heritage Square. Preliminary analysis suggests that the lease rate for use of a City sidewalk would be about $15 per sq. ft.; i.e., $1,800 annually for a 120 sq. ft. sidewalk café operating area. This is derived by taking the average full cash value established by the Coconino County Assessor’s Office for the 12 properties in the downtown and Southside areas, and dividing this value by the area of the parcel. The resultant average land value ($60 per sq. ft.) may then be multiplied by the operating area in sq. ft. and a rate of return value of 25% (i.e. 0.25 over 4 years). Similarly, the cost to the proprietor of a vending cart based on a maximum operating area of 24 sq. ft. would be $360 per year. Note that if the rate of return was calculated over a longer period of time, the annual lease rate would be lower. For example, if the rate of return was calculated over 6 years at 16.67%, then the lease rate for a 120 sq. ft. sidewalk café would be $1,195.
Consistent with Council's direction, staff has developed three options for determining a license rate for the use of public sidewalks by proprietors of sidewalk cafes and sidewalk vending carts. Each of these options are included in Exhibit A to Resolution 2014-10 - refer to Page 5 - and are copied here for the Council's convenience, as well as the corrected version of paragraph 1 of this Section:
B. APPLICATION FEE AND LICENSE RATE
1.Each application for a sidewalk café, sidewalk vending cart, or other permitted encroachment shall be accompanied by an application fee. Application fees are established by the City’s Management Services Director. The application fee is nonrefundable and additional to the license rate payable for the use of public right-of-way. The annual total cost for the use of public right-of-way for sidewalk cafes and sidewalk vending carts shall be collected prior to issuance of the permit, regardless of the amount of time used, or other permitted encroachment, and shall be determined as set forth in sub-paragraph 2. below.
2. OPTION A: [This is staff's recommended and preferred option. It assumes a uniform per square foot cost for the construction and maintenance of sidewalks with curb and gutter (the value was derived from recent construction projects in Southside and Sunnyside) as the basis for determining the license rate, seasonally adjusted for a 9-month season.] The annual total cost (ATC) shall be based on a per square foot (SF) calculation of the permit operating area. The ATC is calculated by determining the total cost for construction and maintenance of sidewalks, which is approximately $5.00 per square foot (i.e. the license rate (LR)). The license rate may then be multiplied by nine (9) to create an annual cost which reflects an anticipated 9 months of potential use, and then is adjusted for an 8-year rate of return ((RR) i.e. 12.5% of value). See calculation below:
Area of Encroachment (SF) X LR X SA X RR = Annual Total Cost
120 X $5.00 X 9 X 0.125 = $675 Annual Total Cost or $56.25 per month
2. OPTION B: [This option is similar to that originally proposed by staff in that an analysis of the full cash value of properties associated with sidewalk cafes and vending carts will form the basis for the calculation of the license rate. However, rather than locking into 12 properties which may be problematic in the long term, staff suggests that for each pending year for which a license rate needs to be determined, the current year's properties would be used as the basis for the license rate calculation, seasonally adjusted for a 9-month season.] The Annual Total Cost (ATC) shall be based on a per square foot (SF) calculation of the permit operating area. The license rate (LR) value per square foot (SF) shall be calculated annually by the Assistant to the City Manager for Real Estate by no later than September 1st of each year. The license rate, which shall be applied to permit operating areas throughout the City of Flagstaff where sidewalk cafes and sidewalk vending carts are permitted, shall be derived by taking the average full cash value as established by the Coconino County Assessor’s Office for the properties with permitted sidewalk café and sidewalk vending cart encroachments in the preceding year (including, if applicable, Heritage Square), and dividing this value by the area of the parcel. The resultant average land value shall then be multiplied by the permit operating area in square feet (SF) and a rate of return (RR) multiplier of 12.5% applied (i.e. an 8-year rate of return). This will then be modified to reflect anticipated seasonal use by adjusting the cost down by 25%, a seasonal adjustment (SA). See calculation below:
Area of encroachment (SF) X LR X RR X SA = Annual Total Cost
120 X $60.00 X 0.125 X 0.75 = $675 Annual Total Cost or $56.25 per month
2. OPTION C: [This option assumes that the license rate would be based on a locally accepted value of $1:00 per square foot of sidewalk space seasonally adjusted for a 9-month season.] The Annual Total Cost (ATC) shall be based on a per square foot (SF) calculation of the permit operating area. A local industry standard value of approximately $1.00 per SF (the license rate (LR)) may be a applied to the permit operating area and adjusted to reflect anticipated seasonal use by multiplying the rate by nine (9) months instead of 12 (SA). See calculation below:
Area of Encroachment (SF) X $1.00 (LR) X SA = Annual Total Cost
120 X $1.00 X 9 = $1,080 Annual Total Cost or $90.00 per month
The license rate proposed above, or as ultimately adopted by the Council, will be applied to business owners who rent sidewalk space for outdoor cafes or vending carts, and will also be applied to business owners who rent portions of Heritage Square for outdoor dining areas. This license rate will not apply in addition to any current lease amounts (e.g., for Cuvee 928 or Monsoon's), and it would only apply once any current lease agreements terminate.
Permitting requirements and conditions of permits. The ordinance establishes the need for a permit for use of public sidewalks for sidewalk cafes and sidewalk vending carts, as well as other permitted encroachments consistent with existing City Code requirements. It also establishes minimum submittal requirements, including proof of liability and insurance, as well as procedures for review. A new provision has also been added to Section 8-03-002-0003.A (Permit Application) to require written authorization from property and business owners adjoining a sidewalk café only if the area of operation is located in front of their businesses.
Denial, revocation or suspension of permits, and permit renewal. This section provides a procedure and standards for the denial, revocation or suspension of permits for sidewalk cafes and sidewalk vending carts. Note that the time frame for the renewal of a sidewalk café or vending cart permit has been changed. As the permit fee is for an annual permit, staff realized that applications for renewals of existing permits should be received from September 1st through December 31st. All applications received after December 31st will be processed as a new application. Consistent with the existing ordinance, an appeal process to the City Manager is established.
Location rules. Sidewalk cafes permitted under the current Division have been successful over the past years that staff has administered sidewalk café encroachment permits. Not only do the sidewalk cafés add to the ambiance and character of downtown Flagstaff, the standards in place have ensured that the encroachments do not constrict the sidewalk such that it is difficult for pedestrians to use them, especially those individuals who are mobility impaired. The proposed amendments to this Division are based on lessons learned through the application of the current standards, as well as best practices from other American cities that also permit sidewalk cafes and sidewalk vending carts. The new Division therefore, more clearly prescribes standards for minimum sidewalk width and a clear pedestrian zone relative to a defined area of operation for a sidewalk café. Allowances are also provided for pinch points around elements such as poles or posts supporting signs.
Standards for barriers defining sidewalk cafes. Arizona liquor laws require that barriers are installed to define an area in which alcohol is served, and federal Americans with Disabilities Act (ADA) standards require that barriers in public places meet certain standards so that, for example, a blind person with a cane can reasonably locate and move around the barrier. There are no minimum standards in the current code regarding the design and placement of barriers. The amendments, therefore, include a provision that requires barriers to harmonize with adjacent building’s design, be moveable and not permanently attached to the sidewalk, and be constructed of high-quality durable materials. Appropriate standards to ensure compliance with ADA regulations are also included.
Sidewalk vending carts. The location and permitting regulations for sidewalk vending carts remain essentially unchanged from the existing regulations consistent with the Council’s direction provided at the October 8, 2013 work session. The operating area for a sidewalk vending cart has been increased to 32 sq. ft. as staff realized that the area of 24 sq. ft. proposed in the October 8th draft was too small for a vending cart, operator, and trash receptacle. Compliance with minimum ADA standards to ensure safe passage for pedestrian accessibility has also been included.
Other Permitted Encroachments. This section remains essentially unchanged from the current regulations in Division 8-03-002, except that it has been updated and text has been clarified. Encroachments by such elements as bicycle racks, newspaper vending machines, potted plants, and mail boxes continue to be permitted, as do overhead encroachments, columns, and basement access. Similarly, permits will continue to be issued by the Engineering Section to allow construction activities in public rights-of-way, and to allow for the placement of waste containers in the right-of-way where there is no other location on-site for them to be placed.
Penalty for Violation and Abatement. Consistent with all City Code provisions, penalties are established for violations of Division 8-03-002, and authority is granted to the City to pursue summary abatement of a condition that creates “a risk of serious injury to persons or property” on a sidewalk and within a public way.
|INFORM, CONSULT, & INVOLVE - Prior to the October 8, 2013 Council work session, staff provided a letter to business owners in the downtown and Southside who have utilized a sidewalk café and vending cart, or who have expressed interest in applying for a permit for one. This letter was also provided to the Downtown Business Association (DBA) and the Flagstaff Chamber of Commerce. On February 18, 2014 an updated letter was hand delivered to 16 business owners in the downtown and Southside neighborhood, as well as to the DBA and Chamber of Commerce so that they would be informed of the proposed amendments and upcoming hearings/meetings with the Council.
City staff attended the DBA’s weekly meeting on February 24, 2014 to discuss the proposed amendments to Division 8-03-002. While the concept of permitting sidewalk cafes and sidewalk vending carts is supported by the DBA because, for example, they add to the ambiance and character of the downtown area, many members were concerned that the cost of the application fee and the permit fee was too high and that this would discourage businesses from applying for the permit. Staff explained why it was important and necessary to have a uniform fee for the use of public right-of-way by private businesses, and that ultimately the Council would decide on the amount of the fee (note the permit fee for a sidewalk café would apply to both Heritage Square and public sidewalks; however, no vending carts are permitted in Heritage Square).
City staff also presented the proposed amendments to a number of City Commissions and Committees, as summarized below:
Pedestrian Advisory Committee – December 12, 2013 and January 9, 2014. The Committee reviewed the proposed amendments to Division 8-03-002 and after some questions to staff and discussion the requirements for barriers around sidewalk cafes were supported, including the need for them to meet ADA standards. Further questions on potential obstructions, permitting requirements, and noise issues were answered by staff.
Transportation Commission – February 5, 2014. The Transportation Commission listened to staff’s presentation on the sidewalk encroachment amendments, and moved to support the ordinance and recommended approval to the Council. The Commission reviewed the minutes of the Pedestrian Advisory Committee’s last meeting, and they concurred with each of their points. The Commission also discussed the requirements for vending carts and were concerned that they were onerous, specifically the 100% approval requirement. Staff mentioned that a similar discussion had already taken place with the Council last year, and that the Council had directed staff not to change the requirements and standards for vending carts.
Disability Awareness Commission – February 25, 2014. After some discussion, during which staff answered questions, the Commission unanimously moved to support the proposed amendments to Division 8-03-002, and recommended their adoption by Council.
The public hearing/first reading of the ordinance to adopt the proposed amendments to Division 8-03-002 has been scheduled for March 18, 2014 with the ordinance’s second reading and possible adoption now scheduled for April 1, 2014. The effective date will, therefore, be May 1, 2014. Owners of interested bars, restaurants, and sidewalk vending carts may apply for a Sidewalk Café and Sidewalk Vending Cart Permit on April 2nd, assuming Council adoption of the ordinance. However, permits will only be issued on April 30th in advance of the May 1st effective date.