Agenda Report
June 13, 2022
TO: Honorable Mayor and City Council
THROUGH: Economic Development and Technology Committee (June 1, 2022) FROM: Department of Public Works
SUBJECT: UTILIZATION OF PUBLIC RIGHT-OF-WAY FOR OUTDOOR DINING RECOMMENDATION:
It is recommended that the City Council:
1. Find that the Utilization of Public Right of Way for Outdoor Dining is exempt from the California Environmental Quality Act ("CEQA") pursuant to State CEQA Guidelines Sections 15301, 15303, 15304, and 15311, there are no features that distinguish this project from others in the exempt classes, and therefore there are no unusual circumstances ;
2. Approve the revised sidewalk/alley and new on-street dining permit fees for inclusion into the FY 2023 General Fee Schedule;
3. Direct the City Attorney to draft an amendment to City's Sidewalk Dining on Public Walkways Ordinance, PMC 12.13 for inclusion of on-street dining within 30 days consistent with the provisions set forth herein; and
4. Adopt On-Street Dining Design Guidelines to be effective September 1, 2022.
ECONOMIC DEVELOPMENT AND TECHNOLOGY COMMITTEE
RECOMMENDATIONS:
On June 1, 2022, staff presented this report to City Council's Economic Development and Technology Committee (EDTech) . EDTech supported the staff recommendations, but proposed changes to standardize and simplify the two base fees for all business improvement districts, at $12.00 and at $7.75 per square foot per year, for sidewalk/public aUey and for on-street respectively.
MEETING OF -----'-'---'0_6_/_1_3..,c.../ 2 ....... 0 __ 2_2_ AGENDA ITE:M NO. __ l _J_~ Utilization of Public Right of Way for Outdoor Dining
June 13, 2022
The table below shows the proposed outdoor dining fees for FY 2023 as originally proposed by staff and then as revised by EDTech:
Metered Parking Recovery (where applicable; currently
OPMD & South Lake Business Districts)
$4.25
$4.00
In comparison, it is anticipated that the total projected annual revenue from the revised fees will be approximately $17,300 lower than staff's original proposal to EDTech.
At the meeting, EDTech also inquired as to the estimated cost for an on-street dining installation that would need to be incurred by a typical business. Since the proposed on-street dining design guidelines allow considerable flexibility for customization of each installation, the cost can vary significantly. Staff estimates a typical installation in conformance with the guidelines to be in the vicinity of $150 per square foot. The annual on-street dining occupancy permit fee for a typical business could range between $3,500 and $5,000, depending on exact square footage and whether metered parking spaces are being impacted.
Staff supports EDTech's recommendation to City Council.
BACKGROUND:
Since March 2020, as restaurants faced COVID-related restrictions impacting their business operations, many cities utilized the public right-of-way to accommodate outdoor dining so that restaurants could remain open. Pasadena expanded upon its existing programs in accordance with Pasadena Municipal Code Chapter 12.13, Sidewalk Dining on Public Walkways, to allow for additional outdoor dining within private Utilization of Public Right of Way for Outdoor Dining
June 13, 2022
parking lots and on city streets. The selected locations for dining activities within city streets are evaluated by the Department of Transportation based on existing traffic flows, speeds, parking layout, and striping configurations. The areas are enclosed by traffic barriers such as concrete k-rails, water barrels, and/or meridians, purchased and deployed by the City for safety purpose.
On October 19, 2021, staff presented an update on the subject matter to the Economic Development and Technology Committee (EDTech). The presentation included a history of the current city ordinance, the urgent program expansion due to COVID -19, the concept of revising the current fee structure, and the need for a more detailed design review for cohesive outdoor dining facilities. On December 8, 2021, Planning and Community Development staff presented recommended design guidelines for on street dining installations to EDTech. See Attachment A.
On May 28, 2020, Resolution No. 9788 was adopted by the City Council for the City Manager to issue a Fifth Supplement to the Declaration of Local Emergency authorizing certain COVID-19 associated actions related to restaurants and retail businesses. As a result, outdoor dining in the public right of way including sidewalk, alley, as well as portions of barricaded streets are permitted with due process. All fees are waived as support and recovery efforts to the local businesses.
After two years of supporting restaurants with these new spaces, community stakeholders have expressed interest for the continuation of the expanded outdoor dining program. Since the program's launch in May 2020, outdoor dining permits have been offered at no cost to applicants citywide. Per City Council direction, these permit fees will continue to be waived through June 30, 2022.
The City incurs costs related to the processing of outdoor dining permit applications, converting or reconfiguring of parking lanes for on-street dining uses, deploying traffic barriers and enforcing rules and regulations. The proposed base rates on occupancy per square foot per year are categorized by three business improvement districts (BID) - Old Pasadena Management, Playhouse Village, and South Lake - and the rest of the City as non-BID.
Staff proposed establishing a new Sidewalk/Alley base rate by BID. If approved, these rates will be used to calculate the On-Street Dining base rate plus additional charges to recover costs for traffic barriers purchased by the City.
The following table shows the originally proposed outdoor dining fees for FY 2023 presented at the EDTech Committee June 1, 2022, followed by the calculation methodology for each fee:
Utilization of Public Right of Way for Outdoor Dining
June 13, 2022
Sidewalk/Alley Base Rate Calculation Methodology: The FY 22 General Fee schedule contains 38 separate street rental rates by street segments. Staff proposed calculating the new sidewalk/alley base rates for each BID based on averaging the FY 2022 General Fee Schedule rates across their corresponding street segments, adjusted by the proposed Consumer Price Index from FY 2022 to 2023.
On-Street Base Rate Calculation Methodology: Staff calculated the annual on-street base rate for each BID by using one-half of the proposed sidewalk/ alley base rate plus $1.50 per square foot per year to recover the cost the City incurred to purchase the traffic barriers. On-street dining uses along Colorado Boulevard are impacted by the annual removal and re-installation of barriers as a result of the City's obligation to prepare the parade route for the annual Rose Parade. The on-street dining rates for locations along the Rose Parade route will be prorated by 11/12 months due to the event-related removal of on-street dining. The cost for the removal and re-installation of all traffic barriers for on-street dining is approximately $70,000 per year. This is part of the cost for preparing for the Rose Parade and is shared by the City and Tournament of Roses equally .
Metered Parking Recovery Rate: Certain on-street dining locations may require removal of metered parking spaces resulting in parking revenue loss to the City. For locations where metered parking spaces are removed to accommodate on-street use, an additional $2.25 per square foot per year is proposed, yielding a projected 20 percent cost recovery of the loss in parking meter revenue.
Utilization of Public Right of Way for Outdoor Dining
June 13, 2022
To substantiate the formulation of the proposed fees, staff consulted a commercial real estate appraiser to perform an analysis on the range of fair market land value in the Old Pasadena and South Lake Avenue commercial corridors. The analysis concluded that the range of fair market commercial land rent is between $15 and $24 per square foot.
Outreach:
The Economic Development Division has been working closely with the Business Improvement Districts (BIDs) throughout the implementation of the outdoor dining program. On May 4, 2022, City staff hosted a webinar to provide updates to the existing permittees and BID representatives on the outdoor dining program . City staff provided an overview of the proposed fee structure, design guidelines, and implementation schedule. Approximately 50 restaurateurs (or their representatives) attended the meeting and were given the opportunity to ask questions and participate in an open dialogue with staff from Departments of Public Works, Transportation, Fire, Planning, Public Health and Economic Development. As follow-up to the meeting, staff distributed a link to.the recording of the webinar along with a FAQ prepared in partnership with multiple city departments and the BIDs.
On-Street Dining Design Guidelines:
As previously mentioned, on December 8, 2021, staff presented to the Economic Development and Technology Committee a series of design guidelines to ensure that future on-street dining installations have a high-quality appearance. See Attachment A.
In summary, the guidelines recommend that such facilities be designed as a comprehensive whole with similar, high-quality materials, avoiding the use of "off-the shelf" elements such as raffia panels, astro-turf, easy-ups, etc. The set-up shall display a sense of permanence, providing platforms aligned with the abutting sidewalk, and install lighting that does not require exterior wiring traversing the sidewalk. The Committee expressed agreement with the proposed guidelines, which are recommended for all on-street dining installations. Upon adoption, staff is recommending granting permittees until September 1 , 2022 to implement the On-Street Dining Design Guidelines, allowing them time to transition their current installations to meet these new guidelines.
Ordinance:
In 1992, the City adopted Pasadena Municipal Code Chapter 12.13, Sidewalk Dining on Public Walkways. The ordinance declared that "the use of public walkways for limited sidewalk dining areas can improve the business environment and enhance the quality of life for Pasadena residents so long as such use is not inconsistent with the underlying dedication for public right-of-way, does not impede travel and does not interfere with the rights of adjoining property owners. Therefore, the City may permit such uses on a temporary or non-permanent basis and as a special privilege, not as a matter of right." As such, an ordinance is required for the permitting of dining activities within the on street portion of the public right of way. Said ordinance shall include similar Utilization of Public Right of Way for Outdoor Dining
June 13, 2022
requirements for design, operating, permitting, and enforcement. It is recommended that the City Council direct the City Attorney to draft an amendment to the Sidewalk Dining ordinance to address all outdoor dining, including on-street dining. Upon Council adoption, the amended ordinance will over-ride the City's Declaration of Local Emergency pertaining to on-street dining.
COUNCIL POLICY CONSIDERATION:
The proposed recommendations are consistent with City Council's Strategic Planning Goals to maintain fiscal responsibility and stability; and to support and promote the quality of life and the local economy.
ENVIRONMENTAL ANALYSIS:
The actions proposed herein are exempt from the California Environmental Quality Act (CEQA) pursuant to State CEQA Guidelines Sections 15301, 15303, 15304, and 15311. Section 15301 exempts from review minor alterations to existing public facilities, Section 15303 exempts from review the new construction of small structures, Section 15304 exempts from review minor alterations to land such as minor temporary uses of land having negligible or no permanent effects on the environment , and Section 15311 exempts from review placement of minor structures accessory to existing commercial facilities. The actions proposed herein would fall under each of these exemptions, as the actions proposed herein are minor alterations to roadways, are temporary, and are accessory to commercial uses. If this program becomes permanent, additional environmental review as appropriate will be considered. There are no features that distinguish this project from others in the exempt classes, and therefore there are no unusual circumstances that would cause these actions to fall outside of the exemptions.
Utilization of Public Right of Way for Outdoor Dining
June 13, 2022
FISCAL IMPACT:
Based on current active sidewalk and on-street dining permits, it is anticipated that approximately $276,000 of revenues will be received during the next fiscal year upon approval and adoption of the FY2023 General Fee Schedule: approximately $155,000 for use of sidewalk and/or public alley; approximately $100,000 for on-street dining (of which $20,000 will be designated for traffic barrier cost recovery); and, approximately $21,000 for parking meter recovery costs.
Prepared by:
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Kris Markarian, P.E.
City Engineer
Approved by:
Respectfully submitted,
~& rNYOLos, P.E.
Director of Public Works
Concurred by:
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David A. Klug
Director of Econo
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Director of Planning and Community
Development
Attachment A - On-Street Dining Design Guidelines
Attachment B - Excerpt from Fiscal Year 2022 General Fee Schedule