“Table for two? Outside? Certainly. Right this way.”
The above exchange has occurred constantly at Key West restaurants since COVID reduced capacities and severely threatened local livelihoods, prompting city officials to allow outdoor dining on city sidewalks — at no cost to the restaurants.
“When COVID first started, we would have been out of business without outdoor seating, no question about it,” said Jesse Anderson, owner of Amigos Tortilla Bar on Greene Street. “The City should be applauded for permitting restaurants to shift seating to the sidewalks during the pandemic. That was huge.”
It was also wildly popular.
“I can’t tell you how many times I’ve heard, ‘This is great! Why didn’t you guys do this before?’ and ‘I love the atmosphere,’ etc., etc., etc.,” Anderson told the Keys Weekly. “I took the time to go around and speak with every restaurant owner I could find in the downtown corridor that had seats outside. The sentiment was universal. Visitors, locals and owners all love the program.”
But as restaurant owners know better than most, there’s no such thing as a free lunch.
The city will begin enforcing the regulations of its sidewalk cafe program — and charging restaurants to participate — come October.
The application and insurance requirements are easy, Anderson said. “The application and permitting process was modeled after the city of Winter Park’s program — other than the fee amounts. The process isn’t onerous at all. A restaurant owner just needs to call their insurance company and add the city as an additional insured entity. That doesn’t cost anything.”
The proposed fees are a different story.
The city of Key West wants to charge restaurants $500 per seat per year, plus a one-time impact fee of $592 per seat to be paid over five years.
As proposed, that two-top table the couple requested at the top of this article would cost a restaurant about $1,236 a year for the first five years. After that, the same two-top table will cost $1,000 a year.
That’s just one table for two. A restaurant with space for 20 sidewalk seats would pay $12,368 each year for the first five years, according to the currently proposed fee structure. After year five, those 20 outdoor seats will cost a total of $10,000 a year.
The city’s proposed fees are more than 10 times the average of what 15 other Florida cities charge restaurants for outdoor tables.
Amigos owner Anderson, who has a degree in finance, researched sidewalk cafe fees in 15 other Florida cities: Sarasota, Naples, Tampa, Delray Beach, Miami Beach, Miami, St. Pete, Fort Myers, Coral Gables, Orlando, Panama City Beach, Pompano Beach, Clearwater, Hollywood and South Miami.
ANNUAL FEES CHARGED BY OTHER CITIES PER SIDEWALK CAFE SEAT:
Tampa — $0
Naples — $0
Fort Myers — $0
Panama City Beach — $0
Clearwater — $0
Pompano Beach — $1.25
St. Pete — $10
Orlando — $25
Sarasota — $25
Hollywood — $25
Delray Beach — $47.50
South Miami — $65
Miami — $115
Coral Gables — $150
Miami Beach — $200
Key West (proposed) — $500
“The average annual fee per seat (among those 15 cities) is about $45, with no impact fee,” Anderson said. “Key West is asking $500 per seat per year, plus a one-time $592-per-seat impact fee prorated over five years.
“While Key West’s Sidewalk Cafe program has been a success during the pandemic year, if the City does not adjust these rates, they are guaranteed to kill the program (except maybe for a handful of high-end restaurants).
“After my discussions with other restaurants, it is vividly clear the vast majority will NOT continue [to offer outdoor seating] if the current rate structure is not brought into line with other municipalities,” said Anderson.
“I believe the basic question comes down to this: Does the City leadership want to continue with a program that has near universal appeal, that adds charm to the City, that ‘reimagines’ the look and feel of the City, that adds a cultural element, while also being business friendly? If the answer is yes, then they must bring the fees in line. If not, it is a certainty that the program will fail, as has already been demonstrated.”
Before the pandemic…
The original Key West Cafe Program, with the same fees now being proposed, was instituted after the demise of the Mall on Duval pilot project and before the pandemic, Anderson said.
“A total of two applications were approved and paid for, the first was Bill Lay of La Trattoria, and the second was Cafe Marquesa,” Anderson said. “I am an owner of Amigos, and at that time I looked at the program and determined it was too expensive. We chose not to participate, as did every single other restaurant on the island except for the above two.
“There were many reasons we thought the fees were too high,” Anderson said, explaining that, “additional sidewalk seats only generate extra revenue for a restaurant when 100% of the interior seats are occupied. If only 75% of seats are full, and a table chooses to sit outside, the restaurant is not generating any additional revenue, but merely shifting occupancy from interior to exterior.”
In addition, Anderson said, outside seats are not as valuable as interior seats because they’re not as desirable when it’s too hot, too windy, raining (or threatening to rain).
“Restaurants with higher ticket averages, such as La Trattoria and Cafe Marquesa, can more easily absorb annual costs. Low-ticket restaurants, such as pizza parlors, taco shops and others are at a disadvantage,” he said, adding that the program includes numerous other unknowns that make such a large investment risky, especially following the pandemic year.
“Again, the City should be applauded for their forward thinking on this program, even prior to the pandemic.” Anderson said. “Changing the fee structure to revenue-neutral for the City will be a net positive for visitors, locals and businesses. It’ll be a win-win all around.”
City to hold public meeting
A public meeting to “discuss and review” the Sidewalk Cafe program will take place at 5 p.m. on Tuesday, June 8 at City Hall, 1300 White St.
Todd Stoughton, in the city manager’s office, told Keys Weekly on Friday, “there is some wiggle room” with regard to restaurant owners’ concerns about the city’s proposed mandated table size that are not a standard size within the industry.
Officials have not yet commented about the proposed fees or any potential flexibility with them. Stay tuned to keysweekly.com as updates become available.