BANFF – A market rate to establish fees for sidewalk seating permits for restaurants, bars and coffee shops in the tourist town’s downtown public spaces is under investigation.
Banff’s governance and finance committee voted 5-2 to get information on what a market rate structure could look like, but some councillors made it clear the vote for more details doesn’t necessarily equate to support for a square-footage rate at this point.
Councillor Chip Olver said she could live with a modest increase in fees for 2022, but feels Banff is still in recovery mode from the fallout of the COVID-19 pandemic of the past two years.
“We need to support our businesses in coming through this situation that they’ve been living in,” she said, but later noted she was in favour of getting additional information.
“Knowing that if once we see it, if we do not want to apply it to 2022, we can stay with the current fees, which is based on chairs and tables.”
Currently, Banff’s sidewalk seating fees are based on the number of tables and chairs under a differential rate for full service patios like licensed restaurants versus a smaller-scale counter service patio such as a coffee shop.
Other communities charge for sidewalk seating permits based on a number of different options, such as an in-street rate applied in Canmore, a commercial rate in Aspen, Colorado, and a scaled rate in Whistler, B.C.
While market rates in the commercial downtown vary greatly based on visibility and accessibility, administration indicates a $100 per square foot assumption is within the range. For discussion purposes, however, administration indicated various discounts should be applied to the $100 square foot rate to reflect the use of the space based on seasonal use and weather, which would bring it down to a pro-rated square foot rate of $19.
That would mean a higher-end full service patio paying about $3,895 under the existing rate structure for 2022 would go to $9,909 under a market rate, whereas a counter service patio such as a coffee shop would go from paying $160 in 2022 under the existing structure to $4,540 market rate fee.
“You can see in the full service areas, you’re tripling your fees, and if you’re a counter service, you can see the factor is around 30 to 40 fold increase in rates,” said Darren Enns, the director of planning and development for the Town of Banff.
“In our minds, this could have a detrimental effect in the sense that those counter services could choose not to participate – and that’s an implication for higher fees for any operator – at some point there’s going to be a breaking point where people won’t participate if the fee structure is too high.”
Stuart Back, the chief operating officer of Pursuit’s Banff Jasper Collection, which has the Mount Royal Hotel on Banff Avenue, opposed fee increases for cafe seating and outdoor retail space, calling such a move both “untimely and unnecessary.”
“Businesses in Banff are in the midst of economic recovery from a dramatic and highly impactful period and will be in this mode throughout 2022,” he wrote in a letter to council.
“Encouraging the use of this space will have a greater beneficial outcome to the community than creating larger cost barriers to entry.”
Councillor Barb Pelham said she agreed 2022 is about economic recovery.
“I also feel that an evolution toward a market rate is reasonable and fair considering the tremendous opportunity of the value of this real estate,” she said.
Coun. Pelham said she also understands there should be a differential rate for full table service versus counter service business.
“There’s no way that counter service can support the same rate as table service, so I do acknowledge that there’s a difference in what that market rate could reflect,” she said.
Councillor Ted Christensen believes private operators should be paying more for the use of public space for sidewalk restaurants and patios.
“The truth is since we’ve moved away from the concerns over the pandemic of distancing and health and safety into vibrancy, we’re increasing the value of the business,” he said.
Mayor Corrie DiManno fears a significant increase in fees based on a market rate, or square foot approach, may discourage many of the counter service businesses who see less of a positive revenue impact from participation in the pedestrian zone.
She said the first two years of the Banff pedestrian zone were about safety and restrictions associated with the pandemic and the next two years are about economic recovery and creation of animation and vibrancy in the downtown.
“What we need to remember here is we’re not competing amongst ourselves, we’re competing now with the reopening of the world to get folks here,” she said.
“We know visitors love the experience of outdoor dining in the mountains and so why wouldn’t we try to do our best to strengthen that offering?”
DiManno said she sees outdoor restaurants as an economic driver and not a revenue generator.
“We need to be mindful of those who may struggle to pay market value or a significant cost increase,” she said.
Over the last few years, the Town of Banff brought in $18,300 in revenue from 15 sidewalk seating permits in 2018, $59,490 from 20 permits in 2019. In 2020, fees were waived and in 2021, $99,510 was generated in revenue from 46 permits. Bear Street fees were waived due to construction impacts.
