BANFF – Fees for sidewalk patios and outdoor merchandising displays in Banff’s public downtown spaces are going up.
Council opted to move to a discounted market rate for 2022 of $8 per square foot for full service eating and drinking establishments and $1.50 per square foot for takeaway counter service businesses like coffee shops.
But the 2023 fees are expected to be much higher, with $14 per square foot for full service and $4 per square foot for counter service. Retailers, which currently pay a flat rate of $210 a year for outdoor merchandising, would go to a discounted market rate of $3 per square foot this year.
Councillor Barb Pelham said the 2022 rates for sidewalk seating are about a 40 per cent decrease from what the rates would be in 2023 under the new market rate system, allowing businesses this summer to focus on economic recovery.
“This year is about economic recovery and next year it’s more related to the true value of the location,” she said in reference to businesses expanding into the public realm.
“If Banff Avenue pedestrian zone does continue beyond 2023, then those businesses are paying a rate that is related to the value of what they’re benefitting from.”
Up until now, Banff’s sidewalk seating fees have been 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.
The Town of Banff’s assessor has provided an anonymous overview of market lease rates for at-grade street-facing businesses throughout the downtown core. The market rate is an option to charge for space in the public realm based on the average market rate for interior commercial leases across town.
However, unlike interior commercial space, outdoor sidewalk seating is seasonal and vulnerable to changing weather in summer. Administration took the average market value of $74 per square foot provided by the assessor and applied weather and seasonal discounts to get to $14 per square foot.
This would double the existing chair-table rate for a full-service patio. For example, under the old table-chair formula, a larger full service area covering 517 square feet of public space would have paid $3,895, but would go to $7,238 based on a $14 per square foot.
Emma Sanborn, development planner for the Town of Banff, said the goal of sidewalk seating is to create a vibrant user experience for visitors, which in administration’s opinion requires a mix of experiences and commercial participants.
“A pure market approach may displace the counter service businesses who see less of a positive revenue impact from participation in the pedestrian zone,” she said.
Mayor Corrie DiManno took issue with the market rate philosophy for sidewalk seating, noting it is not as black and white as first thought and may end up creating more inequalities amongst businesses.
She said sidewalk seating is also meant to aid in economic recovery coming out of the COVID-19 pandemic by adding vibrancy and animation to the downtown core to attract visitors.
“Now is not the time to raise fees that substantially, up to two times for full service,” said the mayor, who was the lone vote of opposition against switching to market rates. “We are competing with a reopening world and we want folks to come to Banff. It’s about trying to see fulsome, sustainable recovery and I think market value pricing may run counter-productive to that.”
Mayor DiManno said businesses will also be facing a labour crunch coming out of the pandemic.
“I just don’t think it’s a good move as partners in recovery to add another expense onto the businesses community,” she said.
“I want to leave it where it is and I am open to a conversation about next summer.”
Councillor Hugh Pettigrew said he believed the $8 per square foot rate for full service and $1.50 per square foot for counter service for 2022 was a good compromise.
“I still believe rates are very generous,” he said. “It is a recovery year …2023 rates might be considerably higher.”
Revenue from sidewalk seating and outdoor merchandising was $99,510 in 2021.
Sanborn said it is difficult to predict impacts to revenue for 2022 with the fee changes.
“Participation levels are unknown at this time, including the impact a different fee approach would have on participation,” she said.
