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HomeLatest NewsBeaches businesses fight for fairer fees for outdoor dining

Beaches businesses fight for fairer fees for outdoor dining

A bid from Manly businesses to postpone ‘paying for the privilege’ of outdoor seating has been partially successful, with Council voting to reduce fees by half over winter.

The fee reduction will apply to all Northern Beaches businesses paying Outdoor Dining Fees over July to end of September, and will not be confined to Manly.

But for café owners such as Vik Joshi of Market Lane Café, who will be asked to pay over $15,000 for his laneway seating this year, the fee structure itself still needs to change. Others, such as Manly’s Bluebottle Café manager James Kofoe, say it’s time to scrap the fees altogether in support of small business and good atmosphere.

What happened last night?

In a tied ballot at Council’s 28 June meeting, Mayor Michael Regan cast the deciding vote to reduce the Outdoor Dining Fees to 50 per cent between 1 July and 30 September 2022. The fees, levied on restaurants and cafes that utilise outdoor seating, were suspended for two years due to the pandemic.

The reduction is intended to give some ‘breathing space’ over winter to venues that are still struggling to bounce back from the 2020-21 coronavirus pandemic and the subsequent ‘lockdowns’ implemented to restrict its transmission. Many restaurants also found regular trade was severely inhibited during the La Niña summer of continuous rains from November 2021 to May 2022, which followed the end of social distancing measures.

How do Outdoor Dining Fees work?

Outdoor Dining Fees are imposed throughout the whole of the Northern Beaches, taxing the ground used by external tables and chairs, but rates vary in different areas.

According to Council’s 2020-2021 fees guide, in premium locations, such as Manly town centre, charges in peak zones along The Corso (between Darley Rd and North Steyne) and South Steyne (The Corso to Wentworth St), are a minimum of $1275 per square metre per annum.

Just one street away, these drop to $765 p/sq/m for Market Lane (parallel to The Corso to the north) and Rialto Square (to the south).

Further afield, the fees scale down to $745 p/sq/m for Dee Why Strand, $480 p/sq/m in Freshwater, $320 p/sq/m in Brookvale, and a minimum of $275 p/sq/m in Curl Curl and Queenscliff.

Market Lane, behind The Corso in Central Manly, a popular spot for locals to relax in an outdoor setting. Photo: Alec Smart

A call for recalibration

However, as Manly Observer has discovered, some venues want Council to recalibrate the Outdoor Dining Fees to “a more equitable system” that takes into account the annual economic turnover of a business. This, they say, is a more equitable arrangement than fixed charges per geographic zone.

Vik Joshi, owner of Market Lane Café, told Manly Observer, “We’re the first café in Manly to open in the mornings – 5.30am – so we provide beverages for people going for an early surf or cops coming off their night shift, and they’re locals who appreciate our being here and open.

“99 per cent of the customers we cater to are locals. They prefer sitting outside, especially the young mums with their prams. Because when you bring a pram inside it restricts people being able to move around, and if somebody falls over it or something falls onto it – it’s our responsibility.

“We’re not saying we don’t want to pay the Outdoor Dining Fees, but $765 per square metre charge for us is sixteen to seventeen thousand dollars per year in fees. If we have a bad season, like we’ve had weather-wise this year with less customers and no tourists, it puts a lot of pressure on us small business owners.

“We’re not saying cancel the fees, we’re just saying they’re not sustainable. Two years ago [pre-Covid] they were just $500, now they’re $765 [per square metre] for this area. We pay a very high rent to be here, which goes up every year a minimum five per cent.

“And yet, on top of inflation and other costs, we pay a premium to put some tables here, in a space that no one else would use if we decided not to have outdoor seating.

“[Furthermore] at the moment everything is double – vegetables, coffee, milk – we’re paying twice as much for everything than we were six months ago [pre-Russian invasion of Ukraine, which significantly increased the cost of fuel and subsequently affected consumer goods]. And the minimum wage is also going up for staff salaries.

“And yet, although we’re paying more for milk and ingredients, we can’t pass those costs on to the customer and charge them $10 for a cup of coffee!

“We’re not disagreeing with the fees, but they have to be something more reasonable. For example, some pubs earn in one day what might take us two weeks, and yet they’re paying the same. Those that run on a smaller budget should be charged less than the higher

Vik Joshi, owner of Market Lane Café, wants Outdoor Dining Fees based on income not location. Photo: Alec Smart

What’s gone before

On 1 July 2020, Council introduced the Community Support Plan, implementing a range of programs to enable businesses and the community recover from the Covid-19 Lockdowns, which were negatively affected by the social restrictions from the worldwide coronavirus pandemic.

Among the measures introduced was the waiving of Outdoor Dining Fees until 31 December 2020, which was then extended until 30 June 2021.

In July 2021, when the waiver was again extended, Northern Beaches Mayor Michael Regan admitted, “The current Sydney lockdown has again hit our local business community hard. They have only just begun to get back on their feet following the Northern Beaches lockdown over Christmas and New Year.”

The Mayor revealed Council had provided $10.1 million in financial support to the community and local businesses throughout the COVID-19 pandemic, including the fee waiver extension.

A further 125 tenants in council-owned properties were also granted $1.23 million in rent relief, including $437,748 in partial waivers and $799,107 excused entirely.

Nevertheless, with the resumption of the Outdoor Dining Fees in July 2022, some Northern Beaches businesses are already reeling from recent invoices for payment sent by Council and claim they don’t have the budget.

Manly Business Chamber took up their cause. In a statement released on 14 June, the Chamber said: “Following two years of unparalleled challenges faced by small business starting with a forced Christmas lockdown in December 2020, the Manly Business Chamber is requesting a review of Northern Beaches Council’s fees and charges.

“The Chamber are requesting that the Outdoor Dining Fees scheduled to recommence 1st July 2022, are delayed for a three month period before bringing back fees to the struggling hospitality businesses.

“In 2019, Outdoor Dining Fees contributed $520k in revenue to Council from 42 businesses trading in a strong economy. Of those 42, only 30 businesses are currently still trading having closed or relocated.

“Today, with zero fees, 50 businesses in the Manly area are making use of Outdoor Dining in front of their premises. This is an exciting number and one we do not want to see reduced – we want to see it grow. Historically visitation to Manly drops during the winter period, in addition during this period ferry traffic remains significantly down on pre-Covid numbers.

“It is the Chamber’s concern that with these additional charges the successful outdoor dining footprint that has developed during the pandemic will cease to exist.”

Manly Business Chamber President Charlotte Rimmer added, “Manly’s outdoor dining fees … are alarming, especially as they are significantly higher than what is paid in the CBD of Sydney – an international city.

“We know outdoor dining adds to the atmosphere of the Manly village so when you learn that a business paid $44k in 2019 in order to make use of the space in front of their premises, it is not surprising businesses are reluctant to add to Manly’s vibe.”

Northern Beaches Council, when asked for comment, explained, “Outdoor Dining Fees are proposed by an external independent valuer and location is part of that assessment process. Fees therefore do vary from location to location… Fees since 2019 (when not suspended) have ranged from $0.45 – $2.20 per seat per day.”

Outdoor dining area in Henrietta Lane, Manly. Photo: Alec Smart

Cancellation?

Despite Manly Business Chamber initiating discussions with Council to extend the fee waiver until the end of Winter, which quite probably persuaded Mayor Regan to cast the deciding vote to reduce the charges by half, some venue managers believe Outdoor Dining Fees should be cancelled completely.

James Kofoed, proprietor of Bluebottle Café in Rialto Square, Manly, told Manly Observer, “I don’t feel it’s right, due to the fact that, one, we’re just getting out of Covid; two, we don’t have the tourists back; three, the cost of living, increase of superannuation payments, increase of taxes, increase of wages; and last, but not least, four, with all those factors included, I don’t feel like Council is doing the right thing – not just for small businesses in Manly but small businesses around our Beaches economy.

“Because without the small businesses, none of us would be here.

James Kofoe, manager of Bluebottle Café in Rialto Square, Manly, thinks Outdoor Dining Fees should be scrapped. Photo: Alec Smart

“And I don’t see why we should be paying $765 per square metre, per annum, in order to make a living. If Council want small businesses to survive, especially within the Northern Beaches, it’s not a feasible option to burn a massive hole in the pocket of small business owners, especially those that have just started up.

“I just started my business four months ago, when it was pissing down with rain. But there was nothing anyone could do about the weather, so, I’m still getting my business established. Even for my five square metres of outdoor space, that’s $3825 per annum on top of everything that I have to pay, just to put a bit of furniture outside so people can be comfortable.”

Does he feel a more streamlined fee system should be implemented?

“I just feel like it should be scrapped altogether. There are a lot of councils in Sydney that completely waive outdoor seating charges. With the increased costs of living and increased cost of goods, it makes it very hard for business owners to make a profit.

“[Because of the Russia-Ukraine war] I have fuel levy surcharges on my all my invoices now, on top of the increased prices for food, milk and coffee…

“Other businesses in Rialto Square feel the same way – ask Dave from the chicken shop, Ryan from the fish & chip shop.”

If fees remain compulsory, how might they be modified to allow smaller businesses like his to survive and thrive?

“I think Council should introduce a fee system that takes into account the ratio of costs to profits so businesses generating a high income pay a fixed percentage of their turnover. And for businesses earning less than, say, an annual $2 million in sales, the dining fee should be scrapped.”

Council response

In a statement to Manly Observer, Northern Beaches Mayor Michael Regan said, “It has been great to be able to support business to the tune of over $14million since the pandemic began, including over $3 million in outdoor dining fee waivers. Many landlords did not provide similar support.

“We need to reintroduce the fees for the commercial use of public land now the restrictions have ended. We will consider doing this in a phased way over the winter trading period.

“The fees represent as little as 45c per seat per day. I am pleased we have been able to support businesses but we can only subsidise them for so long at ratepayer expense. The longer we delay, other critical infrastructure projects miss out like new footpaths, playgrounds or storm water improvements.”

Outdoor Dining Fees per zone on the Northern Beaches for 2020-2021, set by Northern Beaches Council.

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