SANTA MONICA—Residents will be bearing the brunt of new fee increases designed to close budget gaps and improve the Santa Monica financial outlook; however, it will be two years before the new fees take effect.

Restaurants with outdoor accommodations typically pay fees to rent public sidewalk space for that purpose. For many years, outdoor dining fees have not been aligned with inflation, meaning that restaurants were paying substantially less than what was actually appropriate, from the perspective of some council members.

On February 22, the City Council directed that staff look at implementing adjustments by fiscal year 2013-14 to monthly license fees paid by restaurants to the city for the purpose of renting public sidewalk space.

Restaurants may pay up to $3.13 per square foot of sidewalk each month, an increase from the average monthly fee of $1.90 per square foot that restaurants currently pay.  Only three restaurants on Ocean Avenue with fully enclosed patios are exempt.

Another three restaurants on Ocean Avenue may pay $5.83 per square foot per month in order to rent public sidewalk space.

When implemented, the new fee increases are projected to result in an additional $200,000 in revenue for the city. The substantially higher monthly costs, ranging from about $400 per month on the Third Street Promenade to almost $2,800 per month for restaurants using Ocean Avenue real estate, could possibly be passed on to the consumer.

Council members think the new fees are fair.  Kevin McKeown spoke to Canyon News and said, “An outside appraiser told us we had greatly undervalued the rent for restaurant use of public sidewalks. Residents were paying new recreation fees and higher bus fares, while businesses were paying one third to one fifth of what outdoor dining space is worth.”

As McKeown argues, “We raised the fees only halfway to where they should be, and delayed the increase for two years. I think we should have started collecting sooner, and that we can’t make informed long-term decisions on sidewalk usage until we factor in the huge pedestrian influx expected with the arrival downtown of Expo Light Rail.”