Philly quietly added surprise fees and ‘burdensome’ rules for restaurant streeteries

Philadelphia city officials quietly released regulations governing the city’s new streetery law after months of anticipation, and some restaurant owners say the proposed red tape could spell doomsday for outdoor dining across the city.

Many restaurant owners realized new rules passed by City Council in December would require them to clean up access-blocking patio structures and get designs approved by the city for outdoor dining structures built over parking spaces.

But in implementing that law, Mayor Jim Kenney’s administration is adding new regulations that create significant and unexpected hurdles for restaurateurs still struggling to recover from the impact of the coronavirus pandemic.

» READ MORE: Hundreds of restaurants got excluded by Philly’s new ‘streetery’ zones — some by less than a block

Restaurants would be required to pay a $2,200 annual license fee — on top of a $200 application fee.

The sticker shock doesn’t stop there: Restaurants would also need to secure a $60,000 bond to cover potential removal costs for their streetery structures, which officials said could be mandated during snowstorms, according to the new regulations. New construction requirements — like running generators or underground electrical lines to power streeteries — could add thousands of dollars more to the tab.

“For some reason they think that now that we’re open, we’re rolling in money,” said Marc Grika, the owner of Flannel on East Passyunk Avenue. “We lost so much money. We’ve got loans. We’re all in debt now.”

It’s standard practice for the administration to fine-tune regulations after a bill becomes law. Typically, however, the most contentious issues are debated and resolved during the legislative process.

Crystal Jacobs, a spokesperson for the Streets Department, said the bonds are already required for restaurants with sidewalk café licenses, and the increased fees would cover “required inspections, additional personnel, technology upgrades and enhancements to the online application.”

More than 800 restaurants converted parking spaces into outdoor dining patios in order to survive the pandemic. But when lawmakers sought to bring the alfresco dining spaces up to code last year, they kicked off a debate about public space, City Council’s land-use powers, and, of course, anxiety about parking availability.

Restaurant owners largely supported raising the standards for streeteries — some of which are lazily constructed and encroaching on the right of way — but some criticized the two-tier approval system. Under the new law, some restaurant owners can re-apply for their streeteries by-right, while others would need special approval from their district councilperson.

Both restaurants inside and outside the new zones, however, need to meet the new regulations, and some say the proposed code creates more winners and losers. Franchise restaurants will have less trouble ponying up for increased fees and structural modifications, while smaller restaurants will feel the hurt most, critics say.

Streets officials released the resolutions in a memo Feb. 11 and ran them in newspapers as required by law. But officials did not send notice of the regulations to industry stakeholders. And now the clock is ticking.

The regulations will become law on March 11 unless advocates call for a hearing.

“We are not aware of any requests for public discussion at this time regarding this matter,” Jacobs said.

Ben Fileccia of the PA Restaurant and Lodging Association said he is trying to come to an agreement with the Kenney administration, but would seek a hearing if no deal is reached soon. Councilmember Allan Domb, who sponsored the legislation, said he would also call for a hearing if needed.

Even restaurant owners without streeteries expressed shock at the proposed ordinances, which began making the rounds on social media last week.

Running electrical wires across the sidewalk or overhead is now prohibited under the new rules, forcing restaurants to either install underground electric lines or run noisy generators to provide lighting and power electrical heaters. (Propane tanks are also banned going forward.)

“I couldn’t open a streetery even if I wanted to,” said Chad Todd, owner of Sulimay’s diner in Fishtown. “It’s a money grab…It’s ludicrous.”

Domb said he was also blindsided. He called the regulations “burdensome” and “unfair” to restaurants, which are recovering from months of decimated sales thanks to the omicron wave.

“It’s a bureaucratic mess,” said Domb. “This is basically the administration saying ‘we don’t want outdoor seating.’”

Like many restaurant owners, Grika said the 30-some streetery seats at his southern fare Flannel are the only reason his business survived the worst of the pandemic. He was on board with bringing streeteries up to code, he said, but the new regulations seem to be creating hurdles for the sake of hurdles — at the expense of restaurants operating on razor-thin margins.

“It’s kind of like they’re trying to make problems where problems didn’t exist,” Grika said.

To wit: The Streets Department said it won’t approve any streetery design unless it first gets the stamp from the city’s Art Commission. Businesses and building owners sometimes spend months trying to gain approval from the 9-member design review panel, which meets every two weeks.

As written, the regulations would require mandatory removal of streeteries in the event of “severe weather,” leading some restaurant owners to wonder whether they would have to dismantle structures every time it snows.

“Prime example would be snow,” said Jacobs, of the Streets Department, adding that streeteries can “become damaged themselves, damage other properties, and/or cause injury to pedestrians.” (It was not clear Monday whether there was any evidence of streeteries leading to property damage during a storm.)

The $60,000 bond “is similar to, though not exactly like, purchasing insurance,” Jacobs said. “The business owner shops amongst insurance companies offering bonds. It pays a yearly premium, and the bond company guarantees that if the Streetery isn’t removed when ordered, it will step in and assume the costs of that work, up to the $60,000 amount.”

Applications for permits won’t open until at least March 24, officials said last week, and a notice will be sent out to streetery operators before enforcement begins.

Two City Council members have already introduced bills to expand the streetery zones within their districts, with Curtis Jones Jr. adding a commercial stretch of Manayunk and Kenyatta Johnson geenlighting a handful of individual business addresses.

The Council committee overseeing the Streets Department met Tuesday to discuss those bills.