Ian’s Pizza currently pays $750 a year for its outdoor dining space. Mayor Paul Soglin would like it to pay $8,000 more.
That’s a serious rent increase. That’s 2,285 slices of Mac N’ Cheese Pizza worth of rent increase.
In his latest attempt to keep downtown retail alive, Soglin is proposing a new rent structure for sidewalk cafes on State Street and the Capitol Square. He wants downtown to be more than just an entertainment district, which is a laudable strategy, though woefully misguided.
Current fees are based on the number of outdoor seats the particular vendor puts out, somewhere around $30 to $40 a chair. Soglin wants to change it to a square-footage model. That change is a good idea, and it brings Madison more in line with other cities. A moderate rate increase also makes sense at a time when city finances are tight.
The problem: Soglin wants to charge way too much — $13 per square foot.
That’s an annual increase of thousands of dollars a year for many restaurants and coffee shops. Some could probably absorb that cost — the sign for the downtown Colectivo should just be an espresso maker printing money. But it would be a struggle for other restaurants, particularly on State Street, where the crowds get lighter once the students go home for the summer.
The proposed square-foot fee is also much higher than for cafes in pedestrian malls around the country. Fees at Nicolet Mall in Minneapolis top out at $511*. Denver’s 16th Street Mall, a place with a similar vibe in the middle of a much larger metro area, only charges $7 per square foot. What Soglin is proposing for Madison is almost twice that. In a report released by the city, only Miami Beach, San Diego and New York City charge more per square foot than Soglin is proposing.
I know we think we are awesome here in Madison, but State Street is not Miami Beach, San Diego or New York City.
Soglin is not proposing this fee increase to make sure bars, restaurants and coffee houses pay their fair share. Fees this high are punitive. He wants to make it less profitable to run a dining establishment downtown.
The problem is, the increase in downtown dining options is mostly a good thing. When I moved to Madison almost 14 years ago — wow, I have lived here a long time — the Capitol Square was dead after 5 p.m. While I miss the former bookstores and record shops on State Street, the loss of those business is more to blame on Amazon than outdoor dining.
I agree with Soglin that it is important to try to protect some downtown retail. Community Pharmacy and A Room of One’s Own are as important to me as the Plaza and Michelangelo’s Coffee House. But gouging the pizza place isn’t the right way to do it.
*Editor's note: This article was changed with the correct fees at Nicolet Mall. They are $511.
