San Diego city council members say restaurant revenues will rock if they roll back entertainment permits.
November 8, 2011 1:13 p.m.
Kevin Faulconer, San Diego City Council President Pro Tem
Related Story: Possible Relief Coming For Struggling San Diego Restaurants
CAVANAUGH: I'm Maureen Cavanaugh. It's Tuesday, November 8th. Our top story on Midday Edition, four San Diego City Council members are supporting a move they say will help restaurants struggling in the economic downturn. They want regulations on entertainment fees lifted. Oddly enough, the council voted only months ago to boost those fees to increase revenue for the cash-strapped city. San Diego counsel Kevin Faulconer. Councilman Faulconer, welcome to the show.
FAULCONER: Thank you for having me on today.
CAVANAUGH: Tell us what this proposed restaurant relief ordinance would do.
FAULCONER: It's really designed for family restaurants throughout San Diego, and it really cuts some red tape. It removes the regulation that costs businesses literally thousands of dollars annually to have to pay for these entertainment permits. Currently, restaurants have it abide by the same rules as bars and night clubs, and so what we did is came together and we worked on this restaurant relief ordinance, which will remove family restaurants from requiring getting this permit, which sometimes can cost up to $3,000, believe it or not. And it's really designed to encourage restaurants that are bona fide restaurants that aren't bars or clubs to encourage entertainment, not have to pay a costly permit. And I think that's going to be great, certainly for particularly those family restaurants throughout the City of San Diego that want to have the opportunity to attract their customers and patrons without having to go through an unnecessary and burdensome San Diego regulation
CAVANAUGH: Now, you're making your case at a news conference today at the Corvette diner. I'm wondering, how is the Corvette diner hurting from the entertainment permit regulation.
FAULCONER: I'm out in front of the Corvette diner now. It's I great example of a bona fide restaurant that closes -- it's not a night club, not a bar. But they have amplified music and a DJ that plays 50s music, and announces kids' birthday parties. So why on earth would we have this type of restaurant, an establishment, have to get an entertainment permit in terms of a police-regulated business? That's a great example of we want to put our focus on our police department on those entities that do need regulation, and get some relief particularly for these small restaurants, these family restaurant, who shouldn't have to go through that process
CAVANAUGH: When you say you're rolling back requirements for permits, that is, do you mean you're decreasing the cost for these family restaurants or eliminating the need for permits?
FAULCONER: We're eliminating the need altogether. And there are certain requirements in order to be exempt from that permit. They can't charge admission, it has to be a bona fide restaurant. Have to close by 11:00 PM. No customer dancing. And there are restaurants throughout the city. And I've had several examples of other restaurants that say they'd like to be able to have a guitar player come in and play in the corner some nights a week. But they didn't do it because they didn't want to have to go through and get a permit, pay like I said up to sometimes $3,000 a year to do it. So I think it's a small but important type of red tape that we're cutting, particularly in these economic times. And particularly, Maureen, for an industry that is so important to our San Diego economy because these small restaurant, these family-owned restaurants -- and restaurants? General, are one of the largest single sources of sales tax revenue to the City of San Diego. We're trying to do everything we can just like I said, streamline this, make these restaurants successful, and have city hall get out of the way in this case.
CAVANAUGH: Would a restaurant qualify as a bona fide family restaurant if they served alcohol?
FAULCONER: They can serve alcohol, absolutely. But -- so that's part of it as well. If you adhere to some of these other requirements and restrictions, which the majority of the restaurants are, I'm anticipating that we're going to have a lot of restaurants that are going to want to take advantage of this. And the proof will be in the pudding. What we're gonna vote on today is -- at the City Council at 2:00 is the 1-year trial.
CAVANAUGH: I see.
FAULCONER: And I'm hopeful that we're going to get full council support to do this. I know we have restaurants from throughout the city that would like to do this, like to try this. And I can tell you from a lot of restaurant customers that would love to go to their local family restaurant and have the ability to have some type of entertainment and encan joy themselves
CAVANAUGH: I'm talking with San Diego City Council man Kevin Faulkner about regulation relief for restaurants that he and a number of other council members are proposing to the full City Council today. Councilman Faulconer, we had a show not long ago about the dramatic increase in the fee structure for entertainment permits in San Diego that was voted on in June. In some cases, the fees jumped by thousands of dollars. Why did you vote for that increase regionally?
FAULCONER: I tell you, this regulatory relief came out of those discussions, Maureen, where the department was looking at the fees and regulations they did charge the night clubs and bar, and we said, wait a second, we want to make sure that the police are recovering the cost for their time, which we they are, and we also changed that, and dealt with issues of occupancy. Smaller bars weren't paying the same as other larger bars and night clubs. It made it more in line and more fair. And some of the restaurants said, well, why should we have to get an entertainment permit when we're not the type of establishment that's open late, creating noise in the neighborhood, and would create problems that would have the police department regulate them? I formed a task group together without only representatives to the restaurant industry, but representatives of the police department, who were involved in this every step of the way. And I think the ordinance that we have today that gets rid of this red tape is supported by the police department, supported by our restaurant association. So that's why I have supported those changes then, and why I'm supporting this one now
CAVANAUGH: It was reported at the time, and this was only in June and July of this year that this whole fee structure was a negotiated package of higher fees that allowed the city to keep libraries and parks and city pools and parks and recreation open. So im-- wondering if you take away all of that extra added revenue, how is the city going to pay for what these fees were supposed to pay for?
FAULCONER: Well, I'll tell you, the wars and night clubs will still have the entertainment permits, they're still going to have their fees. And the police department eight still be in charge of enforcing this. But from my standpoint, I think a lot of people's standpoint, we say we want our officers out there enforcing those entities that require police enforcement, but not on small, family restaurants that may have some amplified music where we have noise issues, problem issues with the neighborhood. We want the department to focus on problem areas and get them more freed up in not spending their time on issues that frankry don't involve high crime or noise problems in the neighborhood. So that's why I think when the department came together, the restaurant association came together and said, let's try something different. Let's not just do it because we've always been doing it. But let's take this year and say how this could work. And I predict, cautiously optimistic, that it's going to be a huge success. That you're going to have a lot of small restaurants throughout San Diego that are going to want to have small entertainment. They would have been doing it for a while but haven't had the ability because they didn't want to go through the city process to get an entertainment permit and send all that money to the city.
MAUREEN CAVANAUGH: That was exactly the argument that -- what you're talking about, why pay for police protection and so forth, when you don't need it, that a group of coffee house representatives were talking about on this show a couple of months ago because they found themselves under this banner of the new higher entertainment fees. And they're saying, look, we don't -- in many cases, we don't search alcohol, maybe we serve something to eat. But they found themselves, their entertainment fees, boosted through the roof. Now, would this ordinance relieve those fees for coffee houses around San Diego?
FAULCONER: It applies to restaurants, Maureen. And like I said, restaurants that don't have admission charges, dancing and other things as well. So that's the focus of that relief as well
CAVANAUGH: Would you consider -- I mean you must have heard some complaints from the coffee houses in San Diego that they really can't afford these higher entertainment fees
FAULCONER: It is. And it's something that I think if we're able to be successful with this 1-year ordinance, which hopefully we will, not only can we expand it to other areas like you mentioned but particularly a whole spectrum of other things. It really ties into what is the city doing that it maybe shouldn't be doing from a regulatory standpoint, and how do you still provide the proper over sight? I think that's a great . Point.
FAULCONER: When we were talking about this earlier in the year with the coffee house people, we did some research, and it seems that entertainment permit fees in San Diego are before this boost in June way low. Very much lower than most other cities around California. Do you think that perhaps that's the reason you originally thought about raising these entertainment permit fees?
FAULCONER: Well, I think when we looked at adjust adjusting the fees, you wanted to make sure that the smaller areas and permit holders weren't paying unduly for some of the larger establishmentps that do require a lot of police presence and assistant enforcement. From my standpoint, it was very important to make the cost recovery as being the cost that's actually closer to the one that's being charged to the entity. And so if you're a small nightclub or bar that hasn't had any problems, you did not want to be paying the same amount as a larger chub or a larger establishment that has generated complaints and a lot of police responses. As you know, police time is money. And we wanted to put the focus rightfully on those restaurants or entertainment places that were requiring additional enforcement to bear the brunt of that and get some relief to some of these smaller establishments. And I think that's certainly what we're doing with this restaurant exemption today. And as I said, it's one of those things I really commend the restaurant industry that came together on this, and particularly our San Diego police department that was frankly was a little skeptical about it at first. But took the time, worked with the restaurants, and I think the policy that we have today at the council that I'm -- I'm optimistic we're going to pass, is one that is going to provide regulatory relief, and more importantly for customers throughout the City of San Diego, it's going to make their eating a little bit more enjoyable
CAVANAUGH: You say that this permit fee regulation would be rescinded for family restaurants for a trial, for a year.
FAULCONER: That's right.
CAVANAUGH: How are you going to determine if this idea really does stimulate business at these restaurants?
FAULCONER: Well, it's one of those things that we're gone look to our restaurant industry steak holders, many of whom are going to join me in a couple of minutes. We're going to ask them if it was successful. And as somebody who's on the council, I'm going to hear from the public. I hear great things and bad things every day. And that I think will be one of the big determiners of success. And also, the police department. We're going to have representatives of vice here at the press conference as well. We're going to ask them, hey, has this had the intended effect? Has this helped the department? Has it freed up resources to go to other areas? That's I think one of the reasons why the department is supportive of the trial, because it's I fairly different change for how the city has operated. And next year, Maureen, at the council on Monday night, we're going to have a regulatory relief evening where we're inviting San Diegans to come on into the council and say what are your ideas? What bureaucracy, what red tape have you observed in the City of San Diego? What are your ideas how we could make things more streamlined, more efficient besides directly into this that, it's all about trying to make government responses do the things that it should do, but also get out of the areas that it shouldn't be involved in
CAVANAUGH: My last question to you, when you relieve the fees from regulations and so forth that have helped maintain the city to keep the library open, and the parks and recreation areas open, where are you going to find the additional money to keep those libraries open if you remove the fees?
FAULCONER: Well, Maureen, I think it's important to remember that these fees were cost recoverable. So these were going directly to the police department. So these fees were not being used for general fund expenses and others. The so I think from my standpoint, that's obviously important. A strong proponent of fiscal reform on the City Council as we've looked to reduce our costs, retiree healthcare cost, salary benefit costs. And as you you know, I'm a strong proponent of pension reform which I believe will qualify for the ballot any day now. I believe those are the things that help us not only from a short term standpoint, but for a long-term standpoint from our city's fiscal solvency. So this city does not repeat the mistakes of past in terms of pension under funding and make promises that the city cannot afford
CAVANAUGH: I'll let you go to your news conference, councilman Faulkner, thank you so much.
FAULCONER: Thanks for having me on.