Council asks staff to return with proposal to lower some commercial encroachment fees

At an informational presentation Jan. 13, city staff reviewed the commercial encroachment fee schedule established in 2023, which applies different fees by location and use (plaza, upper pier, on-street dining decks, retail). The slide deck and staff comments summarized how fees were set by category and geography.

Council debate focused on retail and small food vendors that rely on modest sidewalk seating or displays but do not provide table service. Council member Keegan and others argued that some long-standing small retailers (identified in public comment as The Green Store and Mickey’s) are disproportionately affected by recent multi-step fee increases; Keegan proposed returning with an action item to lower the rate for qualifying retail/retail-food encroachments to $2 per square foot.

Staff said the 2023 schedule was set by council based on code categories, business type, location and hours; any substantive rate changes would be brought back for council action. Council requested staff draft a proposal for a future meeting that would define qualifying criteria (for example, no table service, no alcohol sales) and estimate fiscal impacts of a rate reduction.

What’s next: Staff will prepare an action item with options for rate adjustments for qualifying retail encroachments, an impact analysis, and recommended eligibility criteria for council consideration.