Slashing dining fees

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September 14, 2009 // UPDATED 9:23 am - September 14, 2009
By: Jake Weyer
Jake Weyer
// The Metropolitan Council approves a 75 percent cut in fees for outdoor dining areas //

Area restaurants looking to build or expand outdoor seating areas will pay significantly less in regional sewer-system fees to do so starting Oct. 1.

That’s when a 75 percent fee reduction, approved by the Metropolitan Council Sept. 9, takes effect. It applies to outdoor spaces exposed to wet weather.

Restaurateurs pushed for the change at a public hearing in August, arguing that the Service Availability Charge (SAC) of $2,000 per every eight seats should not apply to outdoor areas that aren’t used during much of the year.

“The problem is that outside seats are not additive to the bottom line sales number,” said Alan Ackerberg, chief development officer for Parasole Restaurant Holdings, which runs multiple area restaurants including Manny’s, Figlio, Chino Latino and others. “Go walk by restaurants with outside seating on a beautiful summer or fall day; the patio will be full and the restaurants will be generally empty. It’s simply a displacement of diners from inside to outside.”

Ackerberg said a good patio season might stretch from May through October and bad weather and bugs foil many of those days.  

“There’s just not that many days to use the outdoor seats,” he said.

Figlio, which will soon undergo a major remodel, was recently assessed $12,000 in sewer fees for its outdoor dining area.

The fees go toward capital expenses for the region’s multi-billion-dollar inter-city sewer system, which includes 600 miles of massive pipe and seven sewer plants, said Jason Willett, finance director for the environmental services division of the Metropolitan Council. The system does not include thousands of miles of smaller city-operated pipe.

Charges are broken into fixed units based on sewer capacity — how much the system has to stand ready to serve. One SAC represents capacity for one home, which is roughly 274 gallons per day. A formula developed for restaurants and bars has meant they pay one SAC for every eight seats, both inside and out. It’s a one-time fee paid when an outdoor space is built or expanded. SAC credits stay with a property in Minneapolis, so if new seats are added, the restaurant pays the difference.

After Oct. 1, restaurants that add seats to an existing patio won’t have to pay an additional fee if the cost previously paid is equal to or greater than the total charge based on the lower fee, Willett said. But rebates won’t be offered.  

The new rate is based on the sewer system’s maximum capacity on rainy days, when it’s the most burdened, Willett said. Patios would probably not be used much on those days, so less capacity would be needed, but there’s no exact science to the figure.

“I’m in the awkward position of not really being able to have sort of an engineering basis to say here’s the right number,” Willett said.

Calculated or not, many restaurants are on board with the change, including Keegan’s Irish Pub at Hennepin and University avenues. Owner Terry Keegan closed the patio last year to avoid a $7,200 sewer fee assessment and has pushed for a reduction since.

“I’d rather have it drop to zero, but a 75 percent reduction is good,” he said.

It’s good enough for Keegan to reopen the patio next year, for what he hopes will be a better summer than the slow one he had this year.

At Clubhouse Jäger, 923 Washington Ave. N., owner Julius Jaeger De Roma just finished an 85-seat patio expansion. Even though rebates were not part of the Metropolitan Council’s decision, De Roma said he’d probably try to get one, since his seating was added a couple weeks ago.

He said the fee cut in general would be a good thing for independent businesses, which struggle most in hard times.

“Anything that actually saves smaller business people funds, I would support,” he said. “I mean really, because otherwise they’re just being taken.”

Though the fee reduction for outdoor spaces will save some businesses money, the slack will have to be made up somewhere, Willett said. He said it will probably come from a slight increase in the general SAC.

Reach Jake Weyer at 436-4367 or