Extended Sidewalk Patios: Great for Beer, Good for Business?

April 28, 2013
By: Reurbanist

As I was walking around Port Credit Village this weekend, I was excited to see that the pilot project for sidewalk patios from 2012 is being repeated. As part of this project, a temporary patio is built on the existing sidewalk, and a new wooden boardwalk replaces on-street parking spots to accommodate passing pedestrians.

From a self-serving perspective, I am totally all for these patios. The prospect of combining beer and sitting outdoors really appeals to me.

At the same time, I'm very curious about the economics behind the project. It appears that the patios were highly successful  for restaurants making use of the program in 2012, with reported monthly sales increases ranging from 30% to 100%. Nearby retail stores, however, have apparently complained about the impacts of lost parking spots. Although anecdotal, this information is completely consistent with what we know from urban retail best practices elsewhere in North America. Street parking is critically important for the financial viability of most stores, even in highly pedestrianized environments. As well, festivals, events, and pedestrianized streets tend to disproportionately benefit restaurants, while having negligible or even negative impact on other types of retailers.

Unfortunately, I was unable to figure out who was actually paying for the patios to be installed. They look like very costly structures, and assembling, disassembling, and storing the components can't be cheap. Port Credit BIA's annual budget showed no line item for it, and a City of Mississauga report to Council claimed that the financial impact was negligible (save for some lost parking revenue). Hopefully this means that the businesses themselves are shouldering the financial burden, which is only fair.

One final thought - the City of Mississauga waived fees to the business owners for the first year of the project, and it appears in the future the most they would be charged is 75 cents per square foot of patio per month. That works out to only $9 per square foot per year, well below market rents for street retail space in this area. To make matters worse, they only would pay that rate for the 5 months the patio is in operation - so for a measly $1,000 to $2,000 they can generate a huge boost in sales. In my opinion, its acceptable to subsidize rent while you are running a pilot project, but now that the financial returns have been proven, it is time to charge full market rates. It is absolutely unfair to competing restaurants in Mississauga as they do not receive the same level of subsidy. As planners seem to often forget, retail spending markets are finite and see only limited annual growth. If restaurants in Port Credit experience a 30% to 100% increase in sales, that means restaurants somewhere else (and most likely in Mississauga) have seen decreases in sales.

If anyone has more information on the economics, financial benefits, and costs, related to patio programs like this please contact me so I can share it.

-- Update --

The Port Credit BIA gave me an update on some of the questions I had. The cost of constructing the patios are fully funded by the businesses that use them. The patios are not exempt from municipal fees this year (mentioned in the above article). Lastly, the businesses are responsible for storing the patios off-site in the winter.

About Reurbanist
Reurbanist™ believes retail offers cities the best opportunity to recreate their urban fabric.

Developers, investors and governments around the world are recognizing how retail offers enormous opportunities. Retail is the glue which holds communities, neighbourhoods and mixed use developments together.
Recent Articles
Rethinking retail’s role in animating streets and public spaces

For decades, planners, urban designers, and policy makers have advocated for street-facing ground floor retail space as a means of animating streets and public spaces. Retail was in many ways the optimal use for achieving this activation due to its foot traffic generation and visual diversity created by storefront designs, lighting, and window transparency. Many […]

The Benefits of PokémonGo: Footfall, Draw & Leverage

Since the release of PokémonGo, there has been an influx of coverage in what many local business and retail centres are doing to capitalize on this increasingly popular game developed by Niantic and The Pokémon Company. The premise behind this game is to mimic the story and concept of the Pokémon franchise which is aptly […]

The Viability of Vertical Retail in Urban Environments

In the context of vertical shopping environments, a rule of thumb that is sometimes applied is that sales performance drops off by 50% for every floor above ground level. By the time you get to the third storey, you can expect only a fraction of the sales turnover. As a result the space is often not viable. When working […]

Food Lover's Market, Cape Town

To meet the evolving needs of workers and visitors in the core of Cape Town, a new food concept has been pioneered under the “Food Lover’s Market” label. The modern eatery concept brings together the best of an urban grocery store and food court within one beautifully designed facility. Importantly, centralized point-of-sale tills allow visitors […]

Reurbanist on Flickr
  • Istinye Park 1
  • Istinye Park 2
  • Istinye Park 5
  • Istinye Park 8
  • Istinye Park 3
  • Istinye Park 7
  • Istinye Park 6
  • Istinye Park 4
  • Istinye Park 9
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram