With COVID-19 restrictions over, Santa Cruz County’s restaurants are at a crossroads: Should they keep their outdoor, pandemic-era dining spaces, even as jurisdictions require more permanent setups? It’s a question of dollars and cents — punctuated by the changing faces of the county’s downtowns.
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It sure is nice sitting outside Anthony Kresge’s deli on Capitola Avenue. Five yellow tables top a bright bed of artificial grass, bounded by wooden planters, which all fits inside a single parking space fronting the establishment.
Kresge built the “parklet” himself when he and his partner opened their quaint, sea cabin-esque restaurant, Reef Dog Deli, in December 2020. With less than 500 square feet of indoor space, the outdoor seating is the business’s only dining area. But lately, it’s been causing him headaches.
“It’s kind of a double-edged sword for me,” Kresge said. “It’s attracted people to my business who didn’t know it existed.”
But now that Capitola is moving swiftly to implement new rules governing how dining spaces can be set up in its street parking spaces, Kresge has to redo his setup. He understands why the rules are needed: They make the parklets safer, establish a semi-permanent apparatus for deciding who can set one up and help the city safeguard its parking revenues. It’s the out-of-pocket costs to comply with the new rules, totaling $4,000, that are getting caught in his craw.
“The parklets were put in place to gain more business,” Kresge said. “Now, whatever revenue we could have made off those parklets to catch up, I feel, is being refunded back to the city.”
Eating outside — along with wearing masks and scowling at people who cough — might be one of the most visible legacies of COVID-19.
In Santa Cruz County alone, Lookout estimates there are at least 81 businesses that operate parklets — dining spaces set up inside street parking spaces — which excludes the large number of businesses with dining spaces in their private parking lots.
Now, unhampered by the do-or-die mentality that spurred cities to pass temporary laws allowing street dining in the pandemic’s early days, jurisdictions are realizing that parklets are here to stay and that they need permanent regulations to guide where, how and by whom they can be set up.
Capitola’s city council passed a permanent outdoor dining ordinance in December 2021 that limited the number of parking spaces businesses could use for dining space to 25 and introduced new design requirements and guidelines for semi-permanent street dining setups. In Santa Cruz, an ordinance establishing a permanent parklet program passed its first reading before its city council on Oct. 25. It is slated for final review Tuesday.
On the opposite end of things, the city of Scotts Valley has no parklets. If you live or have ever driven through there, it’s easy to understand why: In a town dominated by strip malls, there are no restaurants that front public streets. That means no parklets, though some restaurants in the city have successfully maintained outdoor dining spaces in their private parking lots.
“What each jurisdiction needs in terms of outdoor dining rules are different,” said Stephanie Hansen, the principal planner of Santa Cruz County’s planning department. “It wouldn’t make sense for the same rules to apply to a business in Capitola, on the coast, as one in Scotts Valley.”
With change comes challenges.
The new laws in Capitola and Santa Cruz mean that many food and drink businesses will need to either retrofit or completely rebuild their parklets to bring them up to building safety snuff — which costs big bucks.
Kresge said updating the street dining area at Reef Dog to have a deck and new planters will cost at least $4,000 if he does the job himself, breaking down to about $2,000 for building materials and about $2,000 for permits and other expenses. But an assessment by the city of Capitola found that for most businesses, construction costs alone would be more in the $15,000-20,000 range.
These sums are even higher in Santa Cruz, with prepermitted designs developed by the city ringing in at $40,000-70,000. The city, though, aims to bring these costs closer to $20,000, a figure businesses say is more realistic, according to Santa Cruz economic development manager Rebecca Unitt.
Unitt also said that under the new law, businesses would be allowed to retrofit their existing, temporary parklets to comply with the new standards, and that the city might be able to provide businesses cost estimates based on the item-by-item costs of their own designs.
“We would be able to rely on the cost estimates that we have of our own designs and be able to say, ‘Here’s what your barrier cost is likely to be. If you wanted to put in a different deck, here’s how much that would cost,’” Unitt said.
Regardless, there’s been some sticker shock.
“That’s a lot of money,” said Paul Cocking, the owner of Gabriella Cafe in downtown Santa Cruz, which currently has a white-tented parklet occupying three parking spaces on Cedar Street. “And with a typical restaurant 5% profit margin, that’s a lot of food.”
Another potential problem is timing. In Capitola Village, where business closely follows the tides of summer tourism, the deadline for restaurants to bring their street dining decks (Capitola doesn’t officially use the term parklet) is Jan. 1 — when Kresge says revenues are lowest.
“For it to come right in the middle of winter, when we’re not going to see a ton of benefit from it — I think the timing is wrong, and I think the long-term plans need to be better thought-out,” he said.
This is also the problem facing Hula’s Island Grill and Tiki Room owner Ian McRae, though for different reasons. On the same evening the Santa Cruz City Council passed the first reading of its permanent parklet ordinance, it also greenlighted the Mar. 31 reopening of Cathcart Street — whose eastbound lane has been transformed into a retail and dining space since June 2020.
Hula’s, one of three businesses using the soon-to-be-gone street space bounded by concrete barriers, is now scrambling to figure out how to redo its outdoor dining space in the next 4½ months.
“It just seems like there’s no way that we could get that done — come up with the money, get it through planning, pay the fees,” McRae said. “We’ll see what [the city] will come up with. But there’s no way we’re gonna get anything done in that short time frame.”
Communities across Santa Cruz County are deciding on how to regulate parklets as permanent dining structures. Here’s a look at how Capitola, Santa Cruz and Watsonville are approaching the issue.
Capitola is the furthest along in the county in developing a permanent plan for street dining (the jurisdiction doesn’t officially use the term “parklet,” opting instead for “street dining area/deck”). The seaside locale’s December 2021 ordinance lays out a slew of design safety rules, a structure for permitting and charging upkeep to offset lost parking fees, and introduces two preapproved “prototype” street dining area designs that businesses can use free of charge.
To comply with the design requirements, businesses will need to build street decks made of “high-quality, durable materials” that sit more or less flush with the sidewalk and add bike racks within their allotted parking spaces — or pay a $300 in-lieu fee — along with other requirements. All told, a business can expect to pay $4,000 in permit fees, though this amount can vary depending on how many spaces it uses and where or not it follows one of the city’s prototype designs.
Businesses that wish to maintain their street dining areas must have their permanent setups built before Jan. 1, and had to file paperwork stating their intent to do so by Aug. 15. Those that did not wish to apply for permanent street dining areas had to bulldoze their temporary setups on Sept. 15, when Capitola’s temporary street dining program expired.
Over the months of deliberation and study it took to develop the plan, talk in Capitola’s city hall centered on how businesses’ use of public space for outdoor dining balanced against the availability of — and money generated by — public parking. In the 2022-23 fiscal year, parking fees in Capitola generated $919,275 — a fairly large slice of the city’s $19,741,045 general-fund budget.
Plus, anyone who has ventured to Capitola Village during the summer months will tell you how much of a nightmare the parking situation can be. What’s more, the tightly developed area lies within the California Coastal Zone, meaning the city is mandated to ensure visitors have access to beach parking.
“It’s always a balance in our village, because it’s a highly touristed area,” said Kate Herlihy, Capitola’s community development director.
That’s why the city placed a cap of 25 on the number of parking spaces businesses can collectively use, assigned via a lottery system. The city assigned 19 of the 25 spaces to 13 businesses throughout Capitola Village on Aug. 16, with a second lottery to allocate the remaining spaces slated for February. The city will not reassess these space assignments until three years from now, when the city council is scheduled to review its street dining program.
Three ordinances regulating outdoor dining passed the Santa Cruz city council on Oct. 25. The first, focusing on parklets specifically, lays out steps and fees for businesses to build permanent parklets — and like Capitola’s December 2021 ordinance, tightens design guidelines for these structures.
Businesses will have the option of building based on city preapproved designs, developing their own designs or requesting that city workers draw up a checklist of changes needed to retrofit their temporary parklets. The deadline for filing plans with the city — assuming the ordinance passes its second reading at Tuesday’s city council meeting — is March 31.
There are a few other differences between the two cities’ ordinances: Parklets in Santa Cruz are generally capped at two parking spaces in length, unless businesses have frontage longer than this or they obtain permission from their neighbors to extend their area. And Santa Cruz has more specific design guidelines than Capitola, including requirements for how durable parklet platforms must be, where they are placed in relation to their adjacent curb, how their lighting is arranged and other factors.
These higher standards translate to higher costs. Initial city plans put the cost of building a new parklet as high as $70,000 — though that number applies to only the city’s preapproved designs, and is expected to go down by the council’s next reading of the ordinance.
There’s also talk of providing businesses with 50% forgivable loans to the tune of up to $50,000 for their parklet builds. But negotiations for these are still ongoing, and won’t be hammered out until Tuesday’s council meeting.
“Getting funding would be great,” Gabriella Cafe owner Cocking said. “It’d be an immense help. But I don’t think there’s anything to look at yet.”
Another change on the horizon: no more tarp tents. The city reasons that structures like these pose a fire risk, especially when placed in conjunction with electric or propane heaters. In fact, the new ordinance allows no permanent overhead roof or shade structures. Businesses will instead be allowed to use portable umbrellas, though not in conjunction with heaters.
An adjacent and similarly thorny issue is the partial closure of Cathcart Street, which was the center of debate on the city council’s most recent agenda item. Since June 2020, Cathcart’s eastbound lane has been closed to vehicle traffic, with businesses Hula’s, Spokesman Bicycles and Lupulo Craft Beer House using the space to expand their dining and inventory areas.
City fire officials said at the meeting that the partial closure could slow response times. Plus, Cathcart Street — sitting half a block north of the Santa Cruz Metro Center — will soon be at the center of new housing developments slated to expand the population of downtown Santa Cruz. With people comes traffic, and Cathcart would be the only two-way street running perpendicular to Pacific Avenue for several blocks, several officials mentioned.
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Now that the street will reopen again — the ordinance passed unanimously, setting the resumption date for two-way traffic to March 31 — the businesses along Cathcart are scrambling to figure out what to do about their outdoor spaces. Hula’s owner McRae said he has contracted an architect to draw up plans for various scenarios, based on how much widthwise space will front his business once the city draws the new lane lines.
“What we did is we measured Cathcart Street — measured the two lanes of traffic,” McRae said. “Each one needs to be a minimum of 11 feet wide, and each bike lane 5 feet wide. We did all the math and we’ve got about 14 feet left over.”
Hula’s and Lupulo actually have parklets that predate the pandemic. In 2017, the city of Santa Cruz introduced a pilot program to demonstrate the feasibility of parklets downtown — and Hula’s and Lupulo were the first participants. If you look at their parklets closely, you’ll notice that these old parklets, about 6 feet wide each, are nested inside the concrete barriers that subdivide Hula’s and Lupulo’s current outdoor seating areas and Cathcart Street’s westbound lane.
Now, McRae says his plan is to expand the area of his 2017 parklet to make up for the lost space. No matter what, though, he says Hula’s will lose some of the seats bounded by the traffic barriers, which currently total 56.
“It’s hard to give it up,” McRae said. “Obviously it’s a big plus for us. But it’s also for our downtown — for our community.”
As hustling and bustling as downtown Watsonville might be, there’s only one parklet in the whole of the agricultural hub.
That’s the one in front of the Slice Project, a hip New York-style pizza joint owned by brothers Kristian and Brando Sencion, which opened its doors in the old Fox Theater building in late 2019. Holding the distinction of being home to not only Watsonville’s only parklet, but also its first, the Slice Project’s parklet was built and paid for by the city of Watsonville, as part of an early-2021 pilot program to demonstrate the feasibility of outdoor dining.
The parklet amounts to a small, steel-railed area atop a wood deck, with four barrels serving as tables. Unlike Reef Dog’s relatively zen setup, though, it flanks Watsonville’s four-lane Main Street — meaning that sitting there can be an exercise in shouting over vehicle traffic. Brando Sencion said they’ve heard from patrons that sitting outside makes them feel uneasy, given how fast cars drive past just feet away.
But since the parklet is already paid for, and the city isn’t charging the brothers to keep the space, Brando said they don’t see much reason to take it down. Brando admits it was helpful during Watsonville’s annual Strawberry Festival, when Main Street was closed to vehicle traffic. The parklet saw heavy use during the two festival seasons it’s been around for, Brando said.
But the Strawberry Festival comes just once a year.
“Honestly, if I was the one who had to pay for it, I wouldn’t,” Brando said. “It just doesn’t get a lot of use.”
Murray Fontes, a principal engineer with Watsonville’s public works and utilities department — who oversees the city’s lone parklet — agrees that downtown Watsonville just isn’t an attractive home for outdoor dining. Businesses, he said, want to maintain the parking directly in front of their storefronts.
Fontes said this could change in the future, though, once the city implements its Downtown Specific Plan — which would see a slew of design changes geared toward making downtown Watsonville more pedestrian-friendly. Chief among these would be reducing the number of lanes along Main Street from four to two — plans enshrined in the proposed “road diet,” which has become something of a political football this election cycle.
“The city is completing a Downtown Specific Plan with a goal of redeveloping the downtown area and making it more vibrant and alive,” Fontes said. “And the plan includes opportunities to incorporate parklets perhaps, as different kinds of businesses are attracted to the downtown area.”
The plan was approved by the Watsonville city council on Oct. 25, with the council directing city staff to draft an environmental impact report for the project — planned to be completed by summer 2023.