The Capitola Esplanade aggressively adapted to outdoor dining last year.
(Kevin Painchaud/Lookout Santa Cruz)

Capitola looking to create permanent outdoor dining program, having learned from what worked during COVID-19

Capitola is trying to find a way to make permanent outdoor dining an option for businesses, after seeing the success of its temporary program during the pandemic.

In coming months, the city will look to turn its quickly fashioned “parklet” program, which allowed restaurants in Capitola Village and other places to move service outdoors into public parking spaces, into a a longterm strategy. The city’s stopgap outdoor dining program is set to expire on May 31, but the city council is likely to extend its temporary permits, officials said Thursday night.

Although letting restaurants use public parking spaces has come at a cost — an estimated $140,000 per year in lost city parking revenue — the move helped small businesses that were struggling to rapidly adapt in the COVID-19 economy.

To date, 32 businesses have taken advantage of the opportunity to conduct business outdoors, including 15 restaurants using up 47 parking spaces.

If Santa Cruz County moves into the less restrictive orange tier next week as expected, restaurants will be allowed to return to 50% capacity, which could help return some badly needed revenue to city businesses that missed out on tourist dollars in 2020.

However, six foot spacing requirements mean many restaurants still aren’t serving as many patrons as they could in non-pandemic times.

Small, outdoor dining structures typically erected in parklets help mitigate those impacts while minimizing the risk of viral transmission. What’s more, city leaders and community members alike have noted how those structures have created a new experience that could be attractive to future visitors.

“I think the parklets really brought some charm and some vibrancy to the Village that we didn’t have before,” said Linda Smith, a Capitola resident who served on the city’s planning commission when it originally considered parklets.

In planning for a time after Capitola’s emergency COVID-19 orders expire, city leaders will need to craft a more concrete process to allow outdoor dining, which could include tighter specifications for what kinds of parklets are allowed in the Village and elsewhere in Capitola, as well as what permits business owners would need.

The city isn’t alone in contemplating a more permanent future for parklets and other outdoor business operations. Scotts Valley, Watsonville and Santa Cruz are all having talks about the subject, too.

Capitola had tried its hand at outdoor dining in the Village years before the pandemic, but couldn’t get the program off the ground because of how much it would cost small businesses — close to $20,000 to get up and running. That program included charges of $4,497 for planning applications, a $1,000 security deposit, $3,220 per parking space per year, plus building permit fees and construction costs.

The city only received one application for the pilot parklets, from Capitola Wine Bar, a year after the program launched. When the wine bar owners realized what it would cost, and that the program was to expire the following year, they withdrew their application.

City leaders hope to learn from the 2016 hiccup and — having seen the reality of outdoor dining play out over the last year — create an accessible parklet program without killing parking revenues.

“I think we need to try and solve that dilemma,” Vice Mayor Sam Storey said of finding the balance between the fiscal pressures businesses and the city are both facing.

After discussing the issue, the city council voted 3-2 to take up outdoor dining as a priority in 2021, and evaluate parking rates in the Village afterwards. Storey and council member Jacques Bertrand preferred to study outdoor dining while simultaneously considering a change to parking rates in lots outside of the Village, hence their “no” votes.

Parking fees in the heart of Capitola haven’t changed since 2009, when the city council increased meter rates from $1 to $1.50 after intensive study and community discussion. The city sees the potential to bring in more money by raising rates by 25 cents or more.

However, any changes to the parking rates also would need approval from a state panel, the California Coastal Commission, which could take more than six months to finalize.

It is possible that Capitola would need Coastal Commission approval for a permanent outdoor dining program, too, according to City Manager Jamie Goldstein. City staff will return to the council in April with more information in order for the city to begin formulating a parklet program before summer.

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