Bar Revenue vs. Role in the Community?

An interesting debate is developing in Santa Cruz, Calif., where city officials approved new fees to be levied on restaurant owners who serve alcohol, depending on the amount of hours that they are open. While city staffs are working to determine the specific fee increase for each venue, it is anticipated that the average operator will encounter doubled fees, from an annual average of $867 to $1,576, with the peak fee totaling just under $3,000.

The city council’s decision came after restaurant owners began clearing dining tables after dinner service and bringing in DJs in an attempt to attract more business. While a late-night increase of alcohol sales followed, the city says so did an increase of service calls to the police department resulting in nearly all available officers being assigned to the downtown area. This will be the first fee increase to alcohol-serving venues in nearly a decade.

Lou Caviglia, owner of Clouds Downtown, understands the city’s stance but says he and other operators cannot afford the increase at this time. "Why do you think people are doing what they do with their restaurants? Why are they doing the dancing? You have to do it to stay open," Caviglia told the Santa Cruz Sentinel. He also added that Clouds has been following the mixed-use format for more than 10 years now and will most likely be forced to raise drink prices to cover the increased fees.

This debate highlights the challenges facing operators in these tighter economic times, as well as how the changes they make to affect how they interact with the local community.

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