Cape Town - Businesses in Cape Town’s city centre say they will be forced to retrench staff, and even close down, because of huge hikes in the city’s fees for outside tables.
Crush in St George’s Mall was slapped with a bill of R1 799 this month for its outside eating area, after years of paying an annual fee of R780.
Clive Goss of Wimpy, also in St George’s Mall, said he challenged the city council’s inflated “encroachment fee”, which had jumped by more than 2 000 percent last year.
Garreth Bloor, mayoral committee member for economic development and tourism, confirmed the tariff had increased from R60 a table per annum to a monthly fee of R100 per table.
This means a restaurant with 10 outside tables has gone from paying R600 a year, to R1 000 a month, or R12 000 a year.
The new fee is standard for all restaurants with chairs and tables on pavements, pedestrian malls and squares across the city.
The new tariff will replace the outdated annual tariff determined decades ago by a 1980 council resolution, said Bloor.
Crush has already indicated it will be forced to retrench about 10 of its staff because of the hike. The worst case scenario is that it will be forced to close.
The manager, who declined to be named, said the fee would hit smaller businesses particularly hard. She questioned how the city could impose such hefty fees when it claimed to support small and medium businesses.
But Goss said his restaurant, despite being part of an established franchise, could also not afford the steep increase.
“I won’t be able to open the outside area.”
His partner, Marga, said she had received several letters of demand from the city for outstanding tariff payments. Filled with “sheer terror” at the risk of being blacklisted, she was forced to pay up.
Goss challenged the city’s encroachment fees and to date has not yet received a bill with the new tariffs.
But Marga said it was only a matter of time. “They (the city) make it extremely difficult for small businesses to exist. It is the small businesses that keep Cape Town alive and attractive.”
Other restaurants in St George’s Mall, which rely on pedestrian traffic, said they were aware of the higher tariffs.
Bloor said the new tariffs came into effect in July last year, with council approval.
Restaurants would factor in the cost of outside facilities, and whether they could afford it, “as per normal business practice”.
Asked what the revenue from these tariffs would be used for, Bloor said the fees were “included in the budget and forms part of council’s service delivery programme”.
According to the report on tariffs for tables and chairs, submitted to the economic, environment and spatial planning committee in March last year, the city will still consider introducing a “differentiated tariff” for different parts of the city.
Paul Williamson, of the city’s economic, environment and spatial planning directorate, noted in the report that built property had a valued placed on it, depending on its location. This meant there should be a value on different tables and chairs sites.
“Tariffs should be linked to site size and the desirability of the location.”
The report also noted that the placing of tables and chairs outside was “at the sole pleasure of the council” and was not a right.
“The focus is not to create an extension of a commercial businesses, but a pleasant ambience of the public space for the use of the public.”
The tariffs had been increased “to ensure financial prudence and promote transparency”, and would be reported to the council annually.
But some of the businesses the Cape Argus spoke to said there was no notification of the impending increase, and no consultation with affected restaurants before the new tariffs were imposed.
The Cape Chamber of Commerce said it comment on the impact of tariffs on Wednesday.