Yarra City Council slugs Covid-hit cafes, bars for outdoor dining

Yarra City Council has pushed forward with a controversial plan to charge struggling businesses up to $5000 to convert parking spaces into outdoor dining areas.

An inner-city Melbourne council has pushed forward with a controversial plan to charge $5000 a year for every carpark space used for outdoor dining.

Cafes on strips including Smith and Brunswick streets would be forced to fork out the “exorbitant” fee under a plan from Greens-led Yarra City Council, while business owners in neighbouring municipalities would pay just a fraction of the cost, if anything at all.

The move was dubbed a greedy cash grab by angry business owners who say the exorbitant fees will force them to close their doors.

At a meeting on Tuesday night, the council came to a deadlock over the proposal with four votes for and four against with Mayor Gabrielle de Vietri using her casting vote to pass the motion.

She said the council had taken into consideration concerns raised by business owners but debate about fees had detracted from the issue.

“We have shown time and time again that we listen to our community, we listen to our traders,” Cr de Vietri said.

“We are perhaps the first council to make outdoor dining permanent. This is a really huge step.”

Councillor Stephen Jolly, who voted against the motion, said the exorbitant fees would threaten the recovery of many businesses.

“The Greens on Yarra Council live in a parallel universe if they think it’s fair to inflict struggling hospitality business with the highest fees in Victoria,” he said.

Crab Shack owner Katie Marron in her outdoor dining space. Picture: Mark Stewart

Premier Daniel Andrews called on Yarra City Council to defend the plan that has left struggling business owners irate.

“I look forward to them defending that to their ratepayers,” he said on Tuesday.

Mr Andrews said the state government was doing “quite the opposite” by providing substantial grants to businesses to setup outdoor dining, and said he would have further announcements to make soon.

“The reason for that is that you are at dramatically less risk of spreading this if you are outside in the open air,” he said.

Nearby Darebin still has no plans to change its policy to waive the fees, while the City of Stonnington was on Monday night considering waiving its significantly smaller $1200 fee.

Despite warnings the costs are excessive, sources told the Herald Sun the cash-strapped Yarra City Council was desperate to pass on its ongoing financial woes to business owners. It includes recouping more than $600,000 in lost revenue from parking fees and fines because of the new car space parklets.

Council sources said consideration had even been given to scrapping the planned 25 per cent discount and introducing the new fees imminently.

Local business owner Katie Marron said the council had repeatedly failed to understand the needs of the hospitality sector.

The owner of Miss Katie’s Crab Shack, said the sector was at the core of the City of Yarra’s vitality and the parklets were the key to many small venues surviving.

“I won’t survive with it (the new fees),” Ms Marron said.

Premier Daniel Andrews. Picture: NCA NewsWire

When restrictions ease later this month, she will only be allowed 10 people inside her venue, but can accommodate 20 in her two car spaces.

But she said the flawed fee structure – based on location – would threaten the viability of the outdoor dining option.

Venues on the busiest streets, considered Tier 1, would be charged $5000 per parking space, with Tier 2 $3000 and Tier 3 $2250.

“This really is feeding with one hand and taking from the other,” Ms Marron said. “It’s like, here’s something that’s going to help you stabilise your business, but now we’re going to sting you with exorbitant fees.”

A survey of businesses operating the outdoor parklets found 86 per cent of owners recognised fees were inevitable and necessary.

But three quarters were concerned about the planned fees and one in 10 owners said they would stop operating the outdoor spaces.

Mr Jolly said he was outraged that Yarra business owners were set to be slugged the most expensive fees in Victoria.

“We’re supposed to be the most progressive council,” Mr Jolly said. “Those business owners that have survived are getting a kick in the teeth.”

He described the ­slated 25 per cent discount on the first six months of fees as a trap.

“What we should be doing is supporting small businesses and their workers so they can thrive,” he said. “Any fees should be commensurate with neighbouring councils. They want to destroy small business.”

Small Business Australia’s executive director Bill Lang slammed the introduction of the fees.

“What small businesses need across all of Melbourne is support, not for a local council to be looking at ways of recouping misspent money through taxing a space which is critical to their hardworking local businesses, such a policy shows the complete lack of understanding of any and all within council to the devastating financial impact that COVID has had upon local traders,” he said.

“Anti-business policies such as this is the reason why we need to see greater representation of local business in all forms of government across the state, as right now whether it be the City of Yarra or the State government of Victoria, businesses are being faced with policies that show no respect to those who work so hard to keep the economic heart of our community beating.”