City manager proposes to triple Old Port bar fee
Seeks extra $40,000 from 24 bars to pay for cop coverage
By Chris Busby
Old Port bar owners are livid over a proposal by Portland City Manager Joe Gray that would more than triple a special fee they must pay every year to help cover the cost of police patrols in the tourist and nightlife district. Gray’s budget proposal would raise the so-called “seat tax” – a levy based on a bar’s legal occupancy – from $4.50 to $15 per “seat.”
For Steve Harris, owner of Rosie’s, that would mean a jump from just over $310 to $1,035 per year for his 69 “seats.”
“It’s insanity,” said Harris, who noted that he pays the city $935 annually for his liquor license. “Basically, they’re doubling my license fees.”
“It’s the most poorly thought out plan I can imagine for funding your police budget,” said Gritty McDuff’s owner Richard Pfeffer. “They’re taking a [fee] that, if tested with the State of Maine, would probably be found to be illegal, and using it as a vehicle for 22 small businesses to fund the entire police protection for the area. Anybody can see that isn’t fair and isn’t right.”
Pfeffer and others said the fee hike, if implemented, will likely end up in court. “My guess is if they pursue this, there will be a legal challenge,” Pfeffer said.
Gray said the increase is necessary to fully cover the cost of extra police coverage in the Old Port, much of which is overtime pay for the officers who work the area on Thursday and weekend nights. That cost is about $60,000, Gray said, and the “seat tax” currently generates about $20,000.
When extra police officers are assigned to the Old Port, other areas of the city get less protection, said Gray. “If we have to put that kind of resource in the Old Port at the expense of other parts of the city, I think the bar owners are going to have pay for it,” he said.
City Councilor Jim Cloutier is the primary proponent of the increase. “There’s a significant amount of police resources [dedicated to the Old Port] to simply prevent mayhem and death on Thursday, Friday and Saturday nights,” he said. Based on the council’s review of liquor licenses in the past six to eight months, “what seems to have become plain is that there is inadequate security in the Old Port area.”
Speaking of the bar owners, Cloutier said, “if these people were operating in the mall, they’d be paying for security.”
In addition to the fee increase, the police department is training more officers in liquor enforcement. And the fire department may act more aggressively to enforce the legal capacity at Old Port bars and dance clubs, even shutting down some establishments the same night a violation occurs, said Cloutier.
“It’s possible there’s going to be a new sheriff in town down there,” he said.
The fee increase is part of the new city budget Gray presented to the council on April 3. Overall, the budget would increase spending 6.1 percent over last year, and together with the estimated budget for the School Department, the property tax rate would rise 2.4 percent.
The city council’s Finance Committee, of which Cloutier is a member, is discussing the budget this month. A public hearing on the combined city and school budget has been scheduled for May 1, with a final council vote expected May 15.
Some councilors are skeptical of the fee increase, or at least its size.
City Councilor Will Gorham, a former bar owner whose district includes the Old Port, has been a big advocate of measures to crackdown on violence in the area. Earlier this year, he pushed through a measure to reduce the number of Old Port Overlay Licenses – a special license bars in the area need if more than half their revenue comes from alcohol sales – from 27 to 22. The council ultimately voted to make 24 licenses available, all of which have now been taken.
Only bars that hold Overlay Licenses need to pay the per-seat fee, and Gorham said that may not be fair, since some establishments “have nothing to do with any of the problems down there.”
“I would support some kind of increase,” said City Councilor Cheryl Leeman. “Some level of additional fee is not unrealistic, but what’s being proposed seems a little outrageous to me.”
“The city is getting exactly what they wanted: not more money, but less bars,” said Russ Riseman, owner of The Alehouse, on Market Street. “Really what they’re doing is putting people out of business.”
With a legal capacity of 113 people, Riseman’s annual fee would jump from just over $508 to $1,695. “I think it’s completely unfair,” he said.
Nappi’s owner John Nappi said the fee hike won’t force him to close his Commercial Street bar, restaurant and pool room. But the beer and pizza there may not be as affordable.
The fee increase will cost Nappi about $1,000 more per year, he said, and “unfortunately, everything gets passed down to the customer.”
Money generated by the fee hike will not be used to hire more cops, and thus will not alleviate the strain on police resources caused by extra patrols in the Old Port. “This is not going to change that,” Gray said.
The Industry, a dance club on Wharf Street, has been a focus of police attention over the years, as have most dance clubs on its end of the street. But Industry owner Brian Hanson has not had to pay for an Overlay License because the club – which offers dancing until 3 a.m. to patrons 18 and over – makes more revenue in cover charges than alcohol sales, he reports.
Nevertheless, the proposed fee hike troubles Hanson.
“If a bar district is taxed to cover the cost of additional police coverage does that mean that the coverage is dedicated to that district,” Hanson wrote in an e-mail. “What happens if the Old Port loses coverage when police are called away to Free Street or some other area…?”
Echoing a half-sarcastic sentiment Pfeffer also expressed, Hanson wondered if this cops-for-hire arrangement meant bar owners will “get some say in how and where that coverage is used… [and] be allowed feedback on police performance and response times?”
Pfeffer, Hanson and several other longtime bar owners recalled that when the Overlay License system was created over a decade ago, it had nothing to do with fees, but instead was intended to keep alcohol-serving establishments dispersed within the district.
“If you’re going to create something for specific reasons, use it for that and enforce it the way you intended. Don’t use it for a taxing vehicle,” said Pfeffer, who worked on the original Overlay proposal. Since the system’s inception, its enforcement “has been shoddy, at best,” Pfeffer said.
For example, bars with the license are supposed to be at least 100 feet from each other, but a walk down Fore or Wharf streets shows that provision has been disregarded many times. (The provision was invoked last January when the council denied Hanson’s application for an Overlay License. Hanson plans to transform The Industry into an “upscale” pub called Right Proper Charlie’s in early May, and he sought the license at the time in case Right Proper Charlie’s makes more revenue from alcohol than food sales.)
Several bar owners also said the city does not audit bars’ books to see if they actually do make more money from booze than other sources, a situation that encourages cheating. If the fee hike is imposed, that temptation would be greater.
The fee hike “opens the door for people to be honest and get out of town, or not be honest and the city gets screwed,” said Riseman.
Harris and his wife, Rose, are selling Rosie’s, and Harris said it’s expenses like the one now proposed that prompted their decision. “That’s why Rose and I are selling: We like Portland, but you can’t do business here,” he said.
Pfeffer sees a political motivation behind the fee hike, a reluctance to make property owners citywide continue to bear the cost of extra coverage in the Old Port, where relatively few people live. “The fact the city manager and the councilors are afraid to pass these expanse on to other parts of the city, because that’s where the voters live, is a shame,” he said.
“The Old Port has always been treated like an ugly stepchild, when in reality the Old Port is an economic engine for the city,” Pfeffer continued, noting the high number of people employed in the district and its stature as a major tourist destination in the region. “There are problems, but these problems are part of the fact this is a successful area.”
Riseman has little hope the political winds will blow in his favor. “There’s no sympathy for the [nightlife] industry,” he said. “Everyone looks at us like the evil dispensers of alcohol.”