Sunday, April 09, 2006

Subsidies for startup restaurants

Initially, city officials contemplated a plan that would help cover the rental costs on a sliding scale for downtown restaurants during their first five years in operation. During the first year, the city would cover 50 percent, and that would be reduced to 10 percent by the fifth year. (source: Daily Herald)
Five years is probably a couple years too long. Three years is plenty, maybe even two years is enough. Rent is the most logical expense to subsidize, since it's an expense that can't be controlled and is easy to document. In any case, subsidizing rent is not a bad idea and far cheaper than paying millions of dollars to condo developers.

But the best thing the city council can do is to stop creating Planner's Blight. You can pay 100% of a restaurant's rent, and they will still not willingly go into the demolition zone.

People pay attention. They heard about the Great American Family Diner. The restaurateurs invested $137,000 to move the diner to the downtown, and now the city is telling developers, "Come and get it!" And they're not talking about the food. They're talking about the whole block, which they want destroyed and replaced with condominiums.

The Elgin city council has an uncanny way of bankrupting small businesses in the downtown.


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