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I-Team: City To Begin Push On Long-Standing Fee For Businesses Franchise Fee To Be Enforced On All Business, City Says

Source: - Feb 15, 2012

NEW ORLEANS -- The push is on to begin enforcing a long-standing rule, and collecting money from businesses that make up the fabric of the city of New Orleans. It's a move some say could do more harm than good.

The city is potentially missing out on a lot of money each year, the WDSU I-Team discovered, and there appears to be a new push to start collecting, but some question if it’s a good idea.

Inside a tiny building in the French Quarter is a restaurant some say is heaven sent -- The Green Goddess.

Co-owner Paul Artigues does the most with the space he has, and with a handful of tables indoors, he utilizes the space in front of his restaurant on Exchange Place.

“We're a 12-seat restaurant inside,” Artigues said. “If we don't have our outside seating -- we're done.”

However, that space is public property and not actually owned by Artigues and his partners.

The city of New Orleans controls Exchange Place.

New Orleans City Councilman Eric Granderson said the issue is about using public rights of way.

While the area is closed to automobile traffic, it's still open to pedestrians.

To set up anything on the alley, such as tables, chairs, awnings, Artigues and the other businesses on Exchange Place need to work out what is called a "franchise fee" with the city of New Orleans, which basically is an agreement to use public space.

The cost of such an agreement can vary from business to business and depends on what is set up and for how long.

However, the city said Artigues and others on Exchange Place do not have franchise agreements.

“There are a lot of people out there operating without franchises and I’m not sure we are collecting the fees we should be collecting on the existing fees,” Granderson said.

Granderson said the problem isn't isolated to Exchange Place in the French Quarter. He said businesses from Mid-City to Uptown are also not paying the franchise fee, and he estimates that it could be costing the city hundreds of thousands of dollars each year -- maybe more than $800,000 annually.

“Sidewalk cafes, they could be bringing in a number of dollars to the city when we need it most. More important, it is unfair to those who are paying these fees,” Granderson said. “So, we need to get the money in from those who aren't.”

Granderson is urging that the Landrieu administration to step up enforcement.

All franchise fees must be approved by the council, but it's the mayor's office that makes sure the rules are followed.

A representative from City Hall told the WDSU I-Team, "Inspections for compliance are done when the city receives a complaint about a sidewalk café in the public right of way. We are actively looking for ways to increase the number of businesses having compliant franchises for the use of public space."

The head of the Orleans Parish Republican Party, Jay Batt, thinks stricter enforcement will be bad for small businesses.

“I think the tables outside where you can sip a tea or cocktail -- it's Parisian, it's European, and it gives character to the city. And to go about putting a fee or tax on it, I just don't think it's the right way to go about collecting fees,” Batt said.

“I'm not for it by any means,” Artigues said. “It's something that is gonna affect my business that depends so much on outside seating."

Nonetheless, the city is firm on starting this enforcement. The franchises are monitored by the Department of Public Works inside City Hall.

Category: General Business