A legal Food truck: All it took was a year and 60 trips to city hall

[jsmyers]

Fears about food trucks remind me of this:

http://en.wikipedia.org/wiki/Who_Moved_My_Cheese

[Fnemecek]

In any case, I'm sure they'd rather pay for unnecessary toilet paper than paying taxes on property they don't own because of an unfounded doomsday prophecy from somebody on an internet forum.

Fine. Let's say we continue to give food trucks a discount on taxes, while levying heavier taxes on brick and mortar operations.

Where is the money needed to fund government operations going to come from long term?

[Fnemecek]

Fears about food trucks remind me of this:

http://en.wikipedia.org/wiki/Who_Moved_My_Cheese

Hardly.

The whole point behind Who Moved My Cheese is that change is a constant in the modern world.

As things currently stand, the dynamics of how certain businesses operate is changing. Our current method of financing basic government operations is currently tied to one specific model [[i.e., largely property taxes). In other words, our cheese is moving.

I am the guy who is advocating in favor of adapting to that change by introducing a method of financing basics like police, fire, EMS, and street lights that reflects the evolving business market.

Everyone else seems to be a part of the "Hem" and "Haw" camp, assuming that either no change is needed and the sheer "coolness" of this change is somehow a replacement for basics like police, fire, EMS, and street lights.

If the business market is going to change and evolve [[which it always does) than the way that we tax businesses needs to adapt to those changes.

[Downtown Lady]

Fine. Let's say we continue to give food trucks a discount on taxes, while levying heavier taxes on brick and mortar operations.

Frank, nobody is getting a "discount". You can't charge property taxes on somebody who doesn't own a property.

It seems like you're looking for a sort of across the board "restaurant tax" to be levied on all parties.

[iheartthed]

Fine. Let's say we continue to give food trucks a discount on taxes, while levying heavier taxes on brick and mortar operations.

Where is the money needed to fund government operations going to come from long term?

What government operations need to be funded? Kitchen inspectors? They would be paid through the license fee for processing food. Roads? Vehicle registration fees. Not really sure what the big deal is here. Food trucks are not gonna starve brick and mortar restaurants.

[jsmyers]

As things currently stand, the dynamics of how certain businesses operate is changing. Our current method of financing basic government operations is currently tied to one specific model [[i.e., largely property taxes). In other words, our cheese is moving.

I am the guy who is advocating in favor of adapting to that change by introducing a method of financing basics like police, fire, EMS, and street lights that reflects the evolving business market.

So you agree that the real solution isn't to stop food trucks, but rather to find a different/better way of financing public services?

I think most of us would agree with you there. But I think that most of us disagree that their is a net negative regarding property taxes and the allowing of food trucks. You are right that theoretically, a food trucks could possibly lead to reduced restaurants and therefore lower property taxes. But I believe that you grossly overestimate the magnitude of the expected effect. You also ignore the likelihood that increased foot traffic and streetlife make all property more attractive, increasing property tax revenues. You may dislike "cool" but it fills apartments, offices, and storefronts.

[Fnemecek]

Frank, nobody is getting a "discount". You can't charge property taxes on somebody who doesn't own a property.

Allow me to introduce Company A and Company B, both of which make a living by servicing the needs of the downtown lunch crowd.

Company A pays taxes and fees of $15,000 per year.

Company B pays taxes and fees of $100 per year.

This is neither fair nor is it sustainable in the long term.

It seems like you're looking for a sort of across the board "restaurant tax" to be levied on all parties.

If all parties are going to being competing for the same basic clientele, the tax burden on each of them needs to, in one way or another, be fairly equal. If it's not, those paying the lower taxes have the ability to drive those with a higher tax burden out of business.

Yes, there can be brick and mortar businesses that adapt to the change by going father up market, but the market can only support so many of them. The end result is an inevitable movement away from the brick and mortar operations [[i.e., the ones who pay taxes). Such a movement leaves us without a way to pay for basic city services.

We can adapt to this now or we can keep going on and on about how "cool" a taco tastes when it comes from a truck and end up doing without police, fire, and other basic service later.

[Fnemecek]

What government operations need to be funded?

All of them. Cops and firefighters are great, but they don't work for free. And something has to power those street lights.

[iheartthed]

All of them. Cops and firefighters are great, but they don't work for free. And something has to power those street lights.

Okay, set up a special permit for street vending. Problem solved.

[Fnemecek]

So you agree that the real solution isn't to stop food trucks, but rather to find a different/better way of financing public services?

Well, yes... That's why my first post on this thread was about a drop in tax revenue and why I've advocated for some kind of system whereby food trucks carry a tax burden that's at least close to what their brick & mortar competition does.

I think most of us would agree with you there. But I think that most of us disagree that their is a net negative regarding property taxes and the allowing of food trucks. You are right that theoretically, a food trucks could possibly lead to reduced restaurants and therefore lower property taxes. But I believe that you grossly overestimate the magnitude of the expected effect.

It's impossible to know the magnitude of food trucks vs. brick & mortar restaurants unless we first know how many food trucks are going to set up in the area during prime eating hours. If El Guapo is the only who ever does this then, yeah - the impact will be minimal to nonexistent.

However, since the City is moving towards full-fledged permanent licensure of these things without any indications that there will be a limit to the number of them, it only makes sense in my view that we have policies in place to accommodate a multitude of them. More food trucks will equal more of an impact on brick & mortar operations, which will also equal more of an impact on everything else since so much of our local government is driven by the property taxes that businesses pay.

You also ignore the likelihood that increased foot traffic and streetlife make all property more attractive, increasing property tax revenues.

Quite frankly, I don't believe there will be an increase in foot traffic as a result of food trucks - or at least no where near enough to even begin to off-set the damage to tax receipts. I asked before on this thread for someone to show some evidence that there would be an increase. No one responded.

Let's say, for example, we have a hypothetical group of downtown workers at the Penebscott Building who decide to go to the nearby Jimmy Johns for lunch. They don't magically teleport to Jimmy Johns. They walk there.

If they instead walked to a food truck instead of Jimmy Johns, where would this increase in foot traffic come from?

You may dislike "cool" but it fills apartments, offices, and storefronts.

It's not that I dislike it as much as I'm tired of it. Detroit has some very serious problems. Quite frankly, we need some serious solutions and the drumbeat of how "cool" something is just isn't cutting it.

[Fnemecek]

Okay, set up a special permit for street vending. Problem solved.

Which is basically what I've advocated. It's just that the fees associated with this special permit need to roughly make up for the difference between the taxes that a brick & mortar place pays and what a mobile operation pays.

[noise]

Fine. Let's say we continue to give food trucks a discount on taxes, while levying heavier taxes on brick and mortar operations.

Where is the money needed to fund government operations going to come from long term?

You're getting pretty "creative" with your word choices here. What "discount" are they receiving?

Maybe you're a liar. They're not getting a "discount". They're not "unwilling" to pay their taxes. You are one of those people who want to tax, tax, tax until the business just goes away. Bleed them dry.

[noise]

Allow me to introduce Company A and Company B, both of which make a living by servicing the needs of the downtown lunch crowd.

Company A pays taxes and fees of $15,000 per year.

Company B pays taxes and fees of $100 per year.

This is neither fair nor is it sustainable in the long term.

Is it not fair if one pays more for rent? Is it not fair if one pays more for supplies?

Fair doesn't apply here at all. One pays property tax because they own property. One does not because they do not own property.

I'm not understanding why this is a difficult concept.

[GUSHI]

I have seen food carts were there are restaurants located, all types of restaurants. Fast food, pizzerias high end. etc

Yes, but you see a lot more hot dog carts in many areas where there arent a lot of restaurants at street level. If Detroit lacks in restaurants in CBD, then food carts and trucks could be encouraged.
I would maybe also try to bring on qualified cooks in ethnic cuisines like Portland manages to attract, and give out permits to deserving providers.

[BrushStart]

Fnemecek, I see your point, I really do. I think that it will affect the sales of brick and mortar restaurants. I expect it will affect all existing restaurants that offer a comparable type of lunch. I also agree that food trucks should pay a premium to operate, but no more than a property tax equal to their physical footprint.

This is because you are forgetting that brick and mortar restaurants have several advantages over food trucks that flow from the cost of owning or leasing real property. Namely, a brick and mortar restaurant can be open all year. Food trucks are mainly seasonal businesses, so in February when the El Guapo truck is parked in Anthony Curis' backyard, the brick and mortar sub-shop will still be ringing the register.

Secondly, brick and mortar restaurants are able to offer their customers a lot more because of their physical real estate, namely the use of a restroom. Also, when people sit down for a meal at a restaurant, they tend to order additional items, like appetizers and drinks. A food truck cannot really offer these things. A restaurant can also cater to dozens of customers at once because of its size, whereas a food truck can maybe only handle two customers at a time. Lastly, because a brick and mortar restaurant has an actual kitchen and not just a grill in the back of a truck, it can offer customers a wide variety of menu items. These are distinct advantages that flow directly from having a brick and mortar restaurant. Is it worth what they pay in property taxes? It really depends on the restaurant.

If it helps, consider this: I own a food truck, serving burgers, dogs, deep-fried taters, ice cream cones, and soda pop. I pay $1,500/year to the city for my license, food-truck registration and in health inspection fees. You, on the other hand, are a street vendor. You tote around a large cooler and a backpack, and sell peanuts, popcorn, pretzels, candy bars and bottled water. You pay $15/year for your street vendor permit because you don't have a need for a truck.

Additionally, assume our customers overlap and that we both sell a lot of product to downtown tourists, sports fans, and event goers. My operating costs are 100x yours. Are you going to put me out of business? Not likely. Even though it is substantially more expensive, I derive a distinct benefit from the cost of having a truck. Namely, I can offer my customers hot, cooked food, a frozen desert, and a variety of beverages, while you can only offer packaged snacks and bottled water.

Not everyone is going to patronize the food source of the lowest common denominator. Some people will want to use the toilet before they eat or wash their hands after a meal. Other people will want to sit in air conditioning or be able to take their jacket off when it gets cold outside. Some people will want to be able to ask for a refill of water or order an appetizer or look at a drink menu. Some people will want a wider selection than tacos and burritos, or will want their food cooked to order. These are all benefits that a brick and mortar restaurant derives from paying rent or property taxes. It's about as fair as one can have it.

Making a food cart, like El Guapo, pay the equivalent in property taxes that Loco's Bar & Grill pays, would severely tip the hand in favor of brick and mortar restaurants. In opposite to what you suggest, it would not be feasible for a food truck to survive because they do not offer as much, and are relying on a lower overhead to capture a narrow demographic of on-the-go customers.

[mwilbert]

In my view, this doesn't have anything to do with fairness. The trucks have [[and should have) lower costs as they don't use downtown buildings and they use a lot less space in general. It isn't as if there is a special property tax on restaurants. Businesses that don't need space in the city don't pay property taxes. But If the argument is that the city shouldn't allow trucks to protect revenue, or should only allow them if they pay high fees to offset whatever revenue may be lost from restaurants because of the competition from trucks, that is a practical argument, not one about fairness.

But it isn't really a very good argument. Imagine the city had the power [[which fortunately it doesn't) to only allow physicians to practice in the city if they were residents, or charge non-resident physicians license fees to offset the fact the the resident physicians have to pay higher taxes. Would that be a good idea? No doubt the city is losing lots of income tax revenue from those freeloaders! It isn't fair! Maybe some people do think those are good ideas, but to me they sound like a recipe for worse medical care in the city, which would be bad. Having fewer attractive, reasonably priced food options isn't as serious, but it isn't good for people who want to eat in the city, and there are a lot of those.

[jsmyers]

Good point BrushStart.

I think it is patently absurd to say that the fees for a truck should be equal to the property taxes on a restaurant. First of all, a "restaurant" isn't taxed, the land and buildings it is contained within are taxed. In a urban place, a restaurant should only be one tenant of many in a piece of property. Second of all, a truck does not require the same amount of public services as a building. At 3:30 am, when the truck is parked in the owner's garage, is the DFD responsible for it's fire protection? Only if the garage is in the City of Detroit, in which case, the garage is taxed.

Lastly, where is this one food truck parked during business hours? [[I may have missed it.) If it is parked on public land, then I think that the city should be charging rent for the real estate. If it is parked on a lot owned by somebody, then that lot owner is paying property taxes.

WRT the argument about whether food trucks increase foot traffic. Fnemecek is right that nobody has provided any more than anecdotal evidence to support the notion. But the same can be said for the idea that food trucks don't put restaurants out of business, except in this case, we have anecdotal evidence to the contrary.

[jackie5275]

I don't see a single food truck as a threat to any current established restaurants. Nor do I see any proliferation of them as a threat because of their limited hours. I often have to take my lunch break late, after 1 pm. By the time I even get to a food truck, they'll either be closed or run out of most everything. However, I can always run over to Jimmy John's or Subway, etc.

[jackie5275]

You may dislike "cool" but it fills apartments, offices, and storefronts.

Just the way Granholm's "Cool Cities Initiatives" did?

[jsmyers]

Just the way Granholm's "Cool Cities Initiatives" did?

I don't think the initiative directly did much of anything, but:
Detroit apartment buildings fill; renters' age falls

[1953]

The food truck seemed to be doing a great business today. Picture here.

[jsmyers]

Who owns that lot?

I bet they are getting rent, and paying property taxes, just like a brick and mortar restaurant.

I'm I wrong?

[SWMAP]

Vacant lots taxed considerably lower than built lots. So , effectively has restaurant in his lot but not paying equivalent taxes!

[GUSHI]

But the truck is not a fixed structure, why should they. So if I own a vacant lot next to my home, why should I pay taxes in the same amount as if there was a home on it. Apples and Oranges.

Vacant lots taxed considerably lower than built lots. So , effectively has restaurant in his lot but not paying equivalent taxes!

[jackie5275]

The food truck seemed to be doing a great business today. Picture here.

The line was even longer when I went past it today. Once again, too long for me to stay in this heat.