New outdoor street dining charges are “disrespectful” and “piling even more misery” on struggling hospitality businesses, Mount Maunganui restaurant and cafe owners say.

Changes to Tauranga City Council rules intended to create a fairer and more consistent approach and protect footpaths for pedestrians came into effect on July 1 after consultation last year.

Businesses must have a licence to use street space for dining and pay an annual charge based on the size of the area used and the zone in central Tauranga or Mount Maunganui. Previously, only 27 Tauranga CBD businesses were charged.

The council has waived charges for the rest of 2024 and offered an 80% rebate with no administration fee for the first half of 2025 to reflect “difficult trading conditions” in the city and cost-of-living issues impacts on hospitality.

The fees for Mount Mainstreet businesses for the next financial year will be $150/sq m of street used and half that for Mount Central, while Tauranga city centre businesses would be charged $80/sq m and half that for those between Second and 11th avenues. They would also have to pay GST and a $500 administration fee.

Mount Maunganui Business Association destination manager Michael Clark said alfresco dining added vibrancy and helped attract visitors to the area.

Polar Dessert Bar owners Steffi and Michael Clark. Photo / Supplied.

“I don’t think there should be any charges for using these public spaces for those reasons.”

The co-owner of Polar Dessert Bar on Prince Ave said the fees came as many Mount Maunganui businesses faced rising costs, including council rates and the price of goods.

“I don’t think it’s justified for our council to charge us significantly more for street dining spaces than other main centres. This is just piling even more misery onto businesses already struggling.”

The council’s research found Auckland charged a $401 a year permit fee plus $21 to $154 a square metre, Hamilton a $90 fee plus $27 a table and Wellington $190 for a first permit and $95 for renewals, according to a report for Tuesday’s council meeting.

Veronica de Oliveira, owner of Black Orchid Collective cafe and tattoo shop on Prince Ave, Mount Maunganui, was “not happy at all with these new charges”.

She said she would have to pay a “ridiculous” $750 plus GST and fee to place “three little tables” on about 5sq m of footpath.

“Does the council know how many coffees I will need to sell to earn enough to pay these charges?”

Cafe and restaurants owners in central Mount Maunganui will have pay rental fees for street dining spaces from next year. Photo / Sandra Conchie.

She said some shops had closed after a “terrible winter” and businesses were hoping for a good summer.

“We were finally taking a bit of breath in preparation for our main income-earning period and now were hit with these unexpected charges.

“It’s very disrespectful to us business owners trying to hang on and keep going.”

Matthew Yardley, owner of Rice Rice Baby restaurant on Maunganui Rd, said the street dining charges were “outrageous”.

“I have no problem with user-pay charges as I think all businesses should pay something to rent public spaces, but since [opening in] 2019 my rent has doubled and my insurances tripled and having to pay $150/sq m on top of those extra costs is just crazy.”

He said his Hamilton restaurant paid $124 including GST annually for an outdoor dining space 2.5 times as big as he used in Mount Maunganui.

Tauranga CBD businesses offering on-street dining will pay a rental fee based on the size of public space used. Photo / Andrew Warner.

Ralph Ward, co-owner of The Phoenix bar on The Strand, estimated the annual rental for the two outdoor spaces he was negotiating to use would be about $6000 a year.

“While that’s not excessive the fee is still on the high side and in winter and inclement weather we can’t use our outdoor dining spaces.”

Ward said Strand eateries had been hard hit by the “dramatic decline” in foot traffic since the city centre redevelopment started and 180 parking spaces were removed from the waterfront.

“Parking continues to be one of my biggest concerns and like other businesses, my rates, interest on loans and other costs have all increased.”

Mas Eden, owner of Turkish to Go Tauranga on Devonport Rd, said he was shocked and angry to learn he was now expected to pay rental fees to put four tables on the footpath when his sales were down 60% to 70%.

Eden said he blamed much of the decline on the council on-street parking charges and development disruptions.

Turkish to Go Tauranga cafe owner Mas Eden says he will refuse to pay rental fees to put four tables on the footpath. Photo / Sandra Conchie.

He said foot traffic was so quiet on Thursday he only sold two coffees for $10 between 9am and 11.30am.

“I will refuse to pay these [outdoor dining] fees when I’m not making much money. The council needs to do more to help us, there are already a lot of empty shops in the CBD.”

Parking was a constant customer complaint and he said even short periods free of charge would help.

“Some people describe the CBD as a ghost town and these charges will make things even tougher for us.”

Council city development and partnerships general manager Gareth Willis said the council “fully sympathised” with the hospitality businesses facing tough times, and that was why it was offering big discounts on street dining fees.

Tauranga City Council city development and partnerships general manager Gareth Willis. Photo / Alex Cairns.

“It’s important to have written street dining agreements with businesses to ensure pedestrians can properly access public spaces.”

Willis said there had previously been an “equity issue” with many Tauranga CBD businesses paying and Mount Maunganui businesses not.

“Under the old system, charges were individually negotiated with businesses and were based on complex factors, such as valuations and the status of street upgrades.

“The new system is much simpler more equitable and transparent, ensuring fairness and consistency across the city centre and Mount Maunganui.”

Willis said businesses will be able to have their say on future fees during the next annual plan consultation process early next year.

New alfresco charges

What hospitality businesses will be charged for on-street dining per square metre (and with the temporary 80% discount):

• Zone A: Inner city centre, south of Marsh St to First Ave, $80 ($16 discounted)
• Zone B: South city centre, Second Ave to 11th Ave, $40 ($8)
• Zone C: Mount mainstreet, Grace Rd to Salisbury Ave, $150 ($30)
• Zone D: Mount central, north of SH2, Hewletts Rd and Golf Rd: $75 ($15).

-Bay of Plenty Times.