New Arlington Alfresco dining tax would add 8 cents to cost of a $10 drink
Arlington Heights village trustees are on board with a new tax on restaurant bills in the downtown area to help pay the setup and maintenance costs of the popular summer Arlington Alfresco outdoor street dining area.
The additional local 0.75% food and beverage tax, which would be added to patrons' receipts starting Feb. 1, would mean paying 75 cents more on a $100 meal, or about 8 cents more on a $10 drink.
The extra tax, on top of the existing 1.25% village food and beverage tax, would be charged year-round but only at about a dozen restaurants within the Alfresco zone surrounding Vail Avenue and Campbell Street.
Officials say it would generate $141,000 a year — enough to cover the village's annual expenses, which are estimated to be $90,000 for public works overtime, equipment, materials, supplies and signage.
The mayor and seven trustees present for a committee discussion Monday night endorsed the proposal presented by the village staff; it still requires a formal vote on an ordinance at a village board meeting in January.
But they stopped short of supporting a related idea to charge a $1,000 annual licensing fee to as many as seven restaurants outside the Alfresco area that might use blocked-off portions of public streets for outdoor dining.
Such a fee would directly affect those restaurants' bottom lines, many of the trustees said, whereas the Alfresco tax would be paid directly by diners, including those who live in Arlington Heights and those who don't.
Finance Director Tom Kuehne, who initially proposed the tax during budget discussions last month, recommended Alfresco costs not be paid through the property tax-based general fund. The added food and beverage tax would provide revenue to the village's arts and entertainment fund, which currently isn't large enough to pay for the Alfresco zone, Kuehne said.
Village Manager Randy Recklaus and Arlington Heights Chamber of Commerce Executive Director Jon Ridler said downtown restaurant owners are OK with the tax, believing it would not hurt their businesses.
“The consensus is if it's going to be something on customers, the restaurant owners want to be able to explain what that is and why, and be able to support that,” Ridler said. “It's going to be a lot of communication.”
Ridler even suggested expanding the tax villagewide and creating a reimbursable program for restaurants outside the downtown that don't get as much exposure and aren't doing as well.
A village study showed restaurants in the Alfresco zone received a significant boost in their summertime sales over restaurants not in the zone. The analysis compared the sales figures of summer 2020 and 2021 — when streets were shut down for outdoor dining — to pre-pandemic 2019.
The board also agreed to reauthorize a waiver of minimum parking requirements to allow for outdoor dining on private lots outside the Alfresco area.
The elected panel set the start and end times of Arlington Alfresco from the first week of May through the last week of September. Like this past year at the end of Alfresco, the village and chamber would host Harmony Fest before the streets are reopened.
Trustee Jim Tinaglia suggested organizers explore expanding the festival from two days to three. Most trustees were open to the idea, but Mayor Tom Hayes and Trustee Tom Schwingbeck preferred it remain only a Friday and Saturday event.