Food trucks eat at business?

Terri Buckner reports on the food truck debate:

If there was any greasing of palms at the food truck hearing last night, it was goose fat. The many references to goose fat fries had everyone drooling and wishing the trucks in the parking lot could open up for just a little while.

Unlike many public hearings, tonight’s audience, as noted by Matt Czajkowski, was full of positive energy and enthusiasm. Due to some unfortunately misplaced car keys, I got to the hearing late, and missed the 3 to 4 local restaurateurs who expressed their concerns. By the time I got there, the truck owners and the truck owner wannabees were sharing their histories and their hopes for coming to Chapel Hill on a more regular basis. Currently, some of the trucks are invited to local festivals and events, but town zoning ordinances do not allow them to legally operate at any time other than special events.

The primary opposition to allowing trucks to visit more regularly is the restaurant owners’ fear of unfair competition. The trucks have lower overhead costs and could, without regulation, park in front of restaurants, stealing away their clientele. But as one truck owner said, people go to restaurants to be served. That isn’t the street food experience, so there really isn’t direct competition. What no one raised is the fact that restaurants serve a more varied menu and alcohol. Their costs may be higher, but so is their income potential.

The benefits of owning a truck over a brick and mortar restaurant are lower start-up costs, the ability to focus on a very limited menu, and the opportunity to test a concept before launching into a full-scale business. Only Burger is an example of this incubator model. They continue to operate their truck, but they also have a brick and mortar restaurant.

Trucks are required to meet state and local health department inspections, although the inspection is not rated in the same way as restaurants. In Durham, they must hold a business license and an itinerant merchant permit. And they are required to be tethered to a commissary (fixed structure). As the Parlez-Vous Crepes owner told me at Johnny’s Food Truck Round Up last week, she pays for fees, licenses and taxes “through the wazoo,” and that is on top of rent to the property owner.

Besides the truck owners and restaurateurs, George Draper, chair of the Downtown Partnership, and Aaron Nelson, head of the Chapel Hill-Carrboro Chamber of Commerce, both expressed their concerns about competition with existing businesses. Mr. Draper doesn’t feel like this is a good direction for downtown. Mr. Nelson suggested a compromise that the required commissary would have to be a Chapel Hill restaurant.

So the bottom line of the debate is local start-up businesses, innovation and great food choices versus fear of unfair competition. The council asked the manager to conduct a review of best practices for towns similar to Chapel Hill (over abundance of restaurants in downtown). Stay tuned.
–Terri Buckner

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  1. Mark Marcoplos

     /  March 1, 2011

    Interesting that the Chamber opposes innovative entrepeneurship and free-market capitalism on this issue.

  2. Linda Convissor

     /  March 1, 2011

    George Draper noted that he was speaking as a property owner downtown, not as the chair of the CH Downtown Partnership. He did mention that the CHDP is surveying downtown businesses and would not take a position until hearing from them and listening to the comments made at the forum.

    I’ll second what Terri said about the hearing – although some supported the idea and others opposed, overall it was upbeat, lively and just plain interesting.

  3. Anita Badrock

     /  March 1, 2011

    I enjoy eating at the food trucks all around the Triangle. As a former small business food service owner, however, I understand the concern from businesses that are paying premium rents to operate restaurants. Here are the things to be considered.

    I had to provide 2 handicap access restrooms, , comply with ADA design requirements for access to my restaurant, obey sign ordinances that required me to pay extra for custom signage, and I was not allowed to use public areas outside my business for seating, signage, trash receptacles, or serving my food.

    A quick service restaurant does not provide “full service” and does not usually serve alcohol. The rent it pays is based on location and visiblity. If a food truck can park in the public space in front of my quick service restaurant and use the public spaces to vend its food, does that mean that I can move my operations to the sidewalk in front of my location–or somebody else’s? Can I park my painted delivery truck in front of my business without being issued a ticket for violating the sign ordinance (true story!)? Where will the food truck vendors and patrons dispose of their trash? Will the food truck be required to pay for dumpster and recycling services, as all restuarants currently do?

    And what about supporting local business? How is a food truck owned by a guy in Clayton that drives all around the Triangle selling his food a local business? How does that business invest in the local community? Does he pay taxes on his food truck in Orange County? Where does the sales tax he collects on his food go?—where the truck is registered, where the sales occur, where the owner lives, or where his business is incorporated?

    Demonizing small business owners who have made a commitment to this community by complying with all local laws and who pay premiun rent to do business here because they are concerned about their business’ viability if this ordinance passes is wrong. Instead we should be asking ourselves what expectations we would have of any business, mobile or stationary, that wants to set up shop in our community and benefit from our purchasing power.

    I think there is a solution that can accommodate both, but the business community’s concerns are valid and should be part of the discussion. Otherwise you may wind up with a bunch of empty storefronts (that are empty 24 hours a day, 7 days a week) and a bunch of food trucks parked downtown from 11-3 M-F. Does that sound like a desirable outcome?

  4. Terri Buckner

     /  March 1, 2011

    I’m sorry if anyone thinks I demonized local businesses. I’m not advocating for opening the doors to food trucks with no regulation. But I also don’t think we need to regulate ourselves out of this opportunity. For example, there was some discussion about banning the trucks from downtown because of parking. But if the zoning ordinance is structured properly, it should be the truck owners decision if downtown is a viable spot, i.e., is there enough potential business to make it financially worth their while. In this instance, regulating in anticipation of a problem that may never occur doesn’t make sense. If the trucks are not taking parking spots used by local businesses, if they aren’t blocking access to handicap parking, if they have access to electricity and water (and trash disposal), if their signs meet regulations, if they have all the required licenses and have paid all the required fees, and if they understand how to submit their sales tax receipts for business done in Orange County, isn’t that enough? We don’t impose other competition constraints on brick and mortar businesses.

    As the truck owners said repeatedly, they are in business. They aren’t going to make bad business decisions, such as driving all the way to Chapel Hill without a profitable spot to locate on. One guy shared that his truck gets 8 mpg so it costs him $35 just to drive over here. If he is a pizza truck, it wouldn’t make sense for him to park close to an established pizza place. But he might do just fine over by the Carolina Inn. Would that be considered unfair competition?

  5. Anita Badrock

     /  March 1, 2011

    Terri, I wasn’t talking about your comments. I always find you thoughtful and fair.

  6. Anita Badrock

     /  March 1, 2011

    And I do think there is a solution that could expand the local offerings and drive more business to everyone. It is also true that business clusters help everyone—if an area is known for good retail or good food, then it stimulates traffic to the area for that purpose.

    My only point is that we have businesses who have made the commitement to the local community, and paid the “price of admission” and their voices and needs are a valuable part of the overall discussion and shouldn’t be dismissed as some seem wont to do.

  7. Fred Black

     /  March 1, 2011

    Mark, we all know how you feel about the Chamber, but your characterization of Aaron Nelson’s statement is just flat wrong. You obviously didn’t hear the very positive suggestions offered.

  8. Seth Elliott

     /  March 1, 2011

    I think part of established restaurants’ “commitment to the local community” should be making really good food. Downtown Chapel Hill may have 80+ restaurants, but I can count the really great ones on one hand. Consistently good? Two hands. None of these places have anything to fear from food trucks. They should welcome the innovation and increased focus on the town’s food culture. Those who should be afraid are the restaurant owners who have capitalized on mediocrity. They’ve taken advantage of a college town’s transient population and greater number of visitors and have somehow survived while serving up nothing special.

    Those who enjoy good food made by people who care about what they are doing should welcome food trucks with open arms. Let the competition for food dollars begin. Let the war for the right to make food in this saturated market, mobile or not, be waged on our taste buds. We’ll all be better off for it.

  9. John Kramer

     /  March 1, 2011

    Shame Chapel Hill cannot follow the lead of its neighbor Durham, they of course have it all figured out.

  10. Mark Marcoplos

     /  March 1, 2011

    Fred – I was responding to the report I read here. Perhaps, out of respect for Nelson’s message, the information provided here could have been more comprehensive.

    But am I to understand that Nelson does not want policies designed to protect existing restaurants from competition?

  11. Fred Black

     /  March 1, 2011

    Mark, I don’t think the point was protecting them from competition, but to treat them fairly.

  12. As far as taxes, take a look at Wake County’s website here:

    I missed dinner last night so the discussion was more than enticing…I would’ve been buying a slice of pizza and/or BBQ sandwich if they trucks had been serving in the Town Hall’s parking lot.

    I thought the BBQ Joint’s owner (a former bricks-n-mortar concern) made some excellent points.

    Most of the competition concerns I heard were from Town center (TC1-3) business folks – which makes sense. There’s limited “frontage”, tough parking and a major investment required to be in that district.

    Elsewhere, though, even if the BBQ Joint parked its truck next to Jim’s BBQ on Eliot Rd. would it really impact Jim’s business? That’s the broader competition question Council has to answer.

  13. Terri Buckner

     /  March 2, 2011

    Durham’s commitment to food truck is being extended by the creation of an independent (entrepreneurial) business incubator that will serve as a commissary for the trucks.

    Couldn’t the new food processing center in Hillsborough serve a similar purpose?

  14. Scott Maitland

     /  March 2, 2011

    Yes Terri, I think it could. It could also address the two issues that I have with this idea:

    1) It could then also facilitate the county ensuring the trucks meet the county’s food service regulations.

    2)It could then facilitate the collecting of taxes to make sure that sales made in Orange County stay in Orange County.

    As the owner of the second largest independent restaurant in the state of North Carolina and a citizen of Chapel Hill and Orange County, I welcome all competition that comes to Chapel Hill because I believe that our real issue is not competition from other actors in Chapel Hill, but rather competition presented by Southpointe, Downtown Durham, Glenwood South, etc. for regional dining dollars.

    However, I also think that sales tax for sales made within our county needs to stay in our county (and at the very least just needs to be paid). And public health shouldn’t be compromised by applying different or no standards to food trucks.

  15. John Kramer

     /  March 3, 2011

    As long as Mayor Kleinschmidt goes on believing that Chapel Hill has more restaurants than Durham (yes, he said that!) and using that for a food truck excuse things will never change. You need to spend more time in Durham, mayor and educate yourself.

  16. John, Mark actually said that there’s more restaurants Downtown Chapel Hill than in Durham (where he works). He mentioned how you can’t walk a block here without passing 15 establishments – some which are really good – while he has to scramble to find any place to eat near where he works. He mentioned the “chicken and waffle” joint (quickly adding how wonderful it was) and another place tucked away – hard to find – that he eats at daily.

  17. John Kramer

     /  March 3, 2011

    Well maybe you should go over to American Tobacco and Bright Leaf Square/main st., both in town, rather than take his word for it. You will then realize just how wrong he is.
    Not only does Durham have more restaurants, they have better ones in general.

  18. Terri Buckner

     /  March 3, 2011

    Amazingly, I agree with John on this one. The Mayor’s day job is located in the middle of an area that has some outstanding restaurants—Scratch, Beyu, Rue Cler, Toast. I haven’t tried all of them yet, but my Durham friends are giving me lists to work my way through. They are more funky/trendy than most of the Chapel Hill restaurants, without the long histories of Top of the Hill, 411, Spanky’s, etc.

  19. Joe

     /  March 3, 2011

    Per capita, Durham has nothing on Chapel Hill, in terms of restaurants. I certainly don’t think that anybody should consider Durham as a standard bearer for anything business related, as their downtown is mostly vacant or under utilized. Durham has food trucks because Durham has virtually no regulations on business whatsoever, which is why there’s a skyscraper on 15-501, strip malls on every corner, and Falls Lake is horribly polluted (Jordan lake, soon… thanks Durham!).

    Chapel Hill has maintained its high standard of living and desirability due to carefully considering and weighing each detail when it comes to development. Throwing out any kind of consideration of regulation of food trucks because Durham has a few food trucks would be short sighted folly. Durham has been an economic black hole, with a few vocal advocates shouting “Durham is up and coming” for the past 20 years. Durham’s business climate hasn’t changed one bit, except for a few big money developments downtown that are both empty and bankrupt several times over.

    Chapel Hill should take time and thoroughly consider all sides of the issue, and not just jump on the bandwagon because our economically anemic neighbor is doing it.

  20. Terri Buckner

     /  March 3, 2011

    I hope there’s a middle ground between thinking through new ideas and reacting. There is value to agile business practices just as there are costs to acting without thinking through the details. I enjoy being in downtown Durham; there’s an energy there that I find appealing. That doesn’t take anything away from Chapel Hill, any more than all the Carrboro-ites do. What’s good for Durham, may not be good for Chapel Hill. But we can still recognize that they have good restaurants and a lively night life that achieves some of the goals of the town council and the downtown booster groups.

  21. Guys, I was just clarifying what Mark said not validating it! It’s been awhile since I’ve eaten in Durham but we usually stuck with Brightleaf, 9th St., Main and Broad St. places rather than Downtown.

  22. John Kramer

     /  March 3, 2011

    Joe, you are such an unabashed Chapel Hill snob. Still sad that Duke smacks down UNC in basketball? There are actually more intellectuals in Durham but they are not snobbies.

    Anyone who has spent any time in both towns cannot, without considerable bias, consider Downtown durham anything but the best. Kleinschmidt needs to get a map of Durham.

    Will, those places ARE part of downtown. Geez, stay in Chapel Hill y’all, don’t ruin Durham.

  23. John I’ve spent my fair share of time in Durham the last 30 years. Spent a lot of time walking around Duke campus proper and areas north of Trinity campus. Given that, I guess I see a difference between the Downtown district – which I consider to be between Washington/Geer/Mangum/Durham Freeway – and the smaller hubs centered on Brightleaf, 9th St. and north Broad. I’m sure that the Durham downtown boosters and government see it more along the lines you suggest – just relating my personal view of the area.

  24. Joe

     /  March 7, 2011

    “Anyone who has spent any time in both towns cannot, without considerable bias, consider Downtown durham anything but the best.”

    Opinions aside (You know what “they” say about opinions), Durham is rife with commercial vacancies, while Chapel Hill has very few.

  25. Terri Buckner

     /  March 7, 2011

    Comparing Durham and Chapel Hill just doesn’t work. It doesn’t work for Mayor Kleinschmidt and it doesn’t work for John Kramer or Joe. Durham has an industrial history so it has lots of large old buildings that make for (relatively) cheap sites to try out new commercial businesses. Chapel Hill has limited business/commercial space making it a more risky place to start a new business. But Chapel Hill has more established restaurants and bars, in part I imagine because to make them successful they have to be well capitalized with strong business plans behind them.

    The cost of the average home is Durham is under $200,000 (per the town of Chapel Hill communications department) while the cost of the average home in Chapel Hill exceeds $300,000. Different populations, different tastes and markets. Many Durham residents commute to Chapel Hill daily; many Chapel Hill residents commute to Durham daily. Most of us shop and seek entertainment in both towns. Why don’t we try just appreciating the differences instead of this silly one-upmanship?