The Daily Pulse:

Downtown Restaurants to Food Trucks: Get Out!

Well, as we kind of suspected might happen, downtown restaurants are not taking kindly to the idea of food trucks being allowed on city streets downtown. Not all restaurants downtown -- we know Knox Mason, for one, is supportive of the food truck scene. But a number of restaurants, including Bistro at the Bijou, the French Market, Crown and Goose, Bella Luna, Cocoa Moon, Koi, Trio, Dazzo's, Coolato Gelato, Soccer Taco, Rita's Italian Ice, Laurel Mountain Eatery, Garrett's Deli, Steamboat, Pete's, Shono's, Cru, Shuck, Southbound, Lil' Vinies, and Da Vinci's have hired a lawyer to try to prevent the city from going forward with its pilot program to allow food trucks on city streets. 

We know for a fact more restaurants are involved (including two prominent spots located rather close to each other that have the same initials), so expect this to continue to heat up as more restaurant owners publicly announce that they're cool with competition with each other, just not with younger, hipper chefs on wheels. Still, we can pretty much say off the bat that we don't think food trucks solely contained to World's Fair Park is going to happen. 

Anyway, here's the letter the restaurants' lawyer, Keith Stewart, sent the city today.

September 6, 2013

Ms. Patricia Robledo, Business Liaison
City of Knoxville
City County Building
400 Main St. - Room 660B
Knoxville, TN 37902

Re:  Food Truck Pilot Program


Dear Ms. Robledo,

Downtown restaurant owners believe food trucks have a place in our city, but not in our downtown. A group of restaurant owners with strong feelings about this issue asked me to speak for them regarding food trucks in the CBID. I have listed those restaurants who wish to publicly declare opposition to food trucks in Downtown Knoxville, but there are many more who oppose the intrusion, but are reluctant to state it publicly at this time. Property owners I have spoken to are unanimously opposed to food trucks. Downtown restaurant owners and property owners oppose food trucks within the CBID and with good reason. Allowing food trucks, food trailers and mobile food vendors of any sort in downtown will adversely affect the loyal customer base, atmosphere, and business developed at great cost to downtown restaurant owners.  

The initial list of concerns regarding food trucks within the Central Business Improvement District (CBID) are as follows:. 

1. The restaurant density in the CBID provides more seats than customers. 

2. Food trucks have little, if any, investment in the community and do not provide a stable tax base for the city.

3. Food trucks do not have restroom facilities and their patrons utilize the facilities of the permanent businesses in their immediate vicinity. 

4. Food trucks can and often do impede pedestrian traffic.

5. Food trucks wrap their vehicles in vinyl advertising creating three dimensional moving billboards.  Some are tacky, some are obnoxious but all in violation of the restrictions applicable to retail merchants as per the design guidelines.

6. Food trucks poach business developed at great expense by restaurants in the CBID and are not required to abide by the same rules and regulations, design guidelines or signage restrictions.

7. Food trucks pick and choose the days and times to operate and enjoy the luxury of good weather, peak dining times and special events all at the expense of restaurant profits.

Restaurant owners have committed time, resources and millions of dollars reviving Knoxville's downtown. It is unfair to allow food trucks, with little or no investment in downtown to poach the lunch and dinner business at their leisure. Every dollar in revenue extracted by the food trucks comes out of the pockets of stable and permanent members of the community. Short term profiteering could easily lead to a diminished stable tax base. The lunch business developed by the fixed location restaurants must be protected from the incursion of food trucks. 

The only zone within the CBID suitable for a pilot program is the World's Fair Park. There is ample parking, it is pet and pedestrian friendly, and it is sorely underutilized. There are permanent public restroom facilities. Other than the World's Fair Park being used for a one year pilot program, downtown restaurant owners are adamantly opposed to any mobile food vendors in the CBID.

Downtown property owners should be consulted regarding the impact food trucks will have on their rent rolls and tenants. David Dewhirst, Buzz Goss, Leigh Burch, Tim Hill, Kevin Grimac, Nick Cazanas, Tony Cappiello, Philip Welker and John Trotter, among others, should be consulted for input on the impact of food trucks on their businesses and tenants. We fear that unless food truck are prohibited downtown there will be significant long term impacts to the tax base.  

Restaurants pick locations and pay dearly for pedestrian traffic. Location is an essential element of any business but especially of restaurants. If food trucks are allowed to poach customers, avoid zoning and signage restrictions and all that is required of permanent commercial residents, consequences will be dire. I am happy to discuss food truck zones, regulations, and the concerns of downtown Knoxville Restaurant Owners with you at your convenience. I look forward to working with you.

Yours truly,

Keith D. Stewart
cc: Bill Lyons
Rick Emmett 
Downtown Knoxville Restaurant Owners

Restaurants opposed to Food Trucks 
in Downtown Knoxville: 
______________________________

Bistro at the Bijou
The French Market Creperie 
The Crown and Goose
Bella Luna
Cocoa Moon
Koi
Dazzo's Pizza
Coolato Gelato
Rita's Italian Ice
Soccer Taco
Laural Mountain Eatery
Garrett's Deli
Pete's Coffee Shop
Shono's in the City
Steamboat Sandwiches
Trio Cafe
Cru Tapas
Shucks Raw Bar
Southbound
Lil Vinnie's
DaVinci's

Meanwhile, food truck owners have banded together to form the Knoxville Mobile Restaurant Association. Here's a copy of a letter they sent the city last week, pointing out that some of what the brick and mortar restaurants want is, well, totally illegal. (We hear that KMRA tried to work out a deal with Stewart beforehand, but had no luck.)

Dear Ms. Robledo: 

I am writing on behalf of the Knoxville Mobile Restaurant Association ("KMRA"), as both a member and a director of the KMRA. We are pleased that the City of Knoxville is considering revising its ordinances to allow for an increased presence of mobile restaurants ("MR"). We believe that this increased presence has many actual and potential benefits for the Knoxville business and cultural communities, including, for example: 

1. Speed & Convenience: Because orders are taken, prepared, and delivered from the same place, service can typically be provided at far greater speed than at a fixed-location restaurant. This allows for Knoxville workers to eat and return to their job duties in as little as 15 minutes, instead of sitting down for lunch for over an hour.

2. Culture: Building a city in which great people want to live is about more than providing great services and building great infrastructure (although we recognize the vital importance such activities play). It is also about creating and fostering great culture. Allowing small businesses with lower capital requirements to compete for market share will bring young, smart, educated, and idealistic entrepreneurs to our area. More importantly, fostering business models that allow local producers to market their produce to local consumers will help mend the disparity between the urban and rural communities and create a more enlightened food culture in East Tennessee.

3. Increased Business Activity for All. As the Institute of Justice, a nonprofit law firm, has noted: "Claims that food trucks spell doom for local restaurants are not only unsupported, but are also contradicted by the experiences of other cities, which have enthusiastically welcomed mobile-food entrepreneurs. For example, the continued growth of the food-truck industry in Los Angeles--the birthplace of the modern food truck--in no way diminished L.A.'s vibrant restaurant scene. Citing Los Angeles and Austin as positive examples, a group of restaurateurs in Pittsburgh have joined together to ask their city to get rid of restrictive regulations that have stifled the growth of the food-truck industry there because they have recognized that the "cities with the most vibrant food-truck scenes also have booming restaurant industries."

Indeed, food trucks all over the country are helping to bolster the local restaurant industry in (at least) three specific ways:

  • Food trucks' presence increases the number of customers available to restaurants. Austin's food trucks and food trailers are a rising tide lifting all boats in the local restaurant industry; one way they have done so is by attracting more people--both new residents and tourists--into the city. In Houston, restaurants have experienced increased business generated by food trucks parking nearby and drawing more people to the restaurants' neighborhoods. It is for this reason that restaurant owners have asked the Houston City Council to ease existing laws that make it difficult for food trucks to operate. And in Las Vegas, George Harris, the owner of Mundo, an award-winning upscale restaurant in Las Vegas, has observed that food trucks help his business by bringing new customers to the neighborhood.  Furthermore, historical evidence suggests that banning food trucks from an area in which they currently operate will harm nearby restaurants by decreasing the number of potential customers. For example, when street vendors were banned from New York's Lower East Side and Chicago's Maxwell Street Market, brick-and-mortar businesses complained that they suffered lower revenues as a result. Simply put, food trucks draw people out of their offices and homes and into the community, opening their eyes to all of the meal options their neighborhood has to offer.

  • Food trucks provide restaurants with a great way to market and expand their business. All over the country, restaurant owners are launching their own food trucks. For example, the owners of Curried, an Indian restaurant in Chicago, started a food truck with the same name in order to better market the restaurant. Mission accomplished: "We've definitely seen an increase in business at the restaurant," says Scott Gregerson, Curried's managing partner. Jose Hernandez, general manager at POPS Cheesestakes in Las Vegas, says that the business at the restaurant's physical location has been boosted by the restaurant's food truck: "The truck has been great advertising." Brian Pekarcik and Rick Stern, co-owners of Spoon and BRGR restaurants in Pittsburgh, just launched a BRGR truck for the same reason. "As brand recognition, it's a great advertising piece," they explained. "And we expect that it will drive customers to our restaurants." Similarly, Paul Lee, owner of The Winchester restaurant in Grand Rapids, Mich., explained that he opened the What the Truck food truck to serve "as an extension of [T]he Winchester. It allows for us to reach a greater audience and provide something unique to the city."
  • Food trucks often serve as incubators for new restaurants. Several restaurants got their start as food trucks: Many chefs with a great concept, but without enough capital to start their own restaurant, launched food trucks to bring their cuisine to customers. Finding success in the food-truck arena, these chefs then accumulated enough capital to launch their own restaurants. For example, the New York Food Truck Association has 42 members, and 40 percent of them--including Mexicue, Souvlaki GR and Schnitzel & Things--now also have brick-and-mortar establishments.
These entrepreneurs are not an anomaly. Hundreds of other food-truck owners, have also opened new restaurants. Without the availability of the food-truck business model, these chefs might not have been able to open their restaurants.  In sum, food trucks provide a boost to a city's restaurant industry. (Point No. 3 was adapted from Institute of Justice, Seven Myths and Realities about Food Trucks: Why the Facts Support Food Truck Freedom (attached).  

Many of the existing MRs that currently operate, or desire to operate, in the downtown area have chosen to come together as the Knoxville Mobile Restaurant Association, Inc., a nonprofit mutual benefit corporation. Current members include Savory & Sweet Food Truck, Hoof Knoxville, Mr. Canteen, Tootsie Truck, and Bulls BBQ Bus. We believe that this association will be able to greatly assist in helping to regulate and self-police the operation of MRs in our community. The KMRA membership will be open to all MRs who meet certain objective criteria, such as possessing a Food Establishment Permit from the Tennessee Department of Health, maintaining insurance policies in amounts sufficient to protect the public, and doing a certain amount of business in the Knoxville area.     

As the City considers revising ordinances that impact mobile restaurants, we ask that the City be mindful in the real-world, actual economic and cultural impacts such regulations will have. We also ask that the City recognize that mobile restaurants already comply with many other regulations promulgated by various bodies.

Permits/Licenses for Mobile Restaurants. We note that as existing restaurants, mobile restaurants have already obtained the same licenses, permits, and registrations as any other business or restaurant in Knoxville--we have City and County business permits, we have registered with applicable tax agencies, and we have Food Establishment Permits from the Tennessee Department of Health. In order to receive such permits, we are already required to comply with a variety of regulations, all designed to promote health and safety. For example, the Health Department already prohibits mobile restaurants from discharging any water during operations; rather, wastewater must be discharged into an approved sewer source at the mobile restaurant's fixed-location commissary (which, under Department of Health regulations, it is required to have). Likewise, the Department of Health also addresses life safety issues, such as requiring fire extinguishers and adequate ventilation.   

Consequently, we feel that any additional City of Knoxville permit should only require that the food truck operator demonstrate compliance with existing regulations: that is, once the food truck operator has shown that it has a Food Establishment Permit from the Department of Health, City and County business licenses, and has registered with the applicable tax agencies, no further requirements should be imposed on food truck operators in order to do business within the City limits.  

Distance Requirements. We urge the City to reject any form of mandated proximity from other businesses, including fixed-location restaurants. Proximity is not a factor for government officials to consider, nor is it the City's responsibility to protect established businesses from competition. Indeed, the U.S. Court of Appeals for the Sixth Circuit--which includes Tennessee--said as much in response to a lawsuit challenging a government-imposed monopoly on the sale of caskets. In ruling that the government cannot impose protectionist regulations that restrict individuals' right to earn an honest living, the Sixth Circuit flatly ruled "that protecting a discrete interest group from economic competition is not a legitimate government purpose." Craigmiles v. Giles, 312 F.3d 220, 224 (6th Cir. 2002). Any proximity restriction that Knoxville enacted would similarly be unconstitutional.

Besides the blatantly unconstitutional nature of proximity restrictions, the arguments made for them are absurd. Restaurants open up next door to other restaurants every day, with no uproar. Restaurants will not close because a food truck has rolled into their community. In fact, food trucks draw people outside and into the economy, opening up potential customers' eyes to new opportunities, be it street food or restaurants and shops. Restaurants and food trucks offer different experiences that have different advantages and disadvantages. It is ludicrous to write an unconstitutional law and risk litigation and bad publicity based on a restaurant's fear that they will go out of business because a family going out for a nice dinner might be deterred by a different type of business across the street. 

Knoxville should reject protectionist efforts and instead enact clear, simple, and modern laws that focus exclusively on protecting the public's health and safety. Arbitrary and anti-competitive laws like proximity restrictions and ones that severely limit when trucks may operate restrict healthy economic activity and hit those on the first rung of the economic ladder hardest--those with neither the time nor the resources to fight back politically.

Central Business Improvement District. We recognize that the FLRs have worked long and hard to improve, and have made substantial investments in, the downtown area.  One of the ways that they have invested in our community is through their assessments paid to the CBID. We feel that it is right that the MRs, as neighbors and fellow beneficiaries of the investments made through the CBID, contribute. We propose that the KMRA pay voluntary annual contribution to the CBID. The KMRA would be responsible for paying the voluntary payment to the CBID, and would collect dues from its members to fund such payments. The KMRA asks, however, that it be responsible for helping to schedule MR's access to the CBID zones.

Special EventsGiven that the City is only considering a pilot program now, we feel that it is inappropriate to address the presence of MRs at special events.  We believe that this topic is best addressed at a later time, and under separate cover, if necessary.  

The KMRA is meeting again on Wednesday, August 28th, at 6pm, at the Saw Works Brewing Company.  We would like to invite you to join us at that meeting if your schedule permits. Alternatively, I am happy to meet with you on behalf of the KMRA at any time. We had reached out to the attorney representing several fixed-location restaurants to discuss working together; however, they have rejected our overtures.  

Again, we are pleased that the City of Knoxville is taking proactive steps to allow for increased business by mobile restaurants. We look forward to serving the residents and visitors to this great community, and hope to be a part of making Knoxville a national leader in cultivating a sustainable food economy.  

Best regards,

Johnathan K. Borsodi 
Project Manager, Century Harvest Farms
Director, Knoxville Mobile Restaurant Association 

How long will this battle last? Stay tuned ...


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