Getting a sidewalk permit for outdoor seating is a complex process, but can result in higher revenues

Outdoor seating can help a pizzeria accommodate more people during busy times, and it can also attract more customers. A full patio makes the place seem inviting, and people that walk or drive by see a lively eatery where guests are enjoying food and fun. While outdoor seating can be a plus, it’s not as simple as just setting out some furniture and umbrellas on the pavement. Before adding a patio or other sidewalk dining space, operators must negotiate with their landlords, and get permits from their local governments.

“We would suggest before you put tables outside you make a couple of phone calls,” says Tim Stannard, founding partner of San Francisco-based Bacchus Management Group. The restaurant group includes three Pizza Antica restaurants in Lafayette, Mill Valley and San Jose, California, and all three have patios.

The first call should be to the local planning department, to ascertain whether the business needs to have a permit for outdoor seating. There are construction permits to build a patio, and many jurisdictions also issue permits to use the sidewalk. The application process is usually straightforward, Stannard says, but it’s better to check before signing a lease.

The second call should be to Alcoholic Beverage Control (ABC), or similarly named department that handles liquor licenses. “They can get finicky about how alcohol is moved from an indoor area to an outdoor area,” Stannard says. “If you’re walking from an enclosed area across a public area such as a sidewalk, you’re walking through what they call an uncontrolled environment.”

Permits, zoning and other requirements vary from city to city. For example, Denver restaurants need a Tables, Chairs and Railings (TCR) permit for seating areas adjacent to the establishment. There is an initial processing fee, an annual fee, a field inspection by a city inspector, and the restaurant has to have a Certificate of Insurance. The railings have to define the space and be bolted into the ground. The tables and chairs must not leave the space and create an obstacle for people walking down the street or using wheelchairs.

Even restaurants that have space that is not in the right-of-way have to get certain permits. CRUSH Pizza + Tap in Denver turned an empty space in the front corner of the building into a patio. “We did have to get construction permits in order to have a patio,” says owner Jason McGovern. He also had to get a permit to serve beer, wine and liquor on the patio. “We had to make sure we have a secure patio with a gate, with signage that says, ‘No alcohol beyond this point.’”

Some cities get more specific about sidewalk seating. In New York City, a restaurant that operates a portion of its business on the sidewalk must have a Sidewalk Café License for one of three types of sidewalk cafes: enclosed sidewalk café, unenclosed sidewalk café or a small unenclosed sidewalk café, a single row of tables next to the building. In Chicago, the Public Way Use Unit of the Department of Business Affairs and Consumer Protection issues Sidewalk Café Permits that have nine-month term, March 1 to December 1, and must be applied for every year.

In Seattle, where the wood-burning oven pizza restaurant Bar del Corso opened in 2011, businesses have to apply for a permit from the Department of Transportation. “As long as there is adequate space for foot traffic they will issue you a permit, upon which you have to pay yearly fees,” says chef/owner Jerry Corso.

Bar del Corso also has a patio in back, which Corso negotiated for with the landlord before signing the lease. “We built our patio after we opened, but that is because we had the space out the back door,” he says. “The patio is on the property, therefore the city has nothing to do with it.”

Some cities make it possible for operators to add outdoor seating even if there isn’t enough space on the sidewalk. Seattle has a program in which businesses can convert on-street parking spaces into parklets or streateries. Philadelphia permits parklets through its Streets Department. Los Angeles and Santa Monica, California have tested the parklet concept. Setting up tables in parking spaces is supposed to encourage pedestrian traffic, improve the aesthetics of a block and enhance neighborhoods.

Many municipalities see the benefits of outdoor seating, and so might landlords. “Most good landlords will want you to be successful,” says Brent LaCount, principal at Design Collective, a design and architectural firm in Columbus, Ohio. “A patio can significantly increase your sales by providing extra seating as well as creating a vibrancy to the exterior that drives customers.”

LaCount adds that because most patios are not considered leasable areas, the outdoor seating can significantly increase the eatery’s bottom line without increasing expenses. Leasable area refers to the total enclosed floor space designed for the exclusive use of the tenant.

Restaurant owners should not pay rent on outdoor patios, says Stannard, from Bacchus. “The mistake I see people make is they calculate the rent and they include the patio as part of their lease,” he says. “They pay rent for 12 months, but in some places they can use the patio only six months.”

Stannard says for Pizza Antica leases, the restaurants pay a small percentage of patio revenues to the landlord. “We’re not paying for something we don’t use,” he says. “For the landlord the advantage is when the patio is in use they participate in the sales.” When projecting sales figures, operators should estimate only the amount they will earn with the inside tables, and consider the outdoor tables to be extra. Also, he says, don’t forget to assign enough staff to the outside seats, and also set up a convenient server station.

If a permit is denied, try offering a new plan, with fewer or narrower tables. Every jurisdiction has its own way of handling right-of-way issues, construction permits and liquor licensing related to outdoor seating. Landlords have their own issues, so the key is to handle landlord negotiations and city permits upfront.

Nora Caley is a freelance writer who covers small business, finance and lifestyle topics.