To assess the revenues and costs of their Downtown Restaurant Overlay District (ROD), the City Manager of Fullerton, California conducted a comprehensive audit. They sought to determine the effects of a newly high-concentration of alcohol outlets in their downtown community. In part, they concluded that the high concentration of downtown bars and restaurants cost the city a significant amount of money – even after factoring state sales tax and other revenues.
We focused on the public-safety facets of this study alone, and did not include the development and maintenance services costs Fullerton audited. We illustrate below Fullerton taxpayers were effectively subsidizing bar and restaurant establishments – to the tune of about $15,000 per establishment – all to cover the costs of police, fire and rescue services provided to the establishments and their patrons.
Cities and community advocates can learn the financial impact of high-concentration bar and restaurant districts throughout their communities by following this model. Once cities make such a practical assessment, they can take measures to mitigate these costs through the adoption of local land-use policies, adopting and enforcing best business practices, and recover program costs through fee-based assessments.
Public Safety Costs vs. Sales Tax Revenues – 49 Bar & Restaurant Establishments
| Fullerton Public Safety Costs | |
| $ 811,880. | Police Services |
| $ 326,950. | Fire Services |
| $ 1,138,830. | Total Public Safety Costs |
| $ 23,241. | Average Public Safety Expense per Establishment |
| Sales Tax Revenues | |
| $ 413,790. | Sales tax, business registration, fire permits and engineering revenues to city. |
| $ 8,445. | Average Sales Tax Revenue to City per Establishment |
| Annual Costs | |
| $ 14,796. | Average Net Cost to City per Establishment |
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