Wednesday, January 2, 2013

Local news: Food trucks and movie theaters

Two fun bits of local (Chicago) news, lest you think that over regulation, incumbent protection, rent-gathering and general idiocy reign only in Washington. Food trucks and movie theaters.

If you travel from California or New York to Chicago, especially the beautiful but food-deserted campus of the University of Chicago, you will notice a striking absence: food trucks, which serve a bewlidering variety of tasty treats in other cities.

Finally, last summer, our City council passed an ordinance allowing food trucks to cook food, along with a bewildering variety of restaurant-protecting restrictions, such as that they may not operate within 200 feet of a restaurant, they can't park for more than two hours, they must carry an on board GPS to verify position, and so on. 

Today, the Chicago Tribune reports on the success of this program: 
Of the 109 entrepreneurs who have applied for the Mobile Food Preparer licenses that allow onboard cooking, none has met the city's requirements, ..

The process of getting a license is just too daunting, according to Rodriguez and Fuentes, who cite bad experiences with city bureaucracy, steep additional costs and the need to retrofit equipment among the reasons.

"I think many food truck owners are hesitant to even pursue cooking onboard because of their haunting experience with working with the city," Rodriguez wrote in an email. 
(Kudos to Rodriguez for having the courage to write on the record, and good luck with her next application.)
....Chicago's code includes rules on ventilation and gas line equipment that "are meetable but extremely cumbersome and can raise the price of outfitting a truck by $10,000 to $20,000."..

...the additional ventilation equipment (with intake and exhaust fans similar to those in brick-and-mortar kitchens) also raises the height of trucks to 13 feet, making certain Chicago underpasses impassable.

Aaron Crumbaugh, who operates the Wagyu Wagon, ....said he is outfitting several trucks for franchisees in other cities whose processes for licensing are clear-cut.  "But here they don't know exactly what they want," he said. "Every time a truck comes in (health officials) say 'You need this' but then when you come back they say 'No you need that' and then the next time they find something else."
The Tribune did a much more balanced job of including quotes from city employees defending themselves. I'm a blog so I don't have to be balanced. The numbers speak for themselves. Zero.

Even closer to home, the Hyde Park Herald reports on the current status of redevelopment at 53d and lake park. U of C alums will remember how unpleasant this area had become, and perhaps a hotel, restaurant, shops and a movie theater might be welcome? No, with the theater ready to go, zoning agreed to a year ago (and a theater had been in this spot many times before),
..the Department of Business Affairs and Consumer Protections has required a 60-day window before issuing a business license. The 20 registered voters who live within 200 feet of the theater, 5283 S. Harper Ave., can use this window to voice their objections to the theater operating before the city will issue a license. “If we didn’t have to go through that we’d be showing films today. By forcing us to comply with this irrelevant statute it’s basically robbed the community of their theater through this holiday season,” Fox (the developer) said.
Good thing that Fox can apparently afford to fund an empty building for two months. And with all the costs paid, if 20 people think they don't want the annoyance of a movie theater next door, they can force him to lose his entire investment.

This all seems little and petty. But Chicago, like the US, is broke. It says it wants more businesses. Until actual businesses try to open.

Really, if we can't get food trucks and movie theater regulations to work, how do Dodd Frank and the EPA have a hope?


  1. But we all already knew that Chicago is endemically corrupt and has been for a long time. Maybe it's the water ...

  2. At least they haven't infringed on your soda cup rights. Yet.

    I can't read the Trib story. It's behind a paywall.

    The theater deal is just stupid. The comment period should be held before the building permit is issued.

    I'm conflicted about the food trucks. The food trucks are "new" businesses in the sense of opening 3 Chik-fil-A's even though the demand for fast food is level. They cut up the pie into smaller pieces (pardon the food analogy). It's not like they're opening a food truck factory.

    These new businesses might not really help the city's revenues. If the food trucks drive restaurants out of business you kill off part of your tax base. Unlike restaurants, food trucks pay no property tax. If restaurants are supplanted by food trucks then property tax revenues will decrease. Since food trucks are less labor-intensive you'll probably lose jobs which also lowers tax revenues and increases social safety net costs.

    Could we level the playing field by assessing taxes on the food trucks? They'll still erode the restaurant customer base.

    Help me out here. I find myself arguing for protectionism.

  3. So, if we can't get food trucks and movie theaters to work, how can we hope for "clear and simple" rules you advocate?

    btw, I live in Chicago and there are at least 5 food trucks parked outside of the building I work in during lunch hour. The last thing I want is for them to start cooking the food on their trucks instead of in a proper kitchen

  4. In San Francisco we have seen a proliferation of food truck, largely because the red tape to open a restaurant is extensive and there is litte red tape to clear to start a group of trucks.

    While we have had a growth of new and different food truck choices recently, the trucks have been around for a long time. Traditionally, they serviced the industrial zones, construction sites, and locations with few eating options. What do people do in Chicago if they work in a "restaurant desert?"

    I have an economics puzzle regarding the trucks. New entrants do not steal business from the existing establishments. As the diversity of food offerings increases, more people seek out the trucks. The truck operators have regular meet-ups and encourage new trucks to join the circuit. This is a case were supply actualy does create demand.

    If restaurants "got with the program", they may realize that the trucks are not a threat. A truck on the same block as my restaurant will attract diners to my front door.

  5. Excellent posting. I just linked to it on Google+.

  6. I think that your first sentence misplaces a lot of blame. I was a business owner for seven years, before becoming an economist. I faced hassles from township, county, and state levels all the time, just like what you describe here. Never once faced any hassle of any kind from the federal government.

    For the most part, the federal government doesn't care what businesses do until it really becomes a problem they can no longer ignore. Local governments are another matter; they cultivate personal relationships with incumbent businesses, and endlessly harass newcomers.

    I don't know where this idea of burdensome Washington regulations and red tape came from, but it certainly hasn't been the case in my lifetime.

  7. "I don't know where this idea of burdensome Washington regulations and red tape came from, but it certainly hasn't been the case in my lifetime"

    There's a man who never read his OSHA manual or had to bill Medicare.


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