The owners of a food truck filed suit today challenging Evanston’s rule that only owners of brick-and-mortar restaurants can operate food trucks in the city.
Backed by the Liberty Justice Center, a Libertarian-oriented public-interest litigation group, the owners of Beaver’s Coffee and Donuts allege in their complaint, filed in Cook County Circuit Court, that the city ordinance violates the equal protection and due process clauses of the Illinois Constitution.
James Nuccio and Gabriel Wiesen claim the donut truck meets all the health-related restrictions in the city code, but they can’t get a city license solely because of the ownership restriction, which they claim is designed simply to protect existing restaurant owners from competition.
A YouTube video produced by the Liberty Justice Center to help make their case against the Evanston ordinance.
Evanston City Attorney Grant Farrar, in a news release, said the ordinance had been carefully crafted.
“City staff worked for months over the course of 2010 to develop a mobile food vendor ordinance, the first of its kind in Illinois, which then in turn was assiduously and thoughtfully considered by the City Council.” Farrar said.
Farrar vowed to “aggressively defend the city’s ordinance.”
In addition to requiring that food trucks be owned by restaurant owners, the Evanston ordinance sets limits on where they can operate, largely designed to reduce competition for existing restaurants.
In City Council debate aldermen indicated they wanted to favor the restaurant owners, who unlike the food trucks directly or indirectly pay property taxes to the city, as well as the sales taxes that both food trucks and restaurants are subject to.
The food truck ordinance here was adopted at the request of the owners of Campagnola and Union Pizzeria, who dubbed their truck the Hummingbird Kitchen.
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Excellent suit
I think this is an excellent suit, and hope the food truck operators prevail. It is not the role of government to protect the business interests of one business over another. The end result is barriers to making a living, decreased choice for consumers, and higher prices for consumers. Even if existing restaurants pay property taxes and food trucks do not, and one finds that objectionable, that is a deficiency in the property tax system set up by government — to penalize businesses for not having to pay a tax established by the government is misguided. While I'm certainly no constitutional law expert… I think the food truck business has a good case.
Yes, it is an Excellent suit
I agree entirely with the poster who wrote with the subject "excellent suit". Well said!
Bill, you should add "Like" buttons!
Protecting business interest
Your argument of govt. not protecting the interest of one business over another is valid. And part of that is insuring that govt. creates a level playing field for all business and that no business has an unfair advantage over another business.
So they shouldn't be penalized, let the trucks come, but they should be taxed and that tax should be based not only upon all the fee's that every Evanston based business must pay, but a comparable cost to match the r.e. taxes that each and every Evanston based business must pay in order to do business here.
And that base calculation should be extended beyond their truck, because virtually every truck uses a commissary kitchen for storage and to prep product before it gets loaded into the truck. And like every other Evanston based business, the kitchens and storerooms are not exempt from r.e. taxes.
Considering what the average restaurant must pay in r.e. taxes I'd say, at very base minimum, an additional $18 to $24 thousand a year should be the lowest starting point, plus all the various licence fees. $18 to $24 thousand plus fees, that's actually a really cheap deal, they still would be getting an unfair advantage.
False logic
There are some flaws in your logic:
1. Government created the current property tax system. It is far from a perfect or fair system, but for now, it is what it is. Evanston does not have the legal authority to charge property taxes on a food truck (even if they call it by a different name). You can say that's unfair all you want, and they may be valid, but to prevent businesses from opening up because you don't like the property tax system government created is silly. The more proper route is to change the property tax system.
2. You say they should pay "all the various license fees" other restaurants do — they would have to nor are they claiming they shouldn't.
3. If they are preparing food and storing food in rented kitchens and storerooms, then they are essentially paying property taxes via the rent/fees they pay to that commercial kitchen storeroom which is paying property taxes.
4. Even if they were to pay equivalent taxes — it would not be close to $18,000 to $24,000 per year. Properties pay, by and large, based on the size and value of the land and property — these are small trucks so equivalent property space would pay far less.
5. Don't forget that these guys would be collecting sales taxes and paying income taxes.
6. Be careful what you wish for. Your position would naturally extend to a lot of businesses. I would assume that you would also want a plumber that pretty much works out of his truck with no physical location to also pay $18,000 to $24,000 a year for the right to work in Evanston?
Fairness
Response.
1) I didn't say I didn't like the property tax system, you did. In fact I think it is a pretty equitable system. You open a retail business in a community, extract cash from that community, you pay real estate taxes to that community.. Whether those taxes are high or low is another discussion, but everybody running a for profit retail business pays r.e. taxes. It is a fair system until somebody (food trucks) wants to game it and proclaim it unfair so they can try and weazel out of paying.
2) all and every license fees, naturally.
3) Simple, they are not paying property taxes to the community they are looking to set up shop in. Want to sell prepared food in Evanston, ie, retail foodservice, you should pay property tax. The delivery system, a truck, is irrelevant. The pizza guy doesn't pay taxes on the size of his drivers car, he pays taxes on the size of his commissary production kitchen to the community he wishes to do business in.
4) You obviously have no idea how much commercial property tax is, and that's part of the point of why this is an unfair advantage that is being requested that is not equitable and completely unfair to the upstanding property paying entities of the community.
A small carryout sandwich shop will pay easily 12K and up in r.e. taxes. The hotels and their restaurants can pay up to, even exceed, a million a year. This is where the truck size becomes irrelevant, the main part of the business is the commissary kitchen, not simply the service counter. Otherwise established business should only pay according to the size of their service counter.
5) Yeah, everybody does that , so what.
6) Plumbers do pay a fee to work in Evanston no matter where they're located. It is also a service business, not a retail business, which is a simple and fundamental difference. Food trucks are retail business.
Business paying taxes to some other community do not deserve an unfair advantage over our home community based business. Step up, pay the freight like every other responsible retail business in the community.
Facts.
=== You open a retail business in a community, extract cash from that community, you pay real estate taxes to that community. ===
Businesses do not pay property taxes… property owners do. Property taxes are not levied onto businesses — they are levied on properties which may or may not house a business. Furthemore, the premise behind property taxes is not that one "extracts cash from that community" therefore "you pay real estate taxes" — it is a tax for services in return.
=== It is a fair system until somebody (food trucks) wants to game it and proclaim it unfair so they can try and weazel out of paying… Step up, pay the freight like every other responsible retail business in the community. ===
They are not trying to weazel out of paying any property — it is not part of their argument. First, there is no legal authority to charge them property taxes and there is no system set-up to assess them, determine their tax rate, send a tax bill, etc. You would need a change in state law. Second, even if it was allowable, Evanston is not even offering that option to them. You make it sound like Evanston said pay a tax or you can't operate here and they rejected that offer and are suing — that is not what this is about.
Good lord, show me one single
Good lord, show me one single retail business that doesn't have the property tax passed directly through to them. It's called a triple net lease, base rent, taxes, assessments. A gross lease virtually always has a provision to directly pass through all property tax increases. If the building holds more than single use the property tax increases get pro rated through to the tenant. Seriously, learn some basic business reality.
It is also not a tax for services in return, commercial property receives very few services from a city, the business sends no kids to the schools, they pay their own garbage pick up, etc. etc. etc.
If you want to open and operate a retail store of any nature in any community then you must pay property taxes, period. Simple stuff.
I realize that property taxes are not what is being talked about, natch, but that is part of the argument about why trucks have an unfair situation over every single business in town that does step up and pay the property tax and why something needs to be done to remedy this situation. Let the trucks come, just pay expenses that are fair and comprable to what everybody else must pay.
Of course there is no legal authority to charge a truck a property tax, but if you want to operate a retail business here, no matter what your delivery system, than there is legal authority to implement a simple fee that can be based and approximated upon what every other business in the community must pay. And sales taxes and license fees have nothing to do with that, everybody else already pays those also. Business owners in this community pay thousands upon thousands of dollars to operate here, what makes you think trucks are above that?
Anything less than what every other business in the community pays is asking for special treatment that favors you over the local business community and that is greedy, selfish and unacceptable.
Love it
I love it!! This ordinance is crony capitalist garbage and needs to go down. God bless the Liberty Justice Center.
Donuts and the city
So this company is suing the city/tax payers and then they want me to frequent their business? As much as I love donuts and coffee I will take my business elsewhere.
Really?
You're kidding, right?
Someone stands up for their right to seek the American Dream and against unconstitutional restrictions and you hold that against them?
REALLY???
Really?
You're kidding, right?
Someone stands up for their right to seek coffee and donuts elsewhere, free of persecution, and you hold that against them?
REALLY???
So this is why we are hiring more lawyers!
At a recent council meeting a new lawyer was added to staff. Recently the city made rather silly claims it saved us $350,000 on recent legal cases. It should be clear to anyone , these are more bongus numbers being generated to justify wasting more of our tax dollars.
Now we see the work of the law department, going after a citizen trying to rent out her home and a business trying to sell dounuts. These citizens are fighting back, in Wally's world there is no cost to this, since he is using city staff, who are already there on the payroll, thats not how the real world operates.
Remember the fight over the tree on the alley $40,000 spent in legal fees spent to try to collect $500.
Ofcourse we may not be able to get to the bottom of the waste here since they will claim its a legal issues and they can't tell us. Maybe the two council members who gave up their law licenses, can comment?
What a waste of taxpayers money.
Ponzi comments before City Council
Ponzi,
I have seen and heard you speak during citizen comment a number of times and wanted to give you a bit of advice that might net Evanstonians some action. Your comments are generally confined to giving Council a litany of items where things appear shady. In most of the comments that I've seen you make, you rarely give Council a finite request other than "this has to stop." In this world we live in, if you do not make a pointed request of people, they will brush you off. "This has to stop" is a broad statement that can be roundly ignored when it follows a long list of items. Give the Council some actionable and pointed requests. A few examples:
Above all, the Council absolutely does not like to be embarassed, something we saw with the recent woman who commented about the eyesore in horrible disrepair next door to her home. She pointed out that she would have been flagged with multiple violations if her home were in the state of disrepair of the building next door. Within two weeks, the situation was resolved when they tore down the eyesore. You can take a lesson from her comment.
Good luck, Ponzi. Keep up the fight – some of your comments bring things to light Evanston taxpayers would not otherwise be aware of.
Regards,
Evanston Homeowner and Tortured Taxpayer
Thanks for the feed back
Thank you , Since you are at the council, there is a huge problem with every meeting that is the council is continual wasting our tax dollars, one can not keep up with the nonsense. At one meeting they wasted $35,000 on a free grant to a private business for food, I think you would agree this was a waste.
They hired a new attonery was it needed? ( recent meeting)
At the silly presentation on public safety they showed their true lack of concern for the safety of children, when they put in a recommendation the schools should fund the program. you have to understand the city wants to not have to manage this, since their parking enforcement employees or police officer need to fill in if there is no guard, therefore their answer is to pretend it saves money to contract it out.
Even more nonsense they want to pretend they have funds for these safety items when they don't even have enough money to restrip the cross walks and speed bumps in town. a few back they had less than $10,000 in the budget- I asked one city employee about this after the meeting and he said he did not want to go there. I would suspect they need hundreds of thousand of dollars for the maintenance, by the why Wally's legal department at some point may have to defend a suit due to them not maintaining all these stupid things they keep putting in if someone is hurt and they are no maintained.
I think as you know we citizens only get 3 minutes and I think they would like to limit those of us who continual point out their screw ups and mistakes.
The Council and Capitalism
We knew the Council was not big on capitalism and they like most liberal groups [and apparently the Evanston voters] complain about big business and the evils of earning money—esp. if someone has a good idea that makes them alot of money.
Now they show that not only do they not like big business but small business. Capitalism believes in free-enterprise and competition. Socialism believes the state should control business and who gets to operate. Competition means lower prices and more a wider selection. 'Shop Evanston' seems to mean shop the stores we allow to operate.
Guess where the Council comes down on this.
Beavers. Sheesh.
Photo op was held across the street from the defunct Tiny Dog Cupcakes, and when I saw the name on the side of the truck, I thought, well, at least it's not "Tiny Beavers"?
Food trucks
As an advocate of "community food systems" and "local economies", I would like to add some information about the food truck issue as it is playing out nationally.
1. Institute for Justice Clinic on Entrepreneurship (based at the University of Chicago) has been working on this issue for a long period of time. Check out the "My Streets, My Eats" page on their website: http://www.ij.org/mystreetsmyeats
In April they hosted a conference. On July 25, the City of Chicago passed a new ordinance supporting mobile food trucks, but adding new barriers to successful food truck businesses.
2. Definition of "local" businesses. According to Local First Chicago (a chapter of the national BALLE organization), a local business is defined as:
a. Owner living within 25 (or 50 ?) miles from the business address.
b. Owner has complete control over business decisions.
c. Business is not publicly traded.
As the co-founder of the Evanston Food Council, I am not yet sure what is the right ordinance for the City of Evanston. If anyone wants to host a community discussion about the ins and outs of mobile food trucks, local economies, food policy, etc., I would be happy to support such an event and work with the host to facilitate a friendly, open, and action-oriented discussion. The best discussion, in my opinion, is one that would make a solid, consensus recommendation to Evanston's City Council.
Debbie Hillman
http://www.FoodVote2012.com
Where are the local food trucks ?
I have not seen the local restaurants having food trucks on the street—except the rare ice cream truck.. Unless I have missed them, it seems like they are not interested in the business and so these vendors, like the donut trruck, are providing a service.
Food trucks could be a big draw. Think of the hot dog vendors there used to be on college campuses—a great thing for students.
I'm sure consturction workers would appreciate such. Even if they are close to a restaurant—-despite the $ the restuarant would get, the construction dust, etc,. would probably not make up for the profit. The workers may not want/like to go to a sit-down restaurant. As it is, I see construction workers walking five or six blocks to a Subway or B-K, but those away from the downtown have even fewer choices.
The city seems to make laws to be a solution for problems that do not exist.
Good luck to the donut dudes
These guys are awesome- I hope they win. I'd love to buy a donut from them.
National press on food trucks
The Wall Street Journal Aug. 9 has a half page article on food trucks. Mostly about big cities like Chicago and Boston, but many of the issues and discussion sounds like what Evanston is having.