Fairmount Park fee gives new business 'sticker shock'

**raider.adam** · 08-01-2010, 11:37 PM

Fairmount Park director Mark Focht says the unique users' fee dates to the 2004 arrival of the city's first Segway company, I Glide (I Glide Tours & Rentals - We Rent Segway ® Human Transporters). He can't recall how the $5,600 figure was reached.

Focht says the Segway companies are similar enough to pay the same rate as a matter of fairness.

Monica Yant Kinney: Fairmount Park fee gives new business 'sticker shock' | Philadelphia Inquirer | 08/01/2010

Here's a rule of thumb. If you can't explain how you get the tax number, you probably have a problem with that tax.

**desolate** · 08-02-2010, 07:27 AM

Her arguemnt that she doesn't use the park is the irritating one.

-I don't use the park just the Parkway-

"Vella knew she had to pay hundreds in permits to do business in the city, but admits to "sticker shock" upon learning what Fairmount Park would charge her to operate six months a year: $5,600.

"They say it's for using the park, but we don't really use the park," she says. "We stop across from JFK Plaza. We ride in the street on the Parkway. We're not even allowed to go in Rittenhouse Square."

and then..

""These tours are for-profit businesses using public land," he reasons. "They want to be in the park because it's beautiful, and we maintain it. They have to pay for that.""

**desolate** · 08-02-2010, 07:29 AM

SO it's tough.

She's directly benefiting from using the city's park system.

But she doesn't want to pay a fee (albeit high)

any grass that's public in the city is "fairmount park" or rec center.

**Hospitalitygirl** · 08-02-2010, 08:24 AM

It's a ridiculously high fee--and Adam is correct in why here. By the way, this woman has posted in the Old City forum about her new business (I think someone started a thread about the new tour), and did explain some things.

No one is saying that she should or shouldn't pay something, but face it, there are enough 'businesses' that use some portion of the grounds and don't pay.

**Illiniwek** · 08-02-2010, 09:24 AM

It's a shakedown, pure and simple.

Oh, and "looking at" isn't the same as "using."

**desolate** · 08-02-2010, 10:02 AM

Originally Posted by Illiniwek

It's a shakedown, pure and simple.

Oh, and "looking at" isn't the same as "using."

No Parkway or Parks,

no reason to have segway tours "looking" at them.

I agree the fee is excessive.

But using public land for personal gain..

I mean loggers, oil, food vendors at the Mummers parade, everyone has to pay something.

**Illiniwek** · 08-02-2010, 10:29 AM

Originally Posted by desolate

No Parkway or Parks,

no reason to have segway tours "looking" at them.

I agree the fee is excessive.

But using public land for personal gain..

I mean loggers, oil, food vendors at the Mummers parade, everyone has to pay something.

Yes, but she's not cutting down trees, drilling holes, operating a concession stand or interrupting traffic for a day. And she is using the public-right-of-way that traffic uses to pass through the park without being charged.

BTW, she's already paying "something": the wage tax, the business privilege tax, the were-you-even-thinking-about-money-because-we-get-a-fee-for-that tax, and no doubt a council member will soon hit her up for a contribution to help pay for Brady's birthday present.

**Hospitalitygirl** · 08-02-2010, 10:39 AM

Originally Posted by Illiniwek

BTW, she's already paying "something": the wage tax, the business privilege tax, the were-you-even-thinking-about-money-because-we-get-a-fee-for-that tax, and no doubt a council member will soon hit her up for a contribution to help pay for Brady's birthday present.

Thank you.

**desolate** · 08-02-2010, 01:42 PM

Originally Posted by Illiniwek

Yes, but she's not cutting down trees, drilling holes, operating a concession stand or interrupting traffic for a day. And she is using the public-right-of-way that traffic uses to pass through the park without being charged.

BTW, she's already paying "something": the wage tax, the business privilege tax, the were-you-even-thinking-about-money-because-we-get-a-fee-for-that tax, and no doubt a council member will soon hit her up for a contribution to help pay for Brady's birthday present.

It was the whole

"I'm only driving down the Parkway"

argument that made me not really feel for her.

And again, the fee is excessive, but not without any merit.

**billy ross** · 08-02-2010, 01:45 PM

The reason she's broke isn't because of the city's fees. It's because she foolishly decided to buy brand-new equipment for a cash-poor startup rather than lease it or buy it used. There is a reason airlines lease their jets. Startups which buy brand-new equipment are run by people who don't know what they're doing. Southwest cornered the market on used 737's. Yuengling (which was just about a startup when Dick Yuengling took over from his old man) cornered the market on the obsolete kegs that everyone else was unloading.

Put another way, even in the absence of any fees from the city this young lady would still be broke. Blaming her status of being broke on the city is deflecting the blame away from herself. Startup funds for a new business need to go into working capital, not physical capital. It's the #1 reason most startups fail - they failed to manage their cash flow properly.

When you're broke you don't buy Cadillac products. You cash flow your way into decent stuff, but you start out with cheap stuff. If the cash flow is strong enough you can lease. What will she get for those (now) used Segways if her business fails? Pennies on the dollar? She'd be better off benefitting from someone else's misfortunes.

**eldondre** · 08-02-2010, 01:57 PM

don't know if I agree with billy here. $5600 seems like a lot of taxes to pay on top of her actual taxes (which are supposed to pay for park maintenance). that's comes out after cost of goods sold. ouch. it seems more likely this iditic stuff is why philadelphia's poverty rate is the highest in the nation for large cities.

**raider.adam** · 08-02-2010, 02:15 PM

Originally Posted by billy ross

The reason she's broke isn't because of the city's fees. It's because she foolishly decided to buy brand-new equipment for a cash-poor startup rather than lease it or buy it used. There is a reason airlines lease their jets. Startups which buy brand-new equipment are run by people who don't know what they're doing. Southwest cornered the market on used 737's. Yuengling (which was just about a startup when Dick Yuengling took over from his old man) cornered the market on the obsolete kegs that everyone else was unloading.

Put another way, even in the absence of any fees from the city this young lady would still be broke. Blaming her status of being broke on the city is deflecting the blame away from herself. Startup funds for a new business need to go into working capital, not physical capital. It's the #1 reason most startups fail - they failed to manage their cash flow properly.

When you're broke you don't buy Cadillac products. You cash flow your way into decent stuff, but you start out with cheap stuff. If the cash flow is strong enough you can lease. What will she get for those (now) used Segways if her business fails? Pennies on the dollar? She'd be better off benefitting from someone else's misfortunes.

You are missing the point.

The focus of the story isn't her. Startups struggling happen all the time and isn't news. Her business is the backdrop of the story.

The story is that there is a $5600 fee in the City that no one can explain outside of "we assessed it to someone else, so it only seems fair".

All the additional fees you put on a new business increases the cost of entry.

**Illiniwek** · 08-02-2010, 03:05 PM

Originally Posted by billy ross

Southwest cornered the market on used 737's.

Southwest didn't corner the market on used 737s. What Southwest did was choose to operate with only a single aircraft type as a massive cost-saving measure. As a result, all its mechanics are trained on only on 737s, its stocks includes parts for only 737s and its pilots are certified for 737s. If they need to replace a flight crew, for example, they can replace any pilot with any other, as opposed to, say, American, which operates a wide variety of planes.

Used 737s are available from a variety of sources.

**billy ross** · 08-02-2010, 03:44 PM

Originally Posted by Illiniwek

Southwest didn't corner the market on used 737s. What Southwest did was choose to operate with only a single aircraft type as a massive cost-saving measure. As a result, all its mechanics are trained on only on 737s, its stocks includes parts for only 737s and its pilots are certified for 737s. If they need to replace a flight crew, for example, they can replace any pilot with any other, as opposed to, say, American, which operates a wide variety of planes.

Used 737s are available from a variety of sources.

Southwest has cashflowed its way into wealth. When it was still tight for cash, it bought up all of the used, cheap 737's it could, to the point where they became scarce. Now it has enough cash to buy new 737's, just like now Yuengling has enough cash to buy new, modern kegs. The large capital investments came after the cash flows were demonstrated and had produced enough excess cash to be able to easily afford the large capital investments, and not before. Before the business model had been demonstrated these smart companies kept their cash outlay to a minimum, even if it meant that their operations would be somewhat hobbled by using clapped-out equipment. In this way they could get out / cut back with minimal to zero losses if the business didn't pan out as hoped. This woman has foolishly followed a different route.

**billy ross** · 08-02-2010, 03:49 PM

Originally Posted by eldondre

don't know if I agree with billy here. $5600 seems like a lot of taxes to pay on top of her actual taxes (which are supposed to pay for park maintenance). that's comes out after cost of goods sold. ouch. it seems more likely this iditic stuff is why philadelphia's poverty rate is the highest in the nation for large cities.

If this woman runs her business for only 7 months out of the year (I don't buy the six month season crap), she's paying $800 per month in 'rent' to be able to run a business throughout Fairmount Park. That doesn't seem exhorbitant to me. I see those people doing Segway tours in Fairmount Park, and their commercial use of motor vehicles in the park is not incidental at all. How much does Steven Starr pay in rent to run Rouge? How much do the Duck Boat people pay for parking spaces and boat slip fees to run their businesses? Maybe Fairmount Park doesn't want to have 20 different operators doing 20 different things, so they keep the hurdle high so that there are only three or so operators. As can be seen with the duckboat situation and also the Marcellus Shale extraction, there is a justification for keeping the number of operators down and the quality of operators up, lest some sloppy operators tar the responsible operators via their poor business practices. I believe that PHA is doing the same thing with Section 8 / Housing Choice Voucher 'vendors'. It would rather have fewer but better operators, so it is trying to chase away the mom and pops. Now, if there are only three operators then they will pay only less than $20k per year, but it seems that the city has been letting park vendors get away with murder for years, and now it is belatedly trying to extract some cash out of the wealth that is created. I have zero problem with that. How much do hot dog cart vendors in Center City make? (Ungodly amounts of money) How much do they pay the city in taxes / fees? (Peanuts) Is that fair? The city has been leaving alot of money on the table, and it's past time that it adopted a more businesslike attitude towards vendors. If someone wants to set up shop on my sidewalk to sell something, you can bet your dupa that I'm going to want a piece of the action, unless I feel like doing a public service.

**billy ross** · 08-02-2010, 04:02 PM

Originally Posted by raider.adam

You are missing the point.

The focus of the story isn't her. Startups struggling happen all the time and isn't news. Her business is the backdrop of the story.

The story is that there is a $5600 fee in the City that no one can explain outside of "we assessed it to someone else, so it only seems fair".

All the additional fees you put on a new business increases the cost of entry.

$200 bucks a week to chase away fly by night operations. It's eminently affordable considering that the business is operated in the park and that this would be its major land cost.

**raider.adam** · 08-02-2010, 04:09 PM

Originally Posted by billy ross

$200 bucks a week to chase away fly by night operations. It's eminently affordable considering that the business is operated in the park and that this would be its major land cost.

Nice to see you admit the tax structure is designed to chase business away.

**billy ross** · 08-02-2010, 04:16 PM

Originally Posted by raider.adam

Nice to see you admit the tax structure is designed to chase business away.

You're being dense. This isn't a tax - it's a user fee. It is the equivalent of rent. I own storefronts. I rent them out. I price the rents sufficient that the tenant can make money, but I also don't want the first person to take it either. I price them high enough that most people walk away when looking at them. I'm fine with that. Am I driving away business? Some people don't understand that if my rents are 10% higher I can be at 90% occupancy and still get as much money as the guy with the lower rents who is at 100% occupancy, plus I have the benefit of having vacant units which I can improve and get the rents even higher, or improve and make maintenance much easier, by doing things like upgrading antiquated wiring or plumbing while the unit is vacant. It's a female dog to do maintenance work on buildings that are at 100% occupancy. Once my vacancy gets close to 10% I start cutting rents, and as it gets close to 5% I raise them, and I am comfortable that I am chasing business away.

**Illiniwek** · 08-02-2010, 04:40 PM

Originally Posted by billy ross

Southwest has cashflowed its way into wealth. When it was still tight for cash, it bought up all of the used, cheap 737's it could, to the point where they became scarce. Now it has enough cash to buy new 737's, just like now Yuengling has enough cash to buy new, modern kegs. The large capital investments came after the cash flows were demonstrated and had produced enough excess cash to be able to easily afford the large capital investments, and not before. Before the business model had been demonstrated these smart companies kept their cash outlay to a minimum, even if it meant that their operations would be somewhat hobbled by using clapped-out equipment. In this way they could get out / cut back with minimal to zero losses if the business didn't pan out as hoped. This woman has foolishly followed a different route.

Southwest never had a sufficient share of the used 737s on the world market to gain price-setting power, which is the standard definition of cornering a market.

Yes, cash strapped businesses should forgo purchases of new items when cheaper used items will suffice. But that has nothing to do with cornering a market.

**raider.adam** · 08-02-2010, 04:45 PM

Originally Posted by billy ross

You're being dense. This isn't a tax - it's a user fee. It is the equivalent of rent. I own storefronts. I rent them out. I price the rents sufficient that the tenant can make money, but I also don't want the first person to take it either. I price them high enough that most people walk away when looking at them. I'm fine with that. Am I driving away business? Some people don't understand that if my rents are 10% higher I can be at 90% occupancy and still get as much money as the guy with the lower rents who is at 100% occupancy, plus I have the benefit of having vacant units which I can improve and get the rents even higher, or improve and make maintenance much easier, by doing things like upgrading antiquated wiring or plumbing while the unit is vacant. It's a female dog to do maintenance work on buildings that are at 100% occupancy. Once my vacancy gets close to 10% I start cutting rents, and as it gets close to 5% I raise them, and I am comfortable that I am chasing business away.

All them words still sound like you are advocating for the city to price things to keep some people from doing business in the City.