City of Ballwin’s Sales Tax Receipts in Decline Prior to Smoke-Free Law

We’ve all heard it before.  St. Louis suburb, the City of Ballwin, passes a smoking ban and restaurant sales decline after the effective date.  You know what?  It is true.  Sales & tax receipts have declined since the law took effect on January 2, 2006.  There, I said it.  That is the part, and the only part, the pro-smokers what you to know.  They use this to scare other cities into believing that they too will have a reversal of fortunes if they pass a smoke-free law. What politician will vote for something they’ve been told will reduce their city’s budget?

“There are three kinds of lies: lies, damned lies, and statistics.“

Numbers can be manipulated to show just about anything.  So when someone says that sales declined after a certain point you have to ask what were they doing prior to that point?  Were they ascending prior to that point?  Are their other factors responsible for a decline?

The fact is the City of Ballwin’s receipts had been in decline for several years prior to their smoke-free law.  A friend of mine, a graduate of Saint Louis University’s Masters in Urban Planning & Real Estate Development program working in real estate and economic development consulting, pulled sales tax data from the Missouri Department of Revenue (source) and created the following charts for me to use:

In reading the above note the blue line represents all sales in Ballwin measured based on the values on the left side.  The red line represents restaurant sales as measured by the values on the right hand side.  The are plotted together to see how they fall relative to each other.  The vertical line shows the point when the smoke-free law took effect.  As you can see all sales and restaurant sales had been in decline for years before the smoking ban.

The above shows restaurant sales as a percentage of all sales.

Sales per establishment appear relatively unchanged.  Of course some may have seen a big decrease while others saw a big increase.  But the sky over the City of Ballwin did not fall as is claimed by many.

The number of establishments has varied before and after the law took effect.  Do we see a trend of lots of business closures?  No.

All four charts can be viewed in greater detail here.

A month ago,  comments on Clayton’s discussion of going smoke-free on STLToday.com the City of Ballwin was used as an example of why the smoke-free laws should not be enacted — the sky will fall.

Bill Hannegan   May 5, 2009 2:04AM CST
Harry Belli, owner of Harry’s West in Ballwin, recently wrote to Mayor Goldstein and the Clayton Board of Aldermen detailing the economic hardship the Ballwin smoking ban caused his business:Dear Mayor Goldstein, I am writing you on behalf of Bill Hannegan with Keep St. Louis Free. He asked me to give you my opinion on the discussions regarding the smoking ban. A little history about myself. My name is Harry J. Belli. I presently own Harry’s Restaurant and Bar in downtown St. Louis. I also own the Sidebar on Washington Avenue and owned Maggie O’Briens Pub for 30 yrs. I owned and operated Harry’s West in Ballwin on Kehrsmill and Clayton Roads. We were open at the Ballwin location for 10 years. The Ballwin location had always had the policy of no smoking in the dining area, but allowed smoking in the bar/lounge and patio areas. Our customers were always given the option of separate smoking and non-smoking areas. The alderman in the City of Ballwin approached us about the smoking ban and we told them of our concerns. I can tell you, I believe we were right. The original plan was no smoking inside and within 25 feet of our building. This plan included no smoking in the patio area. We did get them to change that part of the plan and at least allow smoking in the patio area. The aldermen said that by banning smoking we would get the non-smokers to come in. Unfortunately, this was not the case. We saw no increase of either diners nor bar patrons seeking out a non-smoking environment. Subsequent to the smoking ban, Harry’s West lost between 10% and 15% of our revenue within the first 30 days. That was $2000-$2500 per week or approximately $130,000 per year. What kind of financial slope would the City of Clayton be in if it were to lose 10% to 15% of it’s tax base? I can assure you that it is not a good position to be placed in. We could not overcome that loss and eventually closed the Restaurant. We employed 40 people that lost their jobs and the City of Ballwin lost tax revenues. However, I am sure that the surrounding municipalities enjoyed their windfall. We were definitely not the only dining establishment to close their doors and to my knowledge, no restaurants and bars are eager to open in Ballwin. The problem with banning smoking by municipality is that the establishments are anywhere from a couple of miles or sometimes yards away from establishments that allow smoking, giving the non-smoking establishments an unfair disadvantage. It just makes no sense, unless the ban is imposed state-wide. I believe that if the restaurants and bars give their customers the option to dine in a smoke-free environment and their smoking customers the option to eat and drink in the bar/lounge/patio areas, that you accomplish the best for both and don’t lose your hard earned dollars, not to mention jobs and tax revenue for the City. I also believe that a municipality ban will discourage new businesses from wanting to open up shop in an area that will put them at a distinct disadvantage….. Sincerely, Harry J. Belli

A response was enlightening:

Enlighten Me   May 5, 2009 10:03AM CST
Mr. Hannegan -With all due respect to business owners and Harry Belli, Mr. Belli does not know what’s happened in Ballwin after their Clean Air Ordinance went into full effect on January 2, 2006. Your constant repeat of Belli’s letter to Clayton is getting old…real old. Here are the real facts:As quoted in a St. Louis Post-Dispatch Suburban Journal news article on June 28, 2007, “Tom Aiken (Ballwin’s City Planner) said life after the ban has remained status quo. After reviewing business license fees, which are based on gross receipts, two years prior to and one year following the ban, there was no dramatic difference in any business’ numbers, Aiken said. Aiken said that while some residents attributed the closing of several businesses to the ban, those restaurants’ sales histories showed a decline in business several years prior to the legislation. He said restaurant sales throughout the city had both decreased and increased with the ban, but the difference in percentage points was so little that it was impossible to conclude whether either was a result of the no-smoking ordinance”. Staff has recently reviewed numbers to date and this trend…or lack thereof…continues. Harry’s West lost significant lunch crowd when Citicorp moved to Wentzville and dinner crowd when Chesterfield Valley exploded with development of retail and restaurants. Let’s continue.French Quarter Bar: When Ballwin was considering their ordinance, the owner of the bar said he would be shut down by it in three months. Today, three years later, it is still a thriving business with live music offered often. Ashley Daniels, general manager of the French Quarter Bar and Grill in Ballwin, said her business is booming. We are absolutely more successful now than we were before the smoking ban,” Daniels said.More: Red Lobster, Lone Star and O’Charleys – These chain restaurants have relocated to Chesterfield Valley and operate there as a 100% smoke free restaurant voluntarily. There has been much discussion by the cities located in the Manchester Road corridor of the negative effect the booming Chesterfield Valley development is having on all retail and restaurants. Harry Belli has stated on several occasions that the Chesterfield Valley was negatively impacting Harry’s West. Chili’s, Krieger’s Pub and All Stars: Often cited as establishments that closed because of Ballwin’s law but Chili’s was located in Manchester, Krieger’s in Ellisville and All Stars in Chesterfield. The Ballwin postal area extends from Des Peres on the east to Wildwood on the west…far beyond Ballwin’s city limits. When one uses “Ballwin” as a location, it doesn’t necessarily mean within the city limits.Existing, New and Expanding Business in Ballwin – Mi Lupita, a Mexican restaurant in Ballwin, saw a 10% increase in sales after the ordinance went into effect said the restaurant’s assistant manager Raul Haro. They increased their space as well. Sky Music Lounge, a live music bar in Ballwin located in the Barn at Lucerne opened post-ordinance and last friday expanded by adding a sports bar. The owner embraced the idea of smoke-free air and patrons come from all over to hear live music in a smoke-free atmosphere. Harry’s West was located at the same intersection. Charlotte’s Rib and Fortel’s were smoke free before the CAO and remain at the same intersection today. Lone Wolf Coffee Company just opened in Ballwin in late 2008 also near the Barn at Lucerne. Senor Pique, a Mexican restaurant that began in Manchester, has recently moved to Ballwin in the vacated O’Charley’s space. Manchester does not have a smoke-free ordinance. The restaurant is very busy and will be so tonight for Cinco de Mayo. Candicci’s just received the green light (April ’09) to operate in Ballwin. Applebee’s has retained their Ballwin location but closed its restaurants in Wildwood and Chesterfield.Finally, Ballwin’s CAO has been in full effect for over three years and their police have written NO ordinance violations. This is the REAL story about Ballwin. It’s a shame that opponents to Clean Air can’t see through the smoke.

The above commenter knows that other factors, such as competiton from Chesterfield and Citicorp’s move, has impacted Ballwin’s businesses.  Taken together with real sales data from the Missouri Dept of Revenue (above) shows that the City Ballwin may be a good case study afterall.  If your receipts are declining they will likely continue to decline regardless of a smoke-free law.  Just wanted to clear the air.

The Future of a Tiny Vacant Lot on Cherokee Street

For decades a handsome 3-story building stood over the SE corner of Cherokee & Texas (map).  The building served as home to the Empire Sandwich Shop.

By 2005 the Empire was closed.  The building’s owners, unable to sell the property, “gifted” it to the City of St. Louis.  Within months the roof caved in.  9th Ward Alderman Ken Ortmann was faced with a “heartbreaking” reality: emergency demolition of the building.

In the 3 years since the building came down the city owned corner has changed little.  The ground is uneven and bare.  It is a hole in an otherwise mostly intact and up and coming commercial district.  The other three corners at the intersection are in the 20th Ward represented by Ald. Craig Schmidt.  Furthermore the South side of Cherokee Street is the Gravois Park neighborhood while the North side is Benton Park West.  Add in the Cherokee Station Business Association and you quickly get a lot of interested parties.

In October 2008 it was announced “the Incarnate Word Foundation has agreed to invest $25,000 to seed what those who care about the neighborhood decide would be most effective in answering these questions.”  A meeting was held to get ideas.  Out of that came three concepts: a free wi-fi network for Cherokee Street, a community garden and a plaza on this vacant corner lot (more info from Cherokee Street News).  In November a community vote on the 3 concepts was held.

The plaza on the vacant city owned lot won the vote, eventually.  Voting took place over a couple of months.  The plaza idea was announced the winner in late January (view).

Alderman Ken Ortmann refused to release the lot, he wants to keep it available for new construction.  He supports grass but with the city staying in control of the lot.  I agree the lot needs to have a building.  There is no such thing as a temporary plaza.

A couple of people brought the issue to my attention.  I called Ald. Ortmann to discuss.  I’ve been at odds numerous times with Ald Ortmann before but in this case I think he is right to hold out for a new building. I agree with him that a miscommunication occured.  This is why email makes such a nice record.

So what is the wait?  Yes, the current economy is a mess.  But 3 years later no grass?  No RFP (Request for Proposals) issued by the city to unload the lot and get a new building?

Further reading:

• Cherokee Street at Texas Avenue: A Lot of Contention (RFT 4/16/09)
• Posts at Cherokee Street News on the plaza dubbed the ComeUNITY Hub

All this talk of Cherokee Street has me thinking I need to find a smoke-free place there for some good Mexican food!

Clayton To Go Smoke-Free While St. Louis Debates

Board Bill #46 has been introduced at the St. Louis Board of Aldermen.  If approved it would make establishments in St. Louis smoke-free.  The trick, is it would not go into affect until St. Louis County passed a similar measure.  To give the County the political leg it needed to pass a smoke-free law I supported such a trigger mechanism.  But last month neighboring municipality and county seat, Clayton, took a big step closer to going smoke-free by July 2010:

Last night the Clayton board of aldermen gave initial approval to a smoking ban for businesses and restaurants that would go into effect in July 2010.

The bill needs one more reading before becoming law, though it looks to be virtual done deal at this point. Just one alderman voted against the ban yesterday and that’s because he believes it is too weak. (He’d like to see smoking prohibited in public parks and green spaces, as well.)

When the ban becomes law, Clayton will become only the second of St. Louis County’s 91 municipalities to enact a smoking ban.

Last night, Clayton mayor Linda Goldstein said she hoped her city would prove to be an inspiration. “If we pass this ordinance, Clayton will serve as an example to other municipalities and will give them encouragement to pass similar legislation.”  (Source: RFT)

While Illinois is smoke-free, the only smoke-free municipality among the 91 in St. Louis County is the Western suburb of Ballwin.  The Jefferson County of Arnold is also [partially] smoke-free.  But with the abutting suburb of Clayton expected to be smoke-free by July 2010 it changes the political landscape for the City of St. Louis, to a degree.

The bill to make St. Louis smoke-free was introduced by 28th Ward Alderman Lyda Krewson.  Her ward includes the many restaurants along Euclid Ave in the Central West End as well as the city’s portion of the Loop along Delmar.   Most of the Loop is in University City, in St. Louis County.  Krewson doesn’t want to pit establishments against each other, especially on the same street.

University City Mayor Joe Adams was among five Mayors that signed a letter in January urging the St . Louis County Council to adopt county-wide smoke-free legislation.  Clayton’s Goldstein was another.  University City abuts both Clayton & St. Louis.  Will University City also adopt smoke-free legislation?  If so, the Loop could be smoke-free end to end without action by St. Louis County — if University City & the City of St. Louis both passed smoke-free ordinances.

I recently tried the trendy Loop pizza place Pi, located in the City’s section of the Loop.  As regular readers know, I only patronize smoke-free establishments.  The hour long wait to be seated confirmed a place can be both smoke-free and successful.  For the record, it was totally worth the wait!

The restaurant business is tough.  I can think of many places, both smoking & smoke-free, that have closed over the years.  Smoke-free laws are often blamed for the closure of establishments that likely would have closed anyway.  But as we all know places close with or without smoke-free laws.  The smoke-free laws are simply an easy scapegoat for failed businesses and pro-smoking advocates.

Clayton & Ballwin do not have one thing St. Louis does: casinos.  While casinos are not for me, I know I’d avoid Missouri casinos and head to Illinois if so inclined.  But casinos have disproportionally more smokers than the population.  Would St. Louis’ lose business to nearby casino’s if it went smoke-free?  Maybe, maybe not.  A tourist in town wanting to take a drag as they pulled the slot machine lever would find casinos on both sides of the river downtown smoke-free.  Would they drive or take a cab to a smokey casino in St. Louis County or St. Charles County?  Perhaps?  The question is if customers & employees at St. Louis casinos should continue to be subjected to unhealthy air because of a fear of a loss of tax revenue?

So perhaps St. Louis’ smoke-free bill should be amended to take affect upon the earliest of two events:  1) the active date of a  St. Louis County smoke-free ordinance or 2) January 1, 2011.  If the St. Louis County Council passes a smoke-free regulation that would go into affect on say August 1, 2010 then St. Louis’ law would be triggered for that same date.  But otherwise St. Louis would go smoke-free on January 1, 2011 — six months after Clayton.  This doesn’t address the casino issue but it does give other municipalities the comfort of knowing they would not be alone if they too went smoke-free.

St. Louis’ bill is in the Health & Human Services committee chaired by 27th Ward Alderman Gregory Carter.  My Alderman, Kacie Starr Triplett (6th Ward) , is on this committee.

UPDATE 6/2/09 @ 3pm — added the word “partially” before Arnold.

Headquarters Symbolic of Old GM

General Motors is expected to file for bankruptcy protection today.

The GM that helped move the world from horses to Chevys and Cadillacs is expected to file for bankruptcy protection Monday. The new GM that emerges sometime in the future will be leaner — unsaddled from much of its debt and labor cost disadvantages that contributed to tens of billions of dollars of losses. It will also be almost three-quarters owned by U.S. taxpayers.  Source: AP/USA Today

But GM’s headquarters can’t be made leaner as easily.

I saw GM’s Renaissance Center, now branded as Ren Cen, in 2006 while returning to the U.S. from a vacation in Canada  The iconic headquarters gleamed in the sunlight but failed  to impress me.  It symbolizes the old GM — bigger than life, too big in fact.  Disconnected.  It is like tail fins on a Cadillac in an era of Honda Accords.

The history is interesting, starting life with Ford, not GM:

On November 24, 1971, Henry Ford II, then chairman of the board of directors of Ford Motor Company, announced the Renaissance Center project to the Detroit Common Council.  One year later, site clearance for the Center began.  On July 1, 1976 the first office tower (Tower 100) was opened.  A formal dedication was held on April 15, 1977 for the four, 39-floor office towers and the 73-story hotel.Renaissance Center Phase II, Towers 500 and 600, was opened in 1981, as a separate venture developed by subsidiaries of Ford Motor Land Development Corporation and Rockefeller Center, Inc. and purchased by ANR Ren-Cen, Inc. in 1984.

On May 16, 1996, General Motors announced the purchase of the Renaissance Center for use as its global headquarters and later announced a $500 million renovation of the Center.  The GM Renaissance Center is now home to more than 6,000 GM workers and 4,000 Center tenant employees.

• The total square footage of the GM Renaissance Center is 5.5 million.  The office towers include 2.2 million square feet of space; 230,000 square feet is dedicated to retail space. The Marriott Detroit at the Renaissance Center is one of the tallest hotels in the world with 1,298 guest rooms.
• Construction on the Ren Cen began May 22, 1973 (Phase I).
• Project architects were by John Portman & Associates.
• The Ren Cen has its own zip code – 48243.
• The GM Renaissance Center sits on 14 acres.
• There are four 39-story towers (508’ high each).
• The 73 story 1,298 room hotel (Marriott) is 726’ high and 188’ in diameter.
• There is a 5-story glass enclosed atrium (GM Wintergarden).
• There is a 12 ft. wide glass circulation walkway with access to all four towers (for exercise purposes, you need to walk around 8 times for one mile).  Source: gmrencen.com
  

Like so many projects of the era, the large site was cleaned and started over.  Shedding the past, like bankruptcy.  But in the urban renewal version the result is bloated  and detached.

The headquarters isn’t fully to blame for the disconnected from Detroit.  I-375, also known as the Chrysler Expressway, does a good job of separating Detroit from it’s waterfront.

The U. S. auto industry is getting a long overdue overhaul.  New emissions standards will alter the automobiles we see in the future.  Cities too are slowly undoing past urban renewal mistakes.  The scale of GM’s Renaissance Center means it will likely be with us long after the new GM emerges from bankruptcy.  How unfortunate.

Poll, How Often Do You Shop at a Local Farmers’ Market?

The poll for this week has to do with how frequently you shop at your local farmers’ markets. I like to go a couple of times a month.   Soulard Farmers’ Market is usually one of those stops:

Of course I like new markets in addition to the classics like Soulard:

When traveling I like to take in a city’s market.  Not for produce but for local flavor:

I don’t see these markets putting the big grocery chains out of business anytime soon but when you’ve got a market with real farmers it is nice to buy your radishes from the person that pulled them out of the soil.  The poll is located in the top right corner of the main page.