Back in July, 2010, during the last gubernatorial primary season, Republican candidate Tom Emmer set off a firestorm by suggesting that Minnesota revise its labor laws regarding tipped employees. There were more than a few things wrong with Mr. Emmer's approach. First and foremost, his proposal was not part of a discussion to increase the minimum wage. It was simply a proposal to roll back compensation for a significant number of hardworking Minnesotans. Second, he chose to make some claims about tipped employees that, while true in extreme circumstances, were by and large misinformed. Paramount among them was the claim that Minnesota servers could expect to enjoy six figure incomes while working part time. While that might be true for a very select few, it is certainly not the case for the vast majority. It was sort of akin to saying that all CEO's make hundreds of millions of dollars a year. I am the CEO of our corporation, and I can tell you that the five figure salary I pay myself is generally less than the earnings of the majority of our servers and, based upon an hourly wage extension, is roughly equivalent to what we pay our dishwashers.
Countering the Republican claims, the DFL rolled out their own message during a press conference featuring a woman who claimed to be a server at an establishment in the airport. She was bemoaning the fact that she was making only half as much money as the Republican candidate had claimed. I guess we were supposed to feel sorry for her because she was earning $50,000.
For those of us running restaurants, the whole episode seemed liked theater of the absurd. Here we have a bunch of politicians and wonks attempting to propose labor policy for an industry about which they have little or no pertinent knowledge. Certainly, they couldn't have any firsthand experience running a fine dining restaurant such as ours, or neither side would have been so blatantly wrong in the way they approached the issue.
At any rate, when Mr. Emmer got done extricating his foot from his mouth, it became apparent that any sort of relief for our industry via the oft maligned phrase "tip credit" would not be forthcoming, and those two words would no longer be spoken side by side by those of us seeking to achieve that goal.
By way of full disclosure, I am a member of the St. Paul Area Chamber of Commerce Board of Directors proudly representing the left wing. In discussions with both the SPACC and the Minnesota Chamber of Commerce, it was suggested that I petition to testify before the State Legislature concerning the proposed amendment to H.F. No. 92 which establishes the state minimum wage. However, prior commitments requiring my presence at the restaurant made that impossible for me. Consequently, I am laying out my opinion on the bill in this blog in hope that it might help inform the discussion.
The current state minimum wage is $5.25 per hour for small businesses which are defined as those businesses generating revenue of no more than $625,000 per year exclusive of excise taxes at the retail level that are separately stated. Large businesses, which are everyone else, are subject to a rate of $6.15 per hour. Keep in mind that that $6.15 per hour rate is moot since the federal rate is $7.25, and we are bound by law to meet that.
Here's where I usually make a statement that gets me into trouble with my more conservative, free market friends. The fact of the matter is that the federal minimum wage is a joke. The only thing it's good for is to establish a base rate for tipped employees or to serve as a defacto training wage for paid student interns. No one I know in my industry pays minimum wage to their hourly employees. It is impossible to attract quality labor and stay competitive in that regard or to retain those people once they are fully trained and have established some sort of seniority. Why would any smart employer engage in constantly turning over staff that would need to be retrained time and again instead of just retaining their best employees? It makes no economic sense, and it is operationally unsound.
At Heartland, our low end of the hourly wage scale is $13 per hour while the high end is $16 per hour. It makes no difference what the job description is, but it is instead based upon the value that the individual brings to his or her job. Consequently, there are times when the dishwashers are making more money than some of the cooks. The bottom of the salaried employee scale is right around $40,000 while the top is right around $50,000. Salaried staff work an average of 50 hours per week, which pretty much sets their compensation in a range that is equivalent to what the hourly folks are getting paid. In addition, we hand out end of year gifts and bonuses to everyone, the amounts of which are determined by pay rate. It's not what you think. The people making the least amount of money receive the largest bonuses. It is as egalitarian approach as we were able to achieve based upon our available resources.
While you will never see a Heartland ad campaign that trumpets our policies of paying living wage and practicing fair trade with small Minnesota farm families that employ sustainable agricultural practices, we do so because we feel those are the right things to do. As a result, we have to leave some money on the table every day. The reward has been a business that has remained successful and even grown for over ten years while putting most of the revenue it generates right back into the Minnesota and regional economies. Also, while we are not subject to the Affordable Care Act by virtue of the fact that we do not have enough full time employees to qualify, we are in the process of determining how we can offer health care to all of our staff instead of just those who are working the most hours.
Contained within the proposed amendment to H.F. No. 92, is a graduated scale that increases the minimum wage $1.10 every year beginning on August 1, 2013, and continuing through August 1, 2015, until the rate is $10.55 for the aforementioned large employers. However, that is not the whole picture. There is also an escalator that is pegged to the rate of inflation as measured by the Consumer Price Index for all urban consumers.
Quite frankly, I don't have a problem with any of this even though the escalator is an unknown variable that makes it harder to project a yearly labor budget. As I stated earlier, we believe in a living wage, and we feel that $13 an hour in 2013 is about as low as it should go. In fact, we think $14 per hour is probably more reasonable when speaking of living wages. We would like to be able to pay that.
So what, may you ask, is holding us back? It's pretty simple when you do the math. Based upon the legislation being proposed, we will be required to give our highest compensated employees an approximately $6,000 graduated raise by August 1, 2015. Based on twenty tipped employees, that would result in an increase in labor cost of $120,000 or about 5.5% of our net 2012 revenue. That number does not include payroll taxes or the CPI graduated escalator. A number such as that would put us upside down. We would be generating negative earnings. In simpler terms, we would be losing money as a result of increasing the wages of our highest paid employees while our lowest paid employees would have to forgo raises as a result. It would also jeopardize the long term viability of our business.
The National Restaurant Association has determined that the average profit margin of a fine dining restaurant is 4%. How can we afford to increase labor costs by what would effectively be almost 6% and still survive? Believe me when I tell you that if I have a choice of whom on our team will be better compensated, it won't be the group that stands to benefit most from this legislation.
Some people have posed a simple solution. We should just raise our prices. Well that might be fine for McDonald's and Burger King, but we cannot push our prices any higher than we already have in response to the increases we have seen in food costs due to the drought, shipping costs due to energy prices and rent due to increased property taxes and still stay within reach of the average consumer. Operating costs have skyrocketed over the last few years, and there doesn't appear to be any relief in sight. The two most frequent comments I hear about our industry related to these topics are these: "Restaurant employees should be paid more money." "You should charge less; restaurants are too expensive." In other words, we should increase spending while decreasing revenue. If only we could; I would do it tomorrow. However, there is no successful business plan in existence that proposes selling stuff for less money than it costs to make it.
Those in the State Legislature who are supporting this bill are trying to do the right thing, and they are in essential agreement with me when we begin discussing supply side economics. Let's make sure those on the bottom of the economic ladder are better compensated as opposed to those on the top. The working class poor are putting that money right back into the economy, an economy primarily fueled by consumer spending, rather than burying it in offshore accounts or hiding it elsewhere. For the most part, they are spending that money on the basic necessities of life, and they are undervalued and under paid. If my industry or any other industry tries to argue that income inequality is not an issue, they will lose that argument every time. The gap is huge, and it is growing larger. Our Legislature is admirably trying to address that problem, but they are attempting to do so with a one-size-fits-all approach. This sort of approach will only serve to exacerbate a problem that already exists within our industry and which is seldom recognized and has never been addressed.
Furthermore, this approach that makes distinctions between small and large businesses based on revenue as opposed to net income is badly flawed. For example, a business generating $625,000 in revenue with a 20% margin will return $125,000 to the bottom line. This is very likely achieved with a work force far smaller than the labor intensive fine dining restaurant generating $2.5 million dollars in revenue. That business will return only $100,000 to the bottom line based upon the aforementioned NRA average profit margin for fine dining restaurants. Yet, what is being proposed would contain an exemption for the more profitable business while leaving the less profitable business to adhere to the full wage increase. This makes no sense.
In view of all this, the Minnesota Restaurant Association is proposing something similar to what I proposed many years ago. That is, let's not roll back wages on tipped employees. That is wrong, and it is rightly unpopular. No one should legislate a decrease in wages, particularly for the working and middle classes. Instead it seems reasonable to freeze the minimum wage for tipped employees at the current level of $7.25 an hour. The MRA would like to see some sort of waiver in place for employers who have employees who are compensated primarily through gratuities. They are proposing $12 an hour as the trigger for when that waiver kicks in. I am more inclined to see that waiver occur at a rate of $20 per hour. That is roughly the equivalent of $40,000 per year. If anyone feels that the person scooping change off the counter at the local diner is being over compensated then that person needs to spend a day in those shoes. On the other hand, someone working less than 40 hours a week and making $40,000 is being fairly well compensated.
I believe there is room for compromise that will allow us to embrace an increase in the minimum wage. As for Heartland, should the bill pass in its current form and be signed into law by the Governor, then our folks on the bottom of the wage scale will be hurt the most. In addition, our policies of paying living wages and fair trade will have to be reexamined. Keeping our money in Minnesota for Minnesotans might no longer be possible if our business is to survive. Our plans to expand health care coverage will most certainly be put in jeopardy. Dictating by statute a $6000 mandatory wage increase for the highest paid members of our team will not succeed in closing the gap in wages and benefits within our industry. Quite the contrary is true.
I encourage our lawmakers on both sides of the aisle to think outside of their comfort zones and ideological prejudices in examining this issue. An increase in the state minimum wage should be a good thing that will fuel consumer spending while helping to close the wage gap. This is a laudable goal. It is also a hot potato issue that will require courage and level headed thinking. If the goal is to help create some semblance of equity by increasing the wages of the working poor, then it seems essential that the final form of this legislation take into account as many variables as possible so that it doesn't end in results that achieve the opposite of its intent.
Just about a year and a half ago, I was asked, along with other Saint Paul business leaders, to sit in on a meeting in Mayor Chris Coleman's office with a delegation of Federated Department Stores executives who had traveled to Saint Paul to discuss the future of the downtown Macy's. The meeting was designed to allow the attendees to exchange some observations and opinions about where we felt Saint Paul was headed as far as upcoming development and growth potential. Those of us in attendance expressed to the Federated team our bullish enthusiasm for what we saw as Saint Paul's superb opportunities for redevelopment and the steady increase in downtown housing and new residents. The addition of the new light rail line connecting to Minneapolis was also a major discussion point.
The Federated folks listened politely and expressed their continued intention to remain in Saint Paul. We now know that what they said was either noncommittal or blatantly false. No matter, because what Macy's was bringing to the table was not then and is not now an amenity that made us stronger and more attractive as a city. While there is a certain amount of negative symbolism that accompanies the loss of a high profile merchant such as Macy's, that store was never a major draw for most of those who would choose to live or work downtown, and, unlike the Dayton family, Federated never engaged the community in a way that would ingratiate it to the people of Saint Paul.
So when I saw the headline in the Star Tribune opinion pages that declared, "Macy's exit is a wakeup call", I half expected the article to declare what a wonderful opportunity now exists for major redevelopment of a prime downtown parcel sitting adjacent to the new light rail line. Instead, what I read was an overblown attack on every major civic leader and how Saint Paul is sliding into insolvency.
The author of that attack piece is Paul Olson. Olson led the Blandin Foundation for 25 years beginning in 1978 and ending in 2003. What he has been doing since then is not clear to me, but, unlike me and many of my colleagues who sit on the board of directors of the Saint Paul Area Chamber of Commerce, I don't believe he is actively engaged in running private sector businesses. The foundation he ran was established in 1941 by Charles Blandin of the Blandin Paper Company in Grand Rapids, Minnesota. No, Olson didn't create the foundation; he simply assumed control of it. Prior to that, he worked for the Hill Family Foundation. I can find no private sector experience on this man's resume, but he seems to think he knows a thing or two about what we in the private sector consider to be vital.
According to the Blandin Foundation's website, their mission is to help promote economic growth in rural Minnesota with particular emphasis on Grand Rapids. The last time I checked, the unemployment rate in Grand Rapids was 12.3%. Compare that to the state unemployment rate of 6.6% and the 5.5% rate in Saint Paul. Yet Olson saw fit to call out every major philanthropic organization in Saint Paul for what he perceives as their failure to "advance the community". He also decries the public investment in infrastructure and other developments In Saint Paul as well as non-taxpaying government, church and educational institutions. He does so even though Grand Rapids is the beneficiary of a special tax tied to the taconite industry which has been used to decrease property taxes there. Grand Rapids is a very nice town filled with very nice people. When I have visited there, which I have done once a year for the last three years, the ongoing joke has been that their cable bills are more than their property taxes.
Over the last ten years during one of the worst economies on record, Saint Paul has seen an increase of 28% in people who live downtown, an increase which has spurred new investment. In 2009, we chose Lowertown Saint Paul over several other locations to relocate and expand our business. Apparently, Cray Incorporated felt the same way. We see opportunity in the changes taking place here while people like Olson only see what is currently lacking. He claims there is a dearth of leadership regarding our economic advancement, but he offers not one concrete idea to the contrary. In the meantime, people like us in the private sector continue to invest in Saint Paul and look forward to the challenges of the next few years.
And there will be challenges. Those of us in the game know that redevelopment of our fair city will require an intimate partnership between the private and public sectors in order to continue Saint Paul's revitalization, but claiming Saint Paul to be on a "downward trajectory" as Olson did is far from accurate. Quite the contrary is true. As a member of the Lowertown Ballpark Design Committee, I am concerned right now with how we are going to manage our rapid growth while making sure that we have enough parking for everyone who wants to visit Lowertown, including those patronizing our vibrant arts community and the recently opened Baroque Room. With events in Mears Park, the Farmers' Market, the Lowertown Art Crawl, the new ballpark, the new restaurant and entertainment venues and the increase in residents, we are busy looking at ways to ensure that our new found popularity is reasonably managed and remains accessible to all. Wouldn't it be great if there were too many people and not enough parking as opposed to the reverse? That's the kind of problem we can all look forward to solving. Losing Macy's is not a problem. As one door closes, another one opens. What we have here is a great opportunity to bring redevelopment to a prime corner in downtown that will be something that contributes to the vibrancy of our city. Now if only Macy's will take Paul Olson with them when they leave, that would be real progress.
Last night I was enjoying a cocktail with my friends Eric Magnuson and Kay Tuveson at the Heartland bar. It was Kay's birthday, and they were celebrating before leaving for New Orleans for some kind of corporate lawyer shindig.
Eric was formerly Chief Justice of the Minnesota Supreme Court. He was a Tim Pawlenty appointment and was at one time former Governor Pawlenty's partner. I should clarify that. They were law firm partners; they weren't dating. Kay is a brilliant legal mind in her own right having served on the staff of more than one Republican lawmaker in Washington, D.C.
We got to talking about my last blog post wherein I called out the editor of the Villager newspaper for what I characterized as a bigoted attack on gays and lesbians that he posed as his reasons for supporting the heinous marriage amendment. I told them I was surprised that I hadn't yet received any hate mail related to that column, and I went on to say that, as a private citizen independent of the restaurant, I tended to be very vocal about my opinions. We also discussed how the restaurant was politically neutral and secular out of necessity, and that those opinions I express are solely my own. I expect there many people who work for me who don't always agree with me, and sometimes my progressive views on things don't always sit well with many of our conservative clientele. I can disturb a few of our more liberal clientele from time to time as well.
At any rate, every so often I get some anonymous hate mail concerning something I have written in this blog. Sometimes people say stuff right to my face, which is fine. In fact, Council Member Dave Thune called me a right wing radical just last month. I found that to be pretty humorous.
So as the conversation progressed, I said I was thinking about posting something about the photo ID amendment and how that amendment would serve to disenfranchise large numbers of voters. According to this publication, that could potentially be as much as 7% of the population of registered voters that would be deprived of their constitutional right to vote. Both Eric and Kay were quick to say that, in their opinions, both amendments were unconstitutional and they saw no reason why any judge could find just reason to rule otherwise. I stopped short of calling them left wing radicals. I will leave that sort of stuff to Dave.
Upon arriving home last night, my wife handed me a letter addressed to me in a shaky hand with a cryptic return address. It said, "American News Center 55101". I hesitated opening it since it was obviously suspicious, but my curiosity got the best of me. Inside, I found some incredibly entertaining but borderline scary hate mail. There was a cartoon depicting the devolution of man with the title "The Lower End of the Behavioral Spectrum" that showed a progression from man ("normal") to ape ("queer") to a grotesque creature ("pedophile"). There were also some photocopied "news articles", one of which was entitled "News Media Suppresses Growing Homo Attacks On Children". There were some quotes from Tom Prichard who heads Minnesota for Marriage. This is the same Tom Prichard that was quoted by Dale Mischke in his bigoted screed in the Villager that I attacked in my last blog post. Prichard is quoted as saying, "...homosexuals are only one percent of the population, are 12 time more likely to molest children, cause 50 percent of syphilis cases in Minnesota, suffer no economic discrimination, and that half of homosexual men have over 500 sex partners." It doesn't stop there. It also goes on to say that, "homosexual men ingest the feces of 23 different men per year and are 15 times more likely to commit murder." Nice.
So I did a little research trying to find out who might have sent me this vile, hate filled garbage which, since it was anonymous and sent to my home, was obviously meant to intimidate me. I discovered that this same trash has been sent to many members of the media as well as private citizens who have had the courage to speak out on behalf of civil rights for all of us including those in our gay community. In fact, Minnesota Vikings punter Chris Kluwe was sent the same exact letter just a few weeks ago, although his cartoon was personalized.
There are some recipients who claim to know who the author of these letters is, but I couldn't find anything online to support that contention. While the individual named is currently running for office in one of the western suburbs, I will decline to identify him. I will, however, say that I challenge whoever it might be to step forward from the shadows. You don't see me hiding, nor will you be able to quiet me or any of the others you have targeted through your weak actions. Unlike those you have attempted to silence, you are coward.
Those who have read this blog on previous occasions might have noticed that every so often I commend the Villager community newspaper for its sterling coverage of Saint Paul neighborhood issues. My wife and I often depend on that coverage for the most in depth information concerning things that impact us where we live in Macalester-Groveland and for news relevant to greater Saint Paul.
So it was not without some dismay last September 12th that I read a letter to the editor of the Villager from a woman named Jennifer Kowalewski that was so full of insults and bigotry directed at the gay community that I paused to wonder why any respected publication would publish it, let alone give it nearly half a page of what is generally no more than a 36 page newspaper. In it, Kowalewski claimed that homosexuals are much more promiscuous than heterosexuals and are prone to deep bouts of depression accompanied by excessive illegal drug use. While claiming that studies showed these things to be true, she didn't bother to cite any of her sources. Instead, she brought them forth as valid reasons for voting "yes" to the upcoming constitutional marriage amendment referendum that would effectively write into our state constitution a law that would deprive a segment of our population of their civil rights. In doing so, this law could not be overturned through simple legislation. It would either have to be challenged in court or be brought forth for repeal through another referendum. Of course, she claimed no prejudice against same sex couples in her diatribe. Instead, she insisted that the amendment was good for everyone since, after all, this all about the children; and how can anyone believe that children could be raised in a stable environment when separated from one or both biological parents? I have an adopted cousin who is the principal of a Catholic school in New Jersey who might claim otherwise, but I digress.
I didn't write anything here in response to that letter since I wasn't really sure what the editors had in mind when they published it, and I just figured that enough of my neighbors would find it offensive enough to respond directly to the Villager. I wasn't disappointed by that, since many of them did. I guess I was hoping that the Villager was trying to be even handed in publishing opinions from both sides, and maybe this particular opinion was the best they had to offer in that regard. I also thought that maybe they were trying to provoke outrage from the community in order to motivate those of us who might not be speaking out on behalf of those who stand to lose the most by the passage of the referendum. By the looks of the vast majority of letters they published in the October 10th edition, they certainly achieved that. However, a column written by co-editor Dale Mischke in the Viewpoint section of that issue showed that this provocation was purely unintentional.
In that column, Mischke mentions how state Representative Michael Paymar, in a letter to the Villager, claimed that the proposed amendment would limit civil rights and how, in another letter, Dale Smith of Growth and Justice stated that it would "cast in constitutional stone the second-class status of gays and lesbians." He also mentioned the Kowalewski letter claiming that it "outlined historical and cultural reasons for defining marriage as between one man and one woman." He then went on to cite statistics that he asserted show how marriage, which he called the "backbone of the family", was under assault from all sides.
This is where he really goes off the rail. In some sort of convoluted reasoning that only he can explain, he seems to equate the act of depriving civil rights to a certain group of people with the preservation of the institution of marriage without offering any provable causation or logical connection between the two. Instead, he just continues to play the role of a fear monger by stating, "Redefining marriage to allow same-sex couples to marry may make it easier for them to share health insurance policies, visit relatives in the hospital or pass their estate on to a loved one at death, but what will it do to the institution of marriage?"
Well, Mr. Mischke, here is the answer to your question: It will do nothing to the institution of marriage except make it accessible to everyone. As for your claim that allowing same sex couples to marry "may make it easier" so on and so forth, allow me to correct to you. It will finally make it POSSIBLE.
My brother Gerard and his partner Charles have been in a loving, committed and faithful relationship for thirty years. Yet because they live in Florida and because there is no federal law protecting them from discrimination when it comes to having the right to marry, their union is not legally recognized. On the other hand, two people of the opposite sex can fly to Las Vegas, get drunk at a bar, meet at the craps table, fall into the Elvis Chapel and get hitched; and that is legally sanctioned.
My brother served his country for over thirty years, first as the chief USDA inspector at Miami International Airport and later as the acting head of Homeland Security for the ports of Miami and Key West. During the Mariel boatlift, he was in charge of processing the Cuban refugees and inspecting their boats and possessions in order to ensure that our food supply remained safe and that our agriculture industry was not decimated by blights and invasive insects. Nevertheless, his partner is not entitled to the same benefits awarded to the spouses of heterosexuals due to the fact that they are not allowed to marry. The only reason they are not allowed this basic right is because they are of the same sex and are homosexuals. That is bigotry plain and simple.
Mishke goes on in his homophobic screed to quote some outlandish statements from Minnesota for Marriage that have absolutely no basis in fact nor the tiniest shred of evidence to support them. According to that organization, redefining the institution of marriage will result in a massive increase in poverty. It is hard for me to believe that a sound minded individual would agree with such a thing, let alone repeat it; but, when bigotry is the basis for one's assumptions, logic and sound reasoning never seem to enter into the picture.
He finishes his editorial by saying, "Keeping the definition of marriage as between one man and one woman does not prevent same-sex couples from professing their love to one another and making a lifelong commitment. Surely, there are other, better ways for society to honor that love."
If that doesn't smack of "Separate but Equal", I don't know what does. We abolished segregation in this country so bigots could no longer claim such nonsense. Gone are the days when Americans of African descent were denied the same access as other Americans. Gone are the times when bigots could claim that they weren't being bigoted because they have acknowledged our equality even though they won't allow the same access and rights to everyone. Don't swim in their pools or drink from their fountains or marry their sons or daughters.
So what does Mishcke mean by that? Could he be referring to civil unions? I'm not sure, because he doesn't really say. If that is what he means, then his arguments bear no weight whatsoever. In that scenario, same sex couples could be legally joined. It would just be called something else thereby ensuring that they remain second-class citizens at least in name. Once you start calling people's unions by different names, then you inevitably infer that the unions are somehow different and, consequently, not as worthy of the same distinction. "Separate but Equal" anyone?
Let's also be clear that voting "no" to this amendment does nothing to redefine the institution of marriage. It simply keeps discrimination based on one's sexual preference from being institutionalized by being written into our constitution. Allowing such a thing to happen by voting "yes" would be unprecedented in the history of Minnesota, and it is beneath us. I implore all Minnesotans to let their consciences be their guides and vote "no" to this amendment. Please do not let the bigots and the fear mongers sway you into believing that a "yes" vote is more than what it actually is. It is a means to divide us. It is a means to deprive your fellow citizens of their civil rights. No matter how you couch it, it is hateful, and it is wrong.
Back in March of 2010, my business partners and I were sitting in a meeting with Cecile Bodor who heads the Saint Paul Department of Planning and Economic Development. It was Cecile and her team that gave us the lead on the real estate that would eventually become Heartland's new location.
The first question she posed to us was, "How much money are you seeking from the city?" I responded that we weren't seeking any money. All we were asking for was the support of the Mayor's office in helping us navigate the numerous regulatory requirements and logistical obstacles that come with developing any commercial project in a large municipality such as Saint Paul. I further explained that we were scheduled to close on the purchase of the real estate on April 15, and we had our general contractor scheduled to begin demolition on May 1. Our plan was to continue to operate out of our old location until June 13, and then we would reopen in our new location on July 15. I impressed upon her that our business would be bleeding money every day that we were not operating. Besides that, we were concerned about how long our staff would be unemployed. Our goal was to make sure that most of our team would be unemployed for no longer than two weeks. We understood that taking on a project of the size we were proposing, located in a distressed property in a historic preservation district, would pose unique and considerable challenges when it came to regulatory and code compliance. I explained that it was far more valuable to us to have our project supported through the various processes by the Mayor and the Department of Licensing and Inspections than it was to receive a grant or a loan from the city.
As it turned out, things were a lot more complicated than we had anticipated. Nonetheless, we received an enormous amount of support from almost every city entity we encountered. Even when we ran up against a member of the city staff who was less than anxious to help us streamline our inspections and occupancy approvals, the response from the Mayor's office was always timely and effective. As a result, we were able to reopen in our new location on July 27. The one week delay we encountered was not unanticipated, and it it was through the support of the Mayor's office that we stayed so close to our schedule. Financially, that assistance was nearly invaluable to us.
As a member of the Board of Directors of the Saint Paul Area Chamber of Commerce, I believe I am not overstating myself in saying that most of us in the Chamber very much appreciate and support Mayor Chris Coleman in his efforts to help grow Saint Paul's business community. As a political moderate, he understands the needs of all of Saint Paul's citizens, including residents and business owners alike. He has done a wonderful job of balancing neighborhood concerns with the practical necessities of establishing and running a succesful business in our city. This is no easy task. Not only must he negotiate his agenda with the City Council, but he must do so in such a way as to be fair and evenhanded. I firmly believe that it is partially through his leadership in concert with the City Council that we have seen positive growth in our business community and a lessening of restrictions that have impeded such growth in the past.
Most recently, I and my fellow members of the Lowertown Entertainment District found our yearly license applications, those that allow us to sell and serve food in Mears Park during the numerous events being held there this summer, were being denied in part due to a state code that supersedes the current city code which regulates such activities. It was through the efforts of Joe Spencer in in the Mayor's office that we were able to work with DSI to facilitate the writing of a new code that would allow us to continue our presence in the park. The result has been truly a model of cooperation between a city regulatory agency and private businesses. Without that support, I fear that we would have run into a brick wall. As it turned out, we are back on track and making money which, as we all know, generates tax dollars.
Speaking of tax dollars, according to the Saint Paul Port Authority, it is important to note that 33% of nonresidential property in Saint Paul is tax exempt. In the U.S., that is second only to Boston. As result and also according to the Port Authority, commercial properties are taxed at a rate that is roughly twice that of residential properties. Consequently, for every dollar generated by residential property taxes, the city has to provide somewhere between $1.08 and $1.16 in services, while commercial properties require services costing somewhere between $.60 and $.70 for every dollar of taxes paid. Obviously, if the citizens of Saint Paul are to continue to be provided the services we have all come to enjoy and expect from our city, we will either have to increase the tax burden on existing properties or encourage an expansion of the tax base that produces positive cash flow.
Mayor Coleman and his administration understand this. They also understand that residential critical mass, public services, improved infrastructure, better public transportation, the elimination of burdensome regulations and more people friendly public amenities such as the proposed Regional Ballpark are vital to attracting the kind of commercial and industrial growth that contribute to the revitalization of our city. It is my hope that Governor Dayton, through the Department of Employment and Economic Development, as well as our City Council, will continue their recent support of these efforts for they are in the best interests of all of Saint Paul's citizens.
Saint Paul is our Capital City. It deserves the love and respect of all Minnesotans. I encourage anyone interested in opening a new business or in expanding an existing business to take a good, long look at Saint Paul. I think you will be very pleased with what you see.