As St. Paul requires employers to provide sick leave and mayoral candidates promise to raise the minimum wage, some city leaders are growing wary of the effect on business owners and cautious about new regulations.

City Council members, noting concerns about the business climate, halted a plan last week to restrict the types of food packaging that retailers can use. On Wednesday, they will consider a gentler approach — education and encouragement — to achieve their goal of protecting the environment by getting businesses to use only recyclable, reusable or compostable to-go containers and cups.

“There are important social justice issues where business regulation is going to be necessary,” Council Member Rebecca Noecker said, and those should be a priority, while “other ones that don’t have the same payoff and still have the burden are not prioritized.”

She puts the sustainable food packaging ordinance, which would have mirrored Minneapolis’ “Green To Go” rule, in the lower-payoff category. Noecker was one of five council members who voted against the packaging regulation last week and opted to reconsider it next year. Council Members Russ Stark and Amy Brendmoen voted in favor of the regulation, which city staff had been working on over the past year.

The vote followed a concerted lobbying effort by the packaging and restaurant industries that opposed it, and by the city’s recycling contractor, Eureka, in support of it. Eureka staff created a petition with supporters and spoke in favor of the ordinance at community meetings. Opponents called residents and noted concerns about the regulations. And Hylden Advocacy & Law, a firm that represents the food packaging manufacturer Dart Container Corp., compiled a packet with photos of 14 restaurateurs and reasons why they oppose the ordinance.

They included Anthony Mahmood, who owns Aesop’s Table. Mahmood said without the packaging industry’s help there would have been a different outcome.

“I would be raising my prices and seeing my business go down and probably within two years I might not be in business,” he said. He shared his concerns about sustainable container costs with city leaders at a public hearing earlier this month but figured, “It doesn’t really matter what I say, they are going to do what they want. But they actually did listen and I’m impressed with that.”

Encouraging, not regulating

The packaging ordinance was at the center of a controversy earlier this year involving Council Member Dai Thao, who is running for mayor.

Thao met with lobbyist Sarah Clarke, who works for the Hylden firm, and a couple of her clients with Dart Container about the food packaging regulation. Clarke said she sensed Thao was asking for a campaign contribution during the meeting, and afterward a top campaign official texted Clarke asking for a donation, saying they would “rethink” the issue.

The Scott County attorney’s office determined in September that there was insufficient information to prosecute for attempting to solicit a bribe, and noted that during the meeting the group did not discuss Thao’s vote on the city ordinance.

“I’ve done nothing wrong,” Thao said Tuesday, and he didn’t recuse himself from voting on the matter last week.

Although he voted not to move forward with the packaging rules now, Thao said he’s still “100 percent in support” of getting businesses to use eco-friendly takeout containers. But he said the city needs to educate restaurant owners on how they could benefit from the change, rather than have people feel like the rule is forced upon them.

“This year there’s a lot of City Council actions that put a lot of pressure on small businesses,” Thao said.

Stark, who proposed the sustainable food packaging ordinance to city staff three years ago, sees it differently. In recent years, the city eased restaurants’ parking requirements and removed a cap on liquor licenses, he said.

“If anything we’ve been trying to make it easier to have and open restaurants,” he said.

Under Stark’s proposed regulation the city would not have rolled out the food packaging rules until October 2018 and would have spent the year educating businesses on their packaging options.

Thao and Council Member Jane Prince proposed an alternative policy, which the City Council will consider Wednesday, that still includes education over the next year. Instead of a mandate, it encourages restaurants, as well as institutions like hospitals, nursing homes and colleges, to switch to sustainable food containers.