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The Five Rs

July 21, 2006
by: Lynne Breaux, President RAMW, May 2004 - Published in the Beverage Journal (DC/MD)
 
Restaurants beget retail, retail begets residential, residential begets resurgence, and resurgence begets revenue. Society and people benefit, their quality of life improves as crime decreases and city services improve. The intrepid restaurateurs that start the restaurant-to-retail-to-residence snowball are generally brave small business owners with a vision and a passion for creating places of hospitality. Those hospitalians, who so often go out on a personal, precarious financial limb to serve their clientele food and familiarity, end up creating the perfect synergistic storm. They begin the whole process of neighborhood resurgence and engender increased tax contributions the government.
 
So it would just make sense for our legislators to do everything possible to foster the small businesses of our country. From the Small Business Survival Committee www.sbsc.org an apt new report illustrates how one simple tax deduction could really aid these small business owners and therefore start the ball rolling on urban revitalization and increased tax receipts. SBSC is a 501c (4) nonprofit, nonpartisan organization. “According to a recent study by the Small Business Administration’s Office of Advocacy, small incorporated firms benefit more than larger firms from the meals and entertainment deduction. Small firms that take advantage of this deduction reduce their effective tax rate by 0.75 percent on average, while larger firms only receive a 0.11 percent reduction in their effective tax rate.
 
‘This study confirms what we have believed all along,’ said Thomas M. Sullivan, Chief Counsel for Advocacy. ‘Small firms use the meals and entertainment deduction as their primary marketing tool. They don’t have the budget for big ad campaigns, but they can talk with their potential clients over lunch. The study reinforces how important that deduction is for smaller incorporated firms,’ he said.” And more-better business is usually the result since breaking bread with a colleague is the most efficient and most pleasant way of doing business.
Just a quick tour of metropolitan Washington immediately conveys the facts: lawyers, lobbyists, architects, businessmen/women, staffers all dining and working, drinking and networking, and closing deals over meals. Washingtonians sealing fates and policy by effectively collaborating in our restaurants. The most striking fact of this scene of bustling patios and gay repartee is its newness. A few short years ago, parts of DC were infested with crime and desolation, now thanks to the pioneer restaurateurs, these areas are filled with ever-more restaurants and cafes, brightly attractive shops, and all those new condos. All of which have helped to increase the desirability of DC living.
 
In an April 25, Washington Post article entitled “By Any Name, the City’s Center Is Booming” author Debbi Wilgoren writes about the Penn Quarter’s “Five R’s” renaissance, “Fifteen years ago the place was desolate…But now restaurants open every few weeks; office buildings fill with tenants as fast as they are constructed; theatres, nightclubs, and MCI Center draw crowds after dark. New apartment and condo buildings are attracting young urbanites and empty nesters…Tax and zoning breaks have prompted a flurry of residential construction…”
 
Unfortunately, this leads us to another dilemma; the very people that choose to move into these vibrant, edgy urban areas are often to first to complain about the restaurants and nightlife that revitalized the desired neighborhood in the first place. One solution that is actually being implemented in the area is the pro-active approach of new residents signing a memorandum of understanding, an “aware paper” acknowledging the existence and rights of business owners to conduct their businesses responsibly and hospitably.
 
Another pre-emptive strike on preventing the whine of future neighborhood nannies would be for builders to focus on techniques of sound proofing, creating cozy cocoons in the midst of a vibrant 24/7 city.
The benefits of the urban, walking, living, breathing, social communities have been extolled, and are well-documented. What’s going on in DC, Arlington, Alexandria and in pockets all around the country is a trend toward a more healthy lifestyle with less driving increased use of public transportation and more emphasis on neighborhood sociability emulating a town square type environment similar to European and Mediterranean modes of living. Let’s just make sure that our business leaders keep the pressure on our government leaders to keep the 5 “R’s” on a roll with business friendly legislation to the benefit of all.