db,

What you've run into is simply called a location fee. It may be a bit rare where you are, but at photogenic spots in larger cities, those fees make up a huge business, and are considered absolutely legit and routine.

Now, more often than not it involves large productions at private locations for everything from photo shoots to music videos to motion pictures, but (as you've discovered) folks just about anywhere will ask for a little something if they think they can get it.

It's up to you to decide if their requests are reasonable or not, and whether you would be willing to agree to a payment or try to negotiate something else, such as a tradeout for prints.

The percentage thing seems a little weird to me. I've never run into that situation, and I'm not exactly sure how they would verify what sales you make and therefore what cut they're entitled to. I've always done flat fee or nothing...

You might want to check into the legalities of photographing someone's property from the public right-of-way. It's very possible that in that case you may not even need a release...

To answer your question: if the fee was reasonable, and the location important enough to me, I simply paid it...