City's 'Time-Consuming' Permit Process Impedes New Businesses

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New businesses seeking to open in the city of Berkeley are often impeded by a lengthy and cumbersome permit process that creates a costly waiting game for prospective business owners.

The city's zoning ordinance, which defines the type of businesses permitted in each business district and the level of review imposed on the uses of buildings, makes the process of starting a business take longer.

Businesses must have a zoning permit in order to obtain their business license, which is where they run into complications, according to Berkeley City Councilmember Laurie Capitelli, whose district includes Solano Avenue.

There are three levels of zoning approval, the longest of which is called a "use permit" and can take up to 12 months to be issued. The shortest, which does not require administrative and public review, can be issued over-the-counter at the city's Planning and Development Department.

"Time is money," said Roland Peterson, the executive director for the Telegraph Business Improvement District. "If it takes too long, businesses just won't open. A lot of businesses just won't take the time."

While a use permit in Berkeley takes three to 12 months to be reviewed, it only takes about two weeks in the city of Emeryville, according to Arly Cassidy, an assistant planner for the city. Emeryville is considered to be a business-friendly city as compared with Berkeley.

In some extreme circumstances, the process can take years, as was the case with a development company that wanted to build a space that would eventually house Trader Joe's grocery at the corner of Martin Luther King Jr. Way and University Avenue.

Hudson McDonald LLC, the project's development company, first applied for a use permit in September 2002 and went through numerous reviews by city departments, public hearings and even a lawsuit before the permit was finally approved by the Berkeley City Council in July 2007.

After eight years, the project is slated to open in June, following what Chris Hudson, a principal at the company, said was the most complicated process the developers had ever experienced.

"It was very time-consuming," he said. "You really have to have a lot of patience to make it all the way through the processes."

While the company could afford to wait out the process, many small businesses may not have similar resources.

"The system discriminates and tilts the playing field towards larger multi-store chains because they have the resources to wait out the process," Capitelli said. "This is not a cheap process."

The city's quota system may also hinder businesses from starting. While the zoning ordinance states what uses are allowed in certain business districts, quotas place limits on the number of each type of business.

"The quotas system ... was intended to protect the mom and pop store from unfair competition by the large chains," said John Lineweaver, a landlord who owns a mixed-use building in the Telegraph area. "But now it's only the large chains that can afford to go through the process. It needs to be changed."

Many city officials agree that the system is unfair toward smaller businesses, especially in the tough economic climate.

Berkeley Mayor Tom Bates created a permit streamlining task force to find ways to improve the permit process when he first took office in 2002, according to Julie Sinai, chief of staff for Bates.

"One of the things the mayor feels is that there needs to be a thought process," she said. "But at the same time, sometimes things take so long."

Capitelli, who was a member of the group, said that though the task force finished six years ago, it is only halfway through its list of recommendations.

Downtown Berkeley has already benefitted from the streamlined process, according to Deborah Badhia, operations director for the Downtown Berkeley Association.

"We trust that (city officials) are trying to do their best, but there is a bureaucracy," she said. "And we are in a city where the public wants a lot of review."

Lineweaver added that it is the process­--not the city­--that is the inherent problem.

"It's not so much that the departments don't do a good job, but the ordinances that people have to conform to are ridiculously confusing and obsolete in some cases," he said. "I get frustrated just thinking about the process."

In the meantime, Capitelli said progress is being made incrementally.

"The stories pile, and at some point people say, 'Maybe we need to look at this and see wants going on,'" he said. "(Zoning) is entirely complex and that's why it's so difficult to start a business in Berkeley."


Denise Poon covers local business. Contact her at [email protected]

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