Starting a Small Business in Sac County? Get in Line

Sacramento County, CA  |  By Jacqueline Fox
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What could possibly be taking so long? Photo by Paul Scholl

County’s Small Business Start-ups Hampered by Bureaucracy
 
Sacramento County, CA (MPG) - Pent up demand in many parts of unincorporated Sacramento County, and the county proper for retail food chains and other small businesses, some developers and business groups say, is being stalled under the multiple layers of bureaucracy built into the county’s complex permitting process and related issues.

Even opening a franchise for one of the country’s largest and perhaps best-loved food and drink chains can take years.  Case in point: Jamba Juice, which has been pushing to open its first location in Carmichael for more than a year.  The wildly popular fresh juice and smoothie maker, originally slated for opening in August at Carmichael Village on Fair Oaks Boulevard, is once again pushing back its opening to late October, due in large part to set-backs in the permitting approval process, according to Brooks Erickson of Carmichael Village, LLC, developers of the retail complex.

Construction and the permitting process for Jamba Juice began more than 24 months ago. Meanwhile, next door, Wing Stop’s approval took nearly a year to green light.  It followed the oft-stalled opening of Noah’s Bagels, also in the complex, which opened its doors in 2015.

With two open spaces left to fill at Carmichael Village, Erickson wonders how long it will take him to get the green light for what he hopes will be one more food and drink outfit and potentially a small medical related service provider to complete the development project.

“I would say it is a complex process and also can be very surprising when you think you have crossed every “T” and dotted every “I” to find out that you have to keep waiting,” Erickson said.  “I respect the idea of (the permitting and vetting process) being necessary, but it absolutely seems very burdensome.  Even after you’ve won approval for the project, you’re waiting on all kinds of things to be approved just to get construction done.”

Erickson said Jamba Juice is just one of many examples of the frustration he and other developers, not to mention the franchisees and owners, face when it comes to dealing with the county permitting process, which includes clearance requirements from multiple agencies, usually at different intervals in the build out process, including health and safety, the fire department, and ADA regulators, each of which can potentially stall a previously approved permit or plan from one department with a non-compliance order or demand for changes to meet their own department’s regulations. 

A green lighted set of blueprints can hit a number of snags in the process, ranging from issues pertaining to noncompliance with ADA regulations or county fire and electrical system guidelines, to equipment model makes and locations and flooring types, as well as overall construction plans for new infrastructures or remodeling of existing ones.

“What puzzles me is that somebody like Jamba with a national brand would have so much difficulty with our little county,” Erickson said.  “It’s a puzzle to have so many different rounds of changes.”

Linda Melody, executive director of the Carmichael Chamber of Commerce agrees the county’s permitting process often holds up construction plans for many small retailers, specifically eateries.  Carmichael’s revival along the Fair Oaks Boulevard corridor is enjoying a wave of expansion in the retail food sector.  But the growth is being hampered at various levels and she and chamber members are eager to see the momentum continue.

Melody said her agency would like to see pre-approved permitting requirements for existing retail spaces grandfathered in when approvals have been given for one area as others are considered, and that a true one-stop agency for blueprinting approval right down to the plumbing and electrical code sign-off would help.

“I have a hard time with the county penalizing businesses who have already had components of their projects signed off on get rejected at another level and then see them have to go back to the beginning of the process,” Melody said. “You always hear the politicians talk about how much they love business but the rules are often not really all that business friendly.”

Diann Rogers, president and CEO of the Rancho Cordova Chamber of Commerce, said her agency has long-been fielding similar complaints about the permitting process and that mitigating those concerns remains one of her agencies top priorities.

“Are there glitches, yes,” says Rogers.  “But in terms of the challenges, it is all over the board and it really depends on what type of business you’re talking about and which layers of permitting and departments they have to go to.”

Rogers said the Rancho Cordova department of economic development is preparing to launch a new “concierge” service to help business owners understand and work their way through the permitting process.

“It can be daunting,” said Rogers, adding that she did not have specifics about the new program yet.  “I know the goal is to help them navigate the process,” she said.  “I also can say that we have a (city) council that is open and willing to hear these issues, so they do listen to the biz community.” 

Evan Jacobs co-chairs the economic development committee for the Citrus Heights Chamber of Commerce. He said the chamber is aware of the ongoing issues of “complexity” involved with the permitting process and insists it is an issue of ongoing concern and discussion.

“We are working collaboratively with the city to see more layers of bureaucracy removed from the process in order to both retain and attract businesses to the area,” said Jacobs.  “I know we and many other advocates are out there working toward finding a way to put a focus on this issue and see how we can make it easier for businesses to set up shop. There are many complexities involved.”

Troy Givens, director of the Sacramento County Department of Economic Development agreed that the process for setting up a small business in the county can be burdensome, particularly for a restaurant, where you have many health code requirements in play. He adds, however, that the county is always pushing to improve the process, noting the availability of free and confidential programs established to help business owners navigate the permitting process.

“We know there can be difficulties, especially for smaller business owners, but we are always looking at how we can make the process more user friendly,” said Givens.  

Givens referred to the county’s Business Environmental Resource Center (BERC) launched in 1993.  BERC provides confidential support for new and existing businesses as they make their way through the initial phases of setting up shop.  The county, he added, also recently brought in a small business liaison to help potential new business owners with financing-related questions and support.  Many of the frustrations, he says, often stem from the varying number of scenarios that arise with every start-up, whether related to health permit issues or basic blueprint snags, and whether they are a fast-food operation or a clothing retailer.

“We have a service under our department that is free and confidential, which takes a look at the permitting process at the local, state and even the federal levels and helps businesses navigate the system,” said Givens. “We do what we can to help make the process go as quickly as possible.”

Givens said a typical time frame for a franchise like Jamba Juice should be roughly 90-120 days and, while he doesn’t know the specifics of what may be holding up the clearance for Jamba Juice in Carmichael, he would be happy to sit down with Erickson or any other business owner to help figure out where the snags are and how to expedite the process.

“I’m more than happy to meet with Mr. Erickson and other developers to try to figure out if there is a certain area where we can step in,” Givens said.

The county also has a fast track program to help certain projects speed through the permitting process, however, there are specific qualifiers. For instance, a commercial or industrial project must create a minimum of 50 new and permanent jobs or show it will generate at least $10 million in annual taxable sales.  Neither of these options are likely for a small franchise, Jamba Juice included.  Even if the revenue was in place, most fast-casual eateries employ part time workers.

Tom Scott is the state executive director for the National Federation of Independent Businesses based in Sacramento. His agency advocates for roughly 22,000 small and independently owned business members in California and thousands more nationwide.   Scott said the layers of bureaucracy at the county with respect to permits are so imbedded and years in the making, a one-stop shop wouldn’t put a dent in the problem, as it stretches way beyond the permitting process and in to areas concerning housing, rising rent costs, California’s business taxes, (one of the highest in the nation according to recent studies), zoning issues, as well as employment-related legal complexities and wages.

“There’s been a Carl’s Junior effect in California for years,” said Scott, referring to 2014 plans by the Southern California-based CKE Restaurants/Carl’s Junior Restaurants, LLC to expand in the state. Faced with wait times of up to two years to expand in the state, the company moved into Texas and Nevada, where wait-times are roughly only two to three months.

Scott, who also sits on the planning commission for the city of Folsom, said the slow-pace of permitting and approving new eateries and other small businesses is rampant across all parts of unincorporated Sacramento County and the city proper.  In some cases, there just aren’t enough people to push applications through. In others, the rules are simply too draconian and driving business out.

“This problem is happening all over, and it’s not just permitting,” says Scott.  “It’s a chain reaction of things, and the bureaucracy has been building up for decades.  Everyone wants the revenue from small business, everyone agrees small business is the backbone of our economy.  But, on the other hand, they have created such a bureaucratic mess. So the real question is: OK, how do they undo it?”