My barber has been frustrated the last few times I have gotten a trim. Barbers – especially barbers who use a straight razor – are people you want to be in a good mood when they cut your hair. He has been trying to expand his business to a new location a couple of blocks away. His plan was to open there back in October. As of a couple of weeks ago, he was optimistic that he would be able to ring in the new year in his new digs. The problem? The landlord could not get permits from the city to do the needed renovations. (In the new location or the old, Jason does great work. Make an appointment and pay him a visit.)
A couple of weeks ago the Bee’s Appetizers blog ran a piece about the hopefully soon-to-open Ficklin-Wilcox tasting room in midtown Sacramento. Unfortunately, the “laborious” permitting process delayed its fall opening, causing the new retail outlet to miss the Christmas shopping season.
The question I am left with is; how many new and expanding businesses in our region were similarly delayed in their efforts, putting off the opportunity to do business and create jobs by the permitting process? Beyond that, how many were deterred altogether?
In a project I worked on in my day job, I interviewed several dozen manufacturing executives from companies small and large. The firms ranged from local businesses with only a handful of employees to multinational corporations that invested hundreds of millions of dollars at new facilities that employ thousands. The conversations were enlightening.
Repeatedly regulations and the permitting process were brought up as a serious issue. Nothing surprising there, but what was more interesting is that a significant number made clear that they do not mind the regulations themselves. They care about safety and the environment where they and their workers live. They think it makes good business sense to operate in a desirable place to bring business partners or prospective employees. And they are generally just decent people who try to do right by the world. The primary problem they find with these regulations is not the principle nor, in many cases, even the cost. The main problem I was told, over and over again, is the uncertainty and delay the regulations cause.
In order for new, large facilities to pencil out, there seems to be a general consensus that they need to be up and running within two years. Many respondents, including respondents with a long history in the state, made clear this was not possible for them in California. The regulatory process is too slow and has too many delays and pitfalls, which can drag projects on for years.
One last vignette before I get to the policy implications. Several years ago, Mayor Christopher Cabaldon was working to bring Ikea to West Sacramento. As we know, he was successful. He did not give incentives or tax breaks. He had none to offer. What he did was promise them that within one year they would be selling furniture. He took responsibility for ensuring they could move through the process and get their investment working and today the Ikea anchors a shopping center that employs 1,100 people.
So how can our region benefit from this knowledge? Similar to the Mayor’s experience, one executive I talked to related their experience with a city in California. The city actively works with companies to streamline and expedite the permitting process. They have dedicated staff that are experts in helping businesses efficiently comply with regulations.
That is a good idea and it is absolutely one that we should expand on. It addresses our region’s biggest weakness: both the perception and the reality of being unfriendly to business. And it does so by utilizing our greatest competitive advantage: access to and expertise with state government.
The Cities, County and/or other planning agencies should develop a business permitting “Go” team. That team would be responsible for walking businesses through every step of the process, ensuring they have everything in order for expeditious review and developing relationships with regulators in state and local government to ensure prompt, fair action. In doing so, they should calculate and widely publicize the time they save companies, marketing the region as a place where you can enjoy the benefits of the Golden State without the regulatory drawbacks.
There would be some costs to this proposal. It would require a handful of well-qualified staff and some resources spent to develop the knowledge base and strategy to be implemented. But the potential benefits would be real and lasting. It would also more than pay for itself if it successfully brought just one or two new businesses into the region. What can I say; you have to spend money to make money; but this is far more cost-effective than most ideas out there.
With any luck, the “Go” team might even be able to identify strategies to help state regulators streamline their processes. Benefiting from its perspective bridging the gap between the public and private sectors, this program could prove a valuable stepping stone for needed reform statewide.
The bottom line is some projects are not environmentally and culturally appropriate for our region. Others are. In either case, if our local governments can meaningfully expedite the process of giving these projects either a thumbs up or a thumbs down, it will give us a very significant competitive advantage. This is not a magic bullet and it will not completely change things overnight. But it will help to make the Sacramento region a legitimate option for companies looking to expand and put Sacramento on a path for stable, sustained private sector growth.