Starting Small Businesses Hampered in Phoenix Downtown

Timeline for reviewing plans

Regardless of where you build or renovate a business in Phoenix, the process is time-consuming. The city posts approximate times it takes to review plans for building safety and site development. The downtown planning timeline is no different:

Complex plans: (more than 50,000 square feet or $5 million in value) 45 working days for initial review and 20 days more for subsequent reviews.

Small plans: (less than 5,000 square feet or less than $250,000 value) 55 working days and 34 days for subsequent reviews.

Complex revisions: 30 days for initial review and 15 days for subsequent reviews.

Simple revisions: 20 days for first review and 11 days for follow-ups.

Site development consolidated plan review: 21 days.

Fireline review: 24 days for initial; 15 days for subsequent.

Grading/drainage: 21 to 50 days (depending on project size); 12 to 27 days for subsequent reviews.

Landscaping: 29 days for first inspection; 24 days for subsequent reviews.

Water/sewer: 21 to 50 days (depending on project size); 10 to 27 days for subsequent reviews.

PHOENIX (By Yvette Armendariz, Arizona Republic) September 24, 2006 — Even as Phoenix city leaders talk up the future of downtown, frustration brews among some small-businesses owners who have opened, or hope to open, in the central city.

They hear officials tout small companies as instrumental to downtown's success, but many believe they have been left to fend for themselves in a maze of planning and permits.

They also face significant costs. Sellers and landlords are holding out for top dollar on old buildings, and often big renovations are needed. Plus, light-rail construction could scare off would-be customers, and they face drawn-out construction times as contractors deal with labor shortages.

Topping frustrations are the time-consuming and conflicting messages from city officials, who sign off on their ability to make fixes to buildings, put up signs and open their doors for business.

Among the issues cited:

• Delays in getting plans approved and pulling permits to proceed with their concepts.

• Confusion, particularly about signage, restroom and parking requirements.

• Building codes that inconsistently are applied by inspectors, particularly codes that have nothing to do with safety.

• Fear of using programs, such as one for artist storefront improvement, because they may lead to more out-of-pocket expenses related to building codes and zoning rules.

• No designated ombudsman to help confused business owners through the maze of permits needed to open, as found in other cities focused on revitalizing their downtowns.

City officials, who acknowledge some of the concerns, are making efforts to ease worries that Phoenix isn't being business-friendly enough to create a vibrant downtown.

In July, the city kicked off the Downtown Phoenix Urban Form Project, which aims to cut red tape by reducing zoning-restriction conflicts and streamlining the plan-review process. The city also is working on a downtown arts, culture and small-business overlay to create greater flexibility with rules. Neighborhood meetings are planned in October.

Consulting firm Dyett & Bhatia of San Francisco is looking at other cities' programs that can be implemented here and will make recommendations about Phoenix's zoning and building codes.

As the issues are studied during the next 12 to 18 months, city officials acknowledge plenty of challenges to speeding up projects, particularly increased commercial construction and staff shortages.

"We're trying to figure it out," Deputy City Manager David Cavazos said.

Permit challenges

Some owners say the permit challenges are extreme, making them feel unwelcome in plans for a revitalized downtown with a steady stream of residents, workers and visitors dropping cash at hip restaurants, clubs and retailers.

Others say the rules aren't that bad if you're realistic and are financially ready to deal with longer construction times.

"When we did this, we understood we were going to be waiting for permits, waiting for inspections," said Michael Costello, who opened Costello Childs Contemporary Fine Art at Third Avenue and Roosevelt Street in January. "You have to be a little savvy to begin with; otherwise, you are just setting yourself up to lose.

"Too many people come into these (downtown) things underfunded . . . (and lacking) promotion and marketing."

Matt Pool, who two years ago opened Matt's Big Breakfast at First and McKinley streets, said he hesitates to speak his mind. He's trying to open a wine bar to be called the Roosevelt in the next two months.

"There's not a lot of information (about how to open downtown). It's trial by fire, and there isn't one way to do something, so you run into surprises a lot of times," he said. "Had I known all that was involved, I wouldn't have done it."

Pool's effort to convert a residence to commercial use in itself created major headaches, but he didn't expect to factor in extra cost and time for getting approval from the city to have fewer parking spaces, as zoning ordinances require.

"It's not that there's no support," he said. "The process isn't in place to facilitate small-business growth."

That process is fraught with contradictions, depending on the person reached.

"Everyone wants downtown to be safe . . . we sing praises for safety," said Kimber Lanning, who runs the Stinkweeds record store at Camelback Road and Central. "These people can ruin your lives in a blink of an eye. Too much is willy-nilly."

She recalled a nearby project that was delayed because an inspector wanted the business to have two drinking fountains, and another that struggled with the need for separate restrooms for men and women.

Carly's Bistro owner John Logan recalls one inspector telling him he would need a urinal in his men's room, another saying no. He had to negotiate an extra parking space, rebuild a wall that inspectors said changed his use occupancy, then change part of his bar's height to meet Americans With Disabilities Act requirements.

"They all seemed arbitrary," he said of requirements for his business on Roosevelt Street near First Street. "Every time we jumped through a hoop, 10 more would appear."

Leslie Gould, project manager for Dyett & Bhatia, said that a downtown's success depends on making business success a priority. For Phoenix, that could mean revising zoning rules so businesses don't have to go through a time-consuming process of getting an exception, or variance, tweaking conflicting building codes and making business-assistance programs user-friendly.

Entrepreneurs' confusion

Other cities focused on downtown redevelopment found similar complaints from artists, restaurateurs and boutiques seeking to set up in older buildings. Some have designated ombudsmen or advocates to help reduce confusion. Among them are Portland, Ore., and San Diego, which often are looked to as models for Phoenix's redevelopment.

"The intent was to create a voice for small business," said Jennifer Nolfi, the small-business advocate for Portland since 2002. "Key things they wanted to focus on was streamlining the permitting process, providing one-stop for informations for small businesses and coordinating efforts of all the small-business providers."

Still, it didn't stop red-tape complaints.

"You're always going to have people who complain, regardless," she said. Part of the issue is some owners aren't ready financially or lack management skills, which add to troubles of starting up, she said.

San Diego also gets a share of complaints.

"It doesn't matter if they think the city process is good or bad, it's their experience with it," said Donna Alm, spokeswoman for San Diego's Centre City Development Corp. "There will always be people who find it hard because they don't understand the process."

In Phoenix, confusion often stems from business owners not always asking the right questions or being upfront about their plans, said Bob Goodhue, Phoenix's assistant development services director.

Much of the pain can be lessened, he said, by researching before submitting plans.

"It's all based on the information you bring to the city," he said.

He points to a customer-service desk on the ground floor that is quick to help answer questions about how to proceed with a project.

"We try to find ways to make the project work. A lot of times these downtown properties have some limitation on how they have to be developed," Goodhue said.

He is quick to acknowledge a staff shortage is stretching out the time that the city can review projects and that increased commercial work has added to the staff's workload not just in downtown but around the city. Efforts are under way to recruit new staffers.

For now, the city's Web site indicates building safety plan reviews can take 55 working days for small projects and an additional 34 days for subsequent reviews. Revisions to approved plans can add an additional 30 days.

Reviews of site plans range from 21 days for small drainage, paving and water projects up to 50 days for large projects.

Insiders say the process is taking long because of the volume of work. Business owners aren't always aware of help the city offers, which include small-business management training and specialty loan programs.

"They'll tell you those people are there, but they are mysterious, and they aren't promoted. They need to be down in the trenches," Lanning said.

A broken skyline

In 1950, the 17-square-mile city had about 100,000 people. Downtown Phoenix began a period of slow decline as population growth and major annexations hit as the decade ended.

Developers began to eye cheap land in suburban areas. Bankers willingly financed the sprawl. Offices also looked outside; Central Avenue north of McDowell benefited from a zoning decision allowing for high-rise development. A broken skyline was born, and the once-vibrant core faded away.

The first efforts to redevelop downtown began in 1979 and continued in the 1990s with the development of arts and sports venues. Loft and other residential projects took root, and plans to expand the Phoenix Convention Center and Arizona State University's presence were approved. Light-rail lines, scheduled to be completed in 2008, will add life.

Still, the scene lacks "pedestrian continuity," Brian Kearney, president of the Downtown Phoenix Partnership, pointed out in a recent presentation to the Urban Land Institute. That is, retail development and affordable housing, to keep people engaged and moving around the area throughout the day and night.

"We have to have a whole range of reasons to have people here," he said. The non-profit works to market businesses downtown, as well as voice concerns about parking, urban design and public policy.

Soaring land prices and construction costs, coupled with permit troubles and insufficient parking in the core, however, pose challenges to redevelopment, he said.

Meanwhile, the city keeps growing. By 2004, when the city issued its 64-page blueprint for downtown, Phoenix had 1.4 million residents across 514 square miles.

A helping hand

Jerry Colangelo pushed for redevelopment of the central city for years, successfully brought the Phoenix Suns and Arizona Diamondbacks downtown in the 1990s and backed building the Dodge Theatre that opened in 2002.

Long an advocate for downtown, he said it's taken a bit of leaning to make officials commit to making the permit and zoning process smoother and quicker. He's hopeful that small-business revitalization will take root, especially if the process is improved.

"There are too many obstacles. You have to encourage business to come downtown at this stage," he said.