Friday, May 18, 2012

A Gauntlet in the Shopkeeper’s Face

An Entrepreneur Preparing for the Approval Process

Graphic by LeiaMAC
The gauntlet has been thrown by Jerry Brown at the face of the California business community, he has fundamentally said, “Pay up or I will hole the ship of state and we will all go down together.” As a believer in the market forces of competition and growth I am embarrassed by all of this politicking and finger pointing. It’s like Gordon Gecko in the movie Wall Street, but in this case it’s the state government saying, “Greed is good.”

The only way the state of California can get out of this mess, and many other states as well, is to grow out of it, not kill the goose that lays the eggs (at whatever price gold is these days). Bureaucracies, by their inherent DNA, need to control and manage what is set before them, whether it’s fishing licenses or building permits, traffic flows or general plans. And each of these requires staffing, directors, and funds. And if the funds aren’t there, then fees. During my many years as a planner and urban designer I have seen a set of plans for a simple single family house, on an approved lot, go from being approved over the counter to a six month exercise in futility, frustration and fees. I have seen loved communities designed and built in the 1950s in just months; now just the planning and approvals take four and five years before the first grader hits the site. I have seen derelict quarries in desperate need of recycling into better uses, destroyed through votes of the people – people who have nothing vested in the outcome.

Call me Pollyanna. I know there are solutions out there, and they will come when we are desperate enough. The state needs to not just adjust regulations and ordinances, it needs to abolish them, and they will, just wait. Throw them in the political landfills they so adamantly protect.

Growth will only come from the entrepreneurial class, not the big publicly traded retailers and manufacturers. It is these dreamers that will pull the state out of the mess we are in. It is the pizza shop owners, the corner grocers, the nail salons and hairdressers, the trendy new shops for shoes and clothing, the burger joints and the other poster children seen on Diners, Drive-Ins and Dives. It’s the growth of small businesses that will make all the difference. It’s in the desire of almost every immigrant that came to this state, now free from the massive regulations and corruption of their native home, to start a business. Indian videos, Persian treats, Islamic religious art, sushi restaurants and taco trucks, most started by immigrants – everyone employs people, everyone pays taxes, everyone moves the state forward. 
Guy Fieri, the face that helped launch a thousand businesses
I’m reminded of a story I read years ago as applicable today as then. Four very rich men where asked how they would invest $50,000. The first said CDs, the second, more aggressive said the stock market – blue chips, the third said treasuries - you can’t go wrong. The fourth paused and thought for another few seconds and the said, “I would go to the Houston airport, stand outside the international terminal and lend it to the first Korean immigrant I met.” It has been this way for centuries; unfortunately this is being destroyed, especially in this state. We are being burned at the stake by the public unions and civic projects. Enough.

Taxes must be paid and collected, they are critical to the operation of every road and port. And some regional facilities must be subsidized (hold one moment while I slap myself), like transit, safety, and fire. But when taxes are used to slow or even stop growth they are wrong. A businessman would as soon move his new company out of state than pay a tax that is unfair. And Mr. Brown is being very unfair, he using extortion to please the bureaucracy.

Our urban areas are under very dire threats from shifting demographics, age issues, and changes in buying patterns and habits. Yet communities throw barricades up and then these capitalists shrug and go somewhere where they are wanted. Marin County’s loss of a Lucas Film soundstage may be Vallejo’s gain. What retailers and manufacturers decided that Texas was a better business climate than California? We will never know, they don’t write back.

As an example I’m trying to get a number of apartment complexes built in the Bay Area. One is being sued by the carpenters union over environmental impacts (yeah, like that’s the reason), another is faced with approval fees that make each apartment cost almost $40K more – with no benefit. And the utility hookup fees to these units are running over $15K each - for the privilege of paying your monthly water bill forever. And the stories about building code inspectors and delays are legendary. We can’t build our way out of this mess without the removal of obstacles. But each obstacle has its political champion, its director, its staff, its fees and its holy ground. It will be a long and difficult road.

Stay tuned . . . .

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