We hear the refrain time and again: “Los Angeles isn’t business friendly.” But what exactly does that mean?
We could start with the fact that L.A.’s gross receipts tax on business is among the highest in the region, with a dizzying array of classifications and rates. More often, the hue and cry refers to the Byzantine bureaucracy that must be navigated to obtain a business permit, where multiple departments get to have their say before you get yours.
You could drop dead, go broke or give up long before you exit the maze of obstacles, including my favorite: waiting for the one person in the entire city government who has the authority to sign off (on whatever) to get back from vacation!
My personal understanding of the challenge was heightened by a local business organization that recounted its pursuit of two permits. In addition to hearing its story directly, a campaign aide and I simulated the application process online.
In this case, the applicant sought to replace some city-standard bus benches with upgraded benches of a different design.
To effect the required improvements, the applicant needed an A Permit and an R Permit, two of the city’s most frequently requested permits. An A Permit is for repairs or improvements to a public easement such as a sidewalk. An R Permit allows conditional encroachment on a public right of way (including a sidewalk), typically for an extended period of time. Incidentally, these are the same permits that likely would be required if, say, a restaurant wanted to establish and maintain outdoor dining.
Our review of the case revealed a number of stumbling blocks to obtaining permits, including these:
• Confusion over which permit to seek first when two permits are required to effect an action. Instructions online offered no clear direction.
• Incomplete online guidance relative to what information and proof is needed to secure permit approval; some requirements were not revealed until after the initial application was submitted.
• Inability to directly view an application in process once it’s been submitted, and the inability of all relevant city departments to access applications electronically on the same platform as they move through the approval process.
• Confusion surrounding similarly named documents, such as Certificate of Approval and Insurance Certificate.
• Inability of applicants to calculate permit fees, which hinders payment or requires applicants to make an additional trip to the service counter with a check after they already made a first trip to find out what the fee would be.
• The impression that departments share documents with each other when sometimes they don’t. I chuckled at the sight of an Inter-Departmental Routing Transmittal that, as it turned out, was supposed to be carried by the applicant from one department to another.
Actually, maybe the best analogy for the city’s permitting process isn’t a Byzantine bureaucracy but a bureaucracy rooted in the Organization Man culture of the 1950s. I suppose a 20th century system is preferable to one from the 10th century!
How to fix the problem?
Some say the answer is to provide more and better “concierge service” to help businesses navigate the permitting process. That’s nice, but why not fix the underlying problems so a guide is less necessary in the first place?
The time is now for serious business permitting reform to encourage business formation and long-term success in Los Angeles and to realize the vision of Los Angeles as an entrepreneurial business mecca.
Cary Brazeman owns an L.A.-based marketing and public relations firm. He also is an elected neighborhood council board member and a candidate for city controller of Los Angeles.
