Our businesses must thrive!

Our objective is to bring balance and scale back to Santa Monica’s business community and, by extension, our resident community. Creating a robust and diverse commercial environment scaled to the city diversifies revenue risk and creates the heightened sense of belonging and identity that are essential elements to a vibrant and healthy city for new arrivals, families and long-term residents.

A. The Problems

City policy and public statements are the key driver of the issues negatively impacting our small and medium sized businesses. Those policies have created an extremely stressed small businesses environment resulting in unprecedented closures from both the heart of our downtown commercial district and our outlying neighborhoods. The Policy issues can be summarized as follows:

1. Ongoing messaging and project approvals communicate to the business and investor community of unending out of scale development. This creates heightened landlord expectations for ever-increasing future rents and near-term rent increase demands which are exerting huge pressure on existing businesses to exit the city

2. Public discussion of potentially future conversion of all commercial zoning to mixed use has sent confusing signals to property owners about what long term financial strategies to adopt, likely reducing commitment to the existing lease structure if additional financial benefits can be obtained from conversions/redevelopment

3. Mis-interpretation of business trends (perhaps partially deliberate) as being entirely and inexorably driven by the move to online retail and not attributing any cause to city policies and statements.

4. Inverted city / entrepreneur relationship for existing or planned small and medium business where the business is left to navigate the labyrinthine City permit, approval and fee requirements imposed by a silo'd and unwieldy City operating structure.

5. Excessive financial and cash flow burdens placed on entrepreneurs and business owners that include excessive permit fees, opening delays that strain cash flows while rent is still required and requirements to pay estimated sales tax 60 days in advance of any actual sales.

B. The Solutions

My policy prescriptions comprehensively address the issues prevalent throughout the entire SM business ecosystem:

1. Clear and consistent messaging that development in Santa Monica will be right-sized to the scale of the city with a resident-first emphasis.

2. Clarifying exactly which areas, if any, would be subject to zoning changes, and in what time scale.

3. Fact-based assessment, including first-hand business owner and landlord discussions, of actual business trend drivers of commercial challenges in every area of the city to determine the optimum City policy response. Response requires a clear delinking of the housing agenda from the commercial business issues to ensure the right policy development for each specific issue.

4. Completely overhaul the City’s approach to small and medium-sized business support, focusing on streamlined one-stop entrepreneur support. Restructure existing resources and staffing to provide project management service and support while eliminating functional and process duplications. Key points of the plan include:

a. Create an Office of Small Business Development. This office would provide a single point of contact for both existing and in-development businesses for the centralized management of the entire city permitting process

b. Create and keep updated a complete summary schedule for entrepreneur use of every permit, inspection and fee, with relevant contacts for each, tailored for each type of business (e.g. restaurant, retail, financial services, etc.)

c. Provide a project manager function to the applicant/business owner to act as the city hall and county health reference to navigate and coordinate permit issuance and correction issues, approval exceptions, renewals and inspection corrections. Measurement of department success would be based on the share of successful opening permit issuances of total applications in a specific time frame.

d. Combine all small business fees into one total fee for opening and another fee for renewals, each dependent on the appropriate criteria for business size, scope of work being requested (“as is” space or complete remodel) and business type.

e. Commit upfront to opening approval timeline based on successful applicant compliance with all of the city’s requirements; ensure expedited resolution of issues with City departments that may add delays to opening.

f. Provide flexible timelines and fee schedules for entrepreneurs that are taking over existing, previously permitted, space for an identical use if that space is determined to need code upgrades; eliminate conditioning the opening of new businesses in locations where the use has not changed if the prior business was fully permitted (e.g. restaurant to restaurant)

5. Remove financial barriers to new business openings where practicable.

a. Eliminate upfront estimated revenue or operations-based payments prior to opening

b. Collect all such fees in arrears based on actual business performance.