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Permit red tape hampers new, relocating businesses

Santa Clarita, VIA join up to create solution

Posted: March 18, 2014 2:20 p.m.
Updated: March 18, 2014 2:20 p.m.

Apollo's Barber Shop owner Garo Papazian, right, displays a new set of blueprints he had drawn up to eliminate one of two shampoo station at his new Valencia hair salon. Papazian took the action to reduce Castaic Lake Water Agency fees to open the shop that he didn't realize were required. Signal photo by Dan Watson

 

When the owner of Apollo’s Barber Shop on Tournament Road in Valencia decided to open a second Santa Clarita men’s salon, a surprise permit fee almost prevented him from reaching his goal.

Garo Papazian checked with the Fire Department and sanitation district and said he was told there were no fees for opening his new shop. He checked in with the city to ensure everything was in order in terms of permits.

But it turned out he needed approval from Castaic Lake Water Agency before final sign-off to open his new salon as scheduled on Town Center Drive across from the Hyatt Regency Valencia.

And since he needed no permits from the water agency to open his Apollo’s Barber Shop, the requirement was unexpected and nearly stymied his goal of expanding.

“They wanted $5,014 for a hookup fee,” Papazian said during an interview earlier this year. “I don’t have the extra money to pay for this, and it’s going to set me back another 30 days from opening.”

“A small business doesn’t have $5,000 to throw around,” he said. “It’s like putting a chokehold on small business.”

The problem, Papazian learned, was that the previous owner of the shop at the Town Center Drive location ran a florist business from there, not a salon. Because a salon with multiple sinks uses more water, the change of use required a new water agency permit.

The water agency’s “facility capacity fees” — the kind Papazian faced unexpectedly — go toward the agency’s capital improvement program for building and maintaining the infrastructure to treat water that’s imported, and to provide high-quality water to local businesses and residents, said Dan Masnada, general manager of the Castaic Lake Water Agency. It also helps to service debt the agency is in the process of paying down, he said.

If Papazian’s new salon didn’t pay the fee, the costs would have to be paid by other businesses and residents who pay property taxes, he said.

Papazian was able to reduce the fee to $1,295 by cutting down the number of sinks to one, and he opened new salon, also called Apollo’s, in February as planned.

His dilemma illustrates a difficulty faced by many small businesses expanding or opening in the Santa Clarita Valley.

“We’ve struggled with this for years from the standpoint of who’s the best point of contact for new businesses coming to town,” said Robert Newman, Public Works director for Santa Clarita. Because the city imposes no business licensing fee, “unless (new businesses) come talk to us, we don’t know who’s out there.”

The city has a one-stop permitting center aimed in part at heading off multi-permit confusion. But the city is just one permitting agency in the Santa Clarita Valley. And many retail and commercial sections of the valley fall within county, not city, areas; businesses opening in those areas have an entirely different series of agencies to deal with.

The city encountered its own permitting headache recently when it converted the old Newhall Library building to other uses, including that of a business incubator. The Santa Clarita Valley Sanitation District required the building be hooked up to the sewer system, which cost a fee, and the federal government required “significant modifications to the front of the building” to meet Americans with Disabilities Act requirements, Newman said.

Businesses moving into new buildings as original tenants don’t usually run into problems, said Kathy Norris, president and CEO of the Valley Industry Association, an association of local businesses. The problems are usually encountered by those who want to change the use of a business location, both she and Newman said.

“If you were going into a current space that had a previous hair salon,” as Papazian did with his original Apollo’s Barber Shop, “you may not need anything,” Newman said.

But Papazian’s new salon had previously been a flower shop — a situation Norris calls a “second-generation tenant improvement project.”

“I think that some of this came about after the recession,” Norris said. “People used to have someone with expertise to get them through the process. (But) a lot of business owners have taken out the middle man, and they don’t have the background to do it (themselves).”

VIA and the city have both been working to create a one-stop source of information about permitting requirements in the Santa Clarita Valley. But putting it all together is a daunting task, and the city’s “library” of information cannot be expected to include county permitting requirements.

VIA’s Regulatory Reform Committee has been working on the issue for about a year, Norris said.

“We’ve worked with the city portion of it,” she said. “We’re talking about do we want to tackle the county, as well?”

The city and VIA will come together April 15 for a presentation aimed at taking unpleasant permitting surprises like Paparian’s out of the process of opening or relocating a business in the Santa Clarita Valley. Newman’s Department of Public Works will make the presentation.

“We want to make sure these companies can open,” Norris said, “and more of them move to the Santa Clarita Valley.”

ITAL: The VIA monthly luncheon featuring the Santa Clarita Public Works Department presentation is scheduled at 11:30 a.m. April 15 at Valencia Country Club, 27330 Tourney Road, Valencia. To sign up for the presentation, visit the VIA website at http://www.via.org/ and click April 15 on the calendar.

 

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