Colette Griffiths and Chris Allen were thrilled when they were chosen as tenants by the retiring owners of the Federal Store, a small grocery near the intersection of two bike routes in Vancouver’s Mount Pleasant neighbourhood.
Their vision was for a new 21st-century-style grocery store/cafe/deli. The shop would be a distribution hub for organic groceries, while serving as a community gathering spot for cyclists and walkers in the densely populated neighbourhood. It was exactly the kind of place that the city, in theory, would embrace. Politicians and planners talk fervently about support for local producers, the benefits of neighbourhood shopping and the importance of green retailing.
But five months after the young couple started paying rent on the small space, covering the $2,000 monthly cost with the salaries from their jobs in restaurant management and restaurant design, they were no closer to a permit.
The series of city staffers they talked to raised various objections, different each time. One thought that the plans for the place just didn’t “feel” like a grocery store. Another wanted to see a complete list of groceries that they would stock. No one had any kind of printed description or list of criteria that could help them figure out what they needed to do to satisfy everyone.
“We were pretty close to running out of money,” Ms. Griffiths said of their permitting efforts in 2017.
Business owners, retail experts and the people who manage the city’s small-business improvement associations say the bureaucratic and utterly inconsistent process of permitting for the renovations often needed for a new business has become an enormous barrier.
“I’ve been in the industry 13 years and what I hear repeatedly is two main things: It takes too long and the things being asked are unnecessary and costly,” said Michelle Barile, the executive director of the West Broadway Business Improvement Association.
A hidden business-killer
It has become an issue that many say is almost as much of a business-killer as the now high-profile problem of skyrocketing property taxes. While the tax issue is getting a lot of attention, with the province scrambling to provide an interim solution after a year of meetings with mayors, the commercial-renovation permit messes are often relegated to a bullet-point mention in city reports about “licensing issues.”
A tracking graph on the city’s recently introduced “dashboard” of key statistics says that the average waiting time for a minor commercial-renovation permit as of December, 2019 was 5.4 weeks.
But no one in the business community thinks that this figure reflects anything like what is really going on, especially since many businesses spend weeks or months going back and forth with staff before even filing for their official permit.
Not every business experiences the hurdle of getting a commercial-renovation permit every year.
Out of the city’s approximately 60,000 licensed businesses, about 11,000 are currently listed as “pending” for permits, including everything from Tiffany’s and the Fairmont Vancouver Hotel, where there might be just a minor change in use or ownership, to genuinely new shops, offices and restaurants.
Some, like the new Breakfast Table restaurant that took over the old Ouisi spot on South Granville, are able to open almost immediately. But many cannot.
And the roadblocks put in the way of one operation on a street end up affecting others nearby. Streets where businesses are waiting for permits look like they are plagued with vacancies, something that casts a pall on the whole area.
“The problem is the vacancy sign stays up while the process goes on,” said Ivy Haisell, the executive director for the South Granville business association. That leads to perceptions and sometimes media stories about how “the area is dying.”
Representatives of various neighbourhood business associations can list the casualties: The Mouse Trap cheese shop on Main Street, where owners waited so long for its permits that it closed four days after opening because they ran out of money; the experienced Whistler restaurateur who spent $300,000 waiting to get the permits for a new outlet at Main and 16th and was blocked by city staff who said he needed a significant number of parking spots. That was an impossibility on a site where the building covered almost every square foot of the lot. By the time the city’s Board of Variance ruled that he didn’t need to provide the parking, he had given up and sold to the ubiquitous Brown’s chain.
Delays not just a Vancouver problem
And, while the City of Vancouver is often named as the problem child of the region when it comes to many building issues, those in retail say the slowdown for commercial-renovation permits is now a regional one.
“The building-permit problem is pretty much everywhere,” said Sean Ogilvie, a vice-president at the commercial broker Lee & Associates, where he is described as someone with a track record in dealing with multiple or long-term vacancy issues.
He used to negotiate what’s called a “fixturing period” of four to six weeks for new tenants – that’s the time when they’re dealing with permits and renos, before they can officially open and start making money. They don’t pay rent during the fixturing period, something that landlords have to absorb.
“It used to be that a really big grocery store or a restaurant, that would be four months,” said Mr. Ogilvie. “Now, it’s six months just for the permit. Shoe store A to shoe store B, it takes six months. It pains me because people don’t realize what a problem it is.”
That time lost is critical for small businesses, which often need six months or a year after opening to “incubate,” as insiders call it. That’s the period when they slowly ramp up their business before becoming fully profitable. They need a capital cushion to survive that – a cushion that has the stuffing taken out of it if they have to wait months to open.
Asked last week about the problems with commercial-renovation permitting, a senior bureaucrat at Vancouver City Hall replied via e-mail, suggesting delays were mostly the applicant’s fault.
“Our most recent analysis of the permits that have been open in our system for longer than seven weeks shows that the majority of these permits are waiting for customers to take action (either to respond to our questions (14 per cent), call to book their inspections (47 per cent), or to pay their outstanding fees (6 per cent),” said the message from Mark Greenfield, director of operations, development, buildings and licensing.
Getting the permit is only the first step in a small-business’s process toward opening. The renovations themselves, which can’t start until the permit is in hand, can then take weeks or months after that.
Approval came through a fluke
That was the situation for the two hopeful Federal Store owners. Ms. Griffiths and Mr. Allen knew that they needed to do some renovations to make the little space, which Mark and Fong Kwok had run as a traditional old-style convenience store for decades after arriving from Shanghai in their 20s, more contemporary. They wanted larger windows, new floor tiles, a food-prep area, and they needed to close off the doorway that used to lead to the Kwoks’s kitchen in the attached duplex next door.
Their first visit to the city-permitting office was promising. The enthusiastic young man at the counter, someone they only ever knew as Mike, said he knew the store well, biked past it often, and thought they would have no trouble getting permits for the needed renovations quickly. He gave them a checklist and wished them well.
Their friends had told them, “If you find someone supportive at city hall, stick with that person, even if you have to wait for them.” But the young couple thought their situation was so simple that they would do fine, no matter what.
For the next few months, different people in the permitting department raised different objections every time they went in.
Finally, five months after their first visit, they went in, discouraged and on the point of giving up. Mike saw them across the room and came over. “How’s it going,” he wanted to know. “You must be open by now.” No, they said, and explained the problem. At that, Mike went to the counter with them, talked to the woman they’d been dealing with that day, dismissed her quibbling over this and that, and stamped and signed the papers they needed.
“I don’t know what would have happened if he hadn’t been there that day,” said Ms. Griffiths, as she sips a tea in the now-bustling small space that has become a popular neighbourhood hangout.
The problems are not restricted to first-timers or those with food as part of their products. Although restaurants, delis and grocery stores routinely go through complicated sets of hoops, even experienced business owners who have nothing to do with food say that they’ve run into the same delays.
Elsa Biernat ran five children’s clothing shops in Edmonton for 10 years during the 1980s and ‘90s, making a healthy living and never waiting more than a couple of weeks to open. After a decade in Dubai after her husband got a job there, she returned to Vancouver to be close to their daughter. She was too restless to do nothing, so she started another business.
Ms. Biernat, who has a degree in economics and exudes stylish professionalism, picked a walkable block near Broadway and Macdonald in Kitsilano for her new store, Lola’s Kids Clothes, which sells children’s wear imported from France, Spain and New York, among other places.
She signed a lease in December of 2016, where the rent was less than the near $10,000 a month she pays now for the 1,100-square-foot space, but still hefty.
She thought she would be open in a couple of weeks, since all she needed was a new sign with the business name on the front, some extra electrical outlets, a room divider, and shelving and rods for hanging clothes along the walls.
Instead, she wasn’t able to open until late March, while she paid rent and had $80,000 worth of inventory sitting on the floor. There were problems with the sign being slightly larger than what the rules allowed. She needed an engineer’s drawing to spell out exactly what the room divider would look like.
Vancouver city politicians and senior managers have talked for years, decades, about improving the permitting process. But all the talk seems to go nowhere.
Councillor Michael Wiebe knows the problems intimately through his own operation of a restaurant and lounge in Mount Pleasant. He notes that the difficulties are especially hard for small independents because chain operations will often hire a consultant or in-house specialist to do nothing but deal with city-licence issues.
He believes a fix is possible. He said he’s excited about the recent appointment of Jessie Adcock, the city’s former chief technology officer, to the role of general manager of buildings and licensing.
“Everyone knows there’s a problem, they just don’t know what the next step is," Mr. Wiebe said. "But we need to change the way they think. Our goal should be to help a business, not just give them a list. And smaller businesses shouldn’t get treated like a big development company.”