Public employees’ ‘little empires’ turn off businesses

Homebuilders Association
Delaware businesses are calling for fewer regulatons and faster permitting to expedite projects. The state Homebuilders Association is even drafting legislation to create a streamlined process.

Permit process can take years, some owners say

By Kathy Canavan

Business owner Rich Spinks said he can’t sneeze without some government agency telling him how many times he has to sneeze and how many God bless yous he should get.

“They build layer after layer of bureaucracy,” the owner of GiggleBugs Early Learning Center in Millsboro said. “They have all that authoritative power that says, ‘If you don’t deal with us, we’ll shut you down.’

“If you’re a large company, you can lawyer up, but, as a small business owner, I don’t have that ability,” Spinks said. “As a small business owner, you basically either do what they say or you go out of business.”

Delaware businesses — big and small — are calling for fewer regulations and faster permitting.

The Homebuilders Association of Delaware is drafting legislation to create a streamlined review process. The first draft would require the counties to offer expedited reviews —  not longer than 9 months — for large office and manufacturing projects that provide a minimum of 60 new, full-time jobs.

The idea is to tell employers looking at Delaware that the state will work with you and get your approvals quickly and efficiently.

By contrast, developer Paul McConnell said it took him 3½ years to put a Dollar General in Wilmington and, even then, it took a “come-to-Jesus” meeting to get all the approvals he needed.

“Everyone’s frustrated, and, with an economy that’s terrible, there’s no way there should be a backlog,” McConnell said. “Nobody’s doing anything. Nobody wants to be here anymore. Companies are leaving. They find it too hard to do things here. They have to speed things up.”

Businesspeople use words like “strong-arm” and “little empire” and “squash you” to describe the process. One executive said she spent 30 minutes waiting for an official who was in the ladies room. But, most were afraid to talk on the record. As one chain store owner put it, “They have a little empire and they yield a lot of power and you know they can squash you.”

Government officials say it is often the owner or the contractor who drops the ball and doesn’t do what is required of them.

Several municipalities, counties and agencies have sped up their systems and others are trying, but businesspeople say they still have to hire consultants and permit sitters to ford the curlicues of government because some individual bureaucrats won’t get with the program.

“In parts of the city government, they still don’t have voicemail,” McConnell said. “Consultants can’t challenge those officials in any way because they would get dinged on their permits.”

“It takes too long and it’s too expensive,” said Joseph F.  Fitzpatrick Jr. of the New Castle County Chamber of Commerce.  He said companies don’t tell you they’ve gone to another state because Delaware’s process is too drawn out. “They just don’t come.”

“Time is money,” said attorney Richard A. Forsten of Saul Ewing. “For any company coming to Delaware, there are two questions they will ask. One: Can I build the project I want to build? And, two, how long will it take to get the approvals? For better or worse, Delaware’s reputation is that approvals take a long time, compared to other places.”

“You can’t do anything without having a team of engineers and lawyers. We still have to send engineers to Dover to wait in line to meet with somebody. In some cases, there are no appointments.” McConnell said. “The process is just too convoluted, because they never take away anything. They just keep adding stuff.”

Michael J. Hare, vice president at Buccini/Pollin Group, said there may be issues with consistency in the city, but timing is rarely a problem, compared with New Castle County.

“The county code is not as agile as it once was. Most of our work is done in the city, but we hear from other developers that the duration is an issue in the county, especially for major projects,” he said. “Sometimes, even if you have existing zoning, to get something approved is 14 to 16 months, and, assuming you have 14 to 16 months of building at the back of that, it’s a challenge.”

The homebuilders association is working with other business groups and government officials to create the expedited process, Executive Vice President Howard Fortunato said. He emphasized the legislation would exclude housing and retail developments.

A. Richard Heffron, president of the Delaware State Chamber of Commerce, said finding the best way to do it is tricky, but the chamber supports the idea of a quicker process. “We’ve got to do better than we’re doing now. The governor knows it, and I think the county executives are catching on,” Heffron said. “You don’t want to change the rules. You just want to have it move quicker. If Middletown can do it, obviously there is a way to do it.”

An example of a Middletown success: The Johnson Controls building took only three months for all approvals. The building — from soup to nuts — was completed in one year.

“We need some agility when it comes to larger projects that would not be detrimental to the communities where they’re built,” Hare of Buccini/Pollin said. “We need employers because of all we’ve lost recently.”

Brian DiSabatino, president of EDiS Co., lauded the state’s PLUS process that provides agency reviews of major land proposals before they are submitted to local governments and county attempts to create zones near major highways where development is encouraged.

“What is difficult for the developer is the level of regulatory burden and the processing time for all the permits,” he said.  “Unfortunately, the regulatory agencies don’t share that sense of urgency.”

DiSabatino said his first-choice prescription to fix that would be legislation that would entice property owners to get their properties pre-approved. His second choice would be a bill that mandates a deadline. “Right now there are no consequences for the regulatory agency that delays, but there is a tremendous consequence for the business community,” he said.

Rep. Daniel Short, a Republican member of the House Small Business Caucus, said agencies sometimes lose sight of what constituents face when they come into an agency just trying to get from point a to point b.  “It probably would behoove every state employee to have to get a project of their own through the process and see what they put in front of them in terms of hurdles. Let them leave and come back in as if they were customers.”

Rep. Bryon Short, a Democrat member of the caucus, lauded the draft bill: “The legislation is a way for the state, in a real way, to encourage businesses to locate here. Also, I think it’s a very strong message that we’re willing to look at our process and take steps to insure that we’re a place where businesses will want to expand and locate, whether they’re large or small. Obviously, this is focused on large business. But we’re also concerned about small and medium-sized businesses, because they’re a large part of our economic engine.”

Or, as Paul McConnell, whose company turned the old Hercules Building into an innovation center, put it: “We’re not rocking the world here. Companies are not knocking down the doors to get here.”

“The draft legislation is all about creating more jobs in Delaware. Everything starts with more jobs,” said Forsten of Saul Ewing. “If we have more jobs, that reduces poverty, crime and other social ills. If we have more jobs, families have more money and children have a better home environment. … Imagine, for a moment, if we could persuade a large employer, like Amazon, to open its next new facility in the City of Wilmington. Imagine 1,500 or so new jobs in a city of roughly 70,000. The impact would be tremendous. We can spend more money on police, on education, on other social programs, but, if we could spend some money to induce a large employer like Amazon to come to Wilmington, that expenditure could potentially be more effective than a lot of other spending we are doing. It all starts with jobs.”

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