Dwan “Dee” Martin has been a business owner in Chicago for eight years, but doing business in the city hasn’t gotten any easier. A pile of red tape from city permits, inspections, licenses to other red tape is a constant obstacle.
Martin owns Urban Luxe Cafe in South Shore, as well as Urban Luxe Salon in Ashburn and Nail Riot in Englewood. She’s a proud Chicago native, but said, “I’ve considered not opening another business in the city limits.”
Martin is not alone. Other business owners say they are stymied by Chicago’s red tape. To help them, the Small Business Advocacy Council is pushing for reforms to “cut red tape, improve processes and lower the costs of starting and expanding Chicago businesses,” according to a proposal released by non-profit this spring. It was endorsed by more than 30 chambers of commerce and business advocacy groups and 15 councilors.
The council is lobbying for more council member endorsements and hoping for policy changes within departments — possibly even proposing an ordinance if a majority of Chicago aldermen support its call for reform.
In its reform package, SBAC called for streamlining zoning requirements, inspections, debt controls and more. According to the council, these measures will support small businesses, spur economic growth and improve Chicago’s economy during a critical time as it continues to recover from the pandemic.
“It is one very important time for Chicago. Downtown vacancy is still high,” said Elliot Richardson, SBAC president. The reforms are “something that can really help and doesn’t cost money. They will help the city save money in the long run.”
In April, Mayor Brandon Johnson unveiled the Cut the Tape report, which makes more than 100 recommendations to accelerate residential and commercial development. Some goals include reducing the number of weeks it takes to process permit applications; reducing the number of days businesses have to wait to receive updates from various city departments; and simplifying permit applications, such as using digital forms instead of paper.
“Too often, city initiatives to catalyze more commercial investment and small business growth are stymied by burdensome city processes and policies,” according to Johnson’s report. “Some commercial corridors on the South and West Sides of Chicago are reporting store vacancy rates as high as 43%. In a post-pandemic economy, store vacancies are also a significant problem for some previously strong submarkets, including the Loop, which has a retail vacancy rate that exceeds 30% in the mid- an overall downtown office vacancy of over 23% at the end of 2023.
Johnson last month announced steps taken from the report, including the creation of a 50-person task force to help implement the proposed initiatives and the appointment of Abigail Sullivan as the inaugural director of process improvement. Sullivan previously served as principal operations analyst for the Chicago Public Library.
For decades, Chicago mayors have tried to ease City Hall’s notoriously slow and arcane bureaucracy by speeding up the approval of licensing, permitting and development plans in order to help businesses and lower their costs. But progress has been slow and uneven.
“We need politicians to take swift and bold action,” said Richardson, of SBAC. “Cumbersome and unnecessary red tape can stop Chicago entrepreneurs in their tracks and prevent them from starting and growing their businesses.”
Johnson’s initiative is still in its early stages, with the task force’s first meeting held on July 29.
Cassio Mendoza, Johnson’s deputy press secretary, said the city will update its website quarterly showing which recommendations from the report have been finalized.
Hand-delivered paper copies
Tonya Trice, executive director of the South Shore Chamber of Commerce, said: “Going through expensive and time-consuming red tape has been a stumbling block for some businesses.” Frustrating bureaucracy “constrains them from working to their full potential. Going it alone can be very intimidating for small businesses, so they tend to hide and work from home.”
An example is applying for special use permits, which are required for nail salons and other businesses. The permit is intended to manage the types and number of businesses in an area so that, for example, a neighborhood is not saturated with one type of business.
Special use permit applications cost about $1,000. And a hard copy must be delivered in person to the Zoning Board of Appeals office so the applicant can pay the fee and get a public notice sign to post outside the proposed business. The applicant must also send notices to nearby property owners and then wait about 30 to 60 days for a hearing with the zoning board. Waiting time may be longer if plans need to be revised.
Meanwhile, the applicant can pay rent and utilities in an empty space as they wait months for a permit that could be denied, said business owner Martin, who has been through the process with her own nail salons.
Dwan “Dee” Martin at her South Shore restaurant Urban Luxe Cafe.
The drawn-out process “prevents businesses from opening or they open with a financial deficit,” she said. “They’ve already spent thousands on rent, utilities and security long before they even open their business.”
Martin, who is also a real estate investor, enjoys reading the legal documents. But she said less experienced entrepreneurs would have to spend thousands to hire a lawyer or consultant to help with the process and review lengthy forms, such as a 15-page financial disclosure that must be filled out by the applicant. and the owner.
Mendoza said the city makes no money from application fees.
“The business license fees are cost recovery for the city’s expenses in issuing the license,” Mendoza said. “Chicago’s license fees are in line with and in some cases lower than other cities across the country.”
Mendoza said approval rates for special use permits historically exceed 90%, and the number of applications varies each year with some withdrawn by the applicant before the hearing and others denied. In 2023, the Zoning Board of Appeals received 200 special use applications.
Reforms at work
The Cut the Tape report proposes eliminating the Zoning Board of Appeals’ approval “of a special use permit to open a hair salon, barber shop, body art shop or nail salon.”
Mendoza said the special use permit process is being streamlined. For example, the city aims to accept online applications through December. It will also begin accepting electronic signatures and PDF copies of original signatures for applications. And the board will create a more streamlined public hearing package and publish sample forms to help clarify what’s required.
There are also plans in Johnson’s report to “revamp” the debt control process for entrepreneurs applying for business licenses by “eliminating inconsistent results and redundant reviews — ultimately reducing turnaround times for buildings, permits and licensing.” The process checks whether an applicant has excessive debt.
In its list of requested reforms, the SBAC asked the city to speed up mandatory debt audits. The council said personal debt checks are often inaccurate and cause “extraordinarily long delays”.
Communication also needs to be improved with the city by explaining license denials in writing, SBAC said.
Chicago vs. Suburbs
Geri Hernandez, co-founder of gourmet empanada restaurant Savory Crust, caters private events in Chicago, where she serves empanadas filled with fillings such as chicken curry, macaroni and cheese, as well as chicken and beef. But Savory Crust, which has locations in Morton Grove and Carol Stream, won’t bring its food truck to festivals in Chicago because of the city’s cumbersome bureaucracy operating at public events.
For example, the company has a food manager certification that is accepted statewide, including Cook County, but Chicago requires its own certification and training that costs $250.
Food trucks gathered last year at Daley Plaza in the Loop.
The city also requires food preparation to be done in a city commissary, an industrial kitchen, even though Savory Crust has its own kitchen in Carol Stream. It also forces food trucks to dump sewage at a Chicago facility, though Savory Crust said it can do so at its suburban locations.
Hernandez said the prospect of Chicago’s red tape “has just prompted us to seek business in other cities and counties that accept all of our registrations and permits.”
“Applying for multiple licenses and permits is time-consuming and expensive,” she said. “We would rather apply for a permit that covers multiple cities in one county. Getting licenses and permits in DuPage County is easy to navigate, the staff is accessible if you need help, and they get things done quickly and efficiently.”
Hernandez said other business owners have also complained to her about slow and inconsistent inspections by the city that can delay business openings.
Mendoza said Department of Public Health inspection times for food establishments vary and depend on factors such as the type and size of the facility, food processes and the number of violations, if any. New facilities that need re-inspection are prioritized and inspected within five days, he said.
However, Hernandez said “it’s not attractive for us to do business in Chicago with our food truck or events unless it’s on private property.”
The red tape is “just another reason to keep my business out of Chicago and continue to grow in other counties,” she said.