The city that makes it hard to work
Tuesday, Jul 15, 2014 - Posted by Rich Miller
* Agreed…
Chicago needs entrepreneurs. But too often, the city slows them down or chases them out of town.
The “City that Works” doesn’t work for startups. A simple process is necessary so that startups in Chicago can get off the ground and start working, hiring and paying taxes. One good place to start is to make Chicago a 24-hour city.
This idea arrived in America after Phoenix city councilmen observed the startup licensing process in Hong Kong. A Hong Kong entrepreneur can walk into a government office in the morning and walk out with a business permit in the same day.
So the Phoenix City Council set the goal of getting businesses through permitting in one day. Phoenix privatized the process to speed it up, allowed businesses to “self-certify” and is now allowing online permitting so that businesses can get licensed in less than 24 hours.
Chicago, more than anywhere else in the country, needs this type of regulatory innovation
* Let’s just think about one thing: Awnings. If you want to put up an awning in front of your store, you have to fill out a five-page application, submit it to your alderman for approval, then submit it to the city inspector, and then send it to the city council…
Each application for use of the public way requires approval by the City Council. Once the application is approved by the alderman of the ward in which the proposed public way use id located and submitted to BACP, it is prepared for City Council passage. The application is then referred to the Committee on Transportation and Public Way. Once approved by the Committee, the application is referred back to the City Council for passage by the Council. Where the aldermanic approval signature is not received by BACP within 60 days after applicant submission, and there is no applicant-sponsored ordinance as described in paragraph 3 above, then, provided the application is complete and accurate and the applicant is not in violation of any pertinent provision of the Municipal Code and has submitted the necessary Building Permit application(s) to install the sign, canopy, awning, banner or marquee and has been approved by all related inspecting departments, the application shall upon the 61st day be deemed approved by BACP and processed for submission to the City Council as a Mayoral introduction.
Then you pay a $400 city fee and have to buy insurance - a million dollars worth of liability insurance…
The Certificate of Insurance is evidencing no less than $1,000,000.00, combined single limit, with said insurance covering all liability, both public liability and property damage that may result from the granting of said privilege. Please ensure that the insurance liability is no less than $1,000,000.00.
The city estimates that it can take up to three months to navigate this process.
For an awning.
- liandro - Tuesday, Jul 15, 14 @ 1:38 pm:
Little things like that add up quickly. Also, the bad buzz can be as bad as the actual red tape. If someone wants to open up their own biz, but all they hear are horror stories from people they know that have tried it…well, they often won’t even bother.
Chicago seems to have a good vibe going on right now in the tech community…evidence of what happens when the buzz turns in the other direction. Chicago (and IL) needs to get a reputation of being a great place to start up a new business. It needs to make it easier, and be very public about what those steps they take are.
- Commander Norton - Tuesday, Jul 15, 14 @ 1:38 pm:
There seem to be three basic kinds of news stories about government: it’s moving too slowly, it’s moving too quickly or it’s corrupt. Or some combination of the above.
The NRI scandal is a story about government moving too quickly. Procedures weren’t followed; oversight was haphazard or nonexistent. But just as often, we read complaints that the red tape is holding up innovation, creative solutions and economic development.
I’m being (a little) tongue-in-cheek here, but streamlining the permit approval process for awnings will sound like a great idea until someone is killed by a falling awning. Then we’ll all lament that the process moved too quickly and cut corners.
- Goooner - Tuesday, Jul 15, 14 @ 1:42 pm:
That’s actual efficient, by City standards.
Try to get approval of a building permit.
The fact that people hire “expeditors” for building permits says it all.
Don’t hire the right guy? Forget that permit for a while.
And meanwhile work that can be done — and jobs created — comes to a halt.
I’ve lived in the City most of my life and I admit there is no place else I’d rather live, but anybody who claims the City is business-friendly has no clue.
- Goooner - Tuesday, Jul 15, 14 @ 1:44 pm:
NRI was “government moving too quickly”?
Is there an approved speed for passing out cash to politically connected people who can influence GOTV shortly before an election?
- Formerly Known As... - Tuesday, Jul 15, 14 @ 1:46 pm:
There are so many things we can do to help ourselves as a city and state that simply are not being done. The awning example is downright ridiculous.
- A guy... - Tuesday, Jul 15, 14 @ 1:47 pm:
Precisely right. Ald. Rugai tried to streamline the “awning” process in Beverly, the “awning capitol” of the city. It still took 3 months to get a permit, still needed a boatload of liability insurance, still subject to frequent and costly inspections. And this is an area where it was being encouraged…
- RMW Stanford - Tuesday, Jul 15, 14 @ 1:47 pm:
As one person pointed out all of those little regulatory cost add up over time and in economics terms costs are costs, it does not matter if they are imposed by the government or the market. Chicago and Illinois both need to adopt a more market friendly attitude ( note I use market friendly not business friend which is to often code word for subsides and cronism)
- wordslinger - Tuesday, Jul 15, 14 @ 1:50 pm:
The practice (and it’s just that, a practice; there’s no cover of law) of giving aldermen baronial power over development in their wards is ridiculous and undemocratic.
In fact, the whole City Council system is ridiculous. Theoretically, Chicago is a Strong Council/Weak Mayor system. In practice, we know it’s just the opposite.
Try to think of anything good that’s come out of the City Council in your lifetime, except for the perverse entertainment of low-rent crooks getting easily hooked by the federales.
Chicago would be much better off with a council of ten or under. That would require the building of real support from a diverse, large population.
But fewer council members with larger constituencies would pose an electoral risk to Chicago mayors and cut down the gravy train for neighborhood hacks.
- Amalia - Tuesday, Jul 15, 14 @ 1:51 pm:
and then an “entrepreneur” who is apparently well known ruins it for others by holding an unsanctioned concert at
Montrose Harbor, police move in to stop a fight, and a big melee happens with bottle throwing, resulting in arrests. now the City is talking about licensing promoters. it’s complicated.
- Robert the Bruce - Tuesday, Jul 15, 14 @ 1:51 pm:
Does Phoenix not have clouted employees or politically appointed directors of city agencies?
How do they get this done so quickly? Impressive!
- Robert the Bruce - Tuesday, Jul 15, 14 @ 1:51 pm:
also, another good headline, Rich!
- Norseman - Tuesday, Jul 15, 14 @ 1:52 pm:
It’s obscene that you have to apply through your alderman. The rest of the bureaucratic process is just sad.
- Goooner - Tuesday, Jul 15, 14 @ 1:52 pm:
One additional note on this –
The $1 million insurance policy really should not be a big deal.
Commercial general liability policies should be in at least that amount. To open a company anywhere, the company should have one and it should provide coverage for this.
It should be standard and shouldn’t increase anybody’s cost.
The delays and the rest of it are a different matter.
- Because I say so... - Tuesday, Jul 15, 14 @ 1:55 pm:
And some alderman have or had their own local levels of approval through appointed committees. So before you even get to the city hall level, you have to wait for the monthly local zoning commission to meet. One previous alderman had a reputation for making business’s jump through all kinds of hoops that many just avoided trying to business in that ward.
- CLJ - Tuesday, Jul 15, 14 @ 1:56 pm:
Up to three months to go through the process is kind. I once, in a former life, had the job of processing these applications for a former Chicago alderman. There is the initial approval from the alderman (signature on the application), then approval from the city, city staff then draft the ordinance which is presented to the alderman during a city council meeting (second aldermanic sign off), ordinance is introduced. The following month it goes to committee and then council for approval. Then it has to be published, officially become “law” for lack of a better term (third month). Then it goes back to city staff for processing and billing. After payment the permit is approved (fourth -fifth month).
What was great, the city didn’t know this requirement was on the books until around 2006 at which point it hired dozens of inspectors to go to every business to find if they needed a public way permit (canopies, awnings, lights, speaker, basically any and everything that hangs off or is attached to the front of a building hanging over the sidewalk including somethings like bank vaults that might be located underneath the sidewalk).
Again, the city created another bureaucratic layer called the City of Chicago Small Business Office to help businesses deal with the bureaucracy of other city departments. Efficiency!
- Under Further Review - Tuesday, Jul 15, 14 @ 1:59 pm:
A favorite Chicago City Hall memory:
Scene: Customer Service Window of the Building Department.
Purpose of visit: Pick Up a Building Occupancy Certificate
Bureaucrat from Hell: Counter Clerk
“But My Certificate is filled out, stamped and sealed… It is sitting on the desk immediately behind you on the top of the stack… I can see it from here.”
Clerk: “Those completed certificates are not available for customer pick up until tomorrow. You will have to come back tomorrow to pick it up.”
No amount of reasoning could move this oaf. So I had to make another trip downtown.
And they wonder why people are eager to move!
- A guy... - Tuesday, Jul 15, 14 @ 2:07 pm:
===Goooner - Tuesday, Jul 15, 14 @ 1:52 pm:
One additional note on this –
The $1 million insurance policy really should not be a big deal.====
It’s an “additional” policy. Just for the awning. It is a big deal.
- OneMan - Tuesday, Jul 15, 14 @ 2:09 pm:
Got to love central planning as it were.
- Goooner - Tuesday, Jul 15, 14 @ 2:12 pm:
A Guy,
Actually, I don’t think it does.
The form requires that the City be added as an additional insured. That’s also routine.
There is no apparent requirement for a second policy.
As long as the CGL does not exclude coverage for these things, then it is OK.
- Precinct Captain - Tuesday, Jul 15, 14 @ 2:20 pm:
The Reader did an article in 2011 about how few Chicago City Council matters have to with citywide policy. Almost everything is “ward housekeeping.”
http://www.chicagoreader.com/chicago/city-council-reform/Content?oid=3828954
- Ken_in_Aurora - Tuesday, Jul 15, 14 @ 2:38 pm:
===There is no apparent requirement for a second policy.===
I’m not actively underwriting Commercial GL anymore, but this is correct to my experience - CoC is simply added as an Additional Insured on the business policy.
- Amalia - Tuesday, Jul 15, 14 @ 3:19 pm:
Precinct Captain is correct. but, if only one function….traffic….was removed from Council approval, there would be a very low percentage of the work remaining. traffic decisions left to professionals equals better traffic management and fewer ordinances.
- Steve - Tuesday, Jul 15, 14 @ 3:27 pm:
For a look at how Chicago’s closest competitor in population is thriving : check out this article in the Wall Street Journal today. A much easier process in Houston.
http://online.wsj.com/articles/joel-kotkin-and-tory-gattis-success-and-the-city-1405379881
- chicon - Tuesday, Jul 15, 14 @ 3:50 pm:
It is not a surprise to read stories such as this. It is what one should expect when there is a government in place that is not at all answerable to the people that hire them. It is not a good thing to have one party (any party) so utterly dominate a government that it doesn’t fear being replaced.
- WestLooper - Tuesday, Jul 15, 14 @ 4:11 pm:
As a small business owner in the West Loop (we have been in Chicago for 15+ years), I can attest to Rich Miller’s findings in his article. I started the company in Oak Park and moved downtown a few years later. I don’t think Oak Park even knew I existed. No forms, no delays, just got started and paying taxes. I fear that the pending hike in minimum wages will make it more difficult for entreneurs to continue to work in Chicago. As a practice, we hire interns for the summer. I started my career as an intern and feel it is important to pass the learnings along. We pay our interns: I feel that is only fair as they are providing a service. We have always paid more than the minimum wage. But I set the rate, based on skills and market demand; not government dictates. A high school or college student may not have the skills to be paid $15+ a hour. The new wage hike may force me to have only unpaid interns, none at all, or even to move. Small businesses are the key to this country’s, and Chicago’s, success. But our city doesn’t seem to embrace that concept.
- Tim Snopes - Tuesday, Jul 15, 14 @ 4:22 pm:
What’s the problem here? Tradition is good. Everyone gets there’s. “Dju get yers?”
- Anyone Remember - Tuesday, Jul 15, 14 @ 5:07 pm:
As an immigrant to Illinois, stories like this make me ask “Why do legislators have executive power?”
Approval of permit applications is an executive function. Aldermen are elected to perform legislative functions. Please note 30 years ago the federal Supremes struck down Congress’ disapproval of administrative rules, which was nearly identical to the Legislative Audit Commission’s disapprovals of administrative rules. The Supremes said the legislative branch’s constitutionally valid response to executive administrative rules / operations they disapproved of was legislation.
Again, why are legislators given executive authority?
- Chris - Tuesday, Jul 15, 14 @ 5:17 pm:
“traffic decisions left to professionals equals better traffic management”
Maybe, maybe not. CDOT has a poor track record on many (not all. many.) traffic management issues.
- wordslinger - Tuesday, Jul 15, 14 @ 5:25 pm:
– It is not a good thing to have one party (any party) so utterly dominate a government that it doesn’t fear being replaced.–
You’re looking at it the wrong way. Party really has nothing to do with it anymore.
Richard I finished off what was left of the GOP in the city, it’s true, but the monolithic Democratic Party structure died with him, as witnessed by the elections of Byrne and Washington.
All city officials are, at least nominally, Democrats, but the same was true during Council Wars when every day was a battle royale within city government.
There are 50 highly coveted baronies in which a lord or lady can exercise de facto control over much of the estate and make a good (legal) paycheck while keeping an eye out for hinky supplemental income, if so inclined.
The Lord Protector, the Mayor, has in recent decades obtained power via a cult of personality rather than any party system. The mayor as chief administrator wields power and can compel obedience by delivering or withholding favors and services from aldermen.
In addition, the mayor has the power to appoint alderman when vacancies occur, which happen more often as not as aldermen, despite the lessons of history, are strangely compelled to accept envelopes filled with chump-change cash from strangers wired for sound.
At one point, Richard II had appointed nearly half of the City Council.
- Amalia - Tuesday, Jul 15, 14 @ 6:28 pm:
@ Chris, stopsigns and traffic bump a palooza in Chicago is just laughable.