Small businesses struggle to compete in era of redevelopment
Peter Gifford wouldn’t have bought land in Kings Beach if he had known what it would take to develop it. The owner of Green Thumb Grounds Care in Lake Forest decided to take his company east and start a retail nursery, but three years and nearly $70,000 later, not a brick has been laid.
Green Thumb is one of many small Tahoe businesses without enough money to pay the steady stream of fees and entitlements that make redevelopment in the basin so complex. Small business owners such as Gifford become so frustrated and out-spent that many give up, while large corporations have the money, know-how and personnel to stay the course.
“It’s very expensive to redevelop,” said planning consultant Leah Kaufman. “What happens is smaller clients get halfway through the process, realize how expensive it is, and stop.”
Big bucks are the ticket
In addition to the expense of hiring architects and planners, there is a long list of fees business owners must pay in order to build or renovate. Mitigation fees — required to offset certain impacts of new structures — are commonly criticized as being easy for large corporations to pay; in effect, some say, allowing environmental degradation for a fee.
Kaufman, hired by Gifford for the Green Thumb project, used Safeway as an example of how expensive development in the basin can be. The King’s Beach Safeway was apparently the most expensive store the company has built nationwide because of the complex requirements of building in an environmentally sensitive area.
And while businesses like Gifford’s can only afford to employ a few people to handle the permit process, large developers can hire dozens and pay out large amounts in fees. Tonopalo, the lakefront luxury resort in Tahoe Vista, employed at least 50 architects, engineers and planners to get through the permit process, said principal architect Don Clark, of the Reno-based firm Cathexes. He estimated that the cost to Tonopalo was “at least several hundred thousand dollars.”
With such money and manpower, it took just a little more than two years to get the 19-unit Tonopalo development approved. It entered the planning phase in late 1999 and was under construction by May 2002.
In contrast, Gifford is already three years into his planning phase, and since he still has to present the project to the Placer County Building Department, it will likely be a year until he has the permits and another year before he can break ground.
Steve Kastan, deputy field advisor for Supervisor Rex Bloomfield, acknowledged the difficulty small businesses face. “It’s a complicated process and the same process applies to everybody E that’s the problem,” he said, adding there should be more support and guidance for businesses like Gifford’s.
Small businesses bogged down by fees, regulations
Small business owners are growing weary and giving up. They say people at the various agencies have been helpful, but describe a feeling of overwhelming frustration and powerlessness in the face of the system at large.
“There is a lack of cohesion and communication between all the different agencies, so after I’ve been projecting the costs, all of sudden there are new groups of conditions and requirements, and each agency has its own,” said Gifford.
After submitting his initial plan for the nursery to the county and the Tahoe Regional Planning Agency, the first set of conditions was imposed, including construction of a demonstration garden showcasing native plants that help control erosion. He was also required to erect a community sign announcing entrance to Kings Beach, and may need to institute a Christmas tree recycling operation on the grounds.
“That was all fine,” he said. “But then new conditions and information kept coming up as we went along E it gets more and more expensive until it’s just not worth it to do.”
Gifford estimates he’s spent between $60,000 and $75,000 on architects, planners and fees. “If I had known it would be this difficult and expensive, I probably wouldn’t have bought the land,” he said.
Kaufman said one reason the redevelopment process has been so complicated for Gifford is that his is a mixed-use project, both residential and commercial. Along with the retail nursery, he plans to offer employee housing by revamping what are now the Brockway Hills Apartments, on the north side of Highway 28.
This residential-commercial combination “means more scrutiny, more agencies, more requirements,” said Kaufman. Any redevelopment must provide workforce housing if additional units are built or if the land is re-zoned, as Gifford’s has been.
Gifford said providing such housing is not the problem — he had planned to do so from the beginning. The obstacle, he said, is spending the money on structural improvements in order to comply with a spate of conditions and building codes just brought to his attention by the Housing Department.
Dave Wilderotter, owner of Tahoe Dave’s, has also been waylaid in his redevelopment efforts.
Two years ago, he decided to put a 10-foot addition around the sides of Tahoe Paddle and Oar in Kings Beach, but has been held up by the Kings Beach Commercial Core Improvement Project. Wilderotter was told he cannot get a permit issued to build on land that may be used for sidewalks in the improvement project.
“I’ve spent $20,000 and it was such a small project, I’m thinking it will never get signed off on or pay for itself,” he said. “I’ve just run out of energy E every time I feel like the end is in sight, there’s another requirement.”
Community support not a guarantee
Green Thumb and Tahoe Dave’s plans have received warm receptions at public meetings, and county planning officials applaud both projects. Alan Breuch, who has served as county project planner for both, called them both excellent projects that would improve the community and said, “we’re here to expedite and help out.”
So why is it taking so long? No one has a clear answer. Most with knowledge of the process evoke a picture of poorly coordinated agencies sifting through tangles of seemingly ever-changing regulations and codes — making for a slow, sometimes maddening process.
“I’ve been a planning consultant for 23 years, and I still run into conditions I don’t know about,” said Kauffman. She said the time frames for building have become longer over the years.
Small business owners and some county officials agree there should be more support for small, local businesses. Some propose establishing a position or agency specifically to guide owners through the permit process.
In the meantime, Wilderotter has had enough. He recently stopped his efforts to get permits, and now worries about the state of overall development in the basin.
“Big developers are going to continue coming in because they have the smarts and the money to do it — are we going to be a community of Starbucks?”
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