New downtown businesses struggle with permit process

Chef Bob Kinkead has opened restaurants in six states and another that bears his name in the nation's capital.

But the red tape he faced elsewhere didn't prepare him for the struggles he encountered opening Hell Point Seafood restaurant in downtown Annapolis earlier this year.

"Nobody's got anything on this city for making it difficult for business owners," said Kinkead, who hoped to start serving tables at Hell Point in April but didn't open the restaurant until June.

Annapolis is notorious for its arduous permitting process. In a town that enforces stringent historic preservation rules and state Critical Area laws, that's not surprising.

And though not all businesses have trouble opening their doors in Annapolis, the characters in this tale say setting up shop in the city these days is like walking into a world of confusion and frustration blindfolded.

"D.C. is a day at the beach" compared to Annapolis, Kinkead said.

The issue has become a controversial topic in downtown Annapolis, an area suffering from the effects of the national recession and outside developments including the Annapolis Towne Centre at Parole.

Democratic Mayor-elect Josh Cohen said economic development will be a "top priority" of his administration and a "key part of that is making sure our permitting and inspections process is predictable and business-friendly."

"We have a structural, management and workload issue that needs to be addressed," he said.

Cohen said the biggest challenge he and the new City Council will take on is maintaining city services in the face of declining revenues.

"Economic development is not only good for Annapolis, it is going to be key if our citizens are going to expect quality services of City Hall," he said.

Catfights continue

In the meantime, catfights between businesses and city officials persist.

Consider the situation of Sofi's Crepes, a crepe shop that bought the City Wraps business on Craig Street outside the Naval Academy gates.

Ann Costlow, a former stockbroker who founded the Sofi's Crepes concept in Baltimore, assumed cooking was allowed at the former City Wraps building because the former owner had cooked there.

She was wrong.

The city's Department of Planning and Zoning notified her that "they had done some research and found a clause that there was no cooking allowed on the premises," Costlow recalled.

"I had said, 'That's ridiculous because this was a restaurant before,' " Costlow said. "It wasn't that they weren't willing to help us. The system was just so rigid and they didn't seem to know a way around it."

Intent on helping the first franchise of Sofi's Crepes open in Annapolis, Costlow began "knocking on every single person's door" and contacting everyone from city department heads to Gov. Martin O'Malley's office. The city expedited Sofi's Crepes through the special exception process and the franchise finally opened June 6.

With the store up and running, Sofi's Crepes has been busy with Naval Academy deliveries and locals who stop by after heading to the downtown farmers market, said Stephanie Hans, the franchise owner who hoped to open in April.

"It was just that extra month that was frustrating," Hans said. "It was kind of prime time down here."

Ryan Lamy, who opened Pip's Dock Street Dogs at 118 Dock St. on June 29, also tripped upon numerous city roadblocks.

There seemed to be a "whole new set of rules" depending on whom he talked to in the city, he said.

"Basically it was just me putting together the puzzle pieces every day," he said.

Lamy, who named his hot dog business after his 5-year-old daughter, whose nickname is Pipper, decided to open the shop in the former spot of a sushi bar on Dock Street in February. Lamy's problems began when he was told by someone in the city permitting office that he needed a permit to install a plug-in refrigerator and a chest-style freezer. Later, a city inspector informed him that he didn't need that permit, he said.

That's $50 for "no you don't," Lamy said.

City officials say a refrigerator that plugs into a standard receptacle doesn't require a permit.

Another obstacle: The city's Historic Preservation Commission, which has jurisdiction over building exteriors, also questioned Lamy's plans to install a ventilation system outside. City officials asked Lamy if it would be possible to run the duct inside.

So Lamy did some research and determined that installing an inside duct required cutting through a layer of concrete and the antique oak floors of a historic building that "hadn't been touched in 100 years."

After his discovery, the commission approved the original plan for an outside duct, he said.

"I had to go through the entire board hearing again," Lamy said. "It cost me another month's rent and no sales."

Hell Point Seafood's Kinkead, who bought the building along Ego Alley that was formerly home to Phillips Seafood, said he thought the property was up to code.

But he ended up spending $200,000 in unforeseen costs, including electrical and plumbing work and the installation of hallways and doors, he said. Some of that money could have gone toward the training of employees, he said.

Kinkead said he also hired a lawyer to help him deal with the city and ended up missing key money-generating events such as Naval Academy graduation.

"They just don't see if from the business side," he said.

Kinkead said it took him about the same amount of time to open his now legendary Kinkead's restaurant in the Foggy Bottom neighborhood of Washington D.C. But in Washington, "they don't put as many roadblocks in your way," he said. "When they come in and say, 'We want you to do a, b, c, d, e, f, g,' that's the end of it. That's not the end of it in Annapolis."

Helping hand?

City officials say they aren't oblivious to the challenges of opening a business downtown: Annapolis is home to roughly 10 business zones with varying restrictions.

While they acknowledge these obstacles, city officials say there's no compromise when it comes to safety or historical integrity.

"You're looking at buildings that are historic buildings and you have to bring them up to code," said Patricia Blick, the city's Chief of Historic Preservation. "We're in an urban area that is very dense, so we are very careful about code compliance and safety."

Restaurants are inherently more difficult to open downtown because cooking presents potential hazards. "Once you say 'food service,' it is much more complicated," said Chris Hall, the city's zoning enforcement officer.

On top of that, the city must enforce grease interceptors, state environmental regulations, and odor and noise abatement issues. If the city were to cut corners and something terrible happened, the ultimate liability could be on the city, said Jon Arason, the city's Director of Planning and Zoning.

"We're enforcing the laws we are given," he said. "Which codes would you begin to tell the council to eliminate?"

Arason said his office is more than willing to meet with businesses that are having trouble.

"If we can, we try to find ways to help people within the parameters in the code," Arason said. "If people come to us first, we can really help them to avoid this stuff."

In the case of Sofi's Crepe's, it was a "perfectly natural assumption" to think that cooking was allowed in the City Wraps space, Arason said.

To help the business, Arason made sure the shop got through the special exception process "in lightning speed."

Sveinn Storm, owner of the former City Wraps business who testified on Costlow's behalf, said the city was "fully aware" that he cooked at City Wraps.

"There was nothing snuck in under anybody's nose," he said. "We had cooked food in there and it was prepared with heat."

One of the main issues for Hell Point was the need to create a separation between the restaurant and the adjacent kitchen of the Aromi d'Italia cafe, said Mike Mallinoff, director of the city Department of Neighborhood and Environmental Programs. All new restaurants must follow more stringent safety rules to avoid downtown fires, he said. The city provided Hell Point with building permits on May 12 and granted occupancy June 25.

"I don't know how we could be much quicker," Mallinoff said.

Hell Point was allowed to open so long as Kinkead agreed in writing to make modifications within a certain time, Mallinoff said. One of those modifications is a grease interceptor, which Kinkead is financing with a bond.

Solutions

While some merchants have moved smoothly through the process, business leaders say there is need for improvement.

"It's been an ongoing problem for many, many years," said Bob Burdon, president and chief executive officer of the Annapolis and Anne Arundel County Chamber of Commerce. "It's almost become an ingrained culture that has to be redirected, if you will."

Mike Miron, director of the city's Department of Economic Affairs, said there has been discussion about hiring a consultant to conduct a $25,000 study that would review the city's permitting process and identify ways to help make the town more business-friendly.

"It's not just been one or two people that have been pointing the finger at the process," he said. "It has grown into a large group of people who have said, 'This is a problem.' "

The problem might be solved by providing more guidance for businesses trying to open, business owners say.

"I feel like you would absolutely have to meet with someone from the city that would guarantee you help through the process," Costlow said. "Right now, that doesn't happen."

Lamy, of Pip's Dock Street Dogs, said city businesses need a liaison to go over exactly what permits are needed and who specifically to speak with.

"There was nobody there to show you the way," he said.