Entrepreneurs grumble about Santa Rosa permit fees

The permit for a new Santa Rosa wine and beer shop cost its owner $14,230, an amount he called "ungodly" last week.

Now the operator of a coffee stand in Rincon Valley is buzzing over what she contends is a similarly ridiculous cost for a permit to serve customers at a drive-thru.

"I am completely disgusted by the city wanting that much money for a drive-thru," said Susan Price, who recently opened Carnal Coffee in Montecito Marketplace shopping center.

Santa Rosa officials say they have gone out of their way in recent years to make it easier to open a business in the city, mostly by waiving the need for certain types of businesses to obtain use permits. But small-business owners who find themselves needing such permits often face sticker shock over fees they say stifle entrepreneurship.

The use-permit process often involves extensive staff analyses, including traffic studies in some cases.

Informed she would need to pay up to $15,000 for a permit fee to operate a drive-thru, Price instead is operating it as a walk-up coffee shop, an unusual sight for the middle of a shopping center parking lot.

"I've got to explain to people six times a day, if not more than that, why it's not a drive-thru," said Price, 35.

The booth was a drive-thru photo shop and then a coffee shop until that closed about six years ago. The space stood vacant for more than six months, after which the property owner lost the right to lease it as a drive-thru, Price said.

That meant she would need a new permit for a drive-thru. But that would entail an application, a full report by a city planner, a public hearing before the Planning Commission, all with no guarantee the process would result in an approved permit.

"I kind of feel like it's baloney when it's already been done," Price said. "I feel like it's an excuse to make money."

Beginning in 2010, in response to the economic downturn, the city relaxed certain zoning rules to make it easier for businesses to get up and running and landlords to fill vacant commercial buildings. Instead of lapsing after six months, most so-called "conditional use permits" became valid for two years from the time the use ceases, such as when a business shuts down.

But that didn't help Price, whose space lost its permit long before the council relaxed the red tape.

Price said that after first talking to planning staffers, she was under the impression that that no new drive-thrus would be allowed in the city. But as she was preparing to open without a drive-thru, she learned the Dutch Bros. Coffee was opening at the intersection of Mendocino and Pacific avenues under the same use permit -- without cost -- that had been used by the previous tenant, also a coffee purveyor. The site had been vacant less than two years.

When Price inquired at City Hall about a drive-thru permit, she learned the $15,000 fee would apply to her. "How many cups of coffee is that? I'm not Starbucks!" Price said.

So, she opened her business three weeks ago as a walk-up venue, placing several small planters in the former drive-thru lanes to create a little outdoor caf?

She's optimistic about the business' prospects, but knows she's missing the chance to serve those who appreciate the convenience of a drive-thru, particularly mothers with young children or those uninterested in braving inclement weather.

Planner Noah Housh noted that city staff waived several zoning requirements in order to help Price get established. These include allowing her the least expensive process to get a sign permit and waiving any review of her patio.

"I'd say we're doing everything we can to accommodate her," Housh said.

Chuck Regalia, director of the Community Development Department, said the city currently is updating its fee schedule. The last time that happened was in 2004, when development fees rose sharply as building activity boomed.

When the council streamlined the permit process in 2010 as an economic incentive to business, it didn't include alcohol sales or drive-thrus as businesses that no longer required conditional use permits, Regalia said.

The pending study will show the city's permit fees don't cover its costs. If permit fees were lowered, more of the department's funding would have to come from the city's general fund, potentially impacting other city services, he said.

Price claims such permits in the unincorporated areas of Sonoma County run about $3,500, a figure she said she could live with.

"I understand that these things cost money," she said. "I'm willing to do what is reasonable."

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com. OnTwitter @citybeater.