December 28, 2011 | by Mark Lee
Our Business Matters: A year-end update

The past nine months have provided this columnist the privilege of sharing observations, information and feature news profiles on some of the issues, challenges, people and perspectives originating with the local business community. The following is a special year-in-review update on several 2011 “Our Business Matters” topics.

A “scandal scarred” D.C. Council reverses vote on taxes by dropping its opposition to raising local income taxes, already among the very highest in the nation, with a new top rate hitting the small business community hard – allowing for yet another District government spending increase.

Year In Review: 2011

As the year comes to a close, the Council rushed last week to mask some of the stench emanating from the Wilson Building by approving a timid ethics bill after more than two months of discussion punctuated by a nine-hour federal raid and property seizure by IRS and FBI agents at the home of D.C. Council member Harry Thomas Jr. (D-Ward 5).

Meanwhile, criminal and ethical investigations into alleged improprieties by several elected officials drag on, while other Council members suffer the unabated suspicions of residents regarding potential wrongdoing or questionable ethical behavior – in total engulfing a majority of the Council as well as the mayor.

Earlier this month, D.C. Council legislation was introduced addressing taxicab confusions: inferior service, regulatory chaos. Overconfident taxi drivers, believing that their support of Mayor Vincent Gray’s successful 2010 campaign would lead to adoption of their call for a nearly doubling of fares, went ballistic when the D.C. Taxicab Commission instead recommended more modest increases, elimination of most surcharges – including for extra passengers, and a number of service improvements.

Local hospitality industry and business organizations, joined by the grassroots consumer group D.C. Taxi Watch organized by gay Dupont Circle Advisory Neighborhood Commissioner Jack Jacobson, led the opposition to the huge fare increases requested by drivers and demanded better service, including the ability to accept credit and debit card payments and the forced retirement of aged vehicles.

A hearing on the bill is expected in January. Even if passed, don’t expect to see implementation of service improvements for at least a year.

While the annual “Small Business Survival Index” will soon be issued for 2011, little suspense surrounds whether the District will again rank last among itself and all 50 states – detailing how D.C. small businesses face worst-in-nation obstacles. The release of this nationwide study will undoubtedly herald D.C.’s last place reign again this year – a dishonorable distinction held for as long as anyone can recall and disproportionately affecting the outsized percentage of lesbians and gays engaged in entrepreneurial activities.

D.C. Council member Mary Cheh’s “Scarlet Letter” legislation to post sporadic, outdated, meaningless and arbitrary “snapshot” health inspection “letter grades” at the entrances of all food service and hospitality establishments again languished in limbo with no pick-up of support among her colleagues. Reflective of the folly of this proposal by the Democratic Ward 3 Council member, the city’s meager number of inspectors remains insufficient to conduct timely regular inspections or fulfill required re-inspections.

Washington remained one of the very few locations reflecting on its D.C. bag tax: paper, plastic or puffery? Although neighboring Montgomery County, Maryland, institutes a mandatory fee next month, nearly all other jurisdictions across the country have rejected similar business mandates, some by voter referendum.

While retailer compliance remains a significant and serious problem, local consumers have resigned themselves to either paying the minor nuisance price of paper or plastic bag usage or toting around their own household bags. The city has discontinued its recent advertising campaign reminding residents that “the law remains in effect” and checkout clerks now often wait for a customer to volunteer whether they want a bag without needing to ask — except when serving befuddled visitors and tourists.

The last year saw little let-up in the usual shenanigans by neighborhood citizens associations, tiny cadres of random residents forming business licensing protest groups and many Advisory Neighborhood Commission (ANC) members fighting local economic development, commercial projects and alcohol licensing applications. It became more apparent, however, that these squeaky wheels enjoy less support among their neighbors than ever before.

It became widely known in the Dupont Circle area that VIDA Fitness faces opposition by ‘provocateurs’ protesting a liquor license application for the rooftop pool and lounge atop the new U Street fitness center location that opened in mid-July. Prominent community businessman David von Storch was only days ago ultimately successful in acquiring an Alcoholic Beverage Control (ABC) license — but not before suffering several hundreds of thousands of dollars in fees, expenses and lost revenue. The unique amenity will be available to neighborhood residents enjoying one of the sold-out pool memberships beginning April 1 upon the return of warm weather.

A 25-year D.C. entrepreneur, von Storch long ago became familiar with the business obstacles easily and often cavalierly posed by “an extraordinarily small number of people agitated by new development and change.” “The irony of this all,” he now says, “is that as much as the license protestants fought it, the first thing they will mention when selling their home will be its proximity to amenities such as a world-class fitness center, restaurants, nightlife and entertainment.”

A few blocks away, disappointment that a foreign government Chancery — replacing a gay-owned community bed-and-breakfast hobbled by operating restrictions urged by a small number of residents — paved over the front lawn and removed three towering trees underscored that Dupont denizens doth protest too much and illustrated the oftentimes unintended consequences following in the wake of neighborhood obstructionists.

For the record, the Chancery recently removed the concrete ground cover, illegal under the District’s applicable “public space” restrictions, at the urging of the U.S. State Department. No word yet on tree replacement.

In the same vein, Eric Hirshfield provided readers with a personal reflection of his business start-up experiences and participation in industry advocacy efforts regarding D.C. regulatory hurdles as the Duplex Diner pioneer hands over the keys to former bartender and new owner Kevin Lee at mid-year. Hirshfield detailed his experience with the exasperating and notorious so-called “Voluntary Agreement” process leading up to a 1998 opening and continuing operation.

The popular community venue enjoys the renewed affection of customer “stakeholders” under Lee’s stewardship, and the business has recently re-instituted a Sunday brunch. Hirshfield currently assists area businesses in navigating the arduous regulatory process as he examines potential commercial and residential development projects in his Adams Morgan neighborhood.

The highly successful second annual 17th St. Festival unites area to promote business in late September, doubling the number of attendees according to festival co-chair and coordinating sponsor Urban Neighborhood Alliance (UNA) vice president Stephen Rutgers. UNA hopes to continue to build alliances unifying Dupont Circle businesses and residents to overcome the legacy of bitter past regulatory battles, allowing the area to create a more favorable environment for enterprise success – such as that experienced to the more business-friendly east where the 14th and U streets ‘Arts District’ blossoms into more.

Despite the fact that D.C. gives ANCs ‘great weight’ on medical marijuana, the city continued a glacial pace toward implementing its uber-cautious and restricted program. Fear of a threatened federal crackdown resulting from President Obama’s assault on medical marijuana laws has not yet stopped the District from preparing to sometime in the next year issue business licenses for the small number of cultivation centers and dispensaries.

Although the D.C. marriage law engages fewer than predicted during the nearly two years since the initiation of marriage equality in the nation’s capital, minimizing the projected revenue benefit for local businesses and the city’s tax coffers, marriage between heterosexuals has certainly fallen out of favor. Barely half of American adults – a record low of only 51 percent – are currently married, continuing a long downward trend in marriage “market share” unrelated to economic cycles, according to a Pew Research Institute analysis of U.S. Census data released on Dec. 14.

2012 will present both usual and unique challenges and controversies affecting community business activities. A celebratory toast to the hardworking and dedicated purveyors of the amenities enhancing our shared cultural lives is appropriate as we enter the New Year.

Mark Lee is a local small business manager and long-time community business advocate. Reach him at OurBusinessMatters@gmail.com.

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