February 13, 2013 | by Mark Lee
D.C.’s steep climb to becoming business-friendly

“I believe D.C. can be the most business-friendly city in the country.”

So stated Mayor Vincent Gray last Friday when launching the city’s Business Regulatory Reform Task Force at local beer manufacturing startup D.C. Brau Brewing Company.

The cynicism of a skeptic is appropriate when encountering the words “District of Columbia” and “business friendly” in the same sentence.

The mayor’s declaration was welcomed, however, if only for its rarity in local political discourse and his sincerity in conveying it. This regulatory repair effort is among six elements of the administration’s new Five-Year Economic Development Strategy.

But getting there will be a steep climb.

Given the city’s perennial worst-of-the-worst national designations measuring business friendliness and overall enterprise encouragement, the 28 voting and 4 non-voting task force appointees confront a daunting task requiring the ingenuity of a drag queen trapped in a Dollar Store. Faith may move mountains but it will take a miracle of serious effort to achieve real reform enabling D.C. to climb out of the cellar on commerce.

The illusion of prudent policy owed the enterprise opportunities intrinsic to one of the country’s most concentrated “creative class” environs eventually suffers the effects of unduly encumbered businesses. Long-term fiscal strength of a population expanding, economically dynamic and culturally diverse national capital is inevitably restricted by the burdens of excessively high taxation, reflexive regulatory excess and nanny nuisance nonsense exacerbated by government agency dysfunction and distemper.

The construction cranes and other symbols of development progress of which local politicians gloat have risen mostly in spite of local policies, not because of them. A political class accustomed more to disbursement of public dollars than encouraging private sector success is largely clueless about the difference. Business creation and operation experience is as rare among city officials as is their understanding of the challenges to local entrepreneurship at their hand.

In his State of the District address earlier last week, Gray cited the dominant hospitality sector when describing his regulatory revision objectives as a “major step forward” in “boosting economic development in ways that are both familiar as well as groundbreaking for the District.” The task force’s mission includes “scouring the District’s rules and regulations and providing recommendations on how to make the District an easier place to start and grow a business and create jobs.”

Repairing city rules by “identifying existing laws and regulations that otherwise might impede the progress of a business” with an instruction to “monitor and track current and future proposals to reform regulations and identify their potential impact on business” is a tall order in this town.

On another front, the D.C. Tax Revision Commission chaired by former Mayor Anthony Williams is preparing comprehensive recommendations that include making “the District’s tax policy more competitive with surrounding jurisdictions” and to “encourage business growth and job creation.” The commission is another signal that the city has become serious about fixing its noncompetitive and counterproductive revenue extraction practices.

As financial necessity compels the D.C. Council to wrestle with becoming more growth-oriented and development-conscious – even “business-friendly” – in December city legislators finally began reforming alcohol-licensing regulations affecting the city’s hospitality industry. A first whack at the easiest targets restored a small dose of commonsense to the process, mitigating the outsized ability of neighborhood advisory and other small groups to intercede against popular community business initiation.

These nascent regulatory corrections rein in the power of such groups, reducing by half the typical approval schedule for new bars and restaurants encountering license protests. The resulting expedited adjudication timeframe of approximately seven months from start to finish is still too long, but is a critical improvement nonetheless. The Gay and Lesbian Activists Alliance (GLAA) recently released an updated policy brief and questionnaire on which to base the organization’s coveted D.C. candidate ratings, joining others calling for additional reforms in this regulatory domain.

From tax and regulatory obstacles to the inequities of out-of-balance business licensing procedures, it remains to be seen whether city officials are committed to, and capable of, reversing an entrenched anti-business culture.

At least there is growing optimism that, at long last, they will try.

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

1 Comment
  • Mark,

    Me thinks thou hast drunk one too many sips from the Kool-Ade pitcher of free market libertarians. To suggest that a jurisdiction with a 150M budget surplus is in urgent need of wrestling with stifling policies hampering economic growth and development could be construed as an overstatement. A simple walk out the front door might suggest to you that no matter how daunting the obstacles some blessed business owners have somehow run the gauntlet.

    Perhaps a trip out of town, anywhere but Baltimore please, would suggest as well that the District’s business community is not languishing but thriving.

    I will not argue that tax, regulatory, and licensing policies could not benefit from some “scouring” and recommendations for reform. I will argue, however, that the Gray administration is not to be trusted to do it honestly or well. Given Gray’s willful blindness to the shenanigans and maneuverings on his behalf by the likes of Jeffrey Thompson and his record of retrograde appointments and policy blunders I think until we have a change in captain it is best for this ship to stay the course. Why, if Gray is so business friendly, did he de-fund the Washington DC Economic Partnership which had a track record and a body of knowledge supporting exactly the kinds of reasoned applications that you recommend?

    Every action has an opposite and equal reaction which is why in matters pertaining to the public’s affairs it is essential that the public’s best interests be handled by mostly honest brokers. It would seem that from the coterie of self interested parties and she cats with whips with whom this Mayor surrounds himself, and his refusal to acknowledge and separate himself from them, Vince Gray does not qualify.

    I can’t tell you how many sleepless nights I have had agonizing over the fact that Virginia resident, Jamie Leeds, was slowed in her efforts to expand her patio. However, in keeping with my “honest broker” scenario the idea that we should jump into any regulatory reform of the liquor licensing policies guided by, your choice of words, Nanny Jim Graham is frightening to any sane person. Hurricane Katrina was a sunny day compared to the cloud Graham is deservedly under. Until Graham resigns, is recalled, or arrested it is only prudent to table any reorganization of policies that, however imperfect, are functioning and in place. Bear in mind it has taken Whitman Walker over a decade to crawl out from under the detritus of Graham’s tenure there. Graham’s long, corrupt history would suggest there is not a industry lobbyist, crooked businessperson, bagman, or sycophantic flatterer who would find him unwelcoming of their largesse. I think for the time being we would be well advised to remember that slow and steady wins the race.

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