Duane “D” Martin has been a business owner in Chicago for eight years, but doing business in the city hasn’t gotten any easier. The bureaucracy of city permits, inspections, licenses, and other bureaucratic procedures is a constant barrier.
Martin owns Urban Luxe Café in South Shore, as well as Urban Luxe Salon in Ashburn and Nail Riot in Englewood. She is a proud Chicagoan, but said, “I’ve considered not opening another business within the city limits.”
But Martin isn’t alone. Other business owners say they’re struggling with Chicago’s bureaucracy. To help them, the Small Business Council is pushing for reforms aimed at “reducing bureaucracy, streamlining processes, and lowering the costs of starting and expanding a business in Chicago,” according to a proposal the nonprofit released this spring. The proposal has been endorsed by more than three dozen chambers of commerce, business advocacy groups, and 15 City Council members.
The council is lobbying for more support from aldermen and hopes to make policy changes within departments — and perhaps even propose an ordinance if a majority of Chicago aldermen support its call for reforms.
In its reform package, SBAC called for simplifying zoning requirements, inspections, debt verification, and more. According to the council, these measures would support small businesses, foster economic growth, and improve Chicago’s economy during a critical time as it continues to recover from the pandemic.
“This is a really important time for the city of Chicago. Vacancies in downtown are still high,” said Elliot Richardson, president of SBAC. The repairs “are something that can really help and doesn’t cost money. It will help the city save money in the long run.”
In April, Mayor Brandon Johnson unveiled the “Cut the Tape” report, which includes more than 100 recommendations to speed up residential and commercial development. Some of the goals include reducing the number of weeks it takes to review permit applications; reducing the number of days businesses have to wait for updates from various city departments; and streamlining permit applications, such as using digital forms instead of paper.
“Too often, city initiatives to stimulate more commercial investment and small business growth are hampered by cumbersome city processes and policies,” Johnson reports. “Storefront vacancy rates in some commercial corridors on Chicago’s South and West Sides are as high as 43%. In a post-pandemic economy, storefront vacancy is also a major problem for some previously strong submarkets, including the Loop, which has a retail vacancy rate of more than 30% amid an overall downtown office vacancy of more than 23% at the end of 2023.”
Johnson last month announced steps taken based on the report, including creating a 50-person task force to help implement the proposed initiatives and hiring Abigail Sullivan as the inaugural director of operations improvement. Sullivan previously served as chief operations analyst at the Chicago Public Library.
For decades, Chicago mayors have tried to ease the city’s slow and opaque bureaucracy by speeding up approvals for licenses, permits and development plans to help businesses and cut costs. But progress has been slow and uneven.
“We need politicians to take swift and bold action,” said Richardson of SBAC. “Unnecessary and burdensome bureaucracy can hold Chicago entrepreneurs back and prevent them from opening and growing their businesses.”
Johnson's initiative is still in its early stages, with the task force holding its first meeting on July 29.
Cassio Mendoza, Johnson's deputy press secretary, said the city will update its website quarterly to show the recommendations completed from the report.
Hard copies delivered by hand
“The costly, time-consuming bureaucracy has been a barrier for some businesses,” said Tanya Trice, executive director of the South Shore Chamber of Commerce. The frustrating bureaucracy “limits their ability to operate to their full potential. Working alone can be very scary for small businesses, so they tend to hide and work from home.”
An example of this is applying for special use permits, which are required for nail salons and other businesses. The purpose of these permits is to manage the types and numbers of businesses in an area, so that a neighborhood, for example, is not saturated with one type of business.
Special use permit applications cost about $1,000. A printed copy must be delivered in person to the Zoning Board of Appeals office so the applicant can pay the fee and obtain a public sign to hang outside the proposed business. The applicant must also send notices to nearby property owners and then wait 30 to 60 days for a hearing with the Zoning Board. The wait time can be longer if the plans need to be revised.
Meanwhile, an applicant may have to pay rent and utilities on an empty space while waiting months for a permit that could be denied, said business owner Martin, who has gone through this process with her own nail salons.
Duane “Dee” Martin at her restaurant Urban Luxe Cafe on South Beach.
She added that this lengthy process “prevents businesses from opening their doors or opens their doors at a financial disadvantage. Businesses have already spent thousands of dollars on rent, utilities and security long before they open their doors.”
Martin, who is also a real estate investor, feels comfortable reading legal documents. But she said less experienced entrepreneurs may have to spend thousands of dollars hiring an attorney or consultant to help with the process and review lengthy forms, such as the 15-page economic disclosure that the applicant and the owner must fill out.
The city makes no money from application fees, Mendoza said.
“Business license fees are a reimbursement for the costs the city incurs in issuing a license,” Mendoza said. “Chicago’s license fees are in line with, and in some cases lower than, other cities across the country.”
Mendoza said approval rates for special use permits have historically exceeded 90%, and the number of applications fluctuates each year with some being withdrawn by the applicant before the hearing and others being denied. In 2023, the Zoning Appeals Board received 200 special use applications.
Business reforms
The “Cutting the Ribbon” report proposes revoking the Zoning Board of Appeals' approval of a “special use permit to open a hair salon, barbershop, body art store, or nail salon.”
The special use permit process has been streamlined, Mendoza said. For example, the city aims to accept applications online by December. It will also begin accepting electronic signatures and PDF copies of original signatures for applications. The agency will create a streamlined public hearing package and publish templates to help clarify what is required.
Johnson’s plan in her report includes “revamping” the debt verification process for entrepreneurs applying for business licenses by “eliminating inconsistent results and excessive reviews — to reduce turnaround times for buildings, permits and ultimately licenses.” The process checks whether an applicant has excessive debt.
In its list of needed reforms, the SBAC asked the city to speed up mandatory debt checks. The council said personal debt checks are often inaccurate and cause “extraordinarily long delays.”
SBAC said communication with the city should also be improved by explaining the denial of a permit in writing.
chicago vs suburbs
Jeri Hernandez, co-founder of the upscale empanada restaurant Savory Crust, caters to special events in Chicago, serving empanadas stuffed with fillings like chicken curry and macaroni and cheese, as well as chicken and beef. But Savory Crust, which has locations in Morton Grove and Carol Stream, won’t be bringing its food truck to Chicago festivals because of the city’s cumbersome bureaucracy around operating at public events.
For example, the company has a food manager certification that is accepted statewide, including Cook County, but Chicago requires its own certification and training that costs $250.
Last year, food trucks gathered at Daley Plaza in the Loop.
The city also requires food to be prepared in the city cafeteria, an industrial kitchen, although Savory Crust has its own kitchen in Carol Stream. It also requires food trucks to dispose of their wastewater at a facility in Chicago, although Savory Crust said it could do that at its suburban locations.
The bureaucratic potential in Chicago “just pushed us to look for businesses in other cities and counties that would accept all of our registrations and permits,” Hernandez said.
“Applying for multiple licenses and permits takes time and costs a lot of money,” she said. “We prefer to apply for one permit that covers multiple cities in one county. Obtaining licenses and permits in DuPage County is easy, and the staff is available if you need assistance and gets things done quickly and efficiently.”
Hernandez said fellow business owners have also complained to her about slow and inconsistent city inspections that can delay business openings.
Mendoza said the times the Department of Public Health inspects food establishments vary and depend on factors such as the type and size of the establishment, food operations and the number of violations, if any. He added that new establishments that need to be re-inspected are prioritized and inspected within five days.
However, Hernandez said, “It's not attractive for us to do business in Chicago with our food truck or do events unless it's on private property.”
“The bureaucracy is just another reason to keep my business out of Chicago and continue to grow in other counties,” she said.
