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Businesses in Anaheim Get a Break

The city is waiving fees for new owners, hoping to boost its economy in the long run by bringing in jobs and investment.

June 18, 2005|Lomi Kriel | Times Staff Writer

Coasting on the success of a similar cost-cutting initiative for property owners last year, Anaheim officials say a 100-day waiver of fees for business owners will benefit the city's economy and, over time, generate more revenue for its coffers.

The waiver certainly sparked some excitement for Fred Bretz, who was starting a children's party business called A Jump in Time. "I went in [to City Hall] with the intent to pay whatever the fee was, but it turned out it was waived," he said. "I was pretty excited."

More than 520 businesses so far have benefited from the city's business tax holiday -- a pet project of Mayor Curt Pringle who touted it as a priority in his State of the City address.

The City Council approved the fee waiver 4 to 1 in March. Councilman Bob Hernandez objected, arguing it wasn't enough of an incentive for business owners and favoring an elimination of the license fees altogether.

The program exempts businesses formed from April 15 to July 29 from paying their initial business license tax, application processing fee and home occupation registration fee, saving an owner an average of $133.

"It might not be so significant for a midsize business, but for a start-up business, it is," Pringle said, adding that the fee cut might motivate residents thinking about starting a business.

Since the start of the program, 326 new businesses have benefited, saving owners -- and costing the city -- $43,467.

Also to benefit are 198 existing businesses, which started without being properly licensed and have saved more than $50,000 from the program's amnesty that allows the owners to acquire licenses without paying late fees.

When the fee break ends in six weeks, the city expects to forgo about $230,000 in income, Anaheim's planning director Sheri Van der Dussen said.

But waiving the fees will generate more money for the city in the long-term by sparking an influx of business, city spokesman John Nicoletti said. The dozens of new companies will create more jobs, he said, and fuel spending as small business owners buy such essentials as computers and cars.

"All of these things will result in more spending for the city, so we don't actually lose any money," Nicoletti said.

For Bretz, at least, the future of A Jump in Time is anything but modest. He predicts it will grow "anytime next year" but could happen "as soon as tomorrow." Ultimately he harbors grand visions of competing against Chuck E. Cheese's but, "I'm not willing to share the details yet," he said laughing.

A first-time entrepreneur, Bretz is a hotel bellhop and describes himself as "a kid person."

"I see kids and families every day on a regular basis anyway," he said. Helping with their parties will be a "really nice way to connect with them."

The waiver is of particular benefit to small businesses -- most of which fail within five years because of a lack of planning and capital, according to the United States Small Business Administration. At the same time, small businesses generate 60% to 80% of new jobs.

About 10,000 of Anaheim's 14,000 businesses have 10 or fewer employees, and removing even a small cost for them will help them succeed, said Todd Ament, president of Anaheim's Chamber of Commerce.

The program is modeled after last year's home improvement holiday, in which the city waived plan-check and permit fees for residents remodeling their homes, sparking $28 million in home improvements in 100 days, including 111 new swimming pools and 1,548 expansions.

As part of this year's initiative, the Chamber of Commerce is offering new businesses a free one-year membership. Anaheim Public Utilities also is suspending its connection fees, which can range from $10 to $40. Business owners can appreciate the instant savings "without having to fill out a rebate application," utility spokesman Mike Ebbing said.

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