Keeping Small Businesses in Business
Excerpt from Justin's February Newsletter
One of the things that makes Alexandria such an attractive place to live and visit is our core of small, independent businesses. It's been a characteristic of our community throughout our history.
Yet some recent small business closures have sparked alarm as to whether that character is being threatened. The loss of a few retail mainstays in both Del Ray and Old Town are certainly cause for mourning. In some cases, those businesses served Alexandria and its visitors for multiple decades. Yet, it should not be a cause for panic.
The reasons these businesses have closed are as varied as the businesses themselves. Some of the business owners have chosen retirement after decades of operation. Some closures were due to the deaths of owners. Some closed due to steep competition by local and internet retailers.
However, we as a City can use this moment as an opportunity to improve the climate for small business attraction and retention.
In recent years, the City has worked to improve the climate for small businesses. In 2005, the City became the first in Virginia to restructure the Business, Professional and Occupational License Tax (BPOL) to simplify and and reduce taxation for small businesses. BPOL is a local tax paid across Virginia by businesses. It is assessed on the gross revenue of a business (neither on income nor profit).
In 2007, the City accepted the recommendation of its Small Business Task Force. It began implementing changes in operations and regulation to assist small businesses with their interactions with City government.
Along with my colleagues Councilman Smedberg and Councilman Lovain, we created a new Business Tax Reform Committee. In 2014, the Committee provided a new set of recommendations for how the City can improve the business climate for success in our community.
I believe there are several areas the City should work immediately to assist the small businesses in our community, as well as the ones who seek to open here.
It is time to expand the City's Administrative Special Use Permit process. Today, many businesses must wait through a staff review, a hearing before the Planning Commission, and later in front of the City Council prior to receiving approval to open. The Administrative Special Use Permit process allows the City staff to make those approvals by applying a consistent and predictable criteria. This saves time and money for new small businesses during their most vulnerable phase. A potential expansion of this process will come before the Council later this year.
We should reform the BPOL tax. I'm hopeful that this reform will be initiated at the statewide level. If that does not occur, we should work locally to make changes to BPOL. This would assist new businesses and target strategic growth industries for the City.
Rising commercial rents reflect a confidence landlords have in the City's business climate as well as a scarcity of available retail space. Yet, these rent levels also squeeze out even successful businesses.
We have the opportunity during our land use planning processes to not only ensure that new retail space is always a component, but also that the space is usable by the type of retail that we seek.
We must continue to support and expand the agencies that help to grow small business activity in the City. This includes the services of the Alexandria Small Business Development Center, the Alexandria Economic Development Partnership, the Marketing Fund, Visit Alexandria, and more.
The recently opened Capitol Post, an incubator for Veterans and their entrepreneurship, has proved the success of providing space for small businesses to thrive.
We still have the opportunity within City Hall to improve processes and reduce red tape.
While businesses in our community can hold sentimental value, they also hold the key to keeping a balance within our economy. Let me know if you have suggestions for improving that climate.