News & Research Archive

Vital Hours for California Business

Dec 02, 2009

 

This has been an extremely difficult year for California state and local governments; deep cutbacks are affecting services in every department throughout the state. With the state in a budget crisis, work furlough days have been mandated for all employees. Choosing to implement a strategy that would maintain a workforce while avoiding mass layoffs, every state department was forced to participate in furlough days with the exception of vital services. One problem with this approach is that all the state licensing departments are affected by these furlough days. Shortened office hours and under staffing makes it more difficult for business to obtain the licenses required to conduct business as well as directly affecting the state’s ability to collect fees from private businesses, slowing new revenue to the state.

Take the ABC Licensing Department that deals with the transfer of alcohol licenses for bars and restaurants for example. This department is a major revenue source for the state and it carries decision-making powers on who can obtain or transfer licenses. For the business owner, these staffing cuts can greatly affect the ability of a new restaurant or bar to open their doors in a timely manner. Our restaurant division at Starboard TCN has experienced this problem with many of our clients that are trying to buy or sell their operations.

Today the ABC Department is closed every Friday and work half day on Mondays. To obtain or transfer a liquor license now days, a potential buyer or seller could be waiting four to six months for the paperwork. This delay means businesses are harmed throughout the food chain of that deal. If the restaurant or bar does not open, it’s not just the operator that experiences losses. The contractors working on the build-outs, the new employees that will be hired, the brokers and title companies involved in finalizing the transaction, all lose work. Additionally the State experiences the loss of fees for the licensing and taxes in their already dry coffers.

Any licensing agency that directly affects commerce should to be viewed as a “vital service” and removed from state furloughs. This is bad for the state, bad for business and more importantly does nothing to reduce state spending, it only creates more losses.

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Written by: Hans Hansson

E-mail: hans@starboardnet.com


Hans Hansson is President of Starboard TCN Worldwide Real Estate Services as well as a member of the Board of Directors for TCN Worldwide Real Estate. Hans has been an active broker for over 24 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email hans@starboardnet.com or call him at (415) 765-6897. You may also check out his website, http://www.commercialspacefinder.com/.

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