As co-owner of a line of juice and sandwich shops, Peter Holland accepts the challenge of dealing with the myriad of governmental rules and regulations that such businesses typically must encounter. But there is one particular piece of red tape that the local entrepreneur finds especially difficult to swallow.

“It truly is a joke that is also a serious problem,” Holland said last week of the city of Boston’s so-called 36A takeout permit, a requirement for eateries whose prime business is takeout food. “Why the process exists is a mystery to me.”

Holland, who operates Jera’s Juice and The Wrap restaurants, is not alone in his chagrin. According to retail brokers and business owners, the innocuous- sounding permit has become a major bureaucratic headache, one so onerous that many claim it has changed the face of retail in the city, especially in the downtown sector. Obtaining a 36A permit can add between six and 10 months to a takeout restaurant’s opening, critics charge, a delay that smaller operations often cannot afford.

“It’s a major, major issue,” agreed retail broker Joseph Levanto. “I can’t believe the amount of money that is lost because of it.”

With retail rental rates in the city’s Downtown Crossing district running as high as $120 per square foot, a delay of even six months can easily exceed $100,000, a bite which Levanto said most landlords are unwilling to accept. For small, independent eateries, the price tag often prevents them from entering the downtown market, Levanto said.

“We can’t even work with mom-and-pops because it’s just a waste of their time,” said Levanto, a principal with Schaffer & Assoc. in Boston. “The reality is that they are at an extreme disadvantage.”

Because of that, Levanto said most takeout establishments downtown are national chains, blunting the sense of diversity that Downtown Crossing has long been known for. While there is an eclectic mix of non-food businesses, food choices are generally restricted to the Wendy’s, McDonald’s and Sbarros of the world.

“It’s very homogenized,” Levanto said. “Walk up and down Washington Street and you won’t see mom-and-pop [takeouts] anywhere, and [36A] is a big reason why.”

Rubber Stamp
Ironically, one of Holland’s biggest complaints about the 36A is that the permit virtually always gets approved, with the actual ruling by the city’s Board of Zoning Appeals generally taking no time at all. It is the bureaucracy wrapped around that hearing that frustrates him, Holland said.

“All I usually need is 15 seconds of [the ZBA’s] time, but it takes forever to get those 15 seconds,” he said. “Everybody knows it’s a rubber stamp, but they still make you go through the whole process anyway, and that’s what is so frustrating to me.”

ZBA officials did not return phone calls by Banker & Tradesman’s press deadline. According to Holland, the first step requires an owner to file a building plan and application with the city’s Inspectional Services Department, a request that is always denied because takeout is a conditional use. The rejection itself can take between two to six weeks to work its way back to the ZBA, followed by anywhere between three weeks to three months to get a hearing before the board.

“And you’ve got to kick and scream just to get your date,” Holland said. Even then, the hearing itself could take another six to nine months, Holland estimated, often depending on the time of year when the request was filed.

Once before the board, Holland said the approval moves quickly, only to run into more delays. To begin with, Holland said the board will not sign the approval until its next meeting, which can run from two to four weeks. After that, a notice of the permit must run in the newspaper, causing another three-week roadblock. Finally, if one is able to survive that long, construction of the takeout space can commence.

“It definitely can change the landscape,” Holland said. “It’s very hard to compete against a non-food use, whether it be a flower shop or a cell phone company.”

Holland’s firm, for example, had looked last year at a location at the corner of School and Washington streets, but when the landlord would not accommodate the process, Holland said they were unable to commit to the site. It is now home to TSR Wireless.

Holland was so upset by the 36A process that he even called a radio talk show last year to complain to Mayor Thomas M. Menino. Holland said the mayor expressed surprise at the situation and referred him to aid John Dorsey. The assistant did help speed up one application Holland was working on at the time, but there have been no changes since to the overall policy.

Reached at City Hall last week, Dorsey said he responded to Holland’s request, but acknowledged there was no subsequent effort to address the larger issue. He added it appears Menino did not pursue the matter himself.

“I don’t think there’s anything on our radar screen,” Dorsey said. He referred additional questions to ISD, which did not return phone calls by deadline.

Retail broker Mark Browne said he believes the rental rates have as much to do with the dearth of independent takeout establishments in the Hub, noting that some smaller entities can be found along Downtown Crossing side streets, where rents can be less than half what is found on Washington Street. Nonetheless, Browne agreed that 36A does pose a problem for takeout owners.

“It’s a major pain in the neck, no doubt about it,” Browne said. “But that’s the city of Boston – you just can’t avoid it.”