ZĞƋƵĞƐƚĨŽƌWŽůŝĐLJŶĂůLJƐŝƐ;ŽƵŶĐŝůZĞĨĞƌƌĂůƐͿ
Department Rules Date Item Department Rep. Name/Ext. Councilmember Sponsorship Policy/Ordinance Subject Staff Recommendation܆ GREEN Adopt based on tradeoffs
outlined on next page
܆ YELLOW
efer to ĂůĂƚĞƌĚĞƐŝŐŶĂƚĞĚ
ĚĂƚĞŽƌƚŚĞĂŶŶƵĂůƵĚŐĞƚWƌŽĐĞƐƐ
܆ RED Recommend Council not
adopt nominated idea
܆ NEEDS CLARIFICATION OR
MORE TIME TO EVALUATE
Staff Evaluation
Is this already underway in a department work plan?
܆ Yes
܆ No
Is this time critical or an emergency?
܆ Yes
܆ No
Will this require substantial resources, staffing, budget, strategic support͕ŽƌƌĞƉƌŝŽƌŝƚŝnjŝŶŐĞdžŝƐƚŝŶŐǁŽƌŬƉůĂŶ? ܆ Yes
܆ No
Criterion to Determine Scale of Project ComplexityProject complexity is determined by scoring the project in each of the 3 criterions below and then summing the score. a. Low Complexity is a sum of 6 or less.b. Medium Complexity is a sum of 7 – 9. c. High Complexity is a sum of 10 or greater.
Total Score =
Scoring Criterion
Low Complexity Medium Complexity High Complexity
Estimated Duration 6 – 9 months
܆ =1 9 - 18 months
܆ =2 More than 18 months
3 =܆
Organizational Complexity (Internal)
Can easily be absorbed into existing work plan
܆ =1 Planned work (future)
܆ =2 Work not currently proposed
3 =܆
Have staff with required skillset/knowledge
܆ =1 Have staff with required skillset/
requires moderate research
܆ =2 Do not have staff with required
skillset/requires significant research
3 =܆
Less than or equal 2 staff required
܆ =1 3 - 4 staff required
܆ =2 More than 5 staff required
3 =܆
(External) 1 Additional department; no
community outreach required
܆ =1 2 Other departments Involved;
some community outreach required
܆ =2 3 or more departments and/or external
partners involved; significant community outreach required 3 =܆
DEPT.
Required
܆ Airport
܆ Auditor
܆ CMO
܆ OEDCA
܆ ESD
܆ Fire
܆ HR
܆ IT
܆ PRNS
܆ Police
܆ Retirement
܆ Attorney
܆ Clerk
܆ CMO –
Budget
܆ Community
Energy
܆ Finance
܆ Housing
܆ IPA
܆ Library
܆ PBCE
܆ PW
܆ DOT
CMO Approval: Date
PBCE/OEDCA 09-03-2025 C.1Chris Burton/Blage Zelalich OrtizExplore Fee Waiver Program forSmall Businesses 8 /s/ Lee Wilcox 9/2/2025
✔
✔
✔
✔
✔
AnalysisExplain the rationale for staff recommendation, including any mitigating factors that need to be considered (recent legislative action, significant work plan changes, etc.). Please address the following as well. GREEN LIGHT: The Administration can implement this nominated idea under its current work plan. Item should be sent to Council to add to department work plan. (1) How will the idea be approached? (2) If adopted, what is its impact and/or tradeoff to the City Council Focus Area or to a department work plan, including strategic support? (3) What is the minimum viable scope to move the idea forward and reduce its complexity? YELLOW LIGHT: ĚŵŝŶŝƐƚƌĂƚŝŽŶƌĞĐŽŵŵĞŶĚƐŽƵŶĐŝůĚĞĨĞƌƚŚŝƐŶŽŵŝŶĂƚĞĚŝĚĞĂƚŽĂůĂƚĞƌĚĞƐŝŐŶĂƚĞĚĚĂƚĞŽƌƚŚĞĂŶŶƵĂůƵĚŐĞƚWƌŽĐĞƐƐĚƵĞƚŽ;ĚĞƐĐƌŝďĞĐŽƐƚŝŵƉůŝĐĂƚŝŽŶƐ͕ǁŽƌŬůŽĂĚŝŵƉĂĐƚƐ͕ŽƌŽƚŚĞƌĨĂĐƚŽƌƐͿRED LIGHT: The Administration recommends Council not to adopt this nominated idea due to (describe reason implementation would be difficult if not impossible – conflict with other laws, etc.).
The Administration recommends moving forward immediately with an effort to consolidate, promote, and raise awareness of the City’s extensive small business support programs through OEDCA. • The City already provides a wide range of support, including storefront improvement grants, neighborhood corridor investments, permitting assistance through the Small Business Ally, enhanced permitting services through the Streamlined Restaurant Program, start-up and neighborhood economic grants, SCORE mentorship, ADA compliance assistance, legal services, and food entrepreneurship accelerators. • Many of these programs are featured on the City’s Small Business Web Portal (Getting Started in San José), which serves as a hub for entrepreneurs and small business owners. (continued)The proposal to waive first-year permit, license, and registration fees for qualifying small businesses in growth areas is an important and impactful concept. Staff completed a preliminary assessment of the total cost to small businesses and given the fiscal and workload implications, staff recommend forwarding this concept to the FY 2025-2026 budget process for evaluation. Approximately 70% of all retail/commercial properties citywide are located within Urban Villages and Growth Area. In FY 2024-2025 the City issued approximately 350 permits for tenant improvements in retail and restaurant uses. Using this as a proxy for "First Year" small businesses opening new spaces in San Jose's growth areas, staff assumed approximately 245 businesses would be served. Expansion of the program would require further refinement of program eligibility.
Analysis (Continued)
Green Light Continued... • Building on this platform, staff can improve and enhance outreach and promotion of these services, ensuring they are easier to find, navigate, and access. • This approach provides an immediate, tangible benefit by simplifying access to City services and ensuring that entrepreneurs are better prepared before entering the permitting and licensing process. This step is achievable under the existing work plan and provides a strong “win” for small business support and storefront activation today. Yellow Light Continued... San Jose’s Business Tax is Rate is $219.60 for businesses with up to two employees. It then increases $37.06 per employee, up to 35 employees. The average permit costs for commercial tenant improvements range from $14,100 to $61,000 (based on 1500-5000 square feet and the value of improvements ranging from $100,000 to $1,000,000). A significant amount of these costs are attributable to the Building and Structures, and the Commercial, Residential and Mobile Home Park Taxes. At the lower end, approximately 35% of the permitting costs result from these taxes. At the upper end, its closer to 75%. Currently, OEDCA operates the Storefronts Activation Grants program which provides financial assistance to small, ground-floor business with two types of grants to activate vacant commercial storefronts and/or businesses wanting to improve their exteriors. The program has an ongoing budget of $350,000 from FY 2025-2026, which is estimated to support up to 31 small businesses at between $10,000 and $15,000. • Cost Estimates (based on FY 2024-2025 activity): o San Jose’s Business Tax Waiver: $53,800 and $353,000. o Average Permit Cost per Business: $14,100 – $61,000 (including construction taxes). o Existing-Level (~30 businesses Citywide): $350,000 annually. o Expanded Pilot (70 businesses): $700,000 annually. o Full Growth Area Coverage (~245 businesses): $2.8M annually. • Implementing a deeper fee waiver program would require ordinance development, administrative infrastructure, and interdepartmental coordination (OEDCA, Finance, PBCE, CMO-Budget), which are not in the current work plan. • The budget process provides the right venue to consider program scale, fiscal trade offs, and alignment with other City Council priorities. By deferring the expansion to the budget process, the City Council can determine the right level of investment while ensuring the program complements and strengthens the City’s existing storefront and small business support efforts.