Palo Alto mulls new strategies for getting businesses to register

Simple requests didn’t work. Neither did the fliers, the visits or the threats.

Now, with the participation rate still lagging well behind expectations, Palo Alto officials are trying to come up with new ways to get local businesses to participate in the city’s new Business Registry. These include a simpler questionnaire, in-person visits from city staff, code-enforcement citations and requirements that businesses seeking other types of permits have their registration certificates handy.

These proposals, which the City Council is scheduled to discuss on Tuesday, Sept. 15, aim to significantly increase business participation in the fledgling program. Launched in March after years of discussion, the registration program was intended to help the city answer some questions deemed crucial for ongoing planning and transportation efforts. These include: How many workers come to Palo Alto? Where do they come from? How do they get here?

Yet after six months of trying to coax and nudge businesses to participate, officials estimate that by end of August only about 2,173 businesses — 69 percent of estimated total — have opted to pay the $50 registration fee and answer the 23-question form, according to a new report from the office of City Manager James Keene.

The rate is certainly higher than the roughly 30 percent that registered by June 1. It should go up even further this month, when the city begins issuing fines of up to $50 ($25 for those 30 days late and an additional $25 for those 60 days late) and with downtown’s new Residential Preferential Parking program officially launching (employers looking to buy permits must have their businesses registered). Yet for a data-hungry city that is now awash with planning efforts, the program continues to pose a frustrating challenge.

Staff had reached out to the unregistered businesses several times, the report states, to gauge their concerns. Some opposed the idea of a registry, while others took issue with particular questions (most notably the question requesting the Federal Tax Identification Number, which for sole proprietors is often the Social Security Number, and the ones relating to employers’ parking permits). Many requested paper-based versions of the online registry — a request that the city complied with by creating a PDF form.

In most cases, the report notes, those expressing concerns did eventually register after staff contact. Some, however, have continued to oppose the requirement. A few businesses mailed checks without the requisite information, though staff was able to follow up and get the needed information, according to the report.

Staff estimates that there are about 3,150 businesses operating in Palo Alto, though they acknowledge that an accurate figure is difficult to gauge (hence, the need for the registry). In Palo Alto’s startup culture, businesses open and close, move and merge seemingly every day and, even with a universally accepted registry, the number would be dynamic.

The new report also notes that some local businesses do not yet have an active business, while others have multiple entities incorporating the same people. To arrive at the figure of 3,150, staff conducted a physical survey and went through more than 200,000 business listings, according to the new report.

One idea for getting the remaining 31 percent to sign up is making business certificates a requirement for other types of permits. This has already happened with the downtown parking program, which officially launches on Sept. 15. The new program will limit parking in the downtown’s residential neighborhoods to two hours unless the parked car has a permit. Permits will only be sold to residents with proof of residency and workers from registered businesses. By the end of August, more than 2,000 people created accounts and purchased permits through the city’s new online system, Assistant City Manager Ed Shikada told the City Council on Aug. 31.

When the council discussed the new parking program on Aug. 17, members took no issue with the staff’s approach in bundling the different permits.

“Hopefully this will generate the results we were looking for for the business registry in getting the information we need,” Councilman Marc Berman said at that meeting.

Now, staff is proposing to take this even further. In the new report, staff is recommending exploring further integration between the new business program and other required permits, including use and occupancy permits, fire inspections and police-alarm permits.

“In the ideal scenario, the multiple permits any business might require from the City would be integrated,” the report states. It notes that by utilizing the user platform created by the Business Registry, the Certificate of Use process “can be redesigned to improve the interface for staff approval by each department involved, and also dramatically improve the customer experience for those requiring it.”

At the same time, the report states, the integration of the data with the business-registry information “can be better utilized by the City.”

Other changes that staff is recommending for the program include exemptions for “very small businesses and nonprofits,” which could be defined as “companies or nonprofits with less than one full-time employee (including the business owner) present on-site.

For all of its existing gaps, the registration program has already allowed staff to gather some basic data about the local employment scene. Information about the registered employers, including the number of employees and the number of parking spaces provided, has been posted on the city’s Open Data portal on the Business Registry Certificate page.

An analysis by staff showed that the businesses registered thus far have a total of 69,136 employees. Citywide, office buildings had about 382 square feet of space per employee (in downtown, the number was 384). Retail establishments had 298 square feet per employee while restaurants had 125. The number is particularly critical for the council given that the city’s existing parking codes assume 250 square feet of space per employee — a number that land-use watchdogs have argued is too high and is more appropriate for traditional offices than for the communal layout of a startup office.

The new staff report also noted that in evaluating the square feet per employee in local commercial projects, the total range “varied greatly.” About 80 companies reported having less than 100 square feet per employee, which includes 35 companies downtown.

Information about the business registry and a link to registration is available here.