When fast-growing Potbelly Sandwich Works Inc. decided to open a 2,200-square-foot restaurant in the Fairfax Corner shopping center in 2003, the chain dutifully applied for a construction permit from the county. It was granted -- 34 days later.
A year later, when Potbelly decided to open a 2,300-square-foot restaurant on 17th and L streets NW in the District, it sought a similar permit from the D.C. government. It, too, was granted -- 78 days later, D.C. records show.
The longer wait in the District forced Potbelly to pay its contractors extra, according to company officials. They said it distracted the staff, which could not move on to the next project. And it delayed the store's opening by weeks.
For Potbelly, the experience is hardly isolated in the District, executives said. According to their records, it has taken the chain an average of three months to obtain building permits in the District, compared with seven weeks in Maryland and five weeks in Virginia.
"It is one of the longest permitting processes we have encountered in any of the markets we are in," said Tom Jednorowicz, director of real estate for Potbelly.
Chicago-based Potbelly has restaurants in seven U.S. cities. In the Washington region it has 15 -- seven in the District and four each in Maryland and Virginia.
Potbelly's experience illustrates how a seemingly small difference in a jurisdiction's business climate can have a significant impact on companies.
Retail real estate managers who work in the District say the District has never been an easy place to open a store, compared with the suburbs. There are historic districts with special design rules and tight urban spaces that make it difficult to build.
"When you are in the District, there is always more complexity," said Avis Black, real estate manager for Safeway Inc., the region's second-biggest grocery chain, with 140 stores.
The District government says it meets its 30-day schedule for reviewing building permit requests 96 percent of the time. To speed up the process, the District recently installed an automated system that tracks applications through several levels of review, said Gwen Davis, a spokeswoman for the District's Department of Consumer and Regulatory Affairs , which oversees building permits.
In Potbelly's case, D.C. inspectors at times asked the chain to correct its original building permit applications, which lengthens the review process, said David A. Clark, the department's director.
"If complete and proper plans are submitted, they are reviewed and permits are issued within 30 days," Clark said.
Potbelly does not dispute that claim, but executives at the company still described the District's permitting review process as unusually long, given their experiences elsewhere.
Before beginning construction of its Dupont Circle restaurant, for example, the chain said it waited 83 days for a building permit. Nationwide, the chain estimates it receives final construction permits, even after corrections, in an average of about 42 days.
"Corrections and modifications are a standard part of the permitting process," Jednorowicz said. "It should not take as long as it takes to go through this process."
Peter Framson, president of Green Light Retail, a Bethesda-based retail real estate brokerage, said retailers "build in extra time" when seeking permits in the District. "They just know it will take longer."
Beltsville-based Ritz Camera Centers Inc., which operates hundreds of shops in the region, hires professional permit handlers to expedite the building-permit process in the District. "We don't even attempt to get them ourselves," said Eric Lahrmer, a project manager for the company.
Despite the complex permit process, retailers -- particularly restaurants -- still flock to the District because of its residential density, large population of daytime employees and the prestige of an urban identity, retail industry analysts said.
Potbelly, for example, believes it must first develop a strong reputation in Washington, where thousands of office workers eat lunch five days a week, before aggressively branching out into the suburbs, where the same people may later seek it out for dinner, Jednorowicz said.
But starting out in the District market has not been easy. Take the company's experience obtaining a building permit for its restaurant at 1900 L Street NW, which opened in 2003. Potbelly applied for a construction permit on July 29, 2002. Within 30 days, it was reviewed by D.C. zoning, mechanical, plumbing, fire, health and structural engineers, meeting the District's internal schedule, according to a detailed statement outlining the building permit process
But all the reviewers requested corrections. According to D.C. records, Potbelly made revisions to its application and resubmitted it on Sept. 23., triggering another round of inspections.
To help Potbelly begin work while it waited for a final building permit, the District issued a permit allowing the chain to perform interior demolition on the site on Sept. 9.
One by one, D.C. officials approved the new plans -- mechanical, plumbing and health staff on Oct. 16, electrical experts on Oct. 8, fire experts on Oct. 21 and, finally, structural experts on Nov. 4.
That day, the District issued a building permit, more than three months after Potbelly filed its application.
In its statement, the Department of Consumer and Regulatory Affairs called it a "lengthy review and approval" but said it made a "diligent effort in providing customer service" while at the same time "ensuring the safety and well being of the citizens of the District of Columbia."
The department noted that it granted Potbelly additional permits, which sought revisions to the Nov. 4 permit and approval for new exterior signs, on Dec. 11, Dec. 13 and Dec. 24, each applied for and issued on the same day.
Potbelly said it could not calculate the precise cost of a lengthy permit process like the one it experienced before building its 1900 L Street restaurant. "It certainly costs us money," Jednorowicz said.
Framson, the retail broker, said "there is a trickle-down affect that can be extremely expensive" as permit delays push back construction and contractors need to be paid. "The issue is pretty simple," he said. "If you are not open for business, you are not making sales."
