Atlanta's effort to help small businesses will require work, owners say

Soft-spoken Julio Guzman is not shy about proclaiming his restaurant, Coco Loco, an Atlanta institution.

He stakes his claim to having the first true Cuban restaurant in the city. The eatery, a few blocks from the Lindbergh MARTA station, has been open nearly 22 years.

Guzman credits a loyal clientele with helping his eight-employee business survive the recession. Two nearby restaurants weren’t as fortunate. They shut down around Christmas, Guzman said.

Atlanta has seen a surge in the number of small businesses in the city in recent years, and new Mayor Kasim Reed vows to help them thrive with less red tape from City Hall. The number of firms with less than 10 employees rose from 8,535 in 2005 to 16,651 last year, according to the Atlanta Development Authority.

Reed said in his inauguration speech he wants to be known as the “mayor of the small businessperson.” He has yet to formulate a concrete strategy, but his plans include improving the permitting process and better advertising opportunities for smaller companies to do business with the city.

“I want to make sure that Atlanta remains a beacon of inclusion, a beacon of talent and a beacon of merit,” Reed told the Georgia Hispanic Chamber of Commerce last week, repeating his mantra to be the mayor of small business.

Some business owners say the city must become more flexible in its zoning regulations, crack down on aggressive panhandlers scaring patrons from some businesses, encourage more nightlife and make it less expensive to do business in order for Reed to earn that title.

The mayor could use the additional income in business licenses, sales tax proceeds and property taxes from healthy small businesses to fund some of his major campaign promises, such as hiring 750 police officers over the next four years.

ADA officials attribute the increase in the sheer number of smaller businesses in the city to people who’ve been laid off starting their own businesses and more internationally-based companies setting up shop in the city. Also, the city of Atlanta’s population has risen by 30 percent since 2000, and many of the newcomers work for themselves, the ADA noted.

Guzman said fees are one problem businesses face. Some restaurant owners can’t afford the city’s $5,000 annual liquor license, he said. Decatur charges $2,750 for a license to serve beer, wine and liquor. Savannah’s fee is also $5,000.

Joe Williams, who helps his wife run The Fainting Couch, an antique shop in Midtown, said it seems rule enforcement is inconsistent in Atlanta. He and the city battled three years ago over the beaded mannequin named “Gertrude” that sits on a bench in front of the shop. According to Williams, the city said the mannequin blocked the path of pedestrians in violation of city guidelines. He said a restaurant a few blocks away has tables on the sidewalk outside its business.

“The people who make the rules don’t understand business,” he said.

Said Darlene Cox, owner of Scarlett Loves Rhettro, located next door: “It’s like having a skinny girl working in the plus-size department.”

The Atlanta Development Authority has several loan programs for small businesses. The loans are as much as $1.5 million. Lonnie Saboor, manager of small business and industrial finance for the authority, said it was “bombarded” with loan requests last year because of tighter lending by banks. The authority also offers technical assistance to small businesses.

Saboor said many service and retail businesses are suffering because they set up in areas where new homes were under construction, anticipating scores of customers who didn’t materialize when homes went unsold or building stopped.

The mayor said he wants to help businesses get their permits faster from City Hall. Reed’s staffers are spending time in Cobb County to talk to officials there about how they streamline their permitting process.

Charles Green, president of Sunrise Bank of Atlanta, supports the mayor’s goal to improve the permitting process. He said some businesses work with as many as six city agencies in order to get a project done. He suggested a system in which the businessperson submits paperwork to a central office and it’s handled there.

“These are entrepreneurs using their own dollars to start a venture to provide an unmet need for a service or product,” said Green. “And every time you set up a barrier, it costs them money. It’s unpaid time jumping through these hoops.”

Reed, a corporate attorney by trade, also has talked about creating a position in his office that could be called “economic development czar.”

Tiffany Bussey, director of the Morehouse College Entrepreneurship Center, said Atlanta and most governments have reputations for too many regulations for businesses to hurdle and making it easier for politically-connected friends to get contracts and other services. She said Reed must make the procurement process more transparent and help small business people better understand the requirements to get city contracts.

Bussey said cities like Boston have built reputations as governments that work well with small businesses. In 2001, the city created a “BackStreets” program, which helps small and medium-sized industrial businesses that are primarily immigrant-owned find space to operate, improve their English and obtain low-interest loans.

Williams is hopeful about the new mayor’s desire to help small businesses.

“I want to give (Reed) a chance because he’s talking a good game,” he said. “Whether he gets it done, I don’t know.”

Guzman wants $25,000 to put tile on the 22-year-old restaurant’s floor and replace the broken springs in the booths. The banks, he said, want to charge too much in interest rates.

“I could use a loan,” Guzman said. “I’m here for the long run.”

Staff Writer David Markiewicz contributed to this article.