Loveland mulls implementing business licensing program for all enterprises

LOVELAND — The city of Loveland will begin to gather information from business owners this week about whether they would support a business licensing program.

The city does not license businesses, other than for collection of sales taxes, for dispensing of  liquor and other specific business types.

Proposed is a compulsory program whereby every business operating in the city would be required to pay an annual fee and register its information with the city. City staff members from 10 departments have been talking about implementing such a program since January, according to information distributed last week.  A business licensing program would require City Council approval.

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“We believe we have an opportunity to better serve the business community,” said Jack Hill, existing industry manager in the city Economic Development Division. He listed four primary reasons:

• In times of natural disasters and pandemics, having ready access to business contact information is important, he said. “It became prevalent during COVID when we were trying to administer our programs to the business community to determine who was being impacted. There are limitations on what (city) departments can share with one another and how we can use that information. There is an opportunity to support more businesses than we did in 2021. Response would have been more rapid and concise if we didn’t have to compile this information.”
• Staff would like to improve communication between the city and business. “There’s a slight disconnect. When visiting a city building (for the first time) it can be daunting to figure out how to operate a business in the city. We’re hoping this can be a ‘front door’ to the city so businesses can figure out how to navigate the city.”
• The city would like to increase awareness of federal, state and local resources. “We try our best to tout these programs and resources, but the message doesn’t always make it to the key decision maker for the business. Sometimes, we don’t even have the contact information for the business.”
• Finally, the city would like to head off problems for new businesses before they start. Businesses sometimes sign long-term leases on property without realizing that the type of business they would like to establish can’t be operated from that location. When that happens, it can delay a business by months and increase startup costs significantly, he said.

He cited the example of a business a few years ago that wanted to move into a warehouse/distribution building but planned to operate a business that didn’t fit the warehouse category. “Without consulting Development Services up front, it didn’t realize there was a changing use cost of going from warehouse to gym,” he said. Traffic counts for the business were much higher than for the prior warehouse use. “It can end up costing tens of thousands of dollars to comply,” he said.

While the landlord has some responsibility to counsel a potential tenant, the landlord doesn’t always know the full story, and there’s nothing to stop a landlord or broker from renting or selling a property even if the new usage doesn’t comply with code. “Most of the time, it falls to the business owner to know (the code),” Hill said.

Business licensing in area cities varies, with Boulder charging a $25 annual fee to all manner of businesses, including those outside the city that might deliver products in the community or want to attend or sponsor an event in the city — even if sales are not contemplated.

Greeley also licenses its businesses on a sliding scale depending on the type of business. Its business license application includes a requirement that the business disclose its number of employees, its legal form, hours of operation and other information.

Longmont, Fort Collins and Broomfield do not list business licensing programs on city websites, although Hill said that sometimes licensing programs are embedded in the sales and use tax licensing program. 

Hill said nothing is set in concrete about the program and, he admitted, widespread opposition from businesses could derail the program.

Businesses can comment online, or at scheduled focus group sessions. Focus groups will be:

Ward 1 — June 1, 5:30-7 p.m., City Council chamber at city hall.

Ward 2 — June 12, 2-3:30 p.m., The Cleveland Room downtown.

Ward 3 — June 6, 8:30-10 a.m. at The Forge Campus.

Ward 4 — June 7, 8-9:30 a.m. at the Loveland Chamber of Commerce office.

Hill said staff is tentatively scheduled to present information to the City Council on July 11.

The program comes with a cost to the city, maybe between $100,000 and $200,000, depending on the software program that would be purchased or leased to operate it. 

“It’s yet to be determined,” Hill said, although he said at least one additional staff position would be required. “In the first year, that person would be dedicated to getting the program going. Then, this would become part of their role within the department” where the program is based.

He said it is undetermined where the program would reside but would likely be attached to Economic Development, sales tax administration or the City Clerk’s office. “It’s a big change for any department to take this on,” he said.

The annual fee is also not determined. He said the fee could be $20 or $50 a year. “Or maybe there’s no fee,” he said, although staff would like the program to be self-funded.

When asked how he’d respond to an established business that doesn’t want additional regulation or fees, he said, “My response would be that we want to be of better service to the businesses in the community. This program will help us do that. In those times of COVID-19 and when floods occur, we want to make sure we can distribute and respond with resources as quickly as possible, and I’m not sure there’s another way to do that.

“Nothing is fully baked and done yet. Want to make sure it fits business needs. If there’s a resounding ‘we don’t want this,’ then it’s not going to happen.”