Slashing Through Red Tape

Bureaucracy – the bane of the business world – can, in fact, be swiftly and successfully navigated.

By George N. Saliba, Managing Editor On Jan 18, 2015

In the business world, “red tape” resulting from bureaucracy is not only personally infuriating, but it can impact the rapidity with which a business operates, and – ultimately – profits. Experts say the first step to overcoming bureaucracy is to understand how a relevant process works, and the associated entities and/or persons involved with it. In New Jersey, attorneys, accountants and other professionals can slash through a great deal of “red tape” with the assistance of the business leaders who hire them. 

While New Jersey is quintessentially a “home rule” state, and each of its 565 municipalities may have various rules and regulations, on the positive side, state government – by some accounts – has greatly streamlined its processes under the Christie Administration, especially at an entity like the New Jersey Department of Environmental Protection.

Overall, businesses often spend time dealing with land use laws and environmental regulations, and, separately – on the tax side – there are bulk sale department filings that must be complied with. At the federal level, securities regulations, bank regulations, immigration issues and franchise regulations top the list of headache-producing scenarios.

Rachel L. Stark, co-chair of the transactional group, at the law firm of Stark & Stark, says, “Most people complain about environmental laws and land use laws; that’s where our clients have the most issues, because they slow down a process. Also, the bank regulations following the [2008] economic crisis have impacted small businesses, because the only loans that a small business can generally benefit from are SBA loans, which are government-guaranteed loans. Those loans are filled with hurdles and requirements.”

Environmental Hurdles

Regarding environmental regulations, the New Jersey Department of Environmental Protection’s spokesman Larry Hajna, says, “We have really made it easier for applicants to work with the department: We have made a lot of our applications available online, now. We streamlined permits; if an individual permit was needed for something, we tried to replace that with a general permit. We’ve taken a lot of steps over the past few years that I think have significantly reduced the amount of red tape involved. But, there are going to be circumstances when you still have to comply with environmental regulations, and sometimes an applicant may not quite understand the wisdom of the environmental regulation. However, the point of streamlining was not to abandon our regulations, but to add common sense to the way we do things.”

Many experts generally concur with Hajna’s assessment, and it should be noted that the DEP underwent customer service training – and also introduced the Licensed Site Remediation Professional program (which essentially outsources many tasks to dedicated professionals, in certain cases) – in recent years. Chris Gulics, vice president and group manager for T&M Associates’ compliance and permitting services, says, “A lot of rules are federally driven, and the state has to comply with those rules. The downside is that, in some cases, the state becomes more stringent than the feds. That’s when you really have to be on the ball, and understand details.”

Often, the DEP exceeds the federal requirements, due to the fact that New Jersey is a highly populated state, with a long history of industrial use.

The million-dollar question, however, is how to navigate red tape. One answer? Hire a professional as early as possible. Gulics elaborates, “The best thing we offer our clients is that we understand the details of the regulations. I run a compliance and permitting group at T&M; we have over 10 people who focus on compliance and permitting. We truly understand the details of the permits and all the conditions – specifically, the applicability of those permits in New Jersey. We deal with everything from land use and natural resource permitting to operational permits.”

He adds, “We look at everything from a multi-media approach; from land use, threatened and endangered species, to air and water resources, storm water, drinking water and waste water. We will look at a facility early on in the process, during a client’s planning phase, which is the best thing a client can do: involve someone with knowledge of the regulations very early on in their business planning, or their project planning. Then, we look at things from a feasibility standpoint to determine what we can and cannot do; we understand the project costs and the timeframes.

“Ultimately, the regulations themselves, and the permits and compliance with them, are going to drive your cost, which is going to translate into your design. They also drive your timeframes. So, looking at – and understanding – the permits and the limitations they are going to provide on your development, early on, is going to give you a better understanding.”

Broader Concerns

Overall, Allen Magrini, senior vice president of land use and development, at developer Hartz Mountain, says, “You have to know the towns you are going into. You need to pay attention. That’s when hiring a local engineering firm, or local law firm that is familiar with the municipality is obviously helpful. You can get an idea by just reading newspapers and paying attention to which towns are more likely [to approve construction]. If you already own a piece of property in the town, you have to cope with it. But, if you are looking to buy a piece of property, I think you can do some due diligence up front about the development climate and the business climate in that municipality.”

Rachel Stark, at Stark & Stark, offers a broad overview: “Ultimately, in each town, county, state, federal government, knowing who is going to be able to help you, is key. [Also important] is really working with other knowledgeable consultants. An example would be LSRPs. There are various LSRPs, and you want to make sure that you are working with somebody who is not only going to do his or her job, but be able to work through the process in a way that is going to benefit your client.”

Regardless of the scenario, consultants and attorneys can make the difference between a morass of ineffectiveness, and success with “red tape,” overall.

Stark adds, “I think often what happens is that a project gets started, and people are worried about engaging the professionals at an early stage, for one reason or another. However, probably the best thing to do is to kind of reverse that project: Get the professionals together as a team. Then, there are certain things the client can handle on their own, if they are on a tight budget.”

John D. Cromie, partner at the law firm of Roseland-based Connell Foley, says, “Many of our clients are entrepreneurial, and very successful, and are used to handling things themselves, and have relationships. We certainly can – and do work – within those parameters. Many of them take projects or issues to a certain level, and if they run into an unanticipated road block, or a new issue that they had not maybe been aware of, we’ll get involved. And in many cases, clients will bring us in on the ground floor, at the earliest stages. I’d say – on balance – we are generally involved in some capacity, especially with our existing long-time clients, early on, and our role can vary from project to project, client to client. But, the more you get the input of outside professionals at any early date, that’s where I think the value proposition is for what attorneys, business attorneys and business accountants can bring to and for our clients, especially in a state like New Jersey, where there are significant levels of regulations at all levels … that is probably not going to go away, any time soon.”

Lawrence P. Burns, is a partner at The Mironov Group, in Edison, and deals with “red tape” matters ranging from State Treasury issues to interacting with financial institutions. He says, “[Our clients] know how to sell cars, and they know how to basically read how much cash they have in the bank, and how much profit they make. However, often when you are dealing with a bank, it will ask detailed questions about your financial statement and what drives the business. Our clients are smart enough to ‘cut to the chase,’ and just refer their bankers directly to us, which makes it a lot easier in answering their questions.”

Conclusion

For the business owner stymied by “red tape,” a phone call to the right environmental engineering firm, accountant or attorney can often pave the way for progress across a wide array of endeavors. Above all, it should be noted that in many cases, a skilled attorney will “spearhead” a project, coordinate with other attorneys who have a range of expertise, and communicate with environmental engineers and other professionals.