A half-dozen restaurants, a hair salon and other businesses planned for the new Galt Village Shopping Center are at a standstill because of the moratorium on building permits imposed on the city.
Lamp Post Pizza, Happy Garden Chinese Restaurant, Baskin-Robbins, Togo's and Great Clips are among the businesses that can't open their doors because of the ban on building permits by the California Regional Water Quality Control Board.
"We're concerned - we're very concerned," said Lux Taylor, development partner for Taylor Properties, which is negotiating with potential tenants for the new shopping center on Twin Cities Road.
The state water quality board is holding up building permits because Galt has yet to comply with state regulations to avoid having treated sewage discharged into Laguna Creek during the dry season - defined by state regulators as May 1 through Oct. 31.
"There would be tenants very close to opening today," Taylor said Wednesday.
Galt Village Shopping Center now has three businesses: Raley's, Blockbuster Video and Dollar Tree.
The water quality board's moratorium, issued Jan. 10, is merely proposed, pending an April public hearing date in Sacramento. Galt is permitted to issue "conditional building permits" allowing all construction except for sewer hookups, Patricia Leary, a senior engineer for the state water board, said earlier this month.
However, city officials decided against issuing any kind of building permit until the situation is resolved because they are not clear what kind of permit the city is allowed to issue, said Curt Campion, who doubles as Galt's assistant city manager and planning director.
Taylor will meet with city officials today to determine whether at least partial construction can begin. Campion said City Attorney Ruthann Ziegler plans to contact water quality officials to clarify what the city can legally allow during the moratorium, officially called a cease and desist order.
"There is some uncertainty until that cease and desist order is lifted," Campion said.
Anyone obtaining a building permit prior to Jan. 10 is exempt from the cease-and-desist order.
Several stores planned for Galt Village Shopping Center have valid permits for building shells, which are good for a unisex restroom, but for businesses with public restrooms, a second permit is necessary, Taylor said. That is the sticking point.
For example, two restaurants, Lamp Post Pizza and Happy Garden, are faced with an extra permit, called a tenant improvement permit, because of the need for public restrooms, dishwashers, extra sinks and grease traps, Taylor said.
Representatives from Happy Garden, currently located on Grant Line Road in Elk Grove, and Lamp Post Pizza were unavailable for comment Wednesday.
Also affected by the building permit moratorium are a tanning salon, dry cleaners and another restaurant that plan to move into Galt Village Shopping Center, Taylor said.
"We borrowed the money from our lender to build these buildings," Taylor said. "It's put us in a bind."
Retail developers typically use rent paid by businesses to pay off the loan to construct the buildings, Taylor said.
Since he isn't collecting rent from new businesses, his firm must pay off the loan from their own pocket, Taylor said.
"It is currently costing us money through loss of rent and interest costs," Taylor said.
The restaurants are in a different bind. Because of the set-up costs, Taylor said, restaurants will borrow $200,000 to $300,000 to equip their building. The restaurants aren't gaining any customer revenue to pay off their loan because they haven't opened yet, Taylor said.
South of the shopping center, Emerald Village, a housing complex for senior citizens, will have to temporarily do without a 3,400-square-foot clubhouse because developer Mike Guttridge cannot acquire a building permit to complete it.
The clubhouse will include a ballroom/banquet room, crafts and card room, exercise gymnasium, pool table, TV, fire place and computers.
Galt Mayor Darryl Clare announced at Tuesday's City Council meeting he hopes to complete negotiations to lease up to 180 acres of land owned by the Sacramento Catholic Diocese by the Feb. 18 council meeting.
Clare said he hopes the water quality board staff would lift its cease-and-desist order without going before the state board in April if the city consummates a lease for church-owned land.
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