Questions and concerns — as well as support — have been raised over a city of Sacramento planning and building department program suspended after it was illegally used to fast-track the Nestlé water-bottling plant.

The little-known Facilities Permit Program came to light in late October when Nestlé's renovation of a South Sacramento warehouse was temporarily halted and a city investigation revealed work had started without legally required building permits.

Many people, including those criticizing some aspects of the current building approval process, said city staff have worked hard in the last few years to become more developer-friendly by improving the building approval process and resolving issues with developers earlier in their projects, which is especially needed for urban infill projects.

The FPP is intended to speed up approval for tenant improvements or renovation of existing buildings by businesses already established with the city.

Developers view the program as an "entrepreneurial" effort between development professionals and city Community Development Department staff to accelerate the building approval process, said Michael Heller, who transformed a former state agency building into the MARRS Building on 20th Street.

"It's overall a very worthy, innovative program. If there are some modifications to make it better, we would all support that," Heller said. "But we certainly would not like to see it disbanded."

While builders praised the FPP for streamlining and hastening the building approval process, others expressed confusion over the program, how it works and who benefits.

Chief among those expressing concerns was former Mayor Heather Fargo, who said she knew nothing about the program, which was adopted while she was mayor, until the city suspended it Oct. 27. During her administration, she was not aware of city staff giving the kind of verbal approval that was used to expedite the water-bottling plant without a formal building permit, which is illegal.

"Not with my knowledge and not with my support. I find it outrageous," said Fargo, who said she would have required the FPP be put on the city council agenda and discussed publicly if she'd known anything about it.

"It's a very public process — development is. It should be," she said.

Several people, including architects and developers who have worked on infill projects, said they didn't know or understand the FPP.

"I don't think anybody is familiar enough with that program — including the city itself," said one person.

Under the FPP and a similar program known as the Matrix, one team or building inspector is put in charge of a project from the beginning of a builder's effort to win a building permit. The Community Development Department's building division reviews construction plans, provides feedback and approves building permits.

"This program is designed to expedite the plan review and permitting process to facilitate a timely process," according to the department. "The most significant differences between the FPP and the normal building permit process is the ability to begin a project at the time of plan submittal and perform inspections with concurrent plan review, by using a team doing both the plan review and the inspections."

Those eligible to participate in the FPP have included building owners or management companies, tenants and contractors, according to the department. Participants must register each year. The size and cost of a project or building has no impact on participation, according to the department.

While mayor, Fargo had supported creating "permit-free" zones in areas that desperately needed to be redeveloped, but not without public knowledge, she said. She also worked to get the "pain" taken out of the building approval process for small business owners after her own experience in the 1990s. She and her husband, a general contractor at that time, had to go through more than 100 people who gave conflicting directions to get a permit to build a small shop and driveway on commercial property in North Sacramento.

Some business owners have given up on business projects in the middle of building approval processes that were going nowhere, she said.

Others who have opened businesses in rehabbed buildings within the last two to three years said their businesses were in danger of failing because of the costly delays and other problems involved in getting permits from the city. Some would not talk on the record for fear of retribution by city staff, they said.

"You put some people through hell and other people don't even have to get a permit? It's ridiculous," Fargo said. "It sounds out of control to me."

Some criticized the city for not issuing permits in a "rational" way.

"We have been concerned with what we've seen for years as a real disparity — a grossly unlevel playing field in terms of how the city handles different kinds of applications. People who are well-connected and have lots of money behind them get lots of favors, and have for years, even before the FPP," said one source. "On the other side, folks who aren't well-connected, who don't have a lot of money behind them... cannot get the city to issue them a permit for the simplest things.

"The FPP seems like a way of formalizing this verbal-agreement approach that has been going on for awhile," according to the source."You don't want it to be a free-for-all where the guys who have the juice get whatever they want and the other people get screwed."

Working through the FPP, the Swiss company Nestlé and its local contractors began construction work on an existing warehouse at 8670 Younger Creek Drive with only verbal approval from a building inspector who coordinates the program. The contractor, Panattoni Construction, is a participant in the FPP, rather than Nestlé, said David Kwong, acting head of the Community Development Department.

"Plans were submitted and verbal approval was granted on this project because of the plan's limited scope (i.e., work only included demising walls and pluming in an existing building)," according to information provided by the department.

Building permit applicants must pay fees to support the FPP and inspectors' time. Nestlé has paid $175,494 in fees for all three phases of the warehouse renovation, according to the Community Development Department.

Nestlé's water-bottling operations are expected to begin in January. The company had protested the stop-work order by saying the city's established process had been followed. The stop-work order was lifted in three business days.

Before the program was suspended, all FPP participants were given start-work authorizations or verbal approval as soon as plans were submitted to the city, as long as the work would not impact buildings' structural integrity, according to the department. The work was later inspected for compliance with city and state building codes.

While state law may not prohibit verbal approvals from replacing building permits, California Building Standards Commission Executive Director Dave Walls said he's not aware of any cities that allow building inspectors to issue permits verbally or in the field.

"I don't know of any local administrative procedures that would permit such a thing," he said. "Most will say you don't start work until you get a permit."

Various state agencies have oversight and can cite for violations of state code regarding the building of homes, schools and hospitals. The state legislature hasn't given any agency, including the Building Standards Commission, the power to enforce codes for commercial construction, Walls said.

Under state law known as the California Building Standards Code, the use of a phase permit program to fast-track a project is done so at the applicant's risk. Permits may be issued for phases of a project before another phase is designed or approved. But the applicant — not the approval-granting agency — takes all the risk for any work done before full approval is given for the entire project, Walls said.

Developers and other business people — including those who recruited Ray Kerridge as an assistant city manager — have met in recent weeks to strategize how to support the FPP and Kerridge, who brought the program from Portland and is now the city manager.

Developers once ranked the city of Sacramento as the worst place to do business in this region. Projects were stymied by the involvement of numerous departments with different agendas, which made developers feel like "a mouse on a treadmill," said Sotiris Kolokotronis, who developed the L Street Lofts.

"By 2005, it (Sacramento) was one of the best places to do business," Kolokotronis said. "I saw in the city some really good things happen."

Developers who seek a speedier process to renovate buildings or make tenant improvements under the FPP know they still must build to code and be in line with the building permit, and that they are assuming all financial risk, Heller said.

"I think that's fair," Heller said. "If a developer is going to benefit from an expedited process, they have to be willing to take that risk."

Suzanne Hurt is a staff reporter for The Sacramento Press.