Media glare comes back to burn Raleigh startup

dbracken@newsobser.comOctober 31, 2012 

The CEO of a Raleigh startup that was written about in The News & Observer on Monday was visited by a city inspector on Tuesday who told him he was breaking city rules by operating the business out of his North Raleigh home.

Justin Miller, whose company Deja Mi has released two smartphone apps since forming more than a year ago, said the zoning inspector informed him that he had 30 days to find another office or he would be cited for illegally operating a business with employees in a residential neighborhood. The N&O story said Deja Mi’s 13 employees work out of the basement of a North Raleigh house and included photos of Miller and other employees working in the basement. It didn’t provide the address or identify Miller as the home’s owner.

The incident is awkward for city officials who have been making a concerted effort to assist startups and brand Raleigh as a place for technological innovation.

“Here we are trying to create an image of being business friendly, especially to technology companies – in my mind that is unacceptable,” said Raleigh City Councilwoman Mary-Ann Baldwin.

An anonymous caller complained about the setup to an administrative assistant in Mayor Nancy McFarlane’s office, and that complaint was forwarded to the city’s zoning enforcement division. McFarlane didn’t return a call seeking comment on Tuesday.

“They chose to remain anonymous, but we do investigate regardless of whether they leave their name,” said Walt Fulcher, a zoning enforcement administrator with the city.

Miller said he assumed the inspector’s visit was the result of the article, as none of his neighbors has complained about the arrangement in the nearly two years Deja Mi has been operating out of the basement. He said the inspector who visited the house Tuesday afternoon, Hunter Boswell, told him there had been complaints from neighbors about traffic patterns on the street.

Deja Mi has raised more than $800,000 from angel investors and is operating out of Miller’s renovated basement in part to conserve its cash. The company’s location-based photo-sharing technology allows conference and wedding attendees to share photos in real time.

In August it launched a new app, WedPics, that allows wedding attendees to take photos with their smartphones and upload them to a central location controlled by the bride and groom.

‘Trying to build a business’

Miller, 31, took issue with the aggressiveness of the city’s actions against him.

“We’re trying to build a business,” he said. “We’ve brought in people from other cities and states to move to Raleigh to become paying citizens of the city to contribute to the economic growth ..., and this is what happens.”

There’s little doubt Deja Mi is in violation of the city’s home occupation guidelines, which state that “no person, other than members of the family residing on the premises, shall be engaged or employed in the business.”

Mitchell Silver, the city’s planning director, said the actions taken against Miller weren’t incongruent with the city’s desire to attract startups.

“We do, we want startups, but at the same time we want the startups to occupy legal space,” he said. “Part of what we have to do is also protect neighborhoods, and typically the reason why we have limits on home occupation is for traffic, for deliveries.”

The city has made a number of efforts in recent years to protect neighborhoods, including its move this summer to impose limits on cars parked on the grass in an area surrounding N.C. State University. Silver said about 90 percent of the city’s enforcement efforts are driven by complaints from callers.

Miller expects to receive a letter from the city by the end of the week. He’ll have 30 days to prove that Deja Mi’s employees have departed.

Although the Deja Mi employees often joke that their scruffy appearance might lead neighbors to believe they were doing something illicit, they never imagined they’d be flagged for a zoning violation.

“My neighbors know what I look like,” Miller said. “Maybe they didn’t know what was going on here.”

Too bad there’s not an app for that.

Bracken: 919-829-4548

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