Say a fire inspection doesn't prevent a business opening so it opens and promptly burns down the building its in, innocent people living in apartments above the business die. I'm sure they will appreciate that while their personal position isn't great their sacrifice is contributing to the regeneration of the city as a whole.
Likewise say an electrical inspection doesn't prevent the business opening, so some poor schmoe gets cooked while plugging in a vaccum cleaner or whatever.
Most of this so called "red tape" exists for a reason and people who are affected by it complain a lot but as in Bastiat's "broken window" fallacy, we never see the people who benefit from these regulations because they are protected from injury and thus the events never happen.
At the margin I'm sure regulation does put some people off running some businesses, but it's really debatable whether removing regulation would be enough to regenerate lots of businesses in cities. The headwinds they are facing seem structural - people are going into offices less are working from home more and so are using different goods and services and in different places from those they were using back pre-pandemic.