As business owners come to terms with the reality of making ends meet in the shadow of an 11-mile, four-year Central Corridor construction project, different camps are staking territory in a touchy debate over whether the $957 million transit line will be more boon or bane.
Skeptical small-business owners say they've been promised up to $20,000 in forgivable business loans, which have yet to materialize as city officials finalize the details. Die-hard rail opponents say public marketing and other promised construction mitigation efforts have failed, and they claim retailers and restaurants have already begun leaving University Avenue.
Even businesses that know they'll benefit from rail riders once the line gets rolling in 2014 are warily studying their receipts.
"Their concern is making it through that period of construction," said Zach Schwartz, a representative of the St. Paul Area Chamber of Commerce.
Others say the departure of even the iconic Porky's drive-in, a University Avenue mainstay for 58 years, is just normal business changeover, and new businesses will be increasingly eager to fill those spots as the rail line evolves.
Dave Brennan, co-director of the Institute for Retailing Excellence at the University of St. Thomas, predicts the rail line will eventually bring plenty of customers and new businesses to University Avenue, especially in areas close to transit stations. But not all retailers will survive construction.
For some small
businesses already affected by the recession, construction might be the final nail in the coffin. "It appears (construction) is going to be several years, and many, many small businesses just don't have those kind of back-up finances," Brennan said. "There will be significant attrition."
Questions about business changeover aren't just philosophical. In April, the Federal Transit Administration released a business impact study that concluded any predictions would be "speculative in the extreme," and it would be impossible to separate the effects of construction from the everyday reality of the recession and other "external economic factors, unemployment rates and world events."
Still, the FTA report came with a caveat. The Metropolitan Council must inform the FTA on the 10th of each month about the extent of its mitigation efforts, including construction complaints and efforts to respond to those complaints. The written updates must monitor the number of business openings and closings along the corridor.
The Met Council recently released a template for the monthly reports online at tinyurl.com/3lsnqmj, and the first official report will be submitted to the FTA's Chicago office by Friday.
To meet that deadline, Robin Caufman, manager of public involvement for the Central Corridor project, said her team is going door to door to gather data on some 1,200 businesses between downtown Minneapolis and downtown St. Paul, updating a business list first compiled in March 2009.
"We'll do mailings, and when we get letters back, we'll find out why....Did they move? Did they close?" Caufman said. "We gather data from a variety of sources."
PRO AND CON
Construction headaches. Limited parking. Millions of dollars in public subsidy. Lenny Russo has heard all the arguments against light rail. He's not buying any of them.
"I think it brings more critical mass to Lowertown, which is great for everybody," said Russo, the executive chef behind the Heartland Restaurant and Farm Direct Market at 289 E. Fifth St., across the street from the St. Paul Farmers' Market and near the eastern terminus of the Central Corridor line.
"Without reasonable public transportation, this city will never be able to be a first-class city," said Russo, a native of Hoboken, N.J. "Is there one major metropolis in the world that doesn't have a first-class public transportation system, or isn't in the process of creating one? I don't understand what the pushback is."
Putting his money where his values are, Russo relocated his popular restaurant and market from St. Paul's Macalester-Groveland neighborhood a year ago, even as preliminary construction of the priciest public works project in state history began tearing up downtown streets just down the block. He's never regretted it.
"We're very much looking forward to the Union Depot opening, and light rail as it develops," Russo said. "Some people have been concerned about light rail. My response to that has been, wouldn't it be great if we had too many people, and not enough parking spots, as opposed to the other way around? ... People who are at an event in Minneapolis can jump on the train and come here. I don't see any downside to this."
Terry Nelson, owner of the Low Vision Store at 2200 W. University Ave., takes a different tack: He hates the construction taking place outside his door. Nelson doesn't swallow arguments that a rail line down University will benefit his customers, the near-blind and disabled, and help more low-vision customers find his shop.
"The sales are down, and it's going to be continually down as long as we stay here," said Nelson, a fervent light-rail opponent. "It's a very, very big inconvenience for these people. We're going to be one of the fortunate ones, and we're going to get through this. ... A lot of (businesses) don't have parking lots."
As construction unfolds, the Cupcake bakery plans to be a survivor. Alicia Hinze, a marketing manager at the bakery at 3338 University Ave. S.E. in Minneapolis, said the business has adjusted its sales approach during construction by launching Cupcake on the Go this week, a traveling food truck, and posting updates about new cupcake flavors on the bakery's Facebook page.
"Cupcake is a firm believer that the Central Corridor light rail is essential for the Twin Cities," Hinze wrote in a statement recently circulated to the press. "We do not want to complain about what the construction may or may not do to our business, rather get our brand out there and let people know that we believe in the Twin Cities and we want to flourish here."
THE UNKNOWN
John Vaughn doesn't consider himself an enemy of light rail so much as a concerned optimist, or perhaps a resigned pessimist. He sees small businesses on the firing line.
"We had expressed a lot of angst and skepticism and held the Met Council's feet to the fire prior to construction," said Vaughn, interim executive director of the University Avenue Business Association. "I think the skeptics are now the copers, now that it's started. The rational approach is to believe your eyes, now that they've dug up the street and installed a fence."
Vaughn, a longtime Twin Cities business advocate and twice-a-week volunteer with the association, walked up and down University Avenue in December and again in May, hand-counting the numbers of vacant storefronts, and he's spotted what he considers a disturbing trend. To his mind, businesses are shutting down or relocating.
The question is: Why?
Out of the 398 storefront businesses in his count, 86 were vacant - a sobering 22 percent of first-floor retailers and restaurants that front University Avenue.
Is that the natural ebb and flow of business on the avenue, or is some of it related to a loss of customers because of Central Corridor construction? Did some businesses flee in advance of construction? Is it all the recession's fault?
Vaughn isn't sure, but he's begun keeping track. Now, with the Federal Transit Administration asking the Met Council to do the same, he hopes the business association can partner with Central Corridor planners to share data. The two parties met twice in May, with Met Council chairwoman Susan Haigh attending the initial meeting.
"We shared our (business) lists, and we're working on reconciling them," said Caufman, the Central Corridor manager of public involvement. "It's a lot of work to go up and down the avenue and find out what businesses have changed."
If he can find the partners and funding, Vaughn hopes to begin calling storeowners in August and find out why they closed or chose to relocate.
By the end of June, Vaughn hopes to host a small-business workshop, hand in hand with Met Council and city officials, helping business owners understand how to access up to $20,000 in city loans. The money, which was expected to be made available within two months of the start of construction in March, would not have to be repaid if the borrower stays in place and in business for five years.
About 40 or more business owners have added their names to a Met Council list of potential borrowers. The trouble is, the loan terms are still being worked out, and the city hasn't finalized an agreement with a nonprofit or nonprofits to administer the funds.
City planner Nancy Homans is encouraging interested businesses to begin assembling three years of tax returns and a financial statement for the year documenting lost sales.
"We're getting close," said Janelle Tummel, a spokeswoman for the city's Department of Planning and Economic Development.
Frederick Melo can be reached at 651-228-2172.
Lenny Russo, executive chef at Heartland Restaurant and Farm Direct Market in St. Paul's Lowertown district, surveys the meat case to see what products came in Tuesday. Russo is a fervent proponent of the Central Corridor light-rail line, whose St. Paul terminus is near his restaurant and market.
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