Immigrant businesses thriving on St. Paul's east side

The east side of St. Paul has struggled economically in recent years, but as more and more immigrants open small businesses along traditional commercial strips like Payne Avenue, the area could be on the upswing.

At the Hmong Pharmacy, Nhia Pao Kue is busy filling orders during the after work rush. He's been at the corner of Maryland and Payne Avenues for more than three years and says he is happy to see more businesses opening up.

"There are some Hispanic entrepreneurs moving in a little bit down the road there and I'm glad to see that area change a little bit, because they are moving into vacant buildings and starting new businesses, slowly bringing some life into this area," said Kue.

In a part of town with a large Hmong population, Kue's got plenty of customers. Many of them, especially senior citizens, would rather fill their prescriptions at a place where their native language is spoken.

"The commercial corridor and its stock of small businesses and small buildings is pretty key ... as a catalyst, a tool for changing what happens in the future."

Kue suspects the same thing will happen as the newer immigrant businesses find their niche.

Of course, there is nothing new about immigrants opening family businesses. In east St. Paul, a traditional immigrant gateway community, mom and pop storefronts have always been a fixture.

What's different now, say developers, is that after more than a decade of job loss, there are signs of a turnaround.

That's what community development advocates are banking on.

Mike Temali heads the independent non-profit Neighborhood Development Center, founded by Western Bank. He said small businesses are key to any neighborhood revitalization effort.

"If it's all run down and half empty, they write off the neighborhood but if it seems to be thriving they think 'Maybe I can shop here, maybe I can start a business here or buy a house, move here, whatever," said Temali. "So, the commercial corridor and its stock of small businesses and small buildings is pretty key as not only an indicator but as a catalyst, a tool for changing what happens in the future."

But new immigrants face steep barriers to getting the financing they need to start a business. Temali's organization uses a business incubator model designed to help entrepreneurs overcome those barriers. The group offers training, micro-loans and support services like help with business plans and marketing.

It recently developed the Plaza Latina mini-mall on St. Paul's Payne Avenue. It's a scaled-down version of Minneapolis' Midtown Global Market. Sharing space means cheaper rent, more customers and visibility.

So far, it seems to be working.

Alejandro Lugo owns the newest business at the plaza. He started out with a kiosk selling jewelry about two and a half years ago. Business was so good, he was able to move into a larger space that he manages with his brother and sister-in-law. Part of his success, he said, is the location inside the mini-mall.

"We are doing well here, the space is a bit better for us. I think it is bringing us a few more customers, people who are shopping at another store in the plaza who see us here and come over," Lugo said. "We are now thinking of opening another store in Saint Paul, another one in a new location."

Anne Briseno from the East Side Neighborhood Development Company said growth like that is the ultimate goal. And it's also creating jobs.

"It's not like big 3M comes in and creates 1,000 jobs, it's little by little, collectively there is a significant impact," Briseno said, "If you look at this building alone, you have 10 businesses with a minimum of at least two employees. And that's just one building."

Briseno said the same thing is happening all along the avenue.

The question on the minds of many is whether there are enough customers to support all of this growth.

Pharmacist Kue said the city could do a lot more to help businesses succeed. He said improving street lighting and putting more police officers on patrol will make customers feel safer doing their shopping after dark. And Kue said business owners need to make sure they attract customers from outside their own ethnic group.

"If it's just mom and pop, what happens when your customer base starts moving out? You lose out too, so eventually you're going to have businesses that serve your own community as well as the mainstream population," Kue said.

State and local officials are interested in how much the state's immigrant businesses contribute to the economy. A 10-member commission created by the legislature will soon release a report with recommendations on how the state can support these businesses.

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