Central Corridor businesses prepare for construction disruption

Christopher Yang
Christopher Yang, left, learns how to keep better track of his salon's revenues and expenses with the help of business consultant Miguel Jongewaard. Yang says his wife's accounting system currently involves handwritten records.
MPR Photo/Laura Yuen

Small business owners along a future light-rail transit line linking St. Paul to Minneapolis are beginning to plot their survival strategies.

The construction of Central Corridor -- with all of its dust, debris and commotion -- will likely be the biggest disruption they've ever felt. They say it's imperative to get their finances in order, and let their customers know they'll be open for business. Some businesses have enlisted consultants to build their websites, design their logos, and help them create a financial plan.

And they're getting many of these services for free.

Jonathan Price, the owner of Johnny Baby's, a neighborhood bar on University Avenue, is one client who turned to the University Avenue Business Preparation Collaborative, known as U7.

Price knows he'll be inconvenienced when crews tear up his stretch of University Avenue in 2012. Major construction is expected to begin around the Capitol as early as this summer. Light-rail planners say the construction will take no more than five months in front of any given business.

"Am I going to make it through light-rail? Yeah," Price said. "Are there going to be ups and downs? Yeah. Can I plan for those? Yes, I have to, because I've got nine people who (need me to be) planned and prepared for light rail. They depend on me for their livelihood."

Since opening his bar six years ago on University, Price has learned the power of marketing. He entices his customers with karaoke and Toga Night. He even crafted a slogan for Johnny Baby's: "Always a good time, never a cover." That tagline was incorporated into new business cards designed by U7's graphic artist. On a recent visit, Price listened carefully as the artist and two business consultants -- all young enough to be his children -- showed him prototypes and answered his questions about branding and construction loans.

Salon work
Stylist and business owner Xai T. Yang blow-dries the hair of a client at the East & West Beauty Salon. Behind them, business consultant Miguel Jongewaard helps train Yang's husband, Christopher, on how to use spreadsheets for his business.
MPR Photo/Laura Yuen

Price knows not every business owner on the avenue is preparing for light-rail. And many are resisting. Another African-American bar owner has sued over the light-rail project, saying planners haven't properly analyzed its effects on minorities. Many black business owners are still haunted by the construction of nearby Interstate 94, which destroyed the city's African-American business district in the 1950s and '60s. Price, who grew up in Rondo and whose grandparents were displaced, shares that painful history.

At first, some of the businesses along University Avenue were cool to respond to visits from U7's consultants, said Isabel Chanslor, the program's project manager. The consultants had to convince the storekeepers that they weren't with the government, and they weren't there to proselytize.

"We are not cheerleaders for light-rail," Chanslor said. "We're light-rail supporters, but we're not there to evangelize anyone to 'get on the train'."

U7 eventually won over the businesses with its free marketing services, including new logos and Facebook tutorials. The other piece, financial planning, has been more challenging, Chanslor said.

Business plans
St. Paul bar owner Jonathan Price, with glasses, discusses business plans with U7 consultants Sia Lo and Miguel Jongewaard. The owner of Johnny Baby's said he is making strides to prepare for light rail.
MPR Photo/Laura Yuen

"To go to a business and ask them to open their books and share with you their accounting -- or lack of accounting -- is really difficult," she said. "We're always trying to say, 'Look, this is your choice, but we're here to help you.'"

Business owners need to keep solid records now to show they're making money in the years before light-rail construction, Chanslor said. If they take a hit during construction, they'll be better able to prove their losses. If the recent rebuilding of Lake Street in Minneapolis is any guide, some businesses might not see much change at all, while others could lose as much as 60 percent of their revenue, according to estimates from the Lake Street Council.

That kind of loss would be devastating to East & West Beauty Salon, another U7 client. On a recent afternoon, salon owner Christopher Yang was perched over a laptop computer, while U7 consultant Miguel Jongewaard demonstrated how to use a spreadsheet to keep project cash flow and develop a budget.

"It will be interesting," Yang said. "We've never done it before."

U7 web design
Project manager Isabel Chanslor (left) points to a U7 web design created by graphic artist Steve Olson. The community-development collaborative helps small businesses with their marketing plans, including logos and web design.
MPR Photo/Laura Yuen

Yang's wife, Xai, currently keeps track of all the salon's financial records by hand.

Despite his preparations, Yang said he's still worried about his future. After 10 years of operating the salon on the avenue, he doubts that the city or light-rail planners will provide much financial assistance to help his business stay afloat.

However, the Metropolitan Council and a group of private foundations known as the Central Corridor Funders Collaborative are working on a small fund to help businesses. At this point, the pot of money is small, with about $1.5 million identified for no-interest loans. The details still need to be finalized.

Officials describe the loan program as a modest safety net to help businesses that will take a significant loss, despite doing everything they could to prepare for light rail.

Your support matters.

You make MPR News possible. Individual donations are behind the clarity in coverage from our reporters across the state, stories that connect us, and conversations that provide perspectives. Help ensure MPR remains a resource that brings Minnesotans together.