Loans offered to businesses to help offset light-rail disruption

Light Rail resource initiative announced
Central Corridor business owner Mike Hatzistamoulos, left, and his wife Pam joke with St. Paul Mayor Chris Coleman, right, Minneapolis Mayor R.T. Rybak, and Metropolitan Council Chairman Peter Bell, behind, during the announcement of the "Ready for Rail" initiative in St. Paul, Minn. Tuesday, July 20, 2010.
MPR Photo/Jeffrey Thompson

Small businesses along a future light-rail transit line linking St. Paul to Minneapolis have been calling on public officials for a plan to help them survive construction.

The mayors of St. Paul and Minneapolis assured those businesses Tuesday that they will stand by them, and announced a new loan program to help their bottom lines during the four-year buildout of Central Corridor.

But some business owners say the loans and other resources aren't enough to ensure their survival while the rail line is being built.

Mike Hatzistamoulos owns a business along University Avenue in St. Paul, and when he learned about plans to build a light-rail transit project down the middle of their street, he started worrying about the future of his business.

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Hatzistamoulos and his wife own the Best Steak House in St. Paul, a fixture on the avenue for 25 years. And they're concerned that their customers might shy away from their gyro and steak dinners once the earth-movers start ripping up the street.

"The construction -- who wants to go out to eat where the construction (is)?" he asked.

But Best Steak House is getting ready for construction. At a press conference, the couple told reporters of a $50,000 city grant they received to improve their parking lot. And with the help of some free consulting services, they're marketing themselves through Facebook and Twitter, and a website called

Best Steakhouse
The Best Steakhouse on University Ave. in St. Paul. The owners of the restaurant are taking advantage of a new loan program to help prepare for disruption that will be caused by construction of the Central Corridor light-rail line right in front of it.
MPR file photo/Melanie Sommer

"We got to move forward. That's what it's all about," said Hatzistamoulos. "We're going to have all kinds of specials for all the construction workers in there. If I will have to bring it out there to them, I will do that, just to stay in business."

A coalition of nonprofits and government agencies pointed to the steakhouse owners as an example of how businesses should get "Ready for Rail," which is the name of their new initiative. It's a packet of information that officials say every business in the corridor will receive to help them prepare for construction.

But some business owners are still skeptical of the plan, and say the new loan program announced Tuesday falls short of their expectations.

Here's how it works: If businesses can prove they have prepared for rail, yet lose money during construction, they can apply for no-interest loans of up to $10,000. The fund, so far, totals $1.5 million.

But that's just a fraction of the $50 million community development fund set up in Seattle, which was put together in part to lessen the impact of light-rail construction on residents and businesses.

Light Rail resource initiative announced
A group gathered in front of Shuang Hur Supermarket during the announcement of the "Ready for Rail" initiative in St. Paul, Minn. Tuesday, July 20, 2010. The "Ready for Rail" initiative brings together public, private and non-profit groups to help provide resources to Central Corridor businesses during the Light Rail Transit construction and service.
MPR Photo/Jeffrey Thompson

Metropolitan Council Chairman Peter Bell, whose agency is building the Central Corridor and contributed to the fund, says he knows that's not enough for the hundreds, if not thousands of businesses, along the corridor. A group of nonprofits called the Central Corridor Funders Collaborative is contributing $500,000 to the loan program.

"I'll readily concede it's an inadequate fund, but it's a start," said Bell.

St. Paul Mayor Chris Coleman calls the $1.5 million part of an overall strategy to address the concerns of business owners.

"It's about maintaining access, about getting in and out as quickly as we can in terms of the construction," said Coleman. "It's about the signage, a network of people supporting each other's business. So when you put that $1.5 million together with other parts of the strategy, you start to go through the corridor and figure out how we can make sure businesses thrive."

Light-rail planners intend to keep traffic open on University Ave. during construction. And, they say crews will be required to restore the street in front of any business within five months.

Mayor Coleman says his goal is to not have a single business shut down because of the light-rail project.

But one University Avenue restaurant is already planning to bail before the first shovel hits the dirt.

Chouaphia Vang is the owner of Krua Thailand, and his restaurant's last day of business will be July 29. He says he's been hit hard by the tough economy, and a lot of small businesses like his are already tapping into their savings. Vang says he thinks construction of light-rail would kill them off completely.

Vang says he's cutting his losses now by closing the restaurant. He may reopen in a new location when the economy improves. Vang adds that he's not impressed by assurances from the city, the Met Council or other groups.

"I think they haven't given the businesses anything solid to make the businesses feel better all this time," said Vang. "The only thing I see they're doing is telling people they're doing it."

The project still faces a number of lawsuits and civil-rights complaints, including one from an Asian business group. But Met Council officials say they don't expect those complaints to interfere with the project.

Initial construction of the $1 billion rail line has already begun, and trains could start service by 2014.