Tuesday, April 28, 2009

Business retention during LRT construction

By Sheila Regan , TC Daily Planet
April 23, 2009

Seattle community organizer Thao Tran stirred up controversy last week as he spoke at various forums and events, proposing the idea that businesses along the proposed Central Corridor line seek direct funding to cover their loss of revenue during construction. Tran is the former executive director for the Vietnamese American Economic Development Association and chaired the effort among community and political leaders in Seattle to create a $50 million mitigation fund, which included $12 million in business interruption grants to 166 businesses during construction of the Seattle light rail and re-establishment payments for 30 businesses that had to move.

Tran described the moment when he decided that instead of working to stop the Seattle rail from happening, he would focus on figuring out the best way to protect his community during its construction. He was fly fishing with his mentor, a dean at the University of Washington, and the dean said: “This project is going to come into your community like a giant snowball, you can’t resist it. The best thing you can do is try to deflect the impact.” Tran said the best way to deflect the impact is to provide direct assistance to businesses to cope with the loss of revenue during construction.

On April 16, Tran spoke in the morning at an event hosted by the University Avenue Business Association (UABA), and co-hosted by the Asian Economic Development Association (AEDA). The morning lecture was geared toward Central Corridor business owners. In the evening, Tran was one of three keynote speakers, including Sushma Sheth and Harold Lucas, at a community forum on resisting gentrification, hosted by the Alliance for Metropolitan Stability , AEDA, and the Aurora St. Anthony Neighborhood Development Corporation. Community members gathered at Lao Family Community in the Rondo neighborhood of St. Paul.

“I believe small businesses are the heroes of our community,” Tran said. Because construction impeded access to businesses in Seattle, many inevitably suffered, losing 20-60% of their gross sales during one or more consecutive quarters, according to data collected by the Rainier Valley Community Development Fund. Tran said one of the first things his steering committee did was rename “grants” and “loans” to “payments” and “advances.”

Tran stressed the importance of getting elected officials on board a mitigation plan, as well as strong neighborhood and business councils. In Seattle, the mitigation fund had strong support from the mayor and several key council members. He encouraged businesses along the proposed Central Corridor line to work together, using organizations such as UABA to obtain a mitigation fund similar to the one set up in Seattle to deal with the loss of revenue during construction.
Laura Baenen, manager of communication for the Central Corridor Light Rail Transit Metropolitan Council (Met Council), responded to Tran’s lecture by saying the Twin Cities Central Corridor Light rail is very different than what happened in Seattle. The Met Council is the agency that implements the planning and the logistics for the light rail construction.

“We’re not shutting down University Avenue,” Baenen said in an interview following the UABA presentation. “We have experience with the Hiawatha and North Star Lines.” Baenen said that traffic wouldn’t be interrupted, and delivery trucks and foot traffic would still have access to businesses. She pointed to a Met Council website, which shows examples of the support the Met Council would provide to businesses, including marketing signs. Baenen said that the Met Council has hired six bilingual outreach liaisons to help communicate with residents and businesses. When asked whether the Met Council would financially assist University Avenue businesses during Baenen said that Met Council would provide marketing support and other similar services, but wouldn’t provide grants or loans to cope with loss of revenue. The amount of marketing support will be a percentage of the contractors’ bid prices, which the project will receive next year, Baenen said.

“There are different levels of assistance,” Tran said in a follow up interview. “Outreach and marketing are very superficial. Sure, they’ll pay for window washing and doormats, but that’s not replacing the loss of income. It’s not going to cover people’s loss of business.”
Linda Winsor of UABA, said in an interview: “I’ve been told for so long no one would give money directly to business.” Winsor is hopeful to hear of Tran’s experience with doing just that in Seattle.

Of the Met Council, Winsor said: “They have outreach workers, but it’s kind of a waste of time. Nothing comes of it that’s meaningful to business.” Winsor said the perception of University Avenue business owners was that the outreach liaisons acted more like public relations than liaisons. “You shouldn’t be reaching out to people until you can provide follow up and support,” Winsor said. Winsor said that she’s been asking how much funding the Met Council had for business mitigation, but hasn’t gotten answers.

Baenen said the Met Council is working with three groups to help with business mitigation. The Central Corridor Partnership (CCP) will hold first Friday meetings, support communication efforts regarding 4th Street advance utility work, bring in experts to speak with business groups to help them prepare for construction, and attend Central Corridor Sustainable Energy Working Group.

Karri Plowman, director of the CCP, said while the group helped bring Tran to speak in St. Paul, they disagree with his proposal. “We’ve seen that [grants to cover revenue losses] might immediately appeal to people because it’s free money,” Plowman said, but “other models such as a collaborative approach and mass marketing” are more effective. Plowman said that marketing efforts by the CCP would utilize in-kind donations, such as donations by printing firms and graphic designers.

The Central Corridor Funders and Collaborative Learning Network (CCFCLN) will promote learning, join community partnerships, and provide investments into promoting collaborative ideas. Jonathan Sage-Martinson, of the CCFCLN, said the group funds both learning and implementation of ideas that support small businesses. They have made a grant of $200,000 this year to the University Avenue Business Preparation Collaborative (U7), to help with Central Corridor mitigation. Sage-Martinson said CCFCLN was not opposed to funding U7 or other groups that would give money directly to businesses, but would not directly give money to businesses themselves.

The U7 formed three years ago through the encouragement of Nancy Homans, policy director in May or Chris Coleman’s office, who approached the Neighborhood Development Center (NDC), and asked them to lead the effort to organize Community Development Councils along University Avenue in preparation of the rail line, according to Mike Temali, CEO of the NDC. Temali said U7 was “all for it” when it comes to giving money to businesses to recoup for revenue loss during construction, but that U7 was only a small piece of the puzzle in terms of providing that kind of funding. “We don’t have the money for [grants for small businesses] yet,” Temali said, but they are currently seeking more funding, including a $25,000 grant from the St. Paul Foundation. He said that other U7 efforts include small business consulting and advocacy efforts to ensure that the construction period is short. “The biggest killer is when construction drags out,” Temali said.

“We can play a small, useful part,” Temali said, “but we’ve been careful because we could also cause more harm than good.” Temali said that that politicians need to step up to the plate in terms of providing mitigation as well. “We don’t want to be the chump, the fall guy,” Temali said. “We don’t want a situation where all the big boys are saying U7 will take care of it, but don’t give us a nickel.”

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