The challenges of the new Lake Street


On November 21 a group of neighbors, politicians, area business owners, and community organizers gathered at Chicago Avenue and Lake Street to officially welcome the return of Metro Transit buses after six months of road reconstruction. It marked the long-awaited end of the first phase of the Lake Street Reconstruction Project. Whereas practically everyone agrees the construction will benefit the business community in the long run, many worry about the future of the small, ethnic businesses on Lake Street.

This physical makeover of one of the main traffic and commercial arteries of the city is also an effort to revitalize what at one time had been the major commercial corridor of Minneapolis. The history of Lake Street has been one of constant changes, successive periods of growth and development followed by recessions. The installation of the street car system was a definite boom and the beginning of an upswing period, when new business started coming in and the future seemed prosperous. But with new urban developments, businesses moving to other areas of the city and the shut down of the Sears Building, Lake Street turned into a second-tier street.

By the end of the ’80s, with the massive migration of people to the suburbs and increasing crime, Lake Street became synonymous with delinquency, prostitution and drug dealing. Property values along the corridor started decreasing, which slowly became appealing to the new population of immigrants, especially Hispanic. Throughout the ’90s, the immigrant community began buying not only residential property in the area but also started to establish its own businesses. It was in this way that Ernesto Reyes, current owner of Carne Asada, Me Gusta Place and Me Gusta Supermercado, became the first Hispanic entrepreneur on Lake Street in 1989. Soon followed other ethnic groups like Somali, Chinese and Hmong. The steady growth of the immigrant business community was calling for big changes and was showing that an economic upswing of the area was once again on the way. Currently, Midtown—the middle segment of Lake Street between I-35W and Hiawatha—is home to almost 200 businesses. Approximately 80 percent of these are immigrant-owned companies.

The economic developments on Lake Street together with its demographics created the very diverse and colorful business community of today. With the exception of big chains like Target, Office Max, Walgreens, Cub Foods or Rainbow, the majority of the businesses are small and run by family members. Some are new or relatively recent whereas others are well established with a reputation built through more than a decade in the neighborhood. The type of commercial activity is even more varied, from restaurants and retailers to auto dealers and beauty salons.

At the core of the revitalization effort of the reconstruction is the significance of the location, creating a new image for Lake Street as the reference point for development that is of high value to the public. The key element is no doubt the Midtown Exchange and the Global Market that are soon going to be inaugurated in the former Sears Building. The new commercial giant will house million-dollar condominiums, the headquarters of Allina, Sheraton Hotel, offices and a huge international market on the street level. All developments in the area are also being connected to the Midtown Greenway, the recreational and bicycle path that runs just one block north of Lake Street. Midtown is quickly turning into a very dynamic and competitive marketplace, and all those that wish to hop on the development train need to speed up their rhythm.

This is going to be the main challenge for the immigrant businesses on Lake Street. Among the different ethnic groups one can find distinct business cultures, and therefore different ways of doing business, caring for the customers and dealing with changes.

In the last decade it has been the immigrant businesses that pushed for the changes and brought improvements to the area, but now they are faced with the need for quick change and adaptability in the years of gentrification and affluence of mainstream businesses. The successful entrepreneur is the one who will be able to creatively overcome the challenges of increasing competition and attract new clientele.

During the year I worked for Lake Street Council as the person responsible for the outreach to the ethnic businesses on Lake Street, I came across many that urgently needed improvements and professional assessment in essential business functions, such as accounting or budgeting. In many cases, marketing and advertising activities were not even something they planed for at all!

Community organizations worked hard for more than a year to help Lake Street businesses prepare for and overcome the impact of the reconstruction, but ultimately it is up to the business owners. Luckily, there were relatively few businesses that closed down during the months of construction, but those that survived will have to make up for the time lost and recover the average 50 percent decrease in sales. This is a pivotal point that once again gives a chance to start anew and review one’s business strategy. Through the years, the key will be to preserve the unique character of Lake Street, the mom-and-pop businesses, its multicultural flavor and, above all, its ethnic richness. In contrast to the ethnic segregation of business areas in other big cities, it’s not too late for Minneapolis to prove that it is still possible to bring together very different ways of living and doing business in one common place.