Immigrant businesses struggle during Lake Street reconstruction


East Lake Street in Minneapolis was once known as a place you didn’t want to go; overridden by prostitution, drugs and violence. But times have since changed, and the 4.8 mile corridor is a vital economic area in the city and state, especially for different ethnic groups.

In 1994, 80 percent of storefronts were boarded up, and there were four Latino owned businesses, according to Ramon Leon Executive Director of the Latino Economic Development Center. Today, there are 215 Latino-owned businesses between Hiawatha and Lyndale Ave South, according to Leon. According to HACER-MN, a research group covering the Latino community, the buying power of Latinos in the Twin Cities metro area was $1.25 billion in 2000. Across Minnesota, Latino buying power rose from $516 million in 1990 to $3.1 billion in 2003.

“It’s the biggest commercial corridor for immigrant communities in the state,” Leon said. “I truly believe the city of Minneapolis appreciates that.”

Perhaps that’s why the city is working on a major construction project for the street for the first time in half a century. Joyce Wisdom is head of the Lake Street Council and she said the city has done patch and repair work all the time, but the problems have moved beyond a quick fix. In that case, the city looks for a longer term improvement.

Lake Street became the responsibility of Hennepin County in 1988 when the state and county negotiated an exchange of roads. Hennepin County than exchanged roads with Minneapolis in 1993, and the city became the owner.

Jim Grube is a County Engineer for Hennepin County, and he has worked on Lake Street for years. He said Lake Street almost felt apart in 1997 after a terrible winter. At the time, the city put down a fresh layer of blacktop knowing they would have to more completely address problems within the decade.

He said the current construction is broken down into three segments, the East, West and Middle. The County is in the second year of a two year construction program, with the first segment totaling about $10 million. The bid for the second segment totaled about $11.5 million, and the third segment is expected to cost around $10 million, for a sum cost of roughly $30 million for the three segments of street-scapeing and reconstruction.
The actual project design was years in the making requiring broad and narrower thinking. The plan had to address the entire length of the constructing, public meetings were held, and common traits of all segments were developed as well as specific needs for each individual part. Grube said the top priorities expressed by business people were keeping on street parking available, since it is essential for business. The other concerns were enabling pedestrians to frequent the street and not hurting the popular transit line on Lake Street.

“During construction is when balancing is most delicate,” Grube said. “We’re keeping Lake Street open to traffic so people can get into the area to shop and do business, but it can get hairy at times as construction is occurring.”

And it’s the concern for business on Lake Street that is one of the biggest challenges with the construction snarling traffic and slowing visitors.
Wisdom reported that from May to November of 2005, businesses in the Chicago-Lake area dealing with construction faced drops in revenue spanning 10 percent to 50 percent. She said the construction plan of splitting work on north and south side helped the situation. Businesses that were on the south side improved shortly after the switch to work on the north side of the same street.

“(Lake Street is) one of the biggest commercial corridors in the city of Minneapolis,” she said. “Despite the highs and lows over the last 50 years it has remained a vital commercial corridor.”

Wisdom said financing the construction is done by property owners. While federal dollars help offset costs, property owners still pay about half the bill. She said property taxes are increasing, some as high as 80 percent in some sections.

Wisdom said the council is encouraging everybody with large bills to have them reviewed because they’re based on property value. Owners can ask the county assessor for a review, and she said the process is not complicated.

“We have an opportunity to increase the market down here,” she said. “Now that overhead is going up business owners need to respond to that. It’s what we have to do if businesses here now are going to survive. There’s a huge opportunity here but we need to work together to take advantage of that.”

But some local business owners are already feeling the pinch from construction. Ali Ishmail has been the owner of Taleeh Food for five years on Lake Street, and he said the construction has caused his sales to dip 25 to 30 percent. He said he’s lost foot traffic and people who used to drive by and stop for items. Ishamail expects taxes and assessments to keep increasing, but noted that his taxes have already quintupled since he started.

Mayra Jimenez has owned a clothing store for three months, and said traffic problems are the biggest concern for her. She said recently she sold $100 in a week, when prior to construction sales ranged from $400 at the low end to between $600 and $700 weekly. She has tried to take her merchandise outside on weekends and sell in the parking lot in order to makeup for lost business.

“They’re saying there will be a lot of changes and it will be better; hopefully it will be better,” Jimenez said.

Jose Lala has been on Lake Street for nine years, and hasn’t faced many problems with his business, something he attributes in part to having on site parking available. He also expects higher rent and anticipates spending more money to keep his location.

There are resources available for businesses on Lake Street for coping with construction and other needs. Leon’s Latino Economic Development Center provides strategies, structure and tools to expand business opportunities for low- and moderate-income Latinos in Minnesota.

The LEDC currently has 150 members, and Leon said his organization is organizing around several factors to address construction issues. Technical assistance and effective marketing system are provided as well as loans for businesses dealing with construction grants.

“It’s going to have a positive effect long term,” He said. “It’s causing problems now. All small businesses are suffering from lack of traffic. With the new tax assessment it’s going to be hard for some businesses to survive.”

The other matter of concern for Leon is preparing the Latino business community to deal with competition that shows up. He said Latino businesses have an advantage in that they offer a unique product that many large corporations don’t provide.

Maria Mata is the Program Director for the Lake Street Business and Career Center, an organization part of the Neighborhood Development Center. The LSBCC provides services with business help, job searches and access to higher education.

“The changes to Lake Street have been amazing,” she said. “I see families and people more relaxed about coming to Lake Street and that’s supporting a lot of the city of Minneapolis. The inner-city was abandoned before and right now there are developing small businesses supporting the economy of Minneapolis.”

The construction project is on pace to finish in its entirety by the end of the November 2008 election season.

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