Some local businesses hurt after Green Line construction, despite efforts to prevent customer loss

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About a week before large crowds gathered to celebrate the opening of the Green Line light rail, one business along the train filed for bankruptcy.

“The construction really hurt,” said Dave Koch, manager of Campus Pizza, a Stadium Village eatery that’s been operating in the University of Minnesota neighborhood since 1959.

Despite efforts in the Twin Cities to reduce the burden of construction along the Green Line, some owners say they have struggled to stay in business.

Last fall, Metro Transit reported that 122 businesses had opened along the light rail’s corridor and 90 had closed since spring 2011.

For Campus Pizza, which filed for bankruptcy earlier this month, construction exacerbated an already difficult parking situation and slowed business, Koch said.

He said the filing is a safety net as the restaurant works to “pull through.”

Since heavy construction on the transit line finished last year, business has picked up, Koch said, adding that he’s hopeful to attract even more new customers traveling on the light rail.

Metro Transit has worked to minimize the impact of heavy construction, which lasted from 2010 to 2013. For example, Green Line planners accelerated construction in certain areas to ease its burden, particularly in places home to many small businesses, Green Line spokeswoman Laura Baenen said.

She said she’s heard of businesses’ stories of success and failure along the corridor, sometimes only blocks apart.

“Some things work for some businesses but don’t work for others,” Baenen said.

Help to stay afloat

To support businesses and organizations along the Green Line during the planned $957 million project, organizations throughout the Twin Cities provided them with small loans and assisted with grant applications. Metro Transit also created a marketing campaign in an attempt to attract customers to the area.

Corridors of Opportunity, an initiative partly funded by the federal government, distributed more than $720,000 in community engagement grants, said Ryan Steel, a research associate at the Wilder Foundation, a nonprofit social services organization based in St. Paul.

Nineteen smaller community organizations throughout the Twin Cities received the grants. Steel said the smaller organizations could better decide how to use the money than larger organizations.

Some used it to organize outreach events where residents and business owners provided input to project planners.

Nine grants went to making improvements to buildings, like renovations to businesses’ facades. Baenen said the Metropolitan Council also provided $2.5 million in forgivable loans to help offset business lost during construction.

Metro Transit also created a marketing campaign called “On the Green Line” that aimed to attract attention to area businesses by advertising on buses, billboards and online.

Still, some business owners say Metro Transit didn’t do enough.

Fran Buongcampo, manager of Village Wok in Stadium Village, said business has declined sharply since construction began, mostly due to the loss of on-street parking in front of the restaurant.

“They used to wait to be seated,” he said. “Now we wait to seat them.”

The new Green Line eliminated 85 percent of on-street parking along the corridor, Baenen said.

But Baenen said there was available parking on nearby cross-streets along the entirety of the Green Line to make up for that loss.

‘A transformative project’

Crystal Wells, an employee of Smokedale Tobacco in Stadium Village, said the store hasn’t seen a significant decrease in sales because a large part of the store’s customer base is students living nearby, who were seemingly less affected by construction.

Instead, Wells said, rising rents could become an issue for the business district, as property value along the Green Line increases.

Following the opening of the Blue Line light rail — which runs from downtown Minneapolis to the Mall of America — the area around the transit corridor experienced a surge in new commercial and residential development, as well as the creation of new high- and low-wage jobs, said Yingling Fan, an associate professor in the Humphrey School of Public Affairs who specializes in transit policy.

Those kinds of factors, she said, can lead to an increase in rent.

Fan said she expects the Green Line to act as an even stronger catalyst for development because it runs through existing commercial and residential areas, whereas the Blue Line cuts through industrial space that’s less right for new development.

The Blue Line’s success also boosted confidence in future transit-oriented projects, which in part has led to the more than $2.5 billion in development and construction along the Green Line corridor since engineering work began, according to a statement released by Metro Transit last month.

But new development can sometimes be hard on existing businesses, said Laurel Bauer, former owner of House of Hanson, a family-owned Dinkytown grocery store that closed in 2013 to make way for a luxury student housing complex.

But Bauer said she thinks the Green Line will do more good than harm to the University area, as diversifying transit options make it more accessible to new customers.

Baenen said while some businesses are adopting a more apprehensive, “wait and see” approach as the Green Line starts, many have expressed excitement about the light rail’s opening.

“It’s such a transformative project,” she said.