The Ready for Rail Business Mitigation Loan Program by the Numbers

December 17, 2014

By Ellen Muller, City of Saint Paul

Financed by the Metropolitan Council, City of Saint Paul and the Central Corridor Funders Collaborative, the Ready for Rail loan program was created to offer loans of up to $20,000-$30,000 per business to cover documented lost sales during the Green Line Construction period.  With 99% of the funds deployed, let’s take a look at the numbers:

The Money:

  • $4 million loan pool program ($2.5 M from the Met Council’s non project sources; $1 M from the City of Saint Paul and $500,000 from the Central Corridor Funders Collaborative)
  • Loan administrators: The Neighborhood Development Center for Saint Paul businesses and the Metropolitan Consortium of Community Developers for Minneapolis businesses
  • Program Administrator: City of Saint Paul staff (for both the city of Minneapolis and Saint Paul)
  • Maximum loan amount available:  $20,000 for businesses affected by 1 year of construction; up to $30,000 for the businesses located at 3 critical intersection areas under construction for 2 or more years
  • 20% of each loan is forgiven each year so that $0 will need to be repaid if the business stays on the Avenue over the 5 year life of the loan
  • $3,809,525 available to loan after 5% loan administration fees paid
  • Total loans made to date: $3,776,710  (does not include administration fees paid), balance remaining of $32,815
  • Average loan: $17,969

The Businesses:

  • Total # of estimated businesses eligible to apply for the program:  557
  • Total # of businesses who received loans:  212 (with some receiving multiple loans over the course of the project)
  • Minneapolis businesses served: 56
  • Saint Paul businesses served: 156
  • 68 businesses are women-owned and 50 of these 68 are women of color
  • 137 were owned by people of color, including women

The Economic Impact:

  • 43 reported pre-construction monthly sales of less than $5,000
  • Average reported loss of sales during construction:  30% (with the range being between 2%-93%)
  • 13 businesses were found to be ineligible to apply for the loans, over half of which were not able to document any loss in sales
  • Since 2011, we have gained 13 new street level businesses along the corridor (134 opened, 90 closed, 31 left and 25 moved within the corridor)

Did this program work?  Indeed, the numbers alone demonstrate that it did.  Was it easy? No. Was everyone happy – not always. But the commitment to keep engaging with business owners, the funders and the program administrators remained strong – we talked, we listened, and we responded in a meaningful way. The intent of the program was to keep small, family-owned, culturally diverse street- level retail businesses along the corridor in operation during tough times.

We did great work.  I invite you to hop on the train and go explore: