Tracking Change on the Corridor: The Business Perspective

 

As the second installment in our series exploring the Central Corridor Key Outcomes indicators report and Central Corridor Tracker, we interviewed Chris Ferguson, chair of the Business Resources Collaborative. The BRC was created to support Central Corridor businesses and property owners during LRT construction and is now beginning to turn its attention toward economic development after the line starts operating.

When you look at the Tracker's macro view of the Central Corridor after two years, what's your biggest takeaway? Were you struck by any particular findings so far? 

From a business perspective, the biggest surprise was that only 56 businesses had been lost as of the end of 2011, with a net loss of three. We’d expected more businesses closing due to the construction impact by this point in the project.  The lower business closings can be attributed to small business owners’ will, fortitude and creativity to survive and the positive impact of Ready For Rail program including forgivable loans, technical assistance and marketing. So far through August of this year, the Met Council is reporting 30 openings and 26 closings or relocations off the Corridor, so the trend is positive but businesses need continued support to recover from the impacts of construction and be in a position to leverage the Green Line.

It’s also good to see the project’s construction opportunity goals are being met. Local minority-owned companies are getting contracts and people in the neighborhood are finding opportunities to work on the project. When the early indicators didn’t show that, there was a lot of fear it wasn’t going to happen.

What other numbers will you be watching for this year?

We’ll definitely be watching the numbers of businesses and their change in size over time. The best indicator would be the actual revenue gain and loss businesses are experiencing so we can see how they are recovering, but that data is just about impossible to get.

From a retail perspective, we want to see a higher WalkScore, since that will mean the Corridor is more likely to have vibrant retail environment and people will have the sense this is a good place for them to be shopping and dining.

How are you supplementing the information available in the Tracker?

We did our own study related to mitigating business losses, with the help of Wilder Research. We wanted to understand whether the services and support provided businesses helped them and what the businesses themselves did to mitigate impact of construction.

The report also gives a more complete picture of the demographics of the businesses, for example, whether they own or rent space, how long they’ve been in business and their experience with construction-related disruption.

The full report was just finalized, and I’m sure there will extracts from that study reported in the months ahead.

Can you give us an example of what it found? Any surprises?

One surprise for me was how the high degree of construction impact reported by the businesses was offset by the level of participation in the services available to help keep the number of businesses closing lower than expected. Of respondents, 36% participated in one or more of the construction mitigation services offered—good, but not as high as we’d hoped.

Given how much impact they felt, it was a surprise so few had gone out of business.

That said, based on everything we understand, it’ll take these businesses three to five years post-construction to get back to where they are healthy and thriving. One reason so many have made it this far is because of the great outreach and community support they’ve received. We can’t just shut it off the day the line starts running. That community support will be very important in the years ahead.

As the BRC's focus moves from business preparation and survival to jobs and economic development, what metrics are you concerned about?

Jobs are key. This was brought home to me by a study that found the Twin Cities metro area has the widest gap in unemployment rate between blacks and whites out of 19 major metro areas. The Corridor is heavily African American, so if we are going to make an impact on employment disparities between whites and African Americans, this community will be important in effecting that change.

Business ownership is very diverse along the Corridor. It will be important to maintain that diversity and to create job opportunities here. Access to transit will go up, and so we will also hope to see increased resident access to workplaces across the region.

As construction winds down, we have to turn our attention to some of these larger questions. We have talked about equity a lot during this project, but we have to be honest about what’s really happening here. The focus on construction jobs is a narrow one. We have to measure equity and track this larger disparity if we’re going to do something about it as a region.

Which indicators are most meaningful to businesses and investors you'd like to attract to the Corridor? Do you wish you had other data you could track?

As I mentioned, revenue would be the best indicator. We’d really like to be able to track how quickly businesses recover and analyze why some are doing better than others. Whenever a business closes, it’s tempting to solely blame construction, but most of the businesses that were completely healthy going in will probably survive. Those already struggling or with weak balance sheets will have much more trouble absorbing the impact. Unfortunately, the fact that the project started immediately after a recession meant that fewer businesses were in a good financial position.

We’d like to see the number of new businesses grow. To capture the full benefit of line, we should start measuring the impact for two blocks beyond University Avenue.

The total number of jobs in the Corridor is obviously a significant metric. Is local employment for people living here growing or not?

After spending $1 billion along the Corridor, we should also see the tax base broaden. Bringing more businesses into the city will help lower tax rates overall, so we’d like to see that impact.

Describe the changes you'd like to see over the next decade or two. How will that show up in the numbers?

I’d like to see us maintain the diversity of income and population that helps give this community its character. Along with that, we’ll have affordable business space that gives businesses a place to get started.

We’ll increase our density. With more people living in the area, businesses will have more customers and the train will have more riders.

Overall, I’d like to see a sense of momentum created, where people and businesses want to be part of this place. For some businesses coming in, I think the Effective Coordination and Collaboration indicators will be seen positively. Those scores give a good sense that you’re becoming part of a community with some vision and common goals that is working together.