Local Businesses Seeking Financial Relief During Construction

Downtown businesses are now asking the City for financial relief in the face of the hardship caused by construction of the Center City District project. Whether the City will provide such relief, as the City itself is facing a major financial crisis, remains to be seen.

In May, developer/restauranteur Kris Elliott, who owns the FieldHouse in Ann Street Plaza, wrote to Council to say “our gross sales are down as much as 70% and that was before the summer and total Albert Street closure.”

According to Elliott, “This extensive project has caused an immediate loss of valuable parking, pedestrian way-finding and overall energy in this area of the downtown.”

The purpose of Elliott’s letter was to “humbly ask that the City waive ALL of or a major portion of our Restaurant and Entertainment Fees during the major Construction and until the Downtown retail customer-services are restored. Our Annual Fees cost in excess of $6,200 and we simply can’t afford them during this severe lack of business.”

According to area restauranteurs, East Lansing charges far higher fees to restaurants and bars than other cities in Michigan and in other states.

Tom (Dewey) Bramson owns and operates a number of dining and drinking establishments in East Lansing, including Beggar’s Banquet, the Riv, and Harrison Roadhouse, as well as restaurants in Ann Arbor, Jackson, and Denver, Colorado. (Disclosure: Bramson’s company provides financial support to ELi.)

Bramson tells ELi that East Lansing is unique in charging very high fees for establishments with liquor licenses. There are no special City services provided in exchange for these charges. Bramson estimates that his East Lansing businesses also pay in total about $200,000 in property taxes each year.

Like Elliott, Bramson has asked the City “that they abate our annual restaurant and entertainment fees” during the construction. Bramson says last summer was as bad as he’d seen in 32 years in operating restaurants in East Lansing, but “this summer is considerably worse.”

He attributes the downturn not only to construction but also to people spending more time on social media and less time socializing in public. Like Elliott, Bramson “remains hopeful” that when the Center City District project is done, it will be a boon for businesses downtown: “It is hopefully short term pain, long term gain.”

But can they make it until then? Ali Haider, owner of the downtown 7-11 store, recently told WLNS’s Dana Whyte, “We’re barely surviving right now.” He says he is seeing roughly 300 fewer customers per day than normal. The parking lot, once busy, is now often empty.

Concerns about a domino effect:

Other business owners who did not wish to be quoted on numbers tell ELi they’ve also seen a dramatic downturn – and that they are not sure they will make it until the Center City project is scheduled to open in late summer 2019. (ELi has asked the contractor and City Planning Department whether the project is on target for that completion date, given delays, but we have not received a response.)

Meg Croft operates Woven Art on Grove Street, a couple of doors north from the 7-11 store. (Disclosure: Croft donates to ELi.) She puts it bluntly: “I hope we are still here when the developers, city, and state officials happily congratulate themselves with a ribbon cutting ceremony when the Center City project is complete.”

Asked at the last Council of Neighborhood Presidents’ meeting about the health of downtown businesses given the construction, Mayor Mark Meadows acknowledged, “It’s been tough for them.” He said there is “plenty of parking downtown” but that “convincing people of that is a hard thing at this time.” (See ELi’s separate special report, also out today, on the issue of parking downtown.)

Meadows told those at the meeting “HopCat is not being impacted,” but he said P.T. O’Malley’s is. (We reached out to management of those businesses for comment, but they did not respond.) Meadows said places that draw diverse crowds are doing better, and he named El Azteco as an example.

Woven Art’s Meg Croft says that a parking voucher program provided by the City has “cushioned us a little bit - but it doesn't make up for lost revenue. It just hurts a little less when I am paying bills at the end of the month.”

Like Haider and other business owners, Croft says she is worried not only about herself but her employees. She also notes the domino effect — when fewer customers come to her business, that means they’re also not there to stop by afterwards at one of the nearby restaurants.

Says Croft, “When I have fewer customers coming to see me, it means less business for 7-11, Black Cat Bistro, Beggar's Banquet, and HopCat, too. As a destination shop, I bring a lot of extra dollars to downtown East Lansing that are spread out among other businesses. And when I have fewer students in my classes, it affects the whole area.”

In our interview, Bramson echoed the idea that any business that can draw customers is good for other businesses.

Confusing signage, access difficulty, and power outages:

In various interviews, three business owners independently named confusing signage as part of the problem. Croft tells ELi, “The City has tried very hard to help customers get to Woven Art, with extra signs at the intersections of Albert and Grove, and Abbot and Linden. But I don't think that these things have helped.”

Croft explains, “It is hard to see these signs amongst the forest of blaze orange construction signs, and I think motorists are visually overwhelmed with signage in the downtown area.”

Another problem has been access for customers, particularly along Albert Avenue while that road was closed in both directions between Grove Street and Abbot Road. Construction there made it difficult for customers with mobility disabilities – for example, wheelchair and scooter users – to go to places they would ordinarily go, including, for example, Black Cat Bistro and Harper’s Restaurant.

Now that Albert Avenue has been reopened westbound, with the north-side sidewalk finished and widened by a few feet as shown below, that area has gotten easier – in fact, easier than it was before construction in terms of sidewalk access. (As ELi reported, Pat and Trish Riley, owners of Harper’s, had asked Council to make sure that sidewalk got widened as part of the re-do of Albert Avenue.)

But two westbound lanes of Grand River Avenue in the area have now temporarily closed for utility work on Center City. Whether the traffic diversions in place for that month-long closure drives customers into or out of the businesses there remains to be seen.

Not everyone in the area is seeing a downturn in business. Luke Hackney, owner of RetroDuck Custom T-Shirts on Abbot Road (above Noodles & Company) tells ELi, “The construction, to the best of my knowledge, has not hurt my numbers.” Hackney has made a point of helping customers understand how to get to his shop when they need to come in to make or pick-up an order.  (Disclosure: Hackney donates to ELi.)

Hackney tells ELi that customer access is not the only financial concern related to construction: “A few incidents involving construction have certainly cost me a fair amount of money. There has been more than one occasion where we had to scramble due to a lack of power or water, but we are actually on the same upwards trajectory we've been on for over five years now, for which I am thankful and perhaps lucky.”

What might help those struggling?

Although several business owners expressed frustration that the Center City District developers have never come to see them, some acknowledged there may be little the project’s developers can do. So what can be done, besides better signage and trying to convince people to use rideshare services and parking garages?

Bramson echoes the feeling of every business owner with whom we spoke: “Our plea, especially to residents of East Lansing and the greater East Lansing area is this: If you enjoy the merchants of East Lansing [that have been here since] before construction and you’d like to see them after construction, then please, please, please patronize them during construction. I’m not just asking for me.”

Says Croft, people should tell their friends the same thing, and let them know about special events businesses are putting on to draw people downtown. Connecting with businesses through social media – “liking” them on Facebook and following them on Twitter – can help.

Croft also suggests getting the owners of the vacant properties in the Park District to turn those lots into temporary surface parking and to suspend permit parking for the summer in near-downtown neighborhoods. She also suggested a “lunch bus” to shuttle people from Hannah Community Center to downtown restaurants.

Bramson says what is most needed is a different attitude at the City towards businesses.

“I recognize there are a lot of good people in East Lansing, I mean specifically good people who work for the City of East Lansing, who try very hard to do the best with what they’ve got.” He named several City staff members working in Planning and Economic Development. “But for some reason, whether you talk to developers or landlords or restauranteurs, it will be tough to find somebody who say who says it is easy to do business in East Lansing.”

His remarks have been echoed by other business owners who have spoken with ELi about the challenges of doing business in East Lansing, including for retail shop owners (see our interview with Mackerel Sky’s owners) and for restauranteurs (see our reporting on East Lansing’s unusual monitoring of alcohol sales at restaurants – a regulation recently repealed.)

ELi has also previously reported on the perception that the City makes it hard for many commercial property owners to improve and redevelop their properties. The Center City District project has been seen as a relative exception to the usual scene in East Lansing. (See our interview with architect Kenneth Jones of Studio Intrigue, our reporting on the Hagan Realty townhouse project downtown, and our reporting on the ‘nonconforming rentals’ property improvement negotiations.)

Bramson says he wishes it were easier to do business here. He points out that his company has worked hard to give back to the people of the area, doing countless fundraisers for good causes and helping to raise hundreds of thousands of dollars, helping to provide a sense of community through their establishments. “But the City doesn’t seem to appreciate it in terms of the City leadership.”

Like other business owners, he tells ELi he would appreciate if City leadership sat down with him and understood his experiences. In other communities he has businesses in, Bramson told ELi, they let him know they value his efforts. “They ask me what they can do to help.”

He says that, given that the Center City District project will produce no new taxes for thirty years – because for that period, all new captured taxes will go to pay for the project – he hopes it will do something exciting for East Lansing.

“I remain hopeful,” he said.

See ELi's news analysis, also published today, on whether there's a bias against parking garages in East Lansing.