Both Twin Cities are offering no-interest, forgivable loans to retail in the Central Corridor.
Biftu Merdassa runs a hair salon on Prior Avenue in St. Paul, just off the Central Corridor along University Avenue. The area outside her shop is torn up, making it difficult for customers to get there. She is eligible for a $20,000 loan to help ease financial losses from construction.
The construction equipment huffing and puffing down University Avenue has left light-rail track for the Central Corridor and struggling businesses owners in its wake.
"It's been a mess since March," said John D'Agostino, an owner of Caffe Biaggio, 2356 University Av. W. "Worst comes to worst, you lay off the day cooks, you lay off the night cooks and you cook yourself."
What used to be a lunch hour with $1,000 to $1,800 in business has shrunk in half, he said.
D'Agostino commented last week at the first St. Paul briefing on how businesses in the Central Corridor light-rail construction zone can apply for forgivable loans to ease their financial woes.
Minneapolis and St. Paul have $4 million in loans to give with $2.9 million available to St. Paul businesses in the construction zone, which stretches from Emerald Avenue on the Minneapolis border to Syndicate Street N.
Nancy Homans, policy director for Mayor Chris Coleman, said the loans are an effort to help. "Yes, it's a crummy time," she told roughly 20 business owners at the first meeting "But we're making a major capital investment that's going to increase the value of businesses along the avenue."
Among the qualifications for the loans: A business must be for-profit and independently owned with four or fewer locations, have an annual gross income of less than $2 million, have been on the corridor line for at least a year and offer a retail service. The business must prove financial loss and have been in a construction zone for at least 60 days.
Loan recipients can receive up to $20,000 with no interest. The loan would be paid back over five years, and for each year the business remains on the corridor, 20 percent of the loan will be forgiven.
Business representatives from Snelling Avenue Fine Wines, Tracks Bar and Grill, Chocolat Celeste, the Russian Tea House, the Love Doctor and others asked technical questions of city staff. Some wanted to know how to account not just for losses, but a stop in the growth of their businesses. They asked how credit checks would be weighed and why they have to include personal financial information.
The answers didn't all satisfy.
For example, D'Agostino said he has laid off four people and cut employees' hours, moves not reflected in balance sheets.
Biftu Merdassa, who owns Global Braids and Salon at 542 Prior Av. N., said after the meeting that she would seek loan money to put up "big signs" alerting customers of her presence. She said construction equipment often parks in front of her salon, blocking the view from the street. Her credit card receipts alone are down about $1,200 a month, she said.
She's been directing clients to alternate routes. "Every phone call, you have to make sure you give directions," Merdassa said.
Dao Hoang, who owns Tracks at 1964 University Av., said she also has cut staff and works a lot of hours herself. "When you lose $200 to $300 a day, you notice that," said Hoang, who picked up a loan application.
On a 1950s throwback weekend that usually features vintage cars and onlookers, Hoang said the parking lot was usually packed and the bar busy. "Now it's just empty and quiet," she said.
But there is one part of her business that has increased -- the necessity to clean up dust flying in her windows from construction, Hoang said.
The Minneapolis program will be identical to St. Paul's.
Kristin Guild, business manager for the city's development agency, said the funds were divided between the cities according to the proportion of track and number of businesses. Businesses can apply for the loans starting Monday.
A marketing campaign is trying to get the word out that when it comes to shops and restaurants on the corridor, "We are open for business, you can get to these businesses and you can park," Guild said.
Rochelle Olson • 651-735-9749 Twitter: @rochelleolson