New zoning rules limit where check-cashing, currency exchange and payday lending establishments can locate.
Non-bank money services businesses -- the kind that cash checks, exchange currency, wire funds and offer high-interest payday loans -- are the latest target of West St. Paul's efforts to upgrade its prime commercial strip on South Robert Street.
The city last week approved a change in its zoning rules for what it now calls "alternative financial establishments," putting more possible sites for the businesses off-limits.
The new rules are more restrictive than a similar zoning ordinance on the books in St. Paul and another being established in Minneapolis. In West St. Paul, the rules not only govern the distance these non-bank businesses can be from one another but also limit how close they can be to a slew of other merchants like pawnshops, bingo halls, tattoo and piercing shops, and second-hand and discount stores.
"Individually, those businesses are fine," said City Attorney Kori Land. "All together, they kind of create a lesser image for the city."
Council Member Jim Englin agrees. "We're just trying to strike a balance," he said. "We don't want to see Robert Street become the check-cashing capital of the metro area."
Englin said that unlike some cities, West St. Paul has only a small commercial corridor. "It's something different for a city the size of St. Paul. It can spread things out throughout the entire city. But with West St. Paul, we only have a 2 1/2-mile shopping district on Robert Street to create an impression of our city."
Robert Street now has only two businesses that qualify as alternative financial establishments. It was an inquiry from another one that prompted the examination of zoning rules. The city told the business, called Inter-Latino, that its zoning laws wouldn't allow a move into the site it had chosen, a former Ace Hardware store.
The new business also was barred from locating directly across the street in Signal Hills Mall because the city recently approved an application for a discount store there. The new zoning rule's distance requirement now puts the mall off-limits to Inter-Latino and other businesses like it. Representatives of Inter-Latino could not be reached for comment.
Englin said the changes address residents' concerns over additional alternative financial businesses. Over the years, the city has heard similar complaints from people who think Robert Street has too many fast-food and auto-related businesses, he said.
"We also have had developers tell us this is why certain types of businesses that our residents are looking for are not looking to come into West St. Paul," Englin said. Robert Street has a good selection of big-box general merchandisers, but the city would like to attract more upper-end soft goods retailers, including a department store.
Andrea Christenson, a vice president of Cassidy Turley, a commercial real estate firm in Minneapolis, said many national retail chains have leasing agreements that specifically prohibit their being near check-cashing businesses and others like pawnshops.
"You'll never seen those uses in a Target-anchored center," she said. Christenson said retail tenants want to be around others that will drive traffic to them. "They're looking for synergy," she said.
Richard Grones, of Edina-based Cambridge Commercial Realty, says it's sometimes better to let the market determine a community's business mix. "If cities could dictate their wish lists, all you'd see would be Whole Foods stores and cute coffee shops," he said.
Stephen Altobelli, a spokesman for Financial Service Centers of America, said there's a misconception about money service business customers, who are mostly employed and have traditional bank accounts. He said they sometimes go to the money-service stores for convenience, certain services and language needs.
Altobelli's industry group has seen other communities enact restrictions similar to West St. Paul's, but he said the businesses are not going where they aren't wanted.
"Just like most other business operators, these people tend to be smart business people. If it makes sense to put a store in a certain neighborhood, then it makes sense. They're not going to put a store in a place where there isn't a customer base for that store."
Susan Feyder 952-746-3282