Daisy Haung has put nearly $3 million into her Frogtown grocery store and bazaar in recent years.

Gennadiy Yermolenko just purchased an old salvage yard nearby and spent about $1.5 million to redevelop it.

Now, both businesses stand in the way of a proposed road extension to connect the Midway area to the East Side, and the city of St. Paul wants to buy them out. It has $5 million in the bank to relocate them, but the City Council hasn't signed off yet.

Neither business owner wants to go.

"We're doing business for the neighborhood; they can't just move us wherever," Haung said. "Our business is where we are today. We don't think this would work elsewhere."

Council Member Melvin Carter III, whose ward includes Frogtown, said he's supportive of the extension but is concerned about losing the businesses.

"We're in process to see if there are compromises that can be found," he said.

The project is an eastern extension of Pierce Butler Route, about 2 miles from Grotto Street to Interstate Hwy. 35E. It would be a four-lane road with a shoulder for bicycle commuters and a separate trail. The purpose is to provide a better channel for traffic, much of it heavy trucks that come from industrial businesses along the north side of the road. Residential neighborhoods are on the south side.

Depending on when other funding is approved, crews could break ground on the first phase of the project in 2011 and on the second phase in 2012.

The neighborhood has in the past said that connecting Pierce Butler to the interstate is a priority, but no route was ever set in stone.

The project is causing a flap in the neighborhood not only because of the potential loss of two businesses but also because of timing and conflicting opinions on changes in the route. The uncertainty of when the second phase of the project would begin also concerns some neighbors, said Tait Danielson Castillo, executive director of the District 7 Planning Council.

Previous plans had the road extending north of Haung's Super Foods and Golden Globe Mall, running along railroad tracks. Plans now call for the road to go through her property.

Project manager Eriks Ludins acknowledges that the project's process has been unorthodox.

Planning had picked up between 2005 and 2007, Ludins said, but then the project manager left and there was a change in leadership at the District 7 council, Ludins said. That caused the project to languish for a while until he came on to take control.

He said the neighborhood knew about the route change in 2007. Running the road north of Haung's store would have been extremely costly because it would have included 1,500 feet of bridge, Ludins said.

Castillo disagrees, saying initial plans took the road north of Haung's business. He also says the city should wait until an environmental assessment is completed and made public before taking the land.

What's more, if the city knew it would need to take the two properties, it should have told the business owners before they made improvements.

Ludins said the city would generally wait until after that assessment to discuss the property acquisition, but he said it makes better financial sense to get them now.

Super Foods, at 630 Pierce Butler Route, has a 2009 taxable value of about $2.2 million and estimated tax bill of about $72,000, according to Ramsey County records. The proposed Capitol Car Co., 388 Como Av., has a 2009 taxable market value of $1.4 million and estimated taxes of $38,000.

Yermolenko recently demolished the existing building on his property and cleaned up some contamination. His plans are to construct a new building for auto repairs that would have space to rent to entrepreneurs.

"They're rushing through this now that the property is cleaned up," said Luis Caire, a consultant who works with Yermolenko. "It's really unfair they waited so long."

Ludins said the timing was unfortunate but that it would make sense to acquire the land before a new building goes up. Despite the recent hiccups, he said, the project is a priority.

An April 1 public hearing will be continued before the City Council on May 6.

Chris Havens • 612-673-4148