University Avenue shops wait it out

The urban slalom run that is St. Paul's University Avenue varies from block to block, but on any given day is likely to feature traffic barricades, backhoes, towering mounds of chewed-up asphalt and an alarming number of disoriented pedestrians wondering how they get from one side of the street to the other.

While newly poured light-rail platforms foreshadow the day when jampacked trains hum along the middle of the avenue, 2014 may prove an agonizingly long time to wait for some of the 800-plus businesses along the 11-mile Central Corridor line.

The past few years had already been tough, especially for the numerous small, independently owned retail and service outlets on the St. Paul stretch of University. First came the recession, then Minnesota's $957 million version of a Big Dig.

"Our business is down 40 percent" from a year earlier, said John Rybiski, the manager for Bonnie's Cafe, a fixture for 34 years at the intersection of University and Vandalia Avenues. "We spent many hours this summer standing here with nothing to do because we had nobody in the restaurant."

At this point, it's not clear how many businesses have come or gone since LRT construction began in March.

NorthMarq, a real estate brokerage and consulting firm, says both overall vacancies and rents have fallen since 2010, but its survey includes many properties not on the Central Corridor line, and excludes many smaller buildings that are.

A Met Council survey of the entire 11-mile Central Corridor line, which begins in downtown St. Paul and ends in Minneapolis, says 37 businesses have opened since construction began, while 25 have closed and another four have moved.

The University Avenue Betterment Association's survey of retail storefront space along St. Paul's University Avenue found a vacancy rate of almost 24 percent, but that analysis wasn't conducted until after construction began.

"I have no reason to doubt the Met Council's numbers, but we're really comparing apples and oranges," said John Vaughn, an association board member who conducted its survey. He thinks it may be next spring before some businesses decide to pack it in.

"Small-business owners are stubborn," he said. "They will try to hang on as long as they can."

Bonnie's is one of about 30 businesses that have received zero- interest, forgivable loans to help offset revenue lost during road construction. The maximum available is $20,000; Bonnie's got $19,130. "It helps, but it doesn't begin to cover what we lost," Rybicki said.

Bruce Delles, owner of Twin Cities Reptiles, worries that the construction will give even longtime customers an excuse to change their shopping habits. "When they get here, they're kind of disgruntled," he said.

Delles' business is down between 20 and 30 percent since construction began. The four employees who left voluntarily over the past few months have been replaced with just two new hires.

"The rest of us are working longer hours," he said.

Judy Mueller, who has been leasing or selling commercial real estate in the Midway since 1969, admits her business almost came to a complete standstill once construction began. "I could have gone home and stayed there," she said.

But things began to perk up about six weeks ago. A day care signed on for 10,000 square feet in a building at Snelling and University Avenues, and on one day last week she had seven different showings in two buildings.

The most intense interest is coming from service businesses, such as day care and health care providers, as well as companies looking for affordable space for backroom operations. Mueller knows of at least one other large property that is the target of developers hoping to build moderate-income rental apartments.

Meanwhile, Twin Cities Habitat for Humanity has reportedly closed on its purchase of the Zimmerman Building at Prior and University Avenues. The nonprofit, which did not return calls, told the newspaper Finance & Commerce in August that it would demolish the building and build a new headquarters if the sale occurred.

"Suddenly, a lot of these businesses are seeing what the Midway will look like once light rail is in," Mueller said. "They realize it's going to be easier to get employees and customers and tenants."

Here's hoping that some of the avenue's longtime businesses will be here when that day arrives.

ericw@startribune.com • 612-673-1736