Title
Urging the Metropolitan Council to add to construction and business mitigation efforts along Central Corridor given new information in the FTA's recent Supplemental Environmental Assessment.
Body
WHEREAS, the Metropolitan Council and Federal Transit Administration (FTA), on March 1, 2011, released for 30 days of public review the Draft Supplemental Environmental Assessment: Construction Related Potential Impacts on Business Revenues; and
WHEREAS, the Draft Supplemental Environmental Assessment made a number of key findings, including:
· Little work has been done nationally to quantify the impact of completed light rail or roadway construction projects on small businesses, leaving our region with imperfect mechanisms with which to project potential impact; and
· A regression analysis of the impact of a highway construction project on a Houston business district in 1993, concluded that not all businesses were impacted equally by construction (de Solminihac and Harrison, 1993). Particularly vulnerable to a loss of sales revenue, based on the Houston analysis, are grocery (-37%), auto retail (-32%), furniture (-17%) and general merchandise (-28%) stores. All other businesses can be expected to experience minimal positive or negative impacts; and
· Some kinds of mitigation-construction phasing, close coordination with individual businesses, businesses counseling, traffic management and public relations/marketing-can serve to reduce the impact of construction. Of particular note was the effectiveness of the TxDOT strategy of scheduling work in the lanes directly in front of businesses early in the project so the businesses could start receiving the benefits of the rehabilitation before the end of the project;
· The same businesses negatively impacted by construction can expect to experience an increase in sales in the year following completion of the project; and
· Consultants to the FTA document 798 businesses with revenue less than $2 million/year on the Central Corridor alignment along University and Washington Avenues in Saint Paul and Minneapolis. Sixty-seven of them are in the four classes of businesses determined in the Houston study to be the most impacted by construction; and
· Using the percentage impacts for the various classes of businesses and annual sales data provided in a DUSA database, the Environmental Assessment estimates an aggregated loss of sales for all businesses during construction to be 2.5% of all sales; and
· A series of commitments to mitigation measures have been made by the Metropolitan Council, the City of Saint Paul and a number of other partners.
WHEREAS, the City Council of the City of Saint Paul has reviewed the draft document and has the following comments:
· The City Council acknowledges and appreciates the Metropolitan Council and prime contractor efforts to adopt a phased construction schedule that restores the streets and sidewalks in front of individual businesses as early as possible in the construction process; and
· The City Council acknowledges and appreciates the investments (e.g. no-cost marketing assistance, forgivable loans to develop parking, alley improvements to support access) being made by project and community partners to support businesses in their efforts to prepare for and operate through the construction period; and
· Construction impacts cannot be defined narrowly by the loss of revenue in the construction year because:
o Businesses who anticipate a reduction in revenue employ cost saving measures in order to minimize the impact on their bottom line.
o Businesses generally experience an increase in sales after a significant public improvement. Ignoring an increase in sales in the year following construction distorts the true impact (positive and negative) of construction; and
· Acknowledging that a 2.5% projected combined loss of sales on the Corridor bears no relationship to the projected impact on any individual business, the weighted average, nonetheless, provides a useful benchmark for policymakers; and
· Sales for Central Corridor businesses outside of the two downtowns that report less than $2 million in annual sales total $519,539,000. A 2.5% loss of sales for a nine-month construction season can be estimated to be $9.75 million; and
· The City of Saint Paul and its partners understand that the construction process will impact small businesses and want to make every effort to support them through the process with a variety of mitigation measures in addition to the construction phasing plans already adopted by the Metropolitan Council and its contractors; and
· The Metropolitan Council and its partners should make every effort to match the $9.75 million projected loss of revenue with $9.75 million in investments designed to support Corridor small businesses impacted by construction; and
· Acknowledging that different kinds of businesses will benefit from different kinds of investments, $6.025 million have already been invested in a range of supportive services, including:
i. $1,500,000 Small business support loan fund (Metropolitan
Council and Central Corridor Funders Collaborative)
ii. $1,325,000 Neighborhood Commercial Parking Program:
Forgivable loans for parking improvements (City of
Saint Paul)
iii. $850,000 Contractor Incentive Program (Metropolitan
Council, awards recommended by Corridor businesses)
iv. $650,000 Street lights/trees/furniture (City of Saint Paul)
v. $400,000 Construction access and signage improvements
(Metropolitan Council)
vi. $350,000 Alley improvements (City of Saint Paul)
vii. $675,000 Marketing support to individual businesses (U-7,
Bigelow, St. Paul Foundation and Central Corridor Funders Collaborative)
viii. $150,000 Facelift financing (Neighborhood Development
Center, City of Saint Paul, Living Cities)
ix. $125,000 Grassroots marketing (MCCD, Midway Chamber of
Commerce, McKnight Foundation and Central Corridor Funders Collaborative)
· The Neighborhood Commercial Parking Program is incorrectly described on page 20 of the report as being financed by the Metropolitan Council. All of the program funds come from the City of Saint Paul. The Business Mitigation Fund, itemized on page 22 of the report will be administered by the City of Saint Paul, but will be financed by the Metropolitan Council and the Central Corridor Funders Collaborative.
NOW, THEREFORE, BE IT RESOLVED that the City of Saint Paul urges the Metropolitan Council to work with the City, other partners and businesses in the Central Corridor to mitigate anticipated losses of $9.75 million due to construction by adding $3.625 million to the $6.025 million already invested in mitigation measures; and
BE IT FINALLY RESOLVED that the City of Saint Paul recommends that the priorities for additional funding be the small business support loan fund, the City's Neighborhood Commercial Parking Program fund, and corridor-wide marketing efforts.