University Ave. businesses spruce up to prepare for light rail customers

University Avenue is getting a mini-makeover, and it's not just the billion-dollar light-rail project that's currently under construction.

The subtler transformations are taking shape inside some of the small businesses along this dense urban street in St. Paul. Owners of more than a dozen shops, salons and groceries are planning to use the customer slowdown to renovate their aging storefronts or expand their businesses.

When Central Corridor trains start to roll in two years, business owners hope they'll be better positioned to attract new customers.

Nail salon owner Maryna Vong is a diminutive woman, but from watching her work one gets the sense that she could move mountains — in five-inch heels.

Vong spent a recent weekend hauling her old pedicure stations out of the salon and moving in the new ones, all by herself. Today, she assembles new rolling chairs for her nail technicians. She says for a small business owner who doesn't have a stockpile of cash, expending $10,000 for new equipment is a big deal.

"It's a pretty large investment, having to shell out a whole bunch of money," Vong said. "But it's going to make the shop look a lot nicer, which hopefully in return, make our clients happier."

Vong's business, The Nail Shop, has been on University Avenue for nine years. Vong said she was initially worried about the possible hit her business would take during light-rail construction. But her decision to hunker down and improve her store was a classic case of "if you can't beat 'em, join 'em."

"With light-rail coming here, they're pitching to us [that] it's going to be newer, cleaner, different environment, and you just got to be ready for change, I guess," Vong said. "I know I'm not moving from here. I've already laid my roots here. And it's like sink or swim, so I guess you got to swim — or ride the light rail, in that case."

The economic slowdown and light-rail construction have been hard on her salon. Vong has had to let go four employees and reduce hours. Businesses are hurting everywhere in the Central Corridor. Some restaurants report losses of about a third of their business, where retail shops say their losses are even higher. But there's also a palpable survivor spirit.

Down the street, the cash registers are ringing a bit slower at Ha Tien grocery. Owner Ne Dao said she will use this sluggish time to embark on a two-month remodeling project. With new equipment, flooring, and lighting, Dao hopes her store's remade image will appeal to customers who have been avoiding the barricaded avenue.

"During construction out there, a lot of customers, we don't see them for at least two or three months. Because the construction, they don't know how to get here," Dao said. "I want to bring them back, and when they see the changes and new remodeling, they might want to tell their friends."

The Neighborhood Development Center, which has been administering loans and offering other services to affected businesses, has worked with about 20 businesses on University Avenue that are remodeling, purchasing their buildings, or moving onto the avenue. Across the entire corridor, 65 businesses have closed, while 79 have opened since the bulk of heavy construction began in March 2011, according to the Met Council.

The NDC's Isabel Chanslor, who manages the U7 program helping Central Corridor businesses, said much of the energy is happening in the Frogtown neighborhood.

"They're seeing that the roads are looking really nice, and they're starting to look at their space and say, 'It's time for us to really make it look better, make it more inviting, to match what's happening on the outside," Chanslor said. "These are people who have been around for 20 to 30 years, and they see the opportunity."

For some business owners, the remodeling projects wouldn't be possible without government assistance or other forms of low-interest community loans. Take The Best Steak House. It's a cafeteria-style, family-owned diner — the kind where one brother pounds slabs of ribeye in the kitchen, while another brother greets customers at the door.

Last year, owner Mike Hatzistamoulos replaced this restaurant's windows and doors, paved his gravel parking lot, and put up a new store canopy. He explains that the timing of the construction and available incentive programs help make the upgrades possible.

The restaurant received $45,000 in grants from the city of St. Paul and other sources. Hatzistamoulos said with a little forethought and planning on his part, business has held steady throughout the construction season.

"Before construction started, I was prepared. My freezer was full of meat, all my bills were paid," Hatzistamoulos said." I just said, 'Just bring it.'"

Other businesses in the Central Corridor aren't faring as well. The largest Vietnamese restaurant on the avenue, Mai Village, is facing foreclosure next month. And a downtown grocery, Eisenberg's, is planning to close shop. Both blame construction for at least part of their financial demise.

A state legislative commission, chaired by Rep. Peggy Scott, R-Andover, monitoring the actions of the Metropolitan Council heard testimony this week from frustrated business owners.

Ryan Wilson, who owns a UPS store on University Avenue, said the Central Corridor project office has suffered from poor communication and failed to make good on its promises.

"For them to come in from 30,000 feet and say, 'This is how it is. Good luck, guys.' When I call them and say, 'You are killing me,' and they say, 'Maybe you should do better management, better business,'" Wilson said. "UPS made me a training center 10 years ago because I am good at what I do. I am an expert at what I do. I didn't forget how to do business in 2011."

Some community members are asking legislators to hold off on funding future light-rail projects until the Met Council can provide more compensation to businesses.

The Met Council stands by its efforts to involve the community and help languishing businesses. To date, 133 businesses have claimed forgivable loans of up to $20,000 each to help them get through construction. More than half of the $4 million fund has been disbursed.

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