Metro take note: Tempe's approach to helping small biz during rail construction
I came across this small article in Governing magazine on how Tempe, AZ is helping small businesses along their new light-rail route survive through construction - something Metro might learn from as they plan the new Universities line (wherever it ends up, but especially along Richmond). It also compliments my previous suggestions to Metro for mitigating the negative side-effects of construction. Unfortunately, the article doesn't seem to be available online, so here's my OCR scan from the magazine:The Hidden Cost of Construction
Tempe will lighten the load for business on a light-rail line
Mom-and-pop businesses along a future light-rail line through Tempe, Arizona, may be able to borrow up to $20,000 at reduced rates. The city, along with the chamber of commerce and a financial institution, has set up a credit line at 1 percent over prime for those adversely affected by construction of a new transit line.
Tempe has committed $100,000 to cover any business defaults. However, since the program is a line of credit, not a loan, if a business fails to make payments, the credit line can be shut off to protect both the lender and the city.
Some 300 businesses are vulnerable to a downturn in sales or other negative impacts as trenches are dug outside their door, large trucks move about in the area or traffic is rerouted. In order to qualify for the line of credit, they have to have been at their location more than two years and have been profitable 12 months prior to getting their line of credit approved. "If a business is otherwise on a track for failing, we don't want them to go into more debt," says Dan Henderson, economic development specialist with the city.
The light-rail line is not expected to be completed until 2008 and businesses will have access to the funds during the entire two- to three-year period. The loan program could be used during utility relocation or other work during the project.
Mesa and Phoenix are looking into similar programs for small businesses along their portion of the light-rail line.
posted by Tory Gattis @ 6:51 PM
1 Comments:
Being forced to borrow due to customers being chased away, even at reduced rates, is still NEGATIVE, and harmful to nearly all small businesses. If they have little or no cash flow for a year or more, they can not survive let alone make any debt payments.
Then, once the tram is operating, most businesses will continue to suffer due to reduction in passenger car traffic, and most folks will not walk more than a block or two in Tempe in the desert sun, therefore, if you are not one of the political "insiders" favored by the transit agency and fortunate enough to swing a taxpayer funded TOD, you are SOL!
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