Aug 02, 2020
Repair, remodel and relocate: How three University Avenue businesses are still recovering from unrest
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It only took one night for businesses along University Avenue to be looted, vandalized and set afire. It’s taking much longer for the business owners to come back from the damage.
Two months have passed since the initial damage was caused in late May during the unrest following the death of George Floyd.More than 1,000 businesses in the Twin Cities metro area reported property damage, and state officials estimated $500 million in damages statewide.
Facing everything from stolen merchandise, to damaged interiors, to buildings reduced to heaps of debris, many businesses are still on the road to recovery. Here are the stories of three of them on University in St. Paul:IRREPLACEABLE INVENTORY
On the night of May 28, Ax-Man Surplus owner Jim Segal watched from his car as people broke into and looted his store. In the end, the looters and vandals caused an estimated $200,000 in damage including stolen inventory, smashed windows and a broken security system, he said.Jim Segal, the owner of Ax-Man on University Avenue in St. Paul, was in his business when the store was broken into and looted earlier this year. He barricaded himself in the bathroom. His store has since reopened. (Scott Takushi / Pioneer Press)
Ax-Man Surplus had already been closed for over a month due to Gov. Tim Walz’s orders to shut down nonessential businesses during the pandemic. The store had reopened for less than two weeks before having to close for another six weeks to clean and repair.
So far, all the expenses of the physical damage are covered by insurance. But the insurance covering the stolen inventory is still in limbo, Segal said.
“The nature of our inventory makes it challenging, because surplus inventory is often not replaceable,” he said.
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Even if the insurance ends up covering the stolen goods, Segal will still be bracing for a financial blow. The store’s St. Paul location is open again, but business is slow. Annual sales are down 40 percent compared with last year due to the pandemic, he says.
“We were closed for 13 weeks, but my expenses didn’t stop,” Segal said. “2020 is going to be a tough year.”THE RUSH TO REMODEL
About two miles down the street at 7-Mile Sportswear Hair Depot, store owner Jin Lim estimates he lost more than $1 million in inventory when his store was looted the same night. And that doesn’t even begin to cover the cost of the interior fire or water damage.A customer looks over the merchandise at 7-Mile Sportswear at University Ave. and Dale St. on Tuesday, July 28, 2020. (John Autey / Pioneer Press)
But when he temporarily closed the store on May 29, Lim received a wave of phone calls from loyal customers.
“I checked the voicemail later, and I had more than 900 phone calls asking when we would reopen the store,” he said.
With high demand for his business’s comeback, he started the rebuilding process almost immediately. Although the building structure was still intact, the entire interior had to be remodeled. And only 60 percent of the damage was covered by insurance, Lim says.
One month and $130,000 later, the wig and hair-extension store has new shelves and display cases. Unfortunately, only 70 percent of them were restocked when he reopened three weeks ago.Dong Kyu Jeon adds labels to merchandise at 7-Mile Sportswear at University Ave. and Dale St. on Tuesday, July 28, 2020. (John Autey / Pioneer Press)
Luckily, having worked in the hair industry for the past 25 years has its perks. Since many of Lim’s distributor companies know him well, they struck a deal with him — they will send him free merchandise for now. He will pay them back later when he has the money, he says.SEARCHING FOR A NEW LOCATION
This June would’ve marked the third anniversary since Solomon Hailie and Rekik Abaineh opened Bolé Ethiopian Cuisine on University Avenue.
This also would’ve been the year they opened Bolé Express, a new grab-and-go counter attached to their sit-down-style restaurant. After a fire destroyed both of their leased properties, the restaurant owners are back at square one.
Lelna Desta, a business consultant and friend of the Bolé’s co-founders, has been helping get the restaurant off the ground again. But as they try to get back in the game, they are realizing that the game looks different now, she says.
It’s unclear if the property owners of their original location on Syndicate Street are planning to rebuild, so they’ve started to look elsewhere in St. Paul to set up shop. But it’s a delicate balance to find a building that is both spacious and affordable, Desta says.
“In the back of our minds, we know the restaurant industry is struggling right now,” Desta said. “We don’t want to lease or buy the wrong property when we know the next six months are going to be a struggle.”
Not only do they have to rebuild their location, but they have to reimagine their business model. With the coronavirus pandemic changing the way people dine out, the original Bolé dining experience is no longer feasible or financially savvy, Desta notes.
“The original concept of Bolé was not just a meal,” Desta said. “People loved the ambiance, the music, the aromas, the coffee ceremony. You can’t pack that up in a to-go order.”
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Over $100,000 in donations flooded to Bolé’s GoFundMe page in the days following the fire. Two months later, Desta and the Bolé staff still receive countless calls from community members expressing their support and asking when the restaurant will reopen.
The Bolé staff feel a sense of responsibility to those community members, says Desta. And the restaurant owners are itching to get back in the kitchen.
“It’s a really bad time to be in the restaurant business, but that’s part of being a small-business owner. There is no right time,” Desta said. “This is a family-owned restaurant, and their livelihood depends on this.”
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Minnesota cities, counties scramble to keep businesses afloat by dishing out CARES Act grants
Van and Jackie Brollini are in the same boat as most bar and restaurant owners — struggling to stay afloat amid the COVID-19 pandemic.
The Inver Grove Heights’ couple bought an established business in Rosemount just over a year ago and took over full control this past January. They changed the name from T.O.P.S. Pizza & Hoagies to Tops Tavern, remodeled the place and set up a new point-of-sales system and website.
“We kicked it into high gear and then — bang — we get shut down a few months later,” Van, 55, said.
Revenue remains down 40 to 50 percent from January and isn’t going to climb back up until they are able to host large private parties again, he said.
“I work to work,” he said. “I don’t make anything. I’m working to pay the utility bills. I’m not the only one like that, though. That’s the story of most of these small restaurants.”
The Brollinis are among the small business owners who counties and cities across the east metro are trying to help by offering grants through the millions of dollars in federal CARES Act money allocated to them through the state. In late June, Gov. Tim Walz approved $841 million in federal coronavirus relief funds for local governments throughout Minnesota that have been shackled with costs responding to the pandemic.
In general, business owners can use the grants to cover operating expenses — including payroll, rent/lease payments, mortgage payments, utilities, supplies — and/or expenses necessary to modify business operations as a result of the pandemic.
The Brollinis plan to apply for a $10,000 grant through a program Rosemount announced last week after the city council signed off on dedicating $500,000 for local businesses. The grants will be awarded on a first-come, first-served basis.
The couple also has the option of applying for a $10,000 grant through Dakota County, which has committed $10 million to the relief effort for small business owners.
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“It kicks the can down the road a little bit to the point where if we didn’t get any support for anything it would have been … can we keep the doors open?” Brollini said.
Here’s a rundown of what some of the cities and counties are offering; contact them for more information, including application deadlines. Information can generally be found on the cities’ websites.BURNSVILLE
The city is allocating more than $1 million of its $4.7 million received from CARES funding to a business grant program. The nearly 25 percent of CARES funding set aside for businesses is the highest amount by a municipality in the region to date, according to the city.
The program will provide grants up to $20,000 to businesses, no matter the number of employees or revenue.
Jenni Faulkner, the city’s community development director, said city officials wanted to be inclusive to all businesses whether small or one of the large retailers.
“The city council wanted the parameters to be as open as possible because so many of our businesses have been affected,” Faulkner said.
National and corporate chains are ineligible, but local franchisees are not.
To create a level playing field, the grants will be awarded through a lottery system, she said.LAKEVILLE
The city will give out $10,000 grants to local businesses until its nearly $485,000 in allocated money is gone.
Businesses must have at least one employee in addition to the owner as of March 1, 2020, and not more than 25 full-time equivalent employees and more than $1 million in annual revenue. It also must have been operating since Dec. 1, 2019.
Home-based businesses are not eligible, with the exception of in-home childcare providers.
Businesses will be ineligible to receive duplicative funds from the city and the state of Minnesota or Dakota County.ROSEVILLE
The city is setting aside $500,000 for grants to help businesses, including home-based businesses, self-employed and individual contractors that can demonstrate revenue loss due to the pandemic. Businesses with an annual gross revenue of less than $1 million are eligible for up to $10,000.
In a unique move, the city council also approved spending up to $1 million in CARES Act funds on a residential relief program to prevent evictions and foreclosures of residents who experienced a loss of income — either from a loss of employment or reduction in hours. Households may receive up to $10,000.ST. PAUL
The city received $23.5 million in CARES Act funds, which only can be used on costs incurred to respond to the COVID-19 public health emergency and are not solely designated for small business assistance, according to a spokeswoman for planning and economic development. The city’s office of financial services is currently working on recommendations on how to allocate the aid.RAMSEY COUNTY
The county is using $15 million toward business relief in various grant rounds. The first grant round was focused on micro-businesses.
A second round that opened last week offers self-employed entrepreneurs up to $7,500 and small businesses with 1 to 20 employees up to $10,000.
The county also set aside $1.5 million for actors, artists, musicians, media folks and other “creatives” via a creative/arts application.WASHINGTON COUNTY
The county, which has $32 million in federal coronavirus aid to spend, has set aside $10 million for aid to businesses, mostly small businesses.
The aid will be administered by the county’s community development agency, through its Open for Business program. It will award grants of up to $15,000.
Most small businesses with fewer than 50 employees and less than $3.5 million in annual revenue will be eligible to apply.
Homeowners who have experienced a reduction in income because of the pandemic may apply for one-time grants of up to $10,000 to help make mortgage payments.
A separate program providing rental assistance will be administered through the county’s community services department.ANOKA COUNTY
The county is offering businesses with 50 or less workers grants up to $10,000.
The grant program excludes home-based businesses, with the exception of in-home licensed childcare providers, and multi-state chains (locally owned franchisees can apply).Related Articles
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