By Ray Stern
By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
The cozy little store, Tracks in Wax, is nestled in an aging strip mall between a hair salon and a psychic, just south of Camelback Road on Central Avenue. It's a niche retail business that differs from Borders and Sam Goodies by selling mostly vinyl records, and it's got a reputation, Valleywide, as a good place to find old punk or classic rock for the turntable.
The 25-year-old business is crammed with record bins and appears maxed out for space; the covers of albums and posters provide a swirl of eye candy for browsers. A manic saxophone wails on the jazz album Chiesa's currently spinning.
"Once rush hour starts, I don't know why I'm here," says Chiesa, the store's owner. He's a short man in his 50s with a substantial paunch, a kindly face, and black hair combed straight back.
His sales are half of what they were by this time last year, he says.
Chiesa blames this problem on light-rail construction. Much of the problem, anyway.
All he really knows is that few people are coming into his store in late November, weeks after the cooler weather has ushered in what's usually a hopped-up retail season.
Central Phoenix has always been a tough place to do business, partly because the metro area's population is so spread out. But the notion that light rail may be culpable for the downturn is hardly the product of an unhinged mind.
Outside the store, Central Avenue has been narrowed to one lane in each direction, the slow-moving traffic guided by thickets of orange-and-white hazard markers.
The old strip mall is at the northern end of one section of torn-up road. Farther south on Central, just west of Steele Indian School Park, hundreds of feet of brown-black steel rail line are stacked six feet high and just waiting to get laid.
No doubt some northbound motorists clench when they make the right turn into the strip mall just past the foot-and-a-half-deep, unfenced trench.
Even tougher driving challenges exist along the 20-mile path of the future light-rail train system. To motorists, the whole route has been an annoying patch of hell since construction began in earnest last year.
We've been bombarded with barricades and signs, shifting lanes, road closures and epic traffic snarls. Daytime movement around the Valley's urban cores has become a vein-popping experience that takes twice as long as usual and requires extra planning to avoid being late to work or for appointments.
But while the construction problems have just been aggravation for most of us, they have been extremely costly for businesses along the light-rail line, especially those that rely on walk-in customers.
Judging by estimates of restaurant, hotel and retail shop owners along the line, plus a report by the City of Phoenix, businesses have lost millions of dollars collectively as potential and regular customers avoid them during the mess.
From Tempe to Phoenix, most business owners interviewed for this article say they are suffering losses. Their revenue is down 7 to 70 percent of what they believe they should have seen in 2006. Though their estimates cannot be verified reliably, their main point is sound: It's a tougher environment than ever in which to do business right now.
Some owners, like David Wimberly of the George & Dragon English Restaurant and Pub down the street from Tracks in Wax, have been complaining bitterly.
True, it has looked like a war zone for the past few weeks outside George & Dragon. Besides the construction activity, the Autumn Court restaurant next door burned down after being abandoned by its owners a few months before. Blackened debris was strewn over its parking lot.
Wimberly says light-rail construction has brought sales down in his pub by 60 percent, and he can't see how much longer he can stay in business. He's one of the people calling for more handouts from the city and Metro rail to help him stay afloat.
"The worst part we're not getting any compensation from the city," says Wimberly. "There should be no taxes on any light-rail people. We pay seven-and-a-half grand a month for taxes; my mortgage is 10. That would be the most fair no taxes until this is done."
Such a move would be above and beyond what other light-rail-building cities have done. As with other urban innovations, Phoenix put off light rail until most other major Western cities had embraced it. But waiting has its advantages: Local officials knew how to apply just the right amount of aid to give small businesses a fighting chance.
Yet there is no guarantee of their survival.
The worst will probably come in the next few months for both George & Dragon and Tracks in Wax as more of Central between Indian School and Camelback roads gets ripped up.
One or both of those businesses could close its doors for good. And a bloody shame that would be G & D is a great dive bar, and serves a mean plate of fish 'n' chips. But should the city or the rest of us really give a toss?
Most businesses on the rail-construction line, though hurting, will survive. And it may sound harsh, but even if they don't, plenty more entrepreneurs are lined up to take their places.
Businesses have had years to plan and prepare for the construction, and they're getting lots of help. Even critics like Wimberly pepper their complaints with praise for the way government officials and the construction companies doing the work act promptly when problems arise.
The reality is that it looks worse than it is out there for businesses.
Sure, some of the most vulnerable will be weeded out. Is that a crime, or is it merely capitalism?
In any case, it's a fiscally foolish idea to give away huge taxpayer dollars to keep afloat a select few merchants whose business acumen ranges from savvy to incompetent.
Even with reasonable government assistance in play, weak ventures are going to wither and die in this Darwinistic landscape.
The strong will not only survive, but if those who have gone through light rail before are any barometer will thrive. Eventually.
And the rail line, still slated to start carrying passengers in December 2008, will be a great amenity for the Valley.
To be sure, one of the project's goals is to reduce the adverse effects of the construction on businesses.
But the first priority is to build the thing.
"Infrastructure for the future comes at a cost," says Phoenix Mayor Phil Gordon. "But it will be paid back in dividends. And a lot of [business owners] know that, and they are just trying to figure out day-to-day how to get through this."
Negative effects from the construction were unavoidable from the beginning, because the route plows through the most densely populated areas of the Valley.
The new railroad track goes from 19th Avenue and Montebello, south on 19th Avenue to Camelback Road, east to Central Avenue, and south to Washington and Jefferson streets. From there, the tracks enter Tempe via a bridge over the Town Lake, through downtown Tempe's Mill Avenue and south to Apache Boulevard. Less than a mile of line is in Mesa, ending its eastward push at Sycamore Street. (See map.)
Neighborhoods were warned that roadwork would go on for 14 to 24 months in front of any given spot along the way.
At the start, more than 250 businesses were condemned and relocated, while others were truncated and remodeled, to make space for the trains.
Some businesses moved out for the duration of the construction, and the rest battened down the hatches.
The construction phase is not for the timid. It's ugly and it's painful.
But c'mon it's not that bad.
Not a single business has been sunk because of light rail. Not yet, anyway. That's the official line from the cities of Phoenix and Tempe, and it's hard to disprove. Without an audit and knowledge of the firm's history, there's no way to say for sure why a business fails.
Lack of customers, which no doubt had something to do with the construction, played a role in the closing of at least one business, A Taste of N'Awlins, as detailed below.
But as Lance Armstrong would say, it's not the bike.
Take the case of Pita Jungle in Tempe, a well-managed eatery that in 12 years has managed to expand once and open two other Valley locations. Hit with a one-two punch on both its access roads, Apache Boulevard and Terrace Road, the place stayed so busy that its owners spent $40,000 in June to expand into an adjacent 1,000-square-foot space.
In downtown Phoenix, ground zero for light-rail construction, city finance department reports show restaurants and bars and retail shops took a big hit in revenue in the months after construction started in March 2005. But they're making a fine comeback.
Downtown restaurants and bars posted receipts of $38 million by late spring 2006. That's not too shabby considering it's $10 million higher than the same period in 2004, when the roads were still intact.
Retail businesses in the studied area (from Fillmore to Jackson streets, and from Seventh Street to Third Avenue) aren't faring quite as well and have been making less money since the construction began.
Save the tears, though: Downtown retail has been gaining revenue for the past 12 months, even through the summer doldrums. Retailers made $9.2 million in sales between July and September, compared with $6.6 million the summer before. (The reports also show how minuscule the downtown retail industry is in comparison with that of the entire city, which posted overall summer retail revenues of $3.6 billion.)
Elsewhere along the light-rail route, new businesses are opening in seeming defiance of common sense.
We can see certain shops struggling with access and traffic problems, and assume their sales are affected. The broadcast media have focused on a few hardship cases.
So if it seems like businesses near light-rail construction face imminent economic collapse, it's an understandable misperception.
In a society trained to seek out instant gratification, the building process of light rail not to mention the hoped-for benefits grinds out in the achingly long-term.
One thing is certain: We have no choice but to adapt to light-rail construction, because it will be going on for a long, long time.
The starter line won't be done for two years. After that, there'll be a two-year respite, and (assuming there are no major snafus) construction will begin anew on the extensions.
It's helpful to keep one thing in mind while dodging barricades and rolling at two miles per hour single-file with other motorists through Construction City:
We brought this on ourselves.
The apparent chaos on the streets started at the polls.
With transportation a growing concern in 1985, Maricopa County voters agreed to pay for dozens of miles of new freeways by raising the sales tax half a cent for 20 years. The vote also created Valley Metro, which organized bus service and looked into trains as a future mass-transit option.
Four years later, in 1989, voters killed the ambitious, $10 billion ValTrans proposal that would have built among other things 103 miles of elevated commuter trains around the Phoenix metro area.
Rail boosters were undeterred. And as the county's population grew from 2.1 million in 1990 to more than 3.7 million today, voters changed their minds about trains.
Tempe and Mesa voters approved paying for light rail by bumping up their sales taxes in the late 1990s.
Phoenix got on board in 2000 after residents voted two-to-one to increase sales tax for light rail. Plans were soon worked up for the $1.4 billion starter line. A public-naming contest dubbed the system "Metro."
Before the construction even started, county voters in 2004 gave a thumbs-up to extend the 1985 tax for wider freeways, more buses and at a cost of $2.3 billion the addition of 27 more miles of light-rail tracks.
In March of 2005, just weeks after the federal government awarded its $587 million share of the funding for the starter line, the jackhammers began sounding.
The main notion of light rail is that it will move large amounts of people who might otherwise be driving cars, thus reducing traffic and air pollution. It's estimated that 26,000 people a day will ride it at first, but it could carry twice that number.
True, the population density of Western cities such as Phoenix makes rail a less efficient option than in, say, New York City. Manhattan is just 24 square miles, yet has roughly the same number of residents as Phoenix, a sprawling mega-suburb that encompasses 515 square miles.
But light-rail lines have still become popular in San Diego, Los Angeles, Salt Lake City, Portland and Denver, judging by how many people ride them and how voters in those cities keep approving light-rail extensions.
Los Angeles, which built its 22-mile Blue Line light-rail service in 1990, went from 19,000 riders a day to more than 75,000 riders a day in 2006.
So it makes sense that the Valley will learn to love its light rail, too.
The Japanese Kinkisharyo trains we're getting have a certain cool factor. They're sleek with lots of glass and can hold four wheelchairs and four bicycles. How PC is that?
Each car seats 66 people but can be packed with 200. Riders will board on stations that in most places will be like islands in the middle of the street. The trains, running the route on two separate east-west tracks, will arrive every five to 10 minutes during rush hour, and every 20 to 30 minutes at other times.
Metro hasn't decided on the hours of service yet, saying only that the trains will operate 18 to 20 hours a day.
Karla Navarrete, a Metro spokeswoman, says people have been asking whether the trains will run late enough to accommodate the state's new 2 a.m. last call at bars, but there are no answers yet.
"That will all really come about as we get closer to opening day," she says.
Businesses will be getting perks. Like the fact that thousands of people will look at their storefronts while riding by on trains every day. That kind of free advertising is hard to beat. And this should mean that new customers will be exploring shops and eateries near light-rail stations.
"The theory is that in the long term, this is going to bring them more business," says John Henry Smith, a business counselor at the Maricopa Community Colleges Small Business Development Center in Phoenix. "It's worked in L.A., Oakland, San Diego and Houston."
In Portland, construction of the Interstate MAX Yellow Line put a few marginal businesses under a few years ago, but resulted in 51 new businesses opening along the line, according to Oregon transportation officials.
The most important benefits of light rail may be the indirect ones. Indeed, light rail is often viewed as a sort of rolling growth-stimulus package, spurring redevelopment of blighted areas and enhancing existing business and residential districts.
"Investment is about more than a new rail system," said U.S. Transportation Secretary Norman Mineta after the feds agreed last year to pay for 42 percent of our $1.4 billion rail line. "It is about a new wave of development that will promote new housing, new retail and new offices."
Studies show that light rail tends to spur development and increase property values. A 2003 report by researchers at the University of North Texas, for example, states that light-rail stations increased residential and office property values 25 percent over similar areas without such stations.
Listening to Mayor Gordon expound on the virtues of light rail, it's almost like he's playing SimCity, the popular computer game in which players build urban environments and he fully expects to win.
"It will create, you know, that high mixed-use density, which then adds property values, provides more individuals to support existing and new businesses, which all provides retail and property tax to government, that then allows government to be able to afford to hire more police and fire and librarians," Gordon says.
Ron Evjen, the regional leasing director for Renaissance Square, says light rail along with other projects like ASU's fledgling Phoenix campus is already sparking demand for downtown Phoenix office space.
Three banks have signed long-term leases at the 26- and 28-story Renaissance buildings in the past year, including Phoenix Suns owner Robert Sarver's business, Alliance Bank.
"Banking is ahead of the curve they can see the benefit," Evjen says. "They know it's going to be a little slow until the light rail is completed, but . . . the traffic that the light rail is going to bring is going to be very positive."
The latest update on Metro's Web site (http://www.valleymetro.org/METRO_light_rail/) says that while sections of Central, Washington and Jefferson will be torn up until the end of 2007, much of the downtown Phoenix work will be done by this coming March.
On First Avenue and Jefferson Street, the main roadwork in front of the Luhrs Tower is already finished. The steel track is embedded in concrete, the sewer lines and fiber optics and gas lines have been relocated.
Businesses in the one-story building just east of the historic Luhrs had it rough while construction went on right outside their shops.
By November it had eased up, but the owners of the nearby 22-year-old Flower Stand shop wonder whether their business will survive another year.
Next door to the flower shop is an empty storefront with a sign on the door: "Sorry, this location [of Red Seven Computers] is closed until January 2007 due to the impact of light rail construction."
Michael Cady, one of Red Seven's owners, says the store had been open for about six months when construction began in June on that part of Jefferson Street.
"It was instantaneous," Cady says of the effect on business. "Boom! It was like the hammer came down."
The downtown store had been getting in five to 10 people a day suddenly its owners were lucky if they got that many in a week. But they were stuck with their lease. Red Seven will come back to downtown in the first half of 2007, Cady says.
"We think it will totally pay off for us," he says. "We feel downtown will finally be reborn."
But, for now, it's cheaper to pay the rent with the store closed than to try to keep it open. The sales-and-repair business has three other Valley locations to subsidize its decision to keep the downtown store closed.
Sometimes it's not just the construction giving businesses a hard time it's their landlords. Light rail promises that property owners will be able to charge higher rents, and some of them are already doing that long before the trains are running. So some stores strapped for business because of rail construction are also seeing their rents jacked up.
Daniel Peralta says he was already struggling to pay the bills at his restaurant, Nick's 101 Bistro on First Avenue, when his landlord doubled his rent to more than $10,000 a month.
"We are [right now] paying high rent for a corner with no access," Peralta says. "We are determined to survive."
Best of luck. The "Nick" in the eatery's name comes from Nick Ligidakis, the chef who has infamously failed at five or six other restaurant ventures since the mid-1980s.
Of all the problems business owners must deal with related to light rail, perhaps the worst is being utterly unprepared for it. Like Ben Bahmae, who not only failed to plan for the trumpeted construction outside his convenience store on West Camelback Road, but says he didn't even know the work would go on in the daytime.
Bahmae, who moved to the Valley in 2006 from Los Angeles, says he worked for the previous owner for six months before buying the store in August.
"I thought it was going to be nighttime construction only," he says.
Now he wants Metro to pay his bills for a few months, since he's experiencing a 40 percent drop in business.
"I made a mistake," he says. "I'm very disappointed."
Four contractors are building light rail's 20-mile starter line nearly simultaneously in five segments. The project also includes a new bridge over Tempe's Town Lake and a $58 million maintenance and storage yard for the trains near Loop 202 and the Salt River bed.
Overseeing everything is Metro, the nonprofit public company (officially known as Valley Metro Rail Inc.) that is in charge of building and operating the Valley's light-rail system. Its board of directors consists of the cities involved in the project.
Both the project and Metro have avoided any major debacles so far.
There was one mini-scandal over the summer: Metro fired Vicki Barron, the project's director of design and construction, in October after the panel decided she had improperly tried to influence consultants for the project to hire an engineering firm run by her boyfriend.
While making headlines, Barron's firing had no discernible effect on the light-rail work.
A few months before, in May, news outlets had reported that the project's work schedule was four to six months behind.
Metro soon announced it had a plan to make up the lost time and still insists the trains will be running by the end of 2008.
While Metro and its partner cities can't prevent the construction from possibly sinking places like 101 Bistro or Tracks in Wax, observers like Smith at the community colleges say the Valley is doing a good job helping businesses.
Complaints that have come up in the year and a half of construction usually see a fast resolution, says Tom Callow, Phoenix light-rail coordinator.
The Phoenix City Council set aside more than $2 million for programs to help businesses stay alive through the three-year construction period. Businesses that sign up get free marketing and financial advice.
Most owners of retail and restaurant businesses interviewed by New Times said they took advantage of that service.
The blue signs and A-frames all over town begging customers to visit stores during construction come from Metro, as does the "Metro Max" discount program, which gives businesses free advertising.
Metro set aside $2.5 million for a program that pits contractors against one another to win cash incentives for excellence in handling complaints from businesses and the business owners decide which contractors win. About half the money has been paid out so far, says Howard Steere, Metro's public involvement manager.
Officials learned many of their tricks from the experiences of Portland and Salt Lake City, flying in business owners from those cities last year to discuss ways to ensure the health of Valley enterprises affected by the construction.
Salt Lake City's initial TRAX light-rail construction in 1999 was a case study in how to royally screw over downtown businesses. Streets and sidewalks were scraped down to dirt from one side of the street to the other, and major throughways were closed for eight blocks.
The rumor mill soon had locals believing downtown was totally closed, says Tony Weller, owner of the 77-year-old Sam Weller's Zion Bookstore at 254 South Main Street in Salt Lake City. The track stop is nice now that it's done, but it "brought me to the brink of bankruptcy," he says.
To survive, Weller blew through a nest egg of a few hundred thousand dollars, and borrowed even more money against the property.
Communication is the key to keeping the frustration levels down for both businesses and their customers, officials here learned. Many owners interviewed had the phone numbers of officials from Metro, the city or a contractor at their fingertips.
That kind of attention has fostered goodwill up and down the light-rail corridor.
Joe Weaver of Stuff Antiques, 4206 North Central Avenue, says that while he opposes light rail, officials do seem to be trying to keep people happy.
During the monsoon season, Weaver noticed construction workers outside his store shoving debris piles against a nearby storm drain, and he worried that his building might get flooded in a storm. He called a woman from Metro, who said the problem would be fixed that day.
Come closing time, it still hadn't been done. So he called the woman again, and she called the work-site supervisor.
"The woman told him he had to do it. He got out with his shovel and he moved it clear," says Weaver, obviously impressed.
When utility relocation stopped water from flowing at George & Dragon for eight hours one evening, owner David Wimberly says the contractor dropped off two portable toilets and seven cases of bottled water.
"And that's brilliant," Wimberly says.
Nothing reveals faith in what light rail could mean to Phoenix like the new businesses opening at ground zero of light-rail construction.
"I think this downtown is just waiting to explode," says Barry Schoeneman, owner of the Men's Apparel Club at 204 North Central Avenue.
Schoeneman, who says he used to own manufacturing businesses in Chicago and is now selling suits here, opened last year "when there was nothing but rubble and trucks and everything else."
"I knew this was going to be like a bump in the road," Schoeneman says. "It hasn't hurt me, particularly. And now I'm here."
Schoeneman, like many others, believes light rail won't give Phoenix the soul it's lacking. But it will help.
People just need a reason to keep coming downtown, he says. He wants to see art shows, fairs, car shows anything that makes the place look more alive, especially on weekends.
"This is like a palette that's empty," he says.
Former downtown business owner John Rapoport says someday he'll hop on a light-rail train, drive past his old business at 130 East Washington Street, A Taste of N'Awlins, shake his head and think of what might have been.
Rapoport is a lawyer who also owned restaurants in the New York City area. He opened the Cajun food cafe in January 2005.
"I didn't fully comprehend how bad it was going to be," says Rapoport, who lives in Chandler. "There were times when light rail virtually blocked the access to my restaurant. You'd have to be dying of hunger to want to get in there."
The business lasted until May.
"We were trying to establish a foothold," he says. "There's no question that, in doing that, you need everything to go your way."
In retrospect, he has decided that light rail was just one factor in his eatery's demise. Phoenix is a town where people would rather visit a chain restaurant, he claims, adding that a bar would have fared better in his old location.
Rapoport says it's wonderful that Phoenix is spending money on light rail to at least try to bring more people to downtown. He added that the city "desperately" needs help.
Anyone who says that weathering light-rail construction won't pay off is "just talking out of their hat nobody's going to know until 10 years from now," Rapoport says. "Some guys like me are going to get kicked down, but that's tough."
Sometimes one man's misfortune is another's opportunity.
Bill Smith, co-owner of Stoudemire's Downtown on Washington Street, knows firsthand that the construction has been brutal. It's "crushing" downtown nightlife, and many people who brave the scene once won't come back, he says.
Yet he's preparing to open a pub this coming year in the space Rapoport vacated.
Clearly, it won't be easy. But "the growing pains are for the greater good," Smith says. "I'm willing to take a two-year loss to have a 30-year gain."
In two years, the trains will be running, the Phoenix Convention Center expansion will be done, and a new 1,000-room Sheraton hotel should be ready for business.
"There are no other big cities you can go into now and get this opportunity," Smith says, adding that the cost would be unimaginable to put a 10,000-square-foot restaurant next to a large office building in San Francisco. "If you want to be ahead of the curve in downtown Phoenix, now is the time."
There is similar enthusiasm uptown as well.
Smelly Dog, a self-serve dog wash on the northeast corner of Seventh Avenue and Camelback Road, has also managed to thrive as the jackhammers and backhoes rattled the streets outside. It opened in May 2005, post-construction. Owners Sean Kirk and Rob Valenzuela say their customers seek them out, and that light-rail work hasn't affected them a bit.
Their business is so good that it spills customers over to Mixture, Mike Hale's small furniture and home-accessory shop that opened a few weeks ago.
"I'll be excited to see how much business we're going to get" from light rail, says Thomas Smith, manager of the Fez bar and restaurant at 3815 North Central Avenue. "We opened our business a year ago this restaurant's been going strong since Day One."
You, the customer, carry most of the responsibility for preserving the businesses you like that are trying to weather the light-rail storm.
Now is the time to dive into that turbulent sea of dirt piles and traffic jams and support your favorite eatery, retail shop or chiropractor. The businesses want you to pay a visit. With the emphasis on pay.
But if the parking problems are too much for you, don't worry. There are customers who are willing to frequent the construction-ravaged areas, no matter what. Always have been. So if the construction is over when Metro Rail officials say it will be and the trains are running in two years, odds are, the place you love will still be in business.
The light-rail project came about partly because it was feared that, without it, the densest part of the Valley would face gridlock. There was also the desire to help poor or disabled non-drivers. And there was also the belief that light rail would be a cool amenity that would spark more interest in downtown Phoenix. For instance, it will be easy for all those ASU students to venture into Phoenix's urban core.
Light rail isn't perfect.
There are no plans for it to go to the airport.
It's obscenely expensive nearly $4 billion for the first 47 miles. The operating cost alone is $28 million a year, and riders will only pay a quarter of that. It may never pay for itself.
Even with the planned extensions, the Valley's north-south corridors will be poorly served by light rail. Valley residents far from the metro area's core will have little need to board light rail except as a novelty ride.
But at full capacity, Metro says its system will move as many people per hour as a six-lane freeway.
The extensions, forecast to open from 2012 to 2025, will shoot the trains west to 79th Avenue on Interstate 10 and north of Paradise Valley up State Route 51.
And, for businesses, there are all those potential dividends Mayor Gordon talks about.
One thing is for sure: There's no use bitching now.
Voters approved light rail, and now it's here to stay.
Jennifer Houde recently closed her downtown shop, Greta's Pet Boutique, to get back into practicing law. She lives in central Phoenix and looks forward to using the light-rail line. Her shop, which opened in March 2005, had always been successful despite the construction.
"We all had enough notice [that light rail was coming] like years," she says, laughing. "I'm sure there are some businesses that are hurting, and that's too bad. I know I always try to personally shop [at downtown stores] to help support them. And if they weren't prepared, then I don't know what else to say."