City Hall relents: $650K fund for 23rd Ave small businesses

(Image: 701 Coffee)

(Image: 701 Coffee)

Mitigation money is on the way for struggling 23rd Ave small business owners who have been calling for help to cope with a two-year overhaul of their busy corridor.

Mayor Ed Murray announced Wednesday afternoon he is creating a federally-backed $650,000 fund to help keep the doors open on businesses most at risk of closing. To qualify for assistance, businesses must have five or fewer employees and demonstrate the project has negatively impacted the business.

Murray also ordered a race and social justice analysis of the project to examine claims made that the project was a systematic attempt to displace minorities and lower income people. If it turns out the project was racist in nature, Murray said “I will shut it down.”

“This isn’t an issue of some people love it some people hate it,” Murray said. “This is a question of is this project intrinsically racist. Is it going to move the African American community further out of its historic neighborhood.”

The decision comes after weeks of complaints from business owners and growing calls for more to be done to protect businesses in the neighborhood. It also represents a significant backtrack for City Hall after officials repeatedly said the area’s merchants would not be compensated for business disruptions.

20 to 30 businesses are expected to qualify for mitigation funds, according to the Office of Economic Development. Other details, like how much each business will get, are still being worked out. City officials said the funds would be made available as soon as the City Council approves the plan. City Council member and District 3 rep Kshama Sawant told CHS she wants that to happen this week.

The road construction projects spanning Montlake, Capitol Hill, and the Central District will transform the street into a new configuration with a center left-turn lane and improve the pedestrian and sidewalk experience. The new layout will allow buses to pull completely out of the traffic lane at stops. Crews are also replacing a 100-year-old water main between E Madison and E Union. While supporters of the businesses have mostly said the investment in the neighborhood is welcome, problems with the timing and phases of the work have created an environment much more difficult to weather than was promised by the Seattle Department of Transportation.

“Obviously there have been problems with the implementation of this project,” Murray said.

City officials had previously said it was against City policy to offer direct mitigation funds to businesses. By using $400,000 of federal Community Development Block Grants already under City control, Murray said the City can avoid running afoul of those policies and the state constitution. The other $250,000 will come from the Seattle Investment Fund —  a private corporation created by the City that manages fees generated through a federal tax credit program.

The money comes on top of a response pledged earlier this month involving marketing funding and better coordination with the city. Last week, Sawant called together a collection of local business owners and city staff to discuss the need for more work to solve the problems. Business owners included Mae of 701 Coffee, Justin Gerardy of Standard Brewing, Nop Zay of Mamas Cafe, and Saad Ali of 99 Cent Plus. Seattle King County NAACP president Gerald Hankerson also attended the public meeting.

As part of Monday’s announcement, the Seattle Department of Transportation said it will be reevaluating how it can better phase the project to help businesses, and will work on securing off site locations for contractor parking and storing construction equipment.

The announcement comes after business owners began calling on City Hall to help them cope with the construction project that has choked traffic and forced pedestrians off of sidewalks. 701 Coffee owner Sara Mae helped lead the way to bring more attention to the issues. In January, she told CHS her coffee shop was seeing 70 or more customers a day. After the construction started, Mae said she was lucky to get 20 people inside the door. “My wife works full time, that’s only reason why we’re still open,” she told CHS.

Murray said he supports the decision of the previous administration of moving ahead with the infrastructure project, which is scheduled to be complete in February 2017. Sawant, who said she supported Murray’s action, had previously invited business owners to brief council members on why they needed mitigation funds.

“This is their activism that really brought this to bear,” Sawant said. “We helped generate the political will to do this.”

While the mitigation money might be enough for the small businesses of 23rd Ave to weather the construction project, larger challenges  — and opportunities — are also on the way with a new wave of investment and development targeting the neighborhood.

UPDATE 2/23/2016: City Council members had plenty of questions about the Mayor’s plan during a Tuesday morning briefing with the directors of OED and SDOT.

701 Coffee owner Sara Mae, one of the most vocal business owners in calling for mitigation funds, thanked they Mayor but said $650,000 would not be enough. “We need this mitigation money pronto,” she said.

That appears to be the plan. OED director Brian Surratt said the first checks would start arriving at businesses within weeks. By the end of this week, OED plans to have a place online where businesses can register to get regular updates on the process.

Surratt also urged owner to begin gathering tax and expense reports so the means-tested funds can be quickly distributed. OED is also planning workshops on the process and developing an intake form for businesses to file. Business not eligible for direct assistance may still be able to receive deferments on their utilities and business license tax.

Addressing concerns about organizations jockeying to be a fiscal agent for the fund, Surratt said the City would not seek a third party administrator. “Given the scale and estimated number of businesses, we feel like we can manage this internally,” he said.

The 23rd Ave corridor overhaul was scheduled to span 20 months in the first phase, broken into three zones. Outcry over the project took hold late last year when work on the second zone started before work on the first was finished. Kubly said it was due to a light pole contractor that failed to complete its work on time and was subsequently fired.

Rather than waiting for two-way traffic to open in the first zone before restricting traffic in the second, Kubly decided to keep the overall project timeline on track while making construction impacts more intense in the short term. City Council member Lisa Herbold told Kubly Tuesday morning the City should have consulted with local businesses first.

“A lot of times we’re faced with decisions that were made very quickly,” Kubly said

The 23rd Ave corridor has been notoriously unsafe for pedestrians. Prior to the 23rd Ave project, the City says there were 900 collisions in five years, including four fatalities.

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29 thoughts on “City Hall relents: $650K fund for 23rd Ave small businesses

  1. Now we’ll see if the “race and social justice analysis” will be more expensive than the money they have to help the businesses. Call me cynical.

  2. That analysis of the social and minority impact of this blight project should have been done some time ago. Also, you can’t shut this effort down now, that’s empty rhetoric. 23rd Avenue is a war zone, all you can do is finish the job as best as you can.

    (Also, can you imagine something like this project in Ballard, Magnolia, or NE Seattle? The neighborhoods would have howled and might never have let this get even started. If it went forward, any mitigation would have been planned into the project from day one.)

    • Have you seen an actual war zone? Pure hyperbole to call it that. 23rd is definitely under construction, but it’s not any worse than other major road projects. I guess we could just let this part of the city fall into perpetual decrepitness.

    • Plus, these sorts of compensation schemes are easily gamed (pretty sure the city won’t question the reported losses with much scrutiny). Horrible precedent. It’s one of those things that sounds good on first take, but ends up being a poster child for economic inefficiency.

  3. If someone deliberately slowed this down to gentrify the area – something that is hard to imagine for anyone who does not enjoy paranoid conspiracy theories – that person would likely be a city employee who works for the mayor by definition. Since the buck stops with you Mr. Mayor, will you tender your resignation if you discover such malfeasance?

    I have wondered why the project seems to be taking so long, but that is another matter. As to this historical neighborhood, let’s stop revisionist history that claims it is historically black to the exclusion of those who came before, including Jews and Japanese.

    Check out this interesting Wikipedia article for what its worth:

    https://en.wikipedia.org/wiki/Central_District,_Seattle

    Let’s hope that the construction finishes soon and that the merchants enjoy even better business when a very friendly street replaces the prior ugly thoroughfare, leading to a nicer, more walkable and attractive neighborhood – regardless of the color of the merchants or their customers.

  4. “As to this historical neighborhood, let’s stop revisionist history that claims it is historically black to the exclusion of those who came before, including Jews and Japanese.”

    What kind of shitty, racist angle is this? Even according to the article you link to blacks did not “gentrify” the neighborhood the way whites have. Who cares if it was or was not exclusively, historically black? The Japanese were sent off to internment camps. “This and many race-restricted covenants to the north and south paved the way for many African Americans to find a new home in the Central District.[5] ”

    The point is: “despite the decline in the African-American population, blacks have a large presence in the neighborhood. The neighborhood still has a high concentration of black or African-American residents for the Pacific Northwest.” So take your “revisionist history” and shove it.

    • Your point? Revisionist my ass. It is a fact. And you have no idea if Japanese might have been there after WW II, nor do I. Even now the percent per the article of this so called black neighborhood is about 20% black. In any event, every home that is owned by a black person that is now owned by someone other than a black person, was sold by that person. Would you endorse racial covenants precluding non-blacks from buying in the neighborhood?

      I fail to see your point or how I am racist by pointing out actual history that this is an historical neighborhood that has historically been the home of many groups, still is, and will be in the future.

      What exactly are you suggesting take place – though of obviously more evolved morality and social justice than I? I bow before you!

  5. It is clear to me that it is time to send all white non-LGBrd2idgjQCd210935789 people off to re-education camps. They are clearly all racist and out to get minorities.

    All hail the mighty Social Justice.

    If you want to learn more, come to some of the services at the Church of Social Justice. In fact, this Friday we are having a white entitled male lynching and will be wearing our Sawant fedoras (official outfit) while we laugh at his agony and ignorance for thinking that he has a right to live in this world like we do.

    All are welcome (except for Wall Street and anybody else we decide to capriciously demonize in our attempts to justify our meaningless existence).

  6. This is interesting because it is an SDOT project, which receives a lot of scrutiny and prioritization, both in the community and within the city. Social equity is a big deal at the city, making sure they don’t do more construction in the north than the south. SDOT has minorities in positions of leadership. It doesn’t make any sense to me why Murray is saying this. Why would SDOT pursue an racist agenda? What’s in it for them? How do they stand to gain?

    Anyways, there have been road projects all over town in the past that have affected businesses, in downtown and in the north. Go back and read articles about the construction of the Convention Center. My recollection was that they didn’t give them any money.

    • You are correct that the city has a very strong social justice agenda. However, the group that takes precedence above all others is developers and corporate real estate investors. The city, the mayor, and councilmembers need their money! They try to cloak their decisions with a social justice spin at times, but it is all a farce. Remember the claim they made a few months ago that single family homes are racist?

      On my daily walk to work through the CD, I have noticed a very disturbing trend of signs advertising that investors will pay market value cash for homes. These types of signs have always cropped up from time to time, but not at the current high volume that has been in place since the construction project on 23rd.

    • actually citycat, the group that takes precedence at the city are the SJWs and people who cry racism at a drop of a hat. just look at the results here.

  7. The idea that this project is somehow racist is hysterical. It’s just another botched project like everything else in this city.

  8. It is ludicrous to propose, as Mr. Hankerson of the NAACP has done, that there might be some Machiavellian plan by city officials to use this project as a way to force people of color out of the neighborhood. That way of thinking is truly paranoid, and I am disappointed in the Mayor for caving into it with his plan to study the idea.

    As for the Mayor’s statement that he will “shut it down” if racism is detected, that is also ridiculous. Millions have already been spent, and the project needs to be completed. Especially with the mitigation money now being offered, it will be a major plus for the businesses along 23rd.

    • Unfortunately, the pattern has been well-established that if you’re not getting what you think is sufficient exposure to an issue or complaint, the quick-and-easy way to instantly get everybody hopped up is to scream ‘racism!’….’gentrification!’. Everyone’s so damn timid and scared of being called racist politicians fall all over themselves to suddenly get all interested.

      The ironic thing is (not that I’m any fan of what SDOT is now doing, but…) if there were no plans for 23rd avenue and it was just allowed to sit and fall apart like it has been for so long, the same people would be screaming “Racism! City Hall doesn’t care about the CD, and it’s all racist!”

  9. Just curious – will they pay back the monies they’ve received once the project is complete and they’re reaping the benefits?

    • But Miss 701 ran out of money from her taxpayer wife to fund her little small business experiment so we should all have to pitch in. Maybe now she will be able to make a sign that doesn’t look like a toddler scribbled on a piece of canvas.

      By the way, where is the mitigation money for Starbucks? I hope Uncle Ike’s gets a lot of mitigation money too. Although the owner of that establishment is not a complete failure so I doubt he will need it.

    • That’s a great point – I hope ALL businesses (ARCO, Starbucks, USPS, Uncle Ikes, Walgreens, Safeway, Red Apple, ect) are included and the payout is related to the amount of revenue generated.

      There’s going to be a lot of competition for that 650k and for a small business like 701 coffee I can’t imagine them receiving more than a couple hundred dollars, if that. No way I want to see my tax dollars support someone that opened a business knowing full well what construction was planned. For other businesses that have been there for years I think it’s great, not just a business like 701 coffee.

      Heck – Dilettante failed at the same corner, right? Didn’t 701 coffee do any market research before opening? It’s only a matter of time before they go out of business and any monies given them will be a waste.

      Being that this 650k comes from taxpayer monies – will they release the amount paid to each business? Anyway the public can chime in how those funds are divided up?

  10. Some of these businesses (the florist on Jackson, the hair salon, Ezell’s) have a long history and can probably point to a pretty clear drop in their revenue (during the construction period) to say “look, this is an obvious anomaly in my xx years of business,” and I’m all for the city helping them out.

    I think it will be tougher for businesses that started more recently (relative to the well-publicized construction) to make a strong argument that they deserve a bailout. For me, it’s a question of are they actually viable businesses (as some of the historic CD businesses clearly are) or were they bound to fail regardless of whether construction happened or not?

    The really interesting thing will be when the construction moves into its next stage and shuts down the Union to Madison stretch; presumably, everyone’s favorite gentrification scapegoat, Uncle Ike’s, will see a decrease in business (not the mention Safeway), and under this new precedent, will have a very strong argument that they’re due compensation from the city. I can’t wait to see the debate around that.

    • Somehow, I think Ike’s will not be too worried about this, as his customers will walk over hot coals to get what he’s selling. The traffic is already somewhat disrupted there now, and it sure doesn’t seem to be hurting his business. Also, in spite of whether a lot of people on here might think otherwise, Ike has more pride and genuine interest in the CD than that– to clamor for $$ handout that would otherwise go to struggling smaller businesses while his is doing just fine.

  11. Hmmm, $650,000 for 23rd but the city found $15 million for the business’s along the waterfront during the seawall rebuild! Is this racism?

    • The waterfront businesses were forced to shut down because access was completely blocked, which is a much bigger deal since the 23rd businesses are accessible. This is a huge distinction.

  12. 701 Coffee does serve good coffee, but their menu is all over the place; sometimes vegan, sometimes grocery store donuts, often out of things. I’m not convinced they had a business plan focused on longevity or if a quasi-vegan business is even right for the neighborhood. When they initially opened I asked the owners about Cortona Coffee on 25th and Union, and they were unaware of its existence, even though they’ve lived in the CD for years. I’d think market/location research essential, especially for low margin businesses.

    The adults who work their are friendly, genuine, personable, and provide great service, but if they’re not around, their kids are often aloof or unfriendly and act as if put upon by your presence. I get it, they’re teenagers (I think they’re teenagers), but they don’t seem to enjoy the responsibility.

    I don’t doubt the owners have worked hard to make their business successful and I do think they deserve the mitigation money due to the city’s poor planning and project management, but I’m not certain they were going to be successful long term. It’s tough for small businesses even without access complications.