Businesses in the MLK Business District

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The following is a summary of the results of information gathered during HomeSight’s MLK target business interviews performed July through September 2008.

Financial Impact on Target Businesses

All of the MLK target businesses that HomeSight interviewed reported a drop in revenues since the beginning of the light rail construction. Half of these businesses reported revenues dropping by 50%, and the remaining businesses reported a drop in revenues in the range of 15-30%. In addition to a decline in revenues, businesses are also experiencing significant increases in the costs of their leases and refusals from landlords to accept long-term agreements pushing businesses into month-to-month situations. Businesses are unsure about their ability to stay in the area long-term. Rising costs of retail space coupled with month-to-month leases create uncertainty among business owners about being able to continue to be located in the area.

Disruption of Business

Each of the businesses that were interviewed has attributed their downturn in revenues to the disruption caused by the light rail construction. They believe that this disruption, along with the loss of on-street parking, has kept customers from visiting the area at the same levels as before the construction. Businesses that relied on lunch crowds as their peak times have been especially impacted, even after the construction has finished. Left turn/u-turn signals that are used to direct traffic across the rail line create additional time to get to and from the area. The required use of these limited rail crossings excludes potential customers with limited time during the lunch hour from coming to the area. In addition, traffic signal changes and rail introduction have limited the pedestrian access to businesses. Businesses report that the overall feel of the area is slower since the construction, but expressed uncertainty over whether this was attributed to the construction, the lagging economy, or some combination of reasons.

Interactions Between Businesses

Businesses recognize some degree of interdependence with respect to clientele. They report noticing that some clients visit their establishment alone, but others will patronize more than one business in a particular trip to the area. Retail establishments for example notice that customers appear directly before dinner hours and then experience a lag during those hours. Businesses that we spoke to didn’t have strong ideas about what specific types of businesses could be attracted that would improve their business, but there was a general impression that people come to the area to eat at restaurants and that this attraction benefits the other businesses.

Services Needed

Muslim owned businesses report that one of the primary issues that they are facing is the lack of available financial services. While the Muslim religion prohibits them from paying interest, few credit lines that are not based upon interest fees are available; those that exist are often perceived as being predatory, and drive businesses to tap into what is available to be borrowed from friends and family. This lack of financial flexibility pushes down investment in these businesses, and makes them less likely to be able to survive current revenue shocks. Businesses that could potentially take advantage of traditional credit lines report that they find themselves in a “Catch-22”: the businesses need money to offset down revenues during the current transition period, but money isn’t available unless they can demonstrate a revenue stream that is capable of paying back the loan.

Businesses report that marketing and outreach services are needed for the area. Outreach can help inform new or returning customers how to easily get in and out of the area, also helping to offset any inconvenience new traffic patterns have caused. Businesses also report that business operational services, including legal assistance and accounting services, are also needed.

Positives Seen & Expectations

Businesses do have hope that the operation of the rail will bring customers to the area. In addition, businesses hope that driving customers will become more familiar and comfortable with the changes in the traffic patterns and will eventually return. Business owners report improvements in the appearance of the neighborhoods, acknowledging the new sidewalks and street paving that the corridor has received and believe that these improvements may make the area more appealing to individuals that haven’t traditionally patronized the area. Businesses that provide services to ethnic groups feel that the residential affordability in the area will ultimately determine whether they can continue to stay in the area. If the clientele goes, so will the businesses.

Perceptions of Identity in the Area

Most businesses feel that the area is most commonly known as “MLK”. When asked how people around the city think of the area, business owners feel that Asian businesses, small businesses, and ethnic goods and services are what people think of. African business owners report that there are many “hidden” African home-based businesses in the area, and that the African Business Association of Seattle (ABAS) should work to increase the profile of these businesses. Businesses believe that after the train starts running, and after more development happens along the corridor, the area may develop more discrete identities around rail stops.