Neighbors, businesses spar on future of Grand Avenue

Grand Avenue is often held up as a model of how an inner-city neighborhood can compete with sprawling shopping centers and planned developments.

During the 1970s and '80s a series of quirky and charming shops and restaurants began sprouting among the avenue's houses, apartments and offices in a way that produced an urban diversity unmatched in any mall. As the avenue became a destination, it wrestled with typical problems of traffic congestion and a shortage of parking. But recently neighbors have raised their voices about what they see as a deeper threat.

Merrit Clapp-Smith, of the neighborhood group, the Summit Hill Association, says rising rents are pushing out independent stores.

"As Grand Avenue has become more and more successful and has caught the attention of tenants who have deeper pockets and are able to do better leases, the marketplace has kind of taken off on Grand Avenue for leasing. And it's hard for some of the small business people that made it so wonderful to stay," according to Clapp-Smith.

Clapp-Smith led a committee that spent more than three years developing a comprehensive plan for the neighborhood. The neighbors initially came up with a plan aimed at prohibiting chain stores -- or formula businesses -- from the part of Grand Avenue that runs through Summit Hill.

Many business people argued that defining a chain store is no simple task and that banning such stores from even a part of the city would hurt St. Paul's ability to lure investment.

The Council ultimately accepted a compromise offered by Council Member Dave Thune. It incorporated some of the development restrictions proposed by the neighborhood group, but postponed any decision on limiting chain stores until after completion of a study. The inclusion of the study in the neighborhood plan was widely endorsed during the hearing.

Clapp-Smith urged the city to look broadly at how to help independents compete with chains.

"Formula business ordinance is one of the ideas we would like to see the city study. But that should not be the only idea. We have suggested that some of the landlords on Grand Avenue suggest their own ideas that they would like the city to study, that they think would help them in the long term continue to lease to independent businesses," Clapp-Smith.

The developer Exeter Realty is one of the largest commercial landlords on Grand. Rob Stolpestad, an executive with the firm, says his company knows that independent businesses are vital to Grand Avenue. He says a majority of Exeter's tenants over the years have been independents.

"While we disagree that regulations that prohibit or limit formula businesses are a desirable way to promote retention of independent businesses, we would support a study that looks at different ways of promoting independent businesses on Grand Avenue and throughout the city," Stolpestad said.

Business and political leaders are clearly attuned to the implications that city action on Grand Avenue could have for the rest of St. Paul. A few Council members said they hope the commercial corridors in their districts will one day struggle with the success-fueled problems that now confront Grand.

Matt Auron, of the St. Paul Area Chamber of Commerce, told Council members whatever they do on Grand will set a precedent.

"Therefore, the discussion on formula business restrictions -- we feel that while the notion of supporting independent small businesses is certainly noble, we feel a more positive approach such as tax breaks or other small business incentives would be a better way to address this issue," he said.

The Summit Hill plan includes other measures aimed at defending Grand Avenue's integrity. It limits the size of any buildings constructed on the avenue to 25,000 square feet and to three stories. It also subjects any construction on the avenue to design standards.

The City Council approved the Summit Hill plan on a 5-to-1 vote.

Council Member Thune says the Grand Avenue study will look both at ways to encourage local businesses and discourage large chains. He expects the study to take three to six months.

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