Infrastructure & Environment

How Rail Impacts Retail

A successful transit line means a more intense commercial life around the stations, and that means higher property values, higher rents and the invasion of chain stores.
by | September 2006

The Twin Cities of Minnesota, so progressive on so many 20th-century fronts, never accomplished much when it came to public transportation. While other cities were building subways and light-rail systems to bring their far-flung metro areas closer together, Minneapolis and St. Paul were still relegating travelers to long, slow bus commutes across vast expanses of congested urban pavement.

In the 21st century, that has begun to change. Completion of the Hiawatha light-rail line two years ago has made it possible to go from the heart of Minneapolis to the Mall of America in suburban Bloomington in a comfortable 36 minutes, or to the airport in only 25. There is, however, one important place you can't get to on the train from downtown Minneapolis. You can't get to downtown St. Paul.

Now that, too, is about to change. In July, after years of debate, the Twin Cities Metropolitan Council voted in favor of building a light-rail line that will finally link the two downtowns. If the 11- mile line wins final approval in a public vote this fall, it should be under construction by 2008. It will run from the skyscrapers and skywalks of the Minneapolis commercial district, past the University of Minnesota campus on the east bank of the Mississippi River, and then down the long commercial corridor of University Avenue to the state capitol in the center of St. Paul. The initial cost estimate is just under $1 billion. The projected completion date is 2014.

Very close to the middle of the line, on the corner of University and Snelling, the trains will pass the aptly named Midway Used and Rare Books. It is a wonderful bookstore. I say that only in part because my daughter Lizzie has spent the past year working there. It really is a unique place, and its owner, Tom Stransky, has devoted the past quarter-century of his life to building this enterprise. The store is one of Stransky's two passionate causes. The other one is fighting against light-rail on University Avenue.

Stransky's argument is not subtle: He thinks that the project will force Midway Books to close. "We won't be here," he says. "We'll be out of business."

As he sees it, the construction alone will drive his customers away. I don't pretend to understand the book business the way a professional does, but somehow I doubt this. Granted, some customers will find the dust and noise too much to bear and will stay away. But Midway Books isn't like a grocery store or a video rental. It's the only establishment of its kind anywhere in the area. People come from miles away because they want products that only Stransky carries. Most of them will brave the construction to get there. If a store such as Midway falls victim to the transit project, there will have to be some other reason.

Well, that reason could be parking. Even after the rail line is completed, the tracks and station at University and Snelling will reduce the number of parking spaces on the street. Moreover, Stransky will probably lose the small adjoining parking lot he currently rents because the owner will want to put a building there.

This is a legitimate problem. But will the business lost because of a parking squeeze be greater than the business gained by the presence of a light-rail station right in front of the store? Projections are that by 2020, the Minneapolis-St. Paul line will be carrying 38,000 passengers per day. That sounds low to me, but even if it's accurate, the result will be at least a few thousand people getting on and off the train every day at Stransky's corner. A significant proportion of them will be book buyers. If you're an optimist, you conclude that the rail-riding book-buyers will more than make up for the drivers who can't park. On this question, I'm an optimist.

There's one more issue, though: property taxes. Already, as the rail project moves closer to construction, assessed property values have been rising at remarkable rates. In 2002, the assessed land value of the Midway Books property was $16.40 per square foot. This year, it was $39.75. It's possible to envision a time when land values around the rail station will be so high that the property taxes will eat up any profit that a store such as Midway can earn.

There's a simple answer to that, of course. Tom Stransky isn't a renter; he's a property owner. If light rail does generate a commercial boom along the University Avenue corridor, he can sell out, make big money and move the bookstore somewhere else. But that's not as attractive as it might appear. Anybody who's been to Midway--50,000 books, three full floors crammed with them on every wall, in every corner, closet and window ledge--might conclude that transferring the inventory would be almost as complicated as building the rail line. If I were Stransky, I'd be tempted just to take the money and get out.

And this is the piece of the argument where I think Tom Stransky is absolutely right. "Everywhere these trains have been put in," he declares, "there has been gentrification." Basically, that's true. Successful transit projects raise rents and property values. And slowly, sometimes imperceptibly, the character of the neighborhood changes--away from small local businesses and toward chain-store standardization. I know about this, because it has been happening in my own neighborhood of Clarendon, in Arlington, Virginia.

I've written about Clarendon before, as have many others, but its story seems so relevant to the debate in Minneapolis that I hope you will spare me a few paragraphs to summarize its modern history.

Arlington is a suburb of Washington, D.C., just across the Potomac River. Clarendon was its original downtown, the scene of thriving retail commerce until the 1960s, when construction began on the Orange Line subway route that included a station on Clarendon's main corner.

The construction took so long and made such a mess that nearly all of the original retail businesses--banks, department stores, clothing stores--moved out. The storefronts were rented to mom-and-pop businesses, most of them restaurants owned by Vietnamese immigrants. These restaurants proved so popular that within a few years, Clarendon became known as a dining and nightlife mecca. By then, the trains were running, and people were coming in from all over the metro area.

The Vietnamese merchants left eventually, but by the 1990s, Clarendon had produced a whole new generation of homegrown small businesses and was thriving again. It began to interest large-scale developers who saw a potential for more than mom-and-pop commerce. Condominiums sprouted up in every direction around the station. A "lifestyle" shopping mall opened, with a Barnes & Noble, a Williams-Sonoma, and an Apple Computer store.

Clarendon now has more than its share of retail-chain shopping. Before too long, that may be all it has. One by one, the local merchants are disappearing. Some sell out, some can't pay the higher rents that the area's new prosperity commands. The hardware store on Wilson Boulevard closed last year after 40 years. It was replaced by an ersatz Irish pub, which might have been an attractive addition to the neighborhood if there weren't already two other ersatz Irish pubs within a few blocks. Then, in July, came a bigger shock. Lazy Sundae, the locally owned ice cream parlor that had been a Clarendon pioneer and gathering place, and seemed to symbolize the whole revival, announced that it was moving out rather than endure another rent increase. We still have Ben & Jerry's in the mall, but it's not quite the same thing.

I'm not expecting many readers to feel sorry for Clarendon. We've got nice stores and restaurants, a vibrant pedestrian scene and housing prices that have made some of the original homeowners rich. But I doubt if we'll never have another neighborhood ice cream place, and I know we won't have another family-owned hardware store. This is the sort of future that Stransky predicts for his area in St. Paul once the rail line is built. "Twenty years from now," he says, "all the local businesses will be gone. There will be a Barnes & Noble on this spot."

The question is what you do about it. I don't accept Stransky's argument that building a light-rail line down University Avenue is a bad idea. On balance, I think more people will benefit than will suffer. There are moves that local government can make to mitigate the damage, especially during construction--such as investing in special signage or establishing a hotline for businesses that find debris dumped on their doorstep. Other things can be done later, such as shared parking arrangements that give customers of small merchants access to spaces in the newer buildings.

But in the end, I'm afraid there's no escaping it: A successful transit line means a more intense commercial life around the stations, and that means higher property values, higher rents and the invasion of the chains. In the end, it means Ben & Jerry's instead of Lazy Sundae. You can shop there, or you can stay away. Those are the choices you have.

I don't know if Stransky's business will survive the light-rail era in Minneapolis-St. Paul, although I think there's a decent chance that it will, if he sticks it out. As long as he's in business, I plan to buy books from him. I hope other people do, too.In 20 years, bookstore owner Tom StRansky says, "all the local businesses will be gone. There will be a Barnes & Noble on this spot.

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