These north metro businesses survived the pandemic, yet road construction was ‘nail in the coffin’

Along Lexington Avenue, near the city line between Arden Hills and Shoreview, store, restaurant and business owners did all they could to survive the pandemic.

Some took out loans. Others cut staff. And those that could lean into online sales, did. But just as life was regaining some normalcy in 2022, Ramsey County commenced a two-year road construction project along the busy commercial corridor, leveling a death blow to some of the businesses.

Because the four-lane highway was reduced at times to a single clogged lane, customers had difficulty reaching Lexington Floral, said Allie Tempelis, the third-generation owner of the shop that opened in 1985.

Walk-in customers accounted for about 70% of the flower shop’s revenue, said Tempelis, who notified customers of detours. Those alternative routes, however, would then become inaccessible as the project shifted. By fall of 2022, Tempelis shut down the shop. And while construction wasn’t the only reason for the family run store’s closure, it was “like the nail in the coffin,” she said.

For this corridor, it was bad luck of the pandemic made worse by road construction, an unavoidable fact of life in weather-worn Minnesota.

Lexington Floral wasn’t alone. Chain locations for Big O Tires, Arby’s, T-Mobile and Pure Barre also closed during construction.

“We were struggling and it seemed like we were finally coming out of how COVID affected our business. Then the construction happened,” Tempelis said. “It was very obvious in the numbers how impactful that construction was to our business.”

In a Minnesota Department of Transportation (MnDOT) report published last year that analyzed projects between 2007 and 2018, researchers determined there were negative effects to sales and employment for businesses following long construction periods though no dollar figure was provided. Researchers suggest regional planners should account for “potential externalities” from construction, particularly for nearby small-business establishments.

Ramsey County officials said they communicated and met with business owners several times in 2022 and 2023 to inform them of construction plans, closures, detours and other effects.

Despite their best efforts, disruptions were prominent, said Julie Gronquist, owner of Balance for Life, a fitness and wellness center on Lexington Avenue, and member of the Arden Hills Economic Development Commission.

“The businesses on Lexington Ave thrive on the traffic, as it is a main artery through the cities of Arden Hills and Shoreview,” she said. “I saw a hardship placed on so many of the businesses as patrons were avoiding the construction, which meant they were not patronizing the businesses.”

When she sought relief funding, Tempelis said city officials pointed her to a recycling grant that she didn’t find helpful.

County and city officials said the reconstruction project was needed to improve traffic flow and safety along the large commercial corridor, which includes the headquarters of food cooperative Land O’Lakes Inc. and a large campus for medical technology company Boston Scientific.

Business growth in the area created more jobs and transportation needs. To meet those demands as well as anticipated pressure from a new high-density housing development, “the roadway needed major upgrades,” city officials from both Arden Hills and Shoreview said in emails to the Star Tribune.

Arden Hills and Shoreview, MnDOT and Canadian Pacific Railway partnered on the $12.5 million project, replaced aging and deteriorating pavement and traffic signals. Utilities in the area, including water, sanitary sewer, storm sewer and water treatment, were upgraded.

Construction was anticipated to last one year. But when crews started work in the spring of 2022, they realized ground utilities including natural gas, electric and a handful of fiber optic lines were incorrectly mapped. This ultimately delayed the project more than half a year.

“The county recognizes it is frustrating to hear that the project will be longer and when unforeseen project circumstances add time more than once, that frustration increases,” a Ramsey County spokesperson said.

The Twin Cities North Chamber launched Welcome Back to Lexington Avenue, a marketing campaign and website meant to draw customers to the local businesses. The campaign ran from January 2023 to September 2023 and was funded by a $25,000 grant from Ramsey County through its Critical Corridors initiative.

“We felt we had to drive incremental demand into that corridor to not only keep people coming back to that corridor and inviting them back, but also for anyone who was new to the community because there’s a lot of multi housing that went up in that area,” said John Connelly, Twin Cities North Chamber president.

There are roughly 80 businesses along the affected stretch of Lexington Avenue, Connelly said.

Ron George, the third-generation owner of George’s Shoes & Repair, has operated on Lexington Avenue in Arden Hills for 20 years. The repair shop was founded in 1905 by George’s grandfather, who immigrated to Minnesota from Lebanon.

The business survived the Great Depression, the Great Recession in the late 2000s and was trying to overcome a third major event in COVID-19. During the pandemic, George had to “tighten the belt” to sustain the repair shop, he said. He cut costs, but also grew other forms of revenue, including a mail-in repair program where people shipped their shoes to the shop.

As the pandemic waned, the shop sales grew, picking up business from the closure of other repair shops in the area, George said. The work to climb out of COVID “seemed like it was never ending,” he said. “And then road construction.”

George’s Shoes is in Shannon Square Shoppes, a small strip mall on Lexington Avenue that includes a Cub Foods, Caribou Coffee and Subway. When construction began, traffic to the repair shop decreased dramatically again, forcing George to cut back store and employee hours. Customers said they would avoid the area until construction completed.

“It was a nightmare,” he said.

Even those like Lifelong Wealth Advisors that managed to stay open through the disruptions felt strained. The financial-services firm had relocated to Lexington Avenue from downtown Minneapolis during the COVID crisis to escape construction, traffic and problems with available parking for clients. Owners promoted the move to clients, promising easy access. The construction on Lexington, however, resulted in clients arriving late and stressed out for what are already sensitive personal finance meetings, said Robert Bonine, a partner at the firm.

Tempelis quietly listed her store for sale. Once a deal was in place, she set a closing date for May 2023. By June, she closed on the sale of the property to a dentist’s office.

While it was too late for her floral stop, Tempelis hopes that locally owned businesses find homes on Lexington Avenue now that construction is done.

For George, staying in business is an uphill battle, as he claws out of the hole created by four years of setbacks.

“We’re still hoping to get over that hump,” he said. “Hopefully 2024 is our big comeback year.”