Hillsborough St. businesses down 30 to 50 percent, owners say

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Business owners along Hillsborough Street across from N.C. State University report that sales are down 30 to 50 percent since construction began over the summer. Construction on the $10-million Hillsborough Street Improvement project began in mid-August and should be done by September 2010.

Paul Reimel, the Downtown Raleigh Alliance’s economic development manager, said that while he can’t back up the information statistically, most DRA restaurateurs in the 110-block Business Improvement District in the heart of Raleigh have told him their business has been up. The western boundary of that BID is about a mile east of the Hillsborough Street project area.

Reimel also said while monthly food and beverage tax revenues for downtown establishments were down 4 percent in August from July, they were up 7 percent in September from August.

Reports of construction-related inconveniences as the Hillsborough Street Project moved along the street’s south side contiguous to N.C. State during late summer and this autumn may only be a harbinger of what’s to come when work moves soon to the business-lined north side.

But project officials said recently that it’s not as if the merchants didn’t see it coming.

Hillsborough Street construction in front of Global Village. Photo by Art Latham.
Hillsborough Street construction in front of Global Village.

Mike Ritchey, who owns Global Village Organic Coffee, 2428 Hillsborough St., directly across from NC State’s Ricks Hall, begs to differ.

“I feel like I’m one of the lucky ones,” he said. “I’m only down $10,000 a month since August. Customer count is down 150 a day. But the real impact will be next summer. I use these fall and winter months to build up the war chest for then, but because of the construction, I’m not going to have the bank account to make it through.”

Especially hard-hit were his pre-9 a.m. folks who’d stop outside the shop, rush in to make a buy, then zoom off to work. That group — 33 percent of his business — disappeared when construction started and parking slots in front of his store dwindled.

“And this is classic,” Ritchey said. “They didn’t leave enough holes in the concrete barriers to start with, then the contractor chose to relocate underground wires, shutting off our utilities, on was what is usually my busiest single day, moving day on campus in mid-August.”

Phil Sykes, general manager of Red Hot and Blue, at 1900 Hillsborough, near the Oberlin Road intersection, also suffered a hit that day.

Sykes, who said his business has been cut in half since the city “brought out the bulldozers in August,” said construction began on two new roundabouts outside his door just as students returned to classes.

The timing couldn’t have been worse, he said.
Efforts to let potential customers know that the businesses in the HIllsborough Street construction zone are still open. Photo by Art Latham.
“It’s been very tough,” said Sykes. “We’ve barely been able to survive. If we do get guests, we don’t get their repeat business because of the way it is. With the economy we had in the summer, we never were able to rebound the way we usually do when the students come back.

“We were all about the project because we know what the long-term effect is. It will add value and increase the business in this part of town,” he said. “But the city didn’t do enough to let people know we were open.

“I was even threatened with a fine by the city for a 3-by-10-foot white banner we secured to the building to let people know we were open,” Sykes said. “And when I contacted WRAL-TV about a story to let people know businesses were open, the next week they did a story on how people should avoid Hillsborough Street.”

Keith Getchell, manager of Two Guys Pizza, 2504 Hillsborough, also has seen business drop by more than 50 percent, especially in the evenings.

“It’s bad,” he said. “And it might have been worse, except in anticipation of this work, we put in a lunch buffet — which has been our only saving grace — added TVs in the back room and generally brightened up the place. But parking is a problem day and night and people fear construction: most tend to avoid it.”

That’s especially true for N.C. State alums, who see Two Guys as an institution and try to visit when they return to campus, Getchell said. “Most of the long-time customers are older and that makes parking even more of a problem,” he said. “They don’t see us as a destination anymore.”

Alan Lovette, who owns Melvin’s Hamburgers, 2508 Hillsborough, said business owners he surveyed recently along the construction-impacted parts of the street report their business is off from at least 23 to 30 percent.

“We have three issues here,” said Lovette, who calls Charlotte home. “The first is parking; the second is the atrocious begging situation. I’ve been almost knifed and gunshot and they tried to hold me up twice to get my briefcase, and I’ve only been here five years.

“The third issue is that N.C. State University won’t let freshmen eat over here. They force them to eat on campus their freshman year,” said Lovette, who owns three other Melvin’s: in Fuqua-Varina, Elizabethtown and Pembroke.

“Those with several restaurants will probably survive. Those who don’t are really going to struggle,” he said.

Global Village’s Ritchey, one of the sole-business owners, calls the city’s actions “the worst kind of eminent domain.” He said the city reneged on several promises it made to business owners at an April meeting before the project kicked off.

“They said they were going to do three things to sustain the businesses,” he said. “One was that they would only do one block at a time to minimize the effects on businesses. That hasn’t happened.

“Second, we were promised parallel parking on the north side of the street except for the one block where construction was going on. That hasn’t happened.

“And third, when we they moved to the north side of the street, we were promised that we would have five-foot sidewalks for customers. The contractor has backed out on all three of those promises,” Ritchey said.

To some degree, however, the speed of the construction seems to be outdating Ritchey’s concerns. Tim Sudano, the city’s project engineer, said recently that work along the seven-block target area is running almost two months ahead of schedule.

“We’re about to wrap up the utility work on the south side, then they’ll cross over to the north side of Hillsborough Street, if not by December, then by January, if all goes well. Then we’ll take that side a block at a time. We have to tie in sewer and electric conduits to the side streets,” he said.

One lane of parking was restored on Hillsborough’s north side, in front of North Hall as far as Logan Street at the project’s east end until Monday, November 23. However, red cones blocked that parking area again on Nov. 23.

As for long-range parking problems, Sudano noted that the Hillsborough Street Improvement website states that the project will add more than 100 spaces to the 77 now permitted.

As for Ritchey’s comments on inadequate pedestrian crossing gaps in the roadside concrete barriers, Sudano said. “We’ve been very quick to put in mid-block pedestrian crossings. Once we got into it with calls from him, we were popping in openings like candy.”

November 18 and 20 drives down Hillsborough showed the street’s south side from Enterprise to Chamberlin streets completely free of concrete barriers, with three openings in existing barriers from Chamberlain to the bus stop in front of D. H. Hill Library at Gardner Street. But both barriers and openings shift as the construction focus shifts.

Sudano also said the contractor can build new sidewalks on the street’s north side and still keep a walking corridor open.

“No matter how you try to tell people up front what will happen in a project of this size,” he said, “until it starts, I don’t think the average businessperson, the average person on the street, can really realize how disruptive it can be. It has to get done and we knew some people would be inconvenienced.”

A student walks along Hillsborough Street. Photo by Art Latham.
A student walks along Hillsborough Street.

But Ritchey, with north-side parking still eliminated and concrete barriers now in front of his shop, considers himself more than inconvenienced.

“Somebody will benefit from this, but it’s not the merchants,” he said. “All you have to do is look at the Fayetteville Street and Glendale Street projects. In both cases, they gave the developers a chance to squeeze out the little businesses.

“A ‘real’ city would provide compensation for the merchants,” Ritchey said.

Red Hot and Blue’s Sykes empathizes. “I’m sure glad that we were the first stage, because we’re through with it. On the other hand, it wasn’t easy.”

But Sykes had nothing but praise for Lynn Craig, who manages the project for contractor Hamlett Associates Inc. “They’ve communicated with us and tried to help us out in every way they can,” he said.

Craig said, “We’re all in business and we know the quicker we can finish, the better. And if anybody has any constructive criticism, we’d be glad to hear from them. Communication is important.”

And inconveniences as construction moves towards a projected summer 2010 completion might not be the only player in business downturns along the street.

“I visit lots of places across the state in my work,” Craig said. “And I don’t think it’s the construction that’s affecting the businesses. I think it’s the economy. The people I talk to all over say business is down 50 percent.”

Nevertheless, he said, “If there’s anything I can do to help, let me know.”

Regardless of differing opinions on the construction process, all involved seemed to agree with the city’s Sudano: “I’m just looking forward to it being complete,” he said.

Photos by Art Latham.

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