Wed, Jun

Construction’s Negative Impact on Local Businesses: Does METRO Even Care?


SKID ROW-As a Skid Row community activist, I must point out that Skid Row’s most northern border on 3rd Street is connected to Little Tokyo and our two communities have supported each other’s efforts to improve our communities a lot in recent years. But when I attended a recent Little Tokyo Community Council ‘All Committees’ meeting, I was shocked to hear about the serious concerns they have about METRO’s construction in their community.


While METRO has established a Business Interruption Fund (BIF) program to compensate businesses that are impacted by its construction, several mom and pop businesses in Little Tokyo complained that METRO claimed they did not qualify for BIF supplemental funding.

Last year, I went through the same scenario with a business on 2nd and Spring streets named Blue Cube. After METRO informed the owner they didn’t qualify for BIF, I contacted them on the owner’s behalf. METRO is now making minor accommodations….although, it seems, reluctantly.

The problem with BIF is that they only compensate businesses that are immediately next to construction sites. Across the street, down the street or a block away won’t qualify a business for BIF. Small business owners fear the negative impacts will put them out of business, yet METRO continues to put on its stiff poker face.

Talking to business owners in the Crenshaw District and attending community meetings on that side of town has led me to the revelation that small mom and pop businesses in that community are also having issues with BIF.

Various members of METRO’s staff have verbally admitted an awareness that many businesses are negatively impacted by their construction. But everything this comes up, they pass the buck to Pacific Coast Regional Corporation, the third-party administrator of METRO’s BIF program.

When I spoke directly with PCRC, their BIF contact person finally said during a phone conversation that they only address BIF as it presently stands. PCRC cannot amend BIF in any way. They told me my inquiries regarding policy changes would have to be directed to the METRO Board of Directors (Garcetti, Ridley-Thomas, et al.) Wait, did someone just say, “good luck with that?” Or are those the voices in my head? The runaround continues. Next up is METRO’s Board of Directors.

In truth, METRO’s new CEO Phillip Washington has been respectful, courteous and quick to respond whenever I contact him. He then proceeds to delegate addressing my concerns to the appropriate staff member, with the exception of the most time I inquired. I was contacted by someone in METRO’s Community Relations department who politely gave me nothing more than entry-level information about the BIF program – details I’m sure I could’ve found on a website somewhere. What I contacted them about was the process for policy changes and other “non-entry-level” concerns.

So what are my solutions?

Mom and pop businesses are already struggling to keep their doors open. The BIF requirements include a stipulation that qualifying businesses “must demonstrate a loss of revenue directly attributable to METRO construction.” 

The problem with that description in Blue Cube’s case, for instance, is that METRO told them that they were not directly affected, even though “early construction” to remove electrical vaults happened “directly” in the intersection of 2nd and Spring. Blue Cube is the second business from the corner on the eastern side of Spring Street. Many of their customers who rush over to this restaurant on their lunch breaks were prevented from crossing the street during construction. These includes patrons from LAPD Headquarters, the LA Times building, City Hall, City Hall East and the jurors and staff from the nearby courts.

METRO contended that Blue Cube couldn’t prove its business was being affected by construction because its customers “could walk around” the construction. Are customers expected to walk a block or two out of the way while passing other food places? Really?

Clearly, since METRO can’t or won’t change or amend their current BIF policy they need to create a “Default Fund” for businesses that are in an “impact area” but don’t qualify for BIF. They could receive a partial compensation based on a “location variable” which could be defined by the METRO Board.

Technical assistance should have been provided to all mom and pop businesses within the proposed construction areas well before construction started. This would have ensured that those businesses had their paperwork in order -- in compliance with BIF requirements -- thus avoiding any negative impacts. Hopefully, with other construction zones in the pipeline, METRO will learn from these mistakes and not repeat them in the future.

Little Tokyo has been re-branding itself for the past few years but has now had to lose a significant amount of business due to METRO’s construction. This will cost them momentum and will inflict damage on the collective morale of that community.

METRO remains steadfast within its set parameters, still showing no signs of willingness to compromise, to be a true “community partner.”

I can’t even begin to imagine what it would be like if this type of construction and subsequent issues were happening in Skid Row. Wow.


(General Jeff is a homelessness activist and leader in Downtown Los Angeles.)

Edited for CityWatch by Linda Abrams.


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