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Progress and Change: City’s Growth Affecting Small Business Owners

May 14, 2019 09:29 AM

(ABC 6 News) - Heather Ritenour-Sampson has made the corner of Broadway and Fourth Ave. her home for the last 5 years.

"I knew it as soon as I walked in the door, that this was the place I wanted to be," Sampson said. 

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However, Sampson said some recent Destination Medical Center (DMC) projects in the downtown area have put her in a position to make a tough decision.

"Last fall I ran into my landlords and they asked me how things were going, and I said, 'it's been really slow, it's kind of scary.’” Sampson said.

Sampson’s landlords mentioned renters' rates were expected to increase even more due to the increased number of big buildings in the immediate area and, at the time, the proposed Bloom Riverfront Project that was expected to go up right behind her business.

"They told me that I should really think hard about if I wanted to continue leasing this space because they were going to have to increase my rent because of property taxes," Sampson said.  

Sampson added that fewer spaces for parking and increased parking rates around her studio have made it difficult for her and others in the area to maintain regular clients.

"Across the street we'd had three businesses come and go in the last year, one of them was here for a really long time," Sampson said.

However, down the street, Tessa Leung's story is a little different.

Leung has owned and operated two restaurants out of the same building in the same spot for the last 13 years.  She estimates that she's seen at least 16 new businesses pop up in the immediate area, and served more patients and customers at Grand Rounds, especially since the creation of DMC.

“I think it's great that we can do something that wonderful, i think with growth there's always growing pains.

However, she's noticed a financial difference as well.

"And people would say property taxes, and I would certainly say ‘oh my gosh, you should see my property taxes,’ but I also know that's a multi-faceted issue."

According to Olmsted County, property taxes have increased over the last 6 years. Heather's landlords have seen a total increase of more than $5,000. Tessa has seen an increase of more than $15,000.

"And it's not just because of DMC, it's really because of how the state and the city and the county have set up property taxes and we have probably the most complicated property tax system in the entire country," Leung said.

"Property tax relief is really, really important, especially for small businesses because most small businesses don't own the land, they rent," Rochester Area Chamber of Commerce President Kathleen Harrington said.

Harrington said that increased cost of the land and the taxes gets passed through to the renter.

"That's affecting small businesses, we're concerned about it and trying to make certain our legislators, our city council really understand the impact on those businesses from an increase," Harrington said.

Some other businesses in the downtown Rochester area have made the decision to move, due to the changing landscape of the city. Welhaven music relocated at the end of March, after being on Broadway Ave. since 1966, citing an influx of traffic and fewer parking spots as a big reason. And the American Legion moved from their location of nearly 30 years as Rochester prepares to construct a new hotel.

But for Sampson, the time for her major decision come quicker than she would've hoped.

"I absolutely love it here,” Sampson said through tears. “I love everything about it, and I really don't want to go, but I know it's what's right for my business."

"The idea of Destination Medical Center on a large scale seems like a really great idea. I don't necessarily feel like the DMC is considering necessarily the power of the small business in the project or I haven't felt that I've been included in that conversation," Sampson said.  

Sampson did find a new place to run Yoga Tribe. She moved into her new location at the Castle Community on April 1, and has continued instructing classes.

Credits

Elise Romas

Copyright 2019 - KAAL-TV, LLC A Hubbard Broadcasting Company

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