UC Irvine School of Law / Irvine, CA 92616-5479
(949) 824-9660
Santa Ana Business Council
400 East Fourth Street Suite 7
Santa Ana, CA 92701
Jan 4, 2016
Ryan O. Hodge
Assistant City Attorney
City of Santa Ana
(714) 647-5201
Re:Possible Ways to Minimize Impact of Streetcar Construction on Businesses
Dear Ryan Hodge:
In preparation for upcoming stakeholder meetings of the Santa Ana/Garden Grove Streetcar, Santa Ana Business Council (“SABC”) asked the Community and Economic Development Clinic (“CED”) to research the impact of streetcar and light rail construction on businesses in the immediate construction zones and provide an overview of mitigation measures other communities have implemented to protect businesses impacted by transit construction. Generally, streetcar and light rail construction does negatively impact revenues of businesses along construction routes. However, as described in detail below, many local governments and transit agencies have instituted successful mitigation measures to protect businesses during construction. Therefore, SABC should advocate for the implementation of mitigation measures during its meetings with the Orange County Transportation Authority (OCTA) and the City of Santa Ana.
Impact on Businesses
Streetcar and light rail construction does negatively impact some businesses within the project’s construction zone because of limited parking, limited visibility, and the difficulties for customers in navigating around street closures.[1]For example, one small-business owner in a New Orleans Streetcar construction zone reported a sales reduction of 40 percent.[2]A food storeowner in the same New Orleans construction route reported that detours and limited parking reduced its business in half.[3] Similarly, in Tucson, theexecutive director of the Fourth Avenue Merchants Association reported that businesses saw an average 30 percent decrease in revenue during construction closures.[4]Furthermore, the negative impact on businesses is perpetuated by frequently delayed construction schedules.[5] For example, required additional infrastructure repairs during Kansas City’s Streetcar construction resulted in a prolonged construction period that negatively impacted business along the construction route.[6]
OCTA officials contend that the streetcar will help businesses by increasing pedestrian traffic in Downtown Santa Ana. For example, Phoenix saw a seven billion dollar positive impact from its completed light rail line.[7] However, the construction of that same Phoenix lineled to a 30 to 40 percent revenue drop during the first phase of construction, and the closure of seven businesses in one segment of the construction corridor.[8] Thus, it is likely that construction of the Santa Ana/Garden Grove will negatively impact some Santa Ana businesses along the construction route.
Mitigation Measures
In anticipation of possible revenue losses of local businesses, cities that underwent streetcar and light rail construction implemented a variety of different mitigation measures to help businesses survive during project construction periods. Some of these mitigation measures included: (1) Grant and Loan Programs; (2) Community Engagement with Construction Contracts; (3) Communication Campaigns; (4) Marketing and Business Advising Programs; and (5) Signage Programs.
1. Grant and Loan Programs
Several cities with streetcar and light rail projectsinstituted grant and loan programs to mitigate the loss of business revenue from construction.[9] For example, Portland instituted a low-interest rate loan program to mitigate the loss of revenue of businesses in the immediate construction zone of the light rail.[10]The city offered loans of up to $25,000 with 3 percent interest that were easily obtainable to any business directly along construction route.[11]Portlandalso offered grants to business owners to rehabilitate their storefronts after construction.[12]Additionally, the City of St. Paul implemented the Central Corridor Ready for Rail Small Business Forgivable Loan Program, which provided no-interest, forgivable loans to eligible, small businesses in Minneapolis and St. Paul that experienced loss of sales due to construction of the city’s light rail project.[13]These loans had stricter requirements, requiring businesses “to have no more than $2 million in annual gross sales; be independently owned (with four or fewer locations); located on the CCLRT or within one block of the construction zone; have been at their current location for one year or more; focused on retail services (selling products or services directly to the consumer, including restaurants); and had experienced a decline in revenue due to the construction of the CCLRT.”[14]
These programs made an impact on the struggling business communities. For example, in Portland, only 1 of the 106 businesses along the construction route closed.[15] Therefore, implementation of a Grant or Loan Program could mitigate the impact that the streetcar construction will have on small businesses.
2. Community Engagement with Construction Contracts
Due to the impact that the actions of contractors, subcontractors, and their employees can have on the timeliness of construction, contractual obligations promoting accountability and community relationship programs promoting collaboration have been incorporated into business mitigation plans.[16]Cities, like Seattle and Phoenix, included specific contractual obligations to protect businesses. For example, Seattle contractually required contractors “to keep garbage, dust, and debris to a minimum and wash the windows of businesses in active construction areas at least once every three months.”[17] To mitigate the parking scarcity perpetuated by construction, the contract also included a parking plan for construction employees.[18] Also, Portland enforced a moratorium on construction during the holiday season, so that businesses could benefit from the seasonal revenue increase.[19]Thus, obligations could be written into construction contracts to protect businesses.
Furthermore, Phoenix and St. Paul established committees of affected citizens, including business owners, to help determine bonus amounts given to the contractors.[20] In Phoenix, five different fifteen-person committees—based on location along transit line— met monthly to review construction related complaints andaward bonuses to contractors if they went above and beyond contractual requirements with regard to community concerns, response time, public outreach, and completion.[21]In St. Paul, the committee met every two weeks to determine the contractor's efforts to minimize impacts of construction on businesses and decide on whether to dispense a bonus from its $850,000 fund.[22] Therefore, Santa Ana stakeholders could request the formation of similar committees to provide incentives that may motivate contractors to address concerns of business owners.
3. Communication Campaigns
A vital component of almost every city surveyed is an established communication plan between the implementing agency and community stakeholders. In Portland, four community relations staffers, all with existing connections with the city, were hired to reach out to business owners with construction updates.[23] These staffers were also available around the clock to field questions and concerns.[24] Portland’s bilingual communications plan utilized websites, door-to-door canvassing, telephone campaigns, mailings, and advertising in local papers and newsletters.[25]In Santa Ana, merchant groups can give advice about the most effective ways to communicate to community members. Since the streetcarroute will serve a diverse population from different cultural and socio-economic backgrounds, OCTA officials should solicit feedback from the community on how to ensure that business owners and residents receive important announcements. It is vital that businesses received timely notice of utility shutoffs, streets closures and detours, and emergency information. Thus, OCTA should present SABC with their communications plan and solicit feedback from SABC and other community groups.
4. Marketing and Business Advising Programs
Several cities have also developed initiatives to provide businesses owners with increased advertising and business workshops. For example, New Orleans and Kansas City had coupon and promotionalprograms for businesses in the construction corridors, which were featured in monthly community newsletters and on social media.[26]As a result, business owners had access to free advertising. Additionally, cities offered free consultations to businesses owners, which taught business owners additional skills in marketing, customer cultivation, and accounting.[27] For example,
“Phoenix hired a business advocate for the sole purpose of supporting small business owners. The business advocate focused on helping business owners analyze and meet immediate and long-term goals and realize business strengthening tools.”[28]Although some question the effectiveness of such programs, language barriers are cited as a reason for why the programs were underutilized.[29] Therefore, while marketing and business consulting program should be considered, those implementing such programs should be conscientious of the cultural and language diversity of business owners along the streetcar line.
5. Signage Programs
Affected cities also implemented signage programs to guide customers and promote businesses. For instance, Phoenix provided courtesy signs to businesses impacted by the construction route and temporarily waived existing signage ordinances along the route.[30]In fact, Phoenix’s transportation agency, Valley Metro, concluded that the free signage program was the most utilized and successful mitigation measure.[31]In addition to implementing strategies similar to Phoenix, the City of St. Paul also allowed business signage, in the form of movable variable-message signs, which allowed frequent changes in construction activities to be communicated to all travelers along its light rail route.[32]Therefore, because of the success of signage programs in other cities, Santa Ana should strongly consider providing signs to impacted businesses and temporarily suspending its sign ordinances that would restrict business owners from using larger signs to promote their businesses during construction.
Conclusion
Therefore, whileSanta Ana businesses will likely ultimately benefit from the existence of the planned streetcar, they are likely to be negatively impacted during the construction of it. As a result, SABC should encourage OCTA and the City of Santa Ana to develop and implement mitigation programs to protect local businesses.
Yours Truly,
Andrenna Berggren and Carolyn Luong
Certified Law Student Interns under the supervision of attorneys Carrie Hempel and Bob Solomon
The Community and Economic Development Clinic
UC Irvine School of Law
Community and Economic Development │Domestic violence│Environmental Law
Immigrant Rights |Intellectual Property, Arts & Technology │International Justice
[1]Michael N. Widener, Curbside Service: Community Land Use Catalysts to Neighborhood Flowering During Transit Installations, 45 Urb. Law. 407, 407–09 (2013).
[2]Tania Dall, N. Rampart-St. Claude streetcar line construction 'hurting' local businesses, WWL-TV CHANNEL 4, (Jul. 18, 2015, 1:20 p.m.),
[3]Id.
[4] Darren DaRonco, Extended streetcar construction hurting businesses along route, Arizona Daily Star, (Sept. 30, 2012),
[5] Lynn Horsley, Downtown businesses rail at Kansas City’s streetcar snarl, Kansas City Star (Nov. 22, 2014),
[6]Id.
[7]Michael N. Widener, Curbside Service: Community Land Use Catalysts to Neighborhood Flowering During Transit Installations, 45 Urb. Law. 407, 411 (2013).
[8]Id. at 412.
[9] Abby Richardson, A Comparison Study of Measures to Mitigate Loss of Business Revenue During Major Construction Projects, J. Affordable Housing & Community Dev. L., 2014, at 267, 275-76 (discussing the Grant and Loan programs for Portland, St. Paul, Phoenix, and Seattle).
[10]Id. at 276.
[11]Id.
[12]Id.
[13] Metropolitan Council, Supplemental Final Environmental Impact Statement--Construction-Related Potential Impacts on Business Revenues at S-19-S-23 (June 2013), available at
[14] Abby Richardson, A Comparison Study of Measures to Mitigate Loss of Business Revenue During Major Construction Projects, J. Affordable Housing & Community Dev. L., 2014, at 267, 278-79.
[15]Id. at 276-77.
[16]Id. at 281-84; Arizona Light-Rail Project Features New Bonus System, Engineering News-Record (July 11, 2007),
[17] Abby Richardson, A Comparison Study of Measures to Mitigate Loss of Business Revenue During Major Construction Projects, J. Affordable Housing & Community Dev. L., 2014, at 267, 282.
[18]Id.
[19]Id.
[20] Metropolitan Council, Supplemental Final Environmental Impact Statement--Construction-Related Potential Impacts on Business Revenues at S-23 (June 2013), available at
[21]Id.
[22]Id. at S-14.
[23] Abby Richardson, A Comparison Study of Measures to Mitigate Loss of Business Revenue During Major Construction Projects, J. Affordable Housing & Community Dev. L., 2014, at 267, 286.
[24]Id.
[25]Id.
[26]Tania Dall, N. Rampart-St. Claude streetcar line construction 'hurting' local businesses, WWL-TV Channel 4, (Jul. 18, 2015, 1:20 p.m.), Lynn Horsley, Downtown businesses rail at Kansas City’s streetcar snarl, Kansas City Star (Nov. 22, 2014),
[27]Abby Richardson, A Comparison Study of Measures to Mitigate Loss of Business Revenue During Major Construction Projects, J. Affordable Housing & Community Dev. L., 2014, at 267, 289.
[28]Id. at 286.
[29]Id. at 289-290.
[30]Reuben Collins, Light Rail Transit Construction Impact Mitigation Strategies: Case Studies and Recommendations for the Central Corridor, 12 (Dec. 21, 2007) (unpublished M.A. Thesis, University of Minnesota),
[31]Id. at 13.
[32] Abby Richardson, A Comparison Study of Measures to Mitigate Loss of Business Revenue During Major Construction Projects, J. Affordable Housing & Community Dev. L., 2014, at 267, 285.