Shawn Fagan, owner of Fagan Studios in downtown Rochester, can recall a time when Rochester’s dining scene was as barren as a near-empty pantry.
There once was a time when Rochester’s dining options were so limited that Fagan and his wife would wait for an hour and half for a table at Olive Garden (The waits can still be long). Or they would drive up to Minneapolis to eat out and catch a show.
Today, dining options in Rochester are vastly improved, including Grand Rounds, Forager Brewery and Pasquales Neighborhood Pizzeria, to name a few. Where once the city had no breweries, it now has six.
“I’ve been crazy excited about the growth,” Fagan said.
But as a downtown business owner, Fagan worries about his studio’s place in the city’s quickly changing downtown core. The city has so far failed to articulate a vision for small businesses.
“Where do we fit into this picture and how is it sustainable?” Fagan asked
The rising cost of operating downtown has created uncertainties for Fagan and other small, locally owned shops. His property taxes have more than doubled since he bought the building 12 years ago. Two reserved parking spots near his business that he pays $200 a month for are expected to jump to $600 over time.
Fagan worries about his ability to survive in the downtown. And others argue that a time may come when only deep-pocketed corporations will be able to do business there, turning what’s unique and distinctive about the downtown into a bland, corporate environment.
“Our vision always used to be we’d retire from running our photography studio and lease our space out. I don’t know if that’s feasible anymore,” Fagan said.
In the last five years, a growing number of distinctive Rochester businesses and restaurants have closed or announced plans to close. They include Michael’s Restaurant, Mac’s Cafe and Restaurant, Barnes & Noble Books, Artistic Framers, The Gingerbread Bakery and O&B Shows.
The closings have raised questions about the survivability of small mom-and-pop shops in Rochester and the distinctive character they bring to downtown.
Joe Powers, owner of Powers Ventures, a family-owned company that includes the Canadian Honker, has been a supporter of DMC from its inception. He says it’s clear to him that without the vision behind DMC, the $142 million Hilton Hotel, other development projects and the interest of developers across the country would not have been possible.
Yet, he too is concerned about the threat growth poses to small downtown businesses.
“We cannot lose the core of what’s made up Rochester, meaning these small businesses,” Powers said. “You go into most cities, and they are full of corporations and franchises and things like that. And we don’t have that.”
Lisa Clarke, executive director of DMC’s Economic Development Agency, said that while growth can be an exciting time, its implementation can also be trying.
For a variety of reasons, some downtown owners have closed or relocated. On the flip side, new businesses have cropped in a variety of locations — in the downtown, in the Heart of City district, in the Hilton Hotel and in Discovery Square, she said.
And the density and growth of housing that DMC is creating will spur more businesses to locate downtown. They will be unique, eclectic, local and regional. In a growing city, you want a blend of boutique businesses and retail that people living in the downtown might need, she said.
“I actually believe that we are being thoughtful about putting a retail strategy in place for the next year … to create a blend that meets the needs of many,” Clarke said.
Tessa Leung, owner of Grand Rounds on Historic Third Street, said the challenges facing small businesses should not be blamed on DMC. If it wasn’t DMC, it would be something else driving growth and causing costs and property taxes to rise.
She said the problem highlights the need for a long-overdue conversation among local and state officials on the need for property tax reform and alleviating the tax burden on mom and shop shops.
She notes that other cities faced with growth have taken different approaches. San Francisco went through rapid growth when Amazon, Google and other tech giants moved in.
Soaring costs made it impossible for most people to live in the city, and it became a touristy, financial ghost town. People and smaller businesses migrated to the surrounding cities.
“All the little cities surrounding the area are really cool, because the people are there,” Leung said.
On other hand, leaders of South Philadelphia decided to preserve the local culture by helping locally owned businesses with property tax and infrastructure costs.
“It’s kind of a blessing and a curse,” Leung said. “And I would hope that they all would come together and figure it out. If you want small businesses to stay, that will be it.”