Detroit prepares loans for Avenue of Fashion businesses hurt by road construction

Detroit — The city has created a loan program to help small businesses on the Livernois "Avenue of Fashion" survive a road construction project. The loan program is aimed at dozens of shop owners who contend they have lost 40% to 60% of their business due to the city's overhaul of Livernois Avenue. 

The Avenue of Fashion construction project and the loan program, which still needs official approval, may be the sign of things to come for other small businesses in other parts of Detroit. There are 19 other commercial corridors where the city has major road construction projects planned, or have just begun. The loan program could be used for small businesses in those commercial corridors if the construction projects begin to take a financial toll, a city official said Wednesday. 

"This will be a pilot program," said Pierre Batton, vice president for small business programs at the Detroit Economic Growth Corp.  The DEGC and other city officials are closely monitoring the impact of other construction projects to see if any small businesses will need the same kind of loans aimed for Avenue of Fashion shops, two city officials said Wednesday.  

Avenue of Fashion is the first in Mayor Mike Duggan's $125 million plan to support local small businesses by revamping the infrastructure of commercial corridors in various neighborhoods. The work on the 1.2-mile stretch of Livernois, between Eight Mile and Margareta Street, began this spring. 

The project went from a renovation to a "reconstruction" due to unexpected work needed to the concrete base of the road as well as some "utility issues," said Caitlin Malloy-Marcon, deputy director of the city's Department of Public Works.

Earlier this month, parking on both sides of Livernois was eliminated for at least one month as road crews hope to catch up after 24 days of rain in May.  Pedestrians often need to walk for blocks to find a path to cross the dug-up street. The goal is to complete everything by November 2020, said Malloy-Marcon.

"It's killing us," said Dolphin Michael, president of the Avenue of Fashion Business Association.

A local pizzeria went from generating $1,000 a day in revenue to around $100, Michael said. The popular Kuzzo's Chicken and Waffles restaurant decided to close until November for renovations and wait out the construction. The owners of Good Times, a new restaurant and bar that planned a June debut, say they have been forced to delay their opening because the road and sidewalk construction blocked access to their building. Good Times owners LaDonna and Derrick Reynolds say they have invested $70,000 in the new business.

Under the proposed loan program, eligible business owners will be able to borrow $5,000 up to $20,000 and will not have to make any payments for the first two years, after the streetscape construction is complete. After making 24 months of on-time payments, the remaining 36 months of the loan will be forgiven, meaning the business owners can have 60% of their loan forgiven.

The city, through the Detroit Economic Growth Corp. and the Invest Detroit Foundation, is expected to launch the pilot loan program next week. The loan program will be managed by the DEGC through the Economic Development Corp., which will be asked to approve the loan program at its Aug. 27 board meeting. Once the program is approved, applications will be available at degc.org.

The city has secured 150 free parking spaces in three nearby lots and a free shuttle between noon and 6 p.m. Monday through Friday. The city and the DEGC are also stepping up marketing and other events, such as the crowd-funding Detroit Soup event. The first Livernois Soup takes place at 6 p.m. Thursday at Table No. 2, 8925 Livernois.

And a "protest/cash mob" event staged by several social justice groups is being planned for 4 p.m. Thursday starting at 7 Mile and Livernois. The groups are calling for more state and city aid to help the small businesses.  

“Now we need more people to come down, check us out and patronize the Avenue of Fashion," said Hugh Smith, owner of Baker’s Keyboard Lounge. "The construction hasn’t stopped us and it shouldn’t stop anybody from seeing everything Livernois has to offer.”

laguilar@detroitnews.com

Twitter: @LouisAguilar_DN