ROCHESTER – The state’s third-largest city is going through an identity crisis. Workers who once filled downtown streets on vacation to grab a bite or run a quick errand are few and far between since the pandemic.
More businesses closed than opened this year, and the remaining businesses are still feeling headwinds.
“It’s a lot more challenging than it used to be,” said Steve Williams, who runs the Eagle Store — the oldest downtown business, started in 1866 — with his brothers and father. “You look up and down the sidewalks and you’d see … 25 to 50 people, just within a block, going from building to building. Right now, it’s probably five.”
Rochester is not alone as cities across Minnesota and the US face similar obstacles to recovering from the pandemic. But this community has Destination Medical Center, a state-backed initiative to bring billions of dollars in investment to transform downtown and cement its status as an international medical center by 2035.
This has fueled ongoing construction projects over the past few years, a factor many businesses cite as their problems.
“Constant construction taught people not to come downtown, and they’ve developed a new habit of doing things elsewhere,” said Heather Wright, owner of Tulips & Truffles, which shared a space with Scrub. Your Butt Soap Co. before both. businesses moved out of downtown in October. Wright moved north of downtown, inside the Kismet Building at 611 N. Broadway Ave..
At least 15 businesses have opened downtown since the start of 2022, from restaurants, coffee shops and cocktail lounges to boutiques, bakeries and event spaces, according to data from the Rochester Downtown Alliance (RDA). However, 12 businesses closed this year and another 11 moved to a location outside the city centre.
That’s down from 2021, when 21 businesses opened, seven closed and nine moved, according to the RDA.
John Kruesel, who owns an antique store, said he expects to see more downtown businesses close within the next few months, taking away much of the area’s unique character.
“We’re destroying the soul and spirit of downtown for the greater good of the supposedly rich (tax funding) with higher property taxes,” he said. “However, it makes that independent small business, which is the personality of the community, disappear.”
Aside from construction, business owners say very few office workers are staying behind in the fight to stay afloat. And, of course, property values and rising taxes make setting up shop downtown an expensive proposition.
Restaurateurs David and Mark Currie closed Hefe Rojo and the original Newt location in October, publicly citing a lack of foot traffic since employers instituted work-from-home policies during the pandemic.
The Mayo Clinic alone moved about 2,900 office workers to work from home.
Mayo Clinic spokeswoman Kristyn Jacobson said in an email that the medical system does not plan to require shift workers to return to the office, but is looking to expand into existing office space.
Downtown boosters may be rethinking whether day laborers are as important as they once were.
RDA held focus groups with residents living in or near downtown in 2021, who said they are looking for more things to do downtown than businesses to cater to them.
“They’re all looking for downtown as a whole experience and as a neighborhood,” said Holly Masek, RDA’s executive director. “And that’s a big difference from ‘Downtown is where I come to work and spend money during the day, and then I go home.'”
A growing number of entrepreneurs say they see opportunity in Rochester’s changing business climate.
Jeff and Sarah Schwenker hope to bring old-fashioned class to the French cuisine restaurant they have planned inside the 164-year-old Kelley Building at S. Broadway Avenue and 3rd Street.
The Schwenkers started Marrow as a pop-up before the COVID-19 pandemic, but put their plans on hold to find a permanent location until earlier this year.
They found their perfect spot in a slim part of the building, where they will install a bar, about 45 seats and an open kitchen next to large windows to add to the cozy atmosphere they are looking for. If all goes well, they will join other restaurants in the area this spring.
“There are really amazing things happening downtown and we just wanted to be a part of that,” Sarah Schwenker said.
Thai Pop restaurant owner Ryan Balow said he believes the downtown area is turning into a fun place to hang out. Balow and his wife, Annie, opened Thai Pop last year after several years as a pop-up restaurant in various downtown locations. Since then, they’ve expanded with a speakeasy in the basement, in the same location where they hosted a pop-up.
A Rochester native, Balow recalls eating at downtown restaurants whenever he got good grades in school, as well as the boom in bars and restaurants from about 2015 to 2019, which made the downtown area a close 3rd Street SW. a nighttime and weekend attraction.
“The people who live here, I think we want them back,” he said. “We saw his potential. … We had a lot going on.”
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