The City of Palo Alto’s multi-year “Upgrade Downtown” infrastructure and street improvement project, slated for completion in 2021, promises repaved streets, widened sidewalks and a new downtown parking garage.

However, local businesses report that the University Avenue construction is also hurting sales.

“[Construction] has significantly impacted traffic, and just the morale of businesses around us,” said Crystal Parras, store manager of David’s Tea on University Avenue. “I’ve noticed during the past six months several storefronts have shuttered,” including Shoe Palace and Yogurtland. 

David’s Tea will close on Apr. 30, Parras said. She attributed the financial strain to slow business combined with high rent prices.

University Avenue restaurant SliderBar saw similar losses when construction barricades were erected near its entrance over the summer. SliderBar’s owners filed a claim with the city on Nov. 20, 2018 that asked for reimbursement for $84,000 in lost sales: according to the claim, sales dropped 13 percent between March and Aug. 2018 compared to the same period in 2017.

“The claim was rejected on January 22, 2019,” wrote Stacy Lavelle, senior management analyst at the Office of the Palo Alto City Attorney, in an email to The Daily. Lavelle did not specify a reason for the claim’s dismissal.

According to Slider Bar manager Tyler Rowland, the summer is typically the restaurant’s busiest time of the year. Despite Slider Bar’s economic slowdown, though, Rowland thinks “the city did the best [it] could.” He hopes sales will continue to pick up now that the worst of the construction is past.

The most disruptive phase of construction, which involves replacing utility pipes, is set to wrap up by the end of March, according to city officials. Additional construction phases include parking structure renovations, sidewalk extensions and street upgrades.

Businesses have struggled from the effects of closed roads, dust and noise during this phase.

According to Palo Alto Bicycles manager Jeff Selzer, the surging price of rent significantly impacts the longevity of a physical downtown business location.  

“[Owning] alone is one of the reasons we’ve been able to weather this storm,” Selzer said.

The bicycle shop, which has owned its University Avenue location since 1973, has faced significant losses this year, Selzer said. Downtown construction has progressed from north to south, and it reached the Palo Alto Bicycles storefront in October.

“As soon as they blocked off this block from Emerson heading south, my business stopped. I mean, stopped,” Selzer said. “[Our profits] were up for the year through the beginning of October. By the end of October I was down about $75,000. From that point on, we have continued to drop off.”

According to Catherine Elvert, Communications Manager for Palo Alto Utilities, the city conducted research prior to commencing the project in an attempt to mitigate the potentially harmful impact of construction on businesses. The schedule they settled on centralizes construction to weekdays during the day.

“Prior to the construction, we had many conversations with the Chamber of Commerce and with business owners to find the best time for construction,” Elvert said. “We tried to get as much business and community input as possible because we understand that construction is never convenient.”

After utility pipe work finishes around March, University Avenue will be repaved. Elvert said that repaving will occur one lane at a time, and only at night, preventing further street closures.

Still, some businesses complained around the construction’s speed and timing.

“The frustrating thing for me is I think it could have been done in a much quicker and more efficient way,” said Selzer, who believes the city should have continued construction overnight and on weekends in order to expedite the project’s conclusion. “That might have been a little more expensive, but quite frankly, just in the money that I’ve lost, the revenue that [the city] could have generated off my sales tax alone would have paid for a couple of weeks of work.”

Contact Jasmine Kerber at jkerber ‘at’ stanford.edu.

This article has been updated to reflect that Palo Alto businesses Shoe Palace and Yogurtland have closed due to the impact of construction. It has also been updated to include a statement from the Office of the Palo Alto City Attorney. It has also been updated to reflect Catherine Elvert’s position as Communications Manager for Palo Alto Utilities, rather than for the city.