This is 3Bits & Change, an email about building a service and retail business. This one was written to the live show Coldplay did in Buenos Aires.
A few quick hits this week.
//no.1 - Bus Construction Status
If they deliver the construction project on our street on November 14, the last day of their current permit, they will have destroyed our economic activity and vitality for ~45% more time than they had planned.
There is 11% of the project remaining under the current plan. They’re 34%, or 57 days late as of today. This should have been 90 days of work and completed on Labor Day. As it stands that 90 days will be only 55% of the actual process - if they get out of the street by Nov 14!
Goodbye already!
//no.2 - Construction Impact
The blue line above represents forecasted revenue as a multiple of our previous store (Wayzata) revenue by month. It seemed the best proxy for a forecast on the new France Ave store.
We didn’t know bus construction would impact our revenue until May. The construction work was passed off by Transit Representatives and Metro Council Representatives as not a big deal because “Northbound France Ave traffic will remain open.”
The green line is actual revenue. The high point you see was the first half of June. I had been on three of the four major TV stations, two local magazines and a radio program in May to prepare our shop for the summer shopping season.
After the first week in June I was encouraged our shop was now positioned to remain profitable. It made money! It was going to be a great summer!
The cones were placed in the street the following week and customers were stunned - “What are they doing?” “It’s so hard to get here.” “I’ll come back when they’re done. When are they going to be done?”
There is no reasonable retail forecaster that would suggest July revenue in Minnesota retail would be equal to February revenue for a business like ours where it is. And the same goes for August and September. And yet, that’s what we’ve experienced because of the bungled re-construction of a bus line that already existed on our street.
There is zero support for businesses whom have or will have their revenue destroyed in the 14B dollars of transit investment scheduled by the non-elected Metropolitan Council by way of Metro Transit over the coming few years. Zero.
And yet, they’ve taken our young business, that had just achieved profitability, and punched it in the face repeatedly.
//no.3 - What if the shop was a YouTube Ad?
Advertisers spend ~$10-$25 dollars per thousand impressions on YouTube. The average cost of a billboard in Minneapolis and Saint Paul is $13.57 per CPM based on a recent rate card. Hennepin county traffic data for France Ave on our block shows 15,500 trips a day, which means we’ve lost ~750,000 trips - read impressions - since the construction cones arrived.
Traffic is currently, maybe, a 1/4 of the average volume before cones. And, contrary to initial promises, 50th at France was closed to east and west traffic for some 4 weeks over the summer as well. (Update, since publishing this post, Transit has informed us all that in order to stay on track for Nov 14th they will be closing east and west 50th at France for the next week. That closure was in place by the morning of the 30th).
Therefore, if the economic impact of this construction is not easily measured by reductions in year over year sales tax revenues from impacted businesses then another reasonable proxy is simple elimination of traffic.
At $10CPM, Metro Transit owes us all $75k for their bungled re-construction project this summer. You think we’ll see 1/2 of that?
On the two closed blocks of France Ave at 50th there are, 23 active stores on the eastside of the street. There are 16 on the westside of the street.
Transit owes the 39 stores on France Ave at 50th $2.9 million at $10 CPM due to a conservative estimate of traffic losses from re-construction alone. Even 1/2 of that…
Note, this figure does not include the actual topline revenue losses we’ve all experienced while being forced to fund this bungled bus re-build with our personal dollars.
Business is not sustainable when construction rips up your street. This is not a revelation like the many transit and non-elected officials who look you in the eye, make promises, break promises, play dumb, point fingers and miss their deadlines repeatedly would like you to believe. And in this case, what they’ve done is only to make the project last longer.
Goodbye already!
Sum
This week a transit official argued in a construction update meeting I attended that it’s too hard to coordinate all the signage to open the road early even if it’s ready to be opened. I wish I were kidding.
Please, remove the cones from the street ASAP.
At this time I’ll withhold the list of recommendations I have for transit and elected officials as a result of this project and others. However, I do continue to wonder why our community continues to accept the results Met Council and Metro Transit deliver for us year in and year out without pushing back and demanding, dare I say enacting, change for the better of all of us.
On Your Way
It’ll be 75 degrees this afternoon. Fall weather has been truly lovely.
Follow Vivront.com on TikTok, Instagram and Facebook.
Follow @josephrueter on Instagram or Linkedin.
Order kitchen knives sharpened or give the gift of sharp at Vivront.com.
Great analysis, Joseph! Very sorry you and your neighbor businesses have had to go through this harsh treatment! Dealing with the “public sector” is often not pretty; this is a great case in point!