Campus-area small business: some say ‘different,’ others say ‘dying’

Editor’s note: This is the second in a two-part series examining businesses around campus

Edwin Nelson remembers when a small barbershop took its place among the ice cream parlors and flower shops of Dinkytown in 1964 .

Now Dinkytown Barbers is closed, waiting to take its place in University lore, as the space becomes part of an expanding Mesa Pizza .

Dinkytown, where Nelson first started cutting hair, may be different, but he said it’s far from dying.

But others believe that businesses around campus are changing, noting four older establishments on campus that closed within the last year.

One camp believes that the closing of Dinkytown Barbers , Grandma’s Saloon and Grill , North Country Co-op and the Oak Street Cinema signal a decay of small business and an increase of corporatization, while others see the closings as natural casualties of business.

Michelle Smolik , owner of the Stadium Village Bruegger’s Bagels , said the University is a more challenging environment for small business than it is for corporate business.

“It’s hard to be an independent business person on campus because you really have to make as much money as you can during those peak periods to sustain yourself during Christmas break,” Smolik said.

“There is definitely an advantage to being a large corporate chain when you have those variations in business,” she said. “I have a whole bunch of Brueggers backing me up.”

This environment is leading to more corporatization, a gradual and imminent change on campus, said Melvin Aanerud , representative of the U.S. Small Business Administration . The four businesses in question don’t have common reasons for closing.

Aanerud said the closings were natural: Co-ops take a hit when customers choose cheap prices over “social conscience,” one-screen cinemas are dropping along with drive-ins, barbershops are being pushed out by hair salon chains, and the bridge collapse and weak economy reduced the customer base of restaurants on the West Bank.

“It’s not just something special for Dinkytown or the West Bank,” Aanerud said. “In all of those cases, it’s just the market changing.

“Now, we’d all like to think that Dinkytown or the West Bank are somehow different than the rest of the market, and, in fact they are,” Aanerud said. “I know it’s unique, but it is becoming less unique all of the time.”

The Twin Cities are the birthplace of several industry giants. Best Buy started in St. Paul as Sound of Music , a single record shop that turned into an empire. Medtronic , now a world leader of medical equipment, started in a 600 square-foot garage in Minneapolis.

Skott Johnson , president of the Dinkytown Business Association, said the University is one of the last small business areas in the Twin Cities where people can come and start a business, build and maybe move elsewhere.

After a CVS pharmacy moved into a downtown development in St. Paul, the city created development regulations on Grand Avenue aimed at keeping chains out by limiting shop size.

Minneapolis does not have a comparable program, but Bob Lind , manager of small business financing from the Minneapolis Community Planning and Economic Development department , said the city offers cut-rate loans and a working capital program for all businesses.

Businesses on the West Bank and in Dinkytown are offered loans nearly twice as large as the rest of the city because they fall under the “commercial nodes” that the city of Minneapolis gives priority funding to, Lind said.

Besides the “commercial node” status, Dinkytown falls under the Marcy Holmes Neighborhood Association master plan. Johnson said the plan – filed with the city of Minneapolis – can stop developers from erecting a “24-story tower” in Dinkytown.

Under the guidelines of the master plan, Johnson said developers of the 1301 University apartments reduced the number of floors and agreed to change from a prefabricated building design to the brick structure it is today.

Master plan or not, some businesses feel that the University area is still a viable market, even with construction projects on the horizon.

“We had our streets and ditches torn up in 1995, you couldn’t drive into Dinkytown, you had to airlift in,” Johnson said. “Luckily, nothing stops students.”

Doug Grina , owner of Al’s Breakfast , said his business isn’t affected by seasonality, and the new construction on campus won’t change Dinkytown much.

“We’re just a little bit further from the Metrodome than we will be from the new stadium,” Grina said, also noting that game day always brings in more customers.

After all of the changes he has seen, Nelson believes nothing is wrong with the University business community today.

“I really think that as long as the college students keep going (to Dinkytown, West Bank and Stadium Village shops) everything will be fine,” said Nelson. “If the people are friendly it won’t matter what’s there.”