Ten months into the construction of a 630-space parking garage in the California Avenue business district in Palo Alto, business owners and managers who lobbied for it say that foot traffic and sales have declined by whopping percentages — as much as 30% in the last year.
The garage is replacing a parking lot on Sherman Avenue between Birch and Ash streets, eliminating those 100 parking spaces during construction. Retailers say that customers are having a harder time finding a place to park, which is discouraging them from coming.
Restaurant owners are among the hardest hit.
"Year over year until last year, we had grown pretty much every year. This year we're off more than 20%. Lately we've been off more than that, even. It's really significant," said Peter Katz, owner of The Counter, which specializes in custom-made burgers.
Almost all of the decline coincided with the start of the garage construction, he said. The Counter is probably affected more than others because the construction is taking place is directly behind the restaurant, he said.
"The farther away you get, there are other parking areas. We're ground zero," he said.
Michael Ekwall, co-owner of La Bodeguita del Medio, which is a block west of The Counter, said his lunch business has declined by 20%, though at night, the impact is not as significant.
"Amongst other things, people are just not willing to drive around for however long it takes them to find a spot if they have a limited time for lunch," he said.
The restaurant has always grown for 21 years, he said, but "last year was the first year we noticed a significant impact."
Restaurants also have faced mandatory wage increases and other challenges.
"For us that significant increase in minimum wage — it's 60% in four years — that's huge. To add onto it a decrease in foot traffic is a little bit challenging," he said.
At Zareen's, which is next to The Counter, owner Zareen Khan said she estimates her business is off about 10%, but she's hopeful that fortunes will change once the garage opens. That's scheduled for late summer or early fall.
"In general, people are scared of parking on California Avenue. Even before (the garage construction), they said: 'It's easier to come to your Mountain View location than to keep looking for parking.' The impact was there and now there's a little more impact. But once the parking lot is there, hopefully people's mindset will change," she said.
Like Khan, Ekwall and Katz said they support having the new garage.
"We lobbied for more parking and the city approved it. Everybody's thrilled with that," Katz said.
But then, "it became obvious it was going to be an 18-month project, and we got very concerned," he said.
The restaurants aren't the only ones suffering.
Blossom Birth Services' Executive Director Dominique Vincent said that since construction began the nonprofit has experienced a 30% hit to its bottom line, the equivalent of about one month of revenue.
"That's a significant amount of money over last year. We were on track for growth, and last year there was no growth," she said.
Many mothers who come for classes arrive late because they can't find parking.
Anthony Haggard, store manager at FedEx Office, said his business has been hit by a confluence of factors, including the garage construction.
The parking lot directly behind the store, which is a block east of The Counter, was initially used for parking construction equipment and vehicles. That prevented customers from coming in FedEx's back door, which is how 75% of customers enter, he said. On top of that, the store was doing a remodel at the same time.
"Last year we missed $500,000 from our bottom-line sales," he said. "Customers in Palo Alto don't like to be inconvenienced."
Businesses with dedicated parking behind their stores, such as Summit Bicycles and California Paint Company, are faring better, however.
Jeff Davidson, owner of California Paint Company, said that from 11 a.m. to 1 p.m., every parking space is taken on the street and public lots and garages. The five dedicated parking spaces behind the store are a saving grace.
"Without that, I couldn't have a paint store here. Painters won't drive around looking for a spot," he said.
Rory Shannon, sales manager at Summit Bicycles, noted that while his store hasn't seen a decline, he understands the impact of long-term construction projects on small businesses. In San Francisco where he lives, the street has been torn up for four years.
"I've seen many, many businesses close," he said.
Startups are also being affected. Kelli Mullen, office manager for BitGo, which is located a half-block from the construction site, said there is constant hammering and loud noise. Parking is a huge problem if one doesn't get to the area by a certain time, and city parking-enforcement officers relentlessly ticket people if they overstay the two-hour time limit, she said.
"We always ask customers to come in a half hour early and give them a parking pass," she said
The passes are only good for a particular day, though, so each day Mullin must go down to City Hall in downtown Palo Alto to get new passes, she said.
Ekwall said the impact mirrors that of the streetscape work that took place six years ago when parking was also limited. Ekwall said business did recover, but slowly.
"When you have a reduction in your sales, whether it's 5 to 10%, it could be basically all of your profitability. I think that's pretty significant," he said of restaurants.
Jessica Roth, owner of The Cobblery, wondered whether customers who are going elsewhere during construction will ever come back.
"Fingers crossed they don't form new habits. That's a concern for small businesses," she said, adding that "there's a lot of businesses that would appreciate people coming down.
"Parking really isn't bad but the perception is that it's bad. If you have one bad experience and come down and search for parking for awhile and don't find it, you just don't come back," he said.
Those customers visiting the district have a more forgiving outlook on the construction. On Wednesday during the bustling lunchtime, customers told the Weekly they weren't perturbed by the construction. Many said they take alternative transportation such as Uber or Caltrain to come to the area and others said they live within walking distance.
"I leave the house a little early," Deanna Wong said. The parking issue caused by construction is "a temporary obstacle. I still love this community," she said.
Barbara Stephik, who was enjoying lunch outdoors with her husband, Mark, said she has a "parking goddess."
"We've been very lucky. When we come here, we just get spots," she said, pointing to their car, which was just steps from their table.
Mark Stephik said parking issues won't deter them from continuing to frequent California Avenue businesses.
"At Stanford Shopping Center and Town & Country everything is very pricey. This street is more affordable and has a more interesting mix of things," he said.
City spokeswoman Meghan Horrigan-Taylor said staff attends monthly meetings of the California Avenue Business Association to update the group on the construction progress and discuss ideas for minimizing construction impacts. The city is leasing Santa Clara County's parking lot at the corner of Grant Avenue and Birch for public parking, reconfiguring the lot behind FedEx (between Birch and Park Boulevard on Sherman) to add more parking, obtaining 44 day permits for construction personnel to park in the Caltrain parking lot and is offering free valet parking from 11 a.m. to 3 p.m. in the lot behind FedEx.
The city is also installing temporary signage to direct motorists to the available parking and has a free shuttle bus, SPRGo!, from Stanford Research Park, she said in an email.
Retailers are hunkering down for the long term, though. Come the fall, following the completion of the new garage, the city will start construction of the new public safety building in the lot behind FedEx. That's expected to end in 2023.
The new garage should provide adequate parking during the police headquarters' construction, Horrigan-Taylor said.