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Sunday, October 24, 2004 - Page updated at 12:00 A.M.
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Minority-owned businesses in Central Area face new challenges

By Blanca Torres
Seattle Times business reporter

BETTY UDESEN / THE SEATTLE TIMES
DeCharlene Williams has operated DeCharlene's Beauty Salon and Boutique in the Central Area since 1968. Now, across the street from her business on East Madison Street, a mixed Safeway and condominium complex is looming near completion, as seen in a view from the back yard of her business.
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Carl Thompson opened Thompson's Point of View 18 years ago at 23rd Avenue and East Union Street.

He still sells Southern and Cajun favorites from his corner "meeting place and watering hole," where local residents get the scoop on what's happening in Seattle's Central Area.

Thompson has been part of the evolution of the rapidly gentrifying neighborhood. As his customers have changed, he's made improvements to keep his place "fresh" — new menus, nicer chairs and tables, new carpet.

"The area has changed, and my business has been forced to change," Thompson said. "I've tried to be responsive to my customers."

Once a neighborhood of mostly small, minority-owned businesses, the area has seen an upsurge of major retailers such as Trader Joe's, Safeway, Starbucks, Hollywood Video and Walgreens.

One driving force is the Urban Enterprise Center, which opened to heal the economic disparities in the Central District. Other organizations — including the Central Area Development Agency and Community Capital Development — formed in the late 1990s to work directly with companies to spur business activity.

"I see excitement," said Jim Thomas, director of Community Capital Development. "I see growth. I see challenge. There is opportunity for small businesses to grow."

The bright signs, big parking lots and brand names gave residents the retail fix they craved.

But while big companies are finding new outlets, many small-business owners say they have been left out. They voice the same complaints they did 10 years ago: There is not enough financing and support for many of the small, black-owned businesses.

"The underlying feeling has not changed," Thompson said. "If it's a business run by people of color, it's looked negatively upon by financial institutions and customers."

Urban plight

The Central Area — also known as the Central District, or CD — has cradled numerous populations over the past century — Jews, blacks, East African immigrants, yuppies.

The traditional heart of the African-American community in Seattle, it is a neighborhood where old meets new in a city where progress is expected and convention is often ignored.

Several areas of Seattle saw a boom of employment and business opportunities during the 1990s, but the Central Area had not experienced the rest of the city's prosperity.

"We had not paid very much attention to the plight of our urban community," said Herman McKinney, who heads the Urban Enterprise Center.

He remembers streets lined with jobless people, drug use in dark corners and rampant violence. Residents in the Central Area felt neglected by businesses and the city, he said.

About 8,000 people marched from Garfield High School to the Greater Seattle Chamber of Commerce office downtown on Martin Luther King Jr. Day in 1993.

The march was held in King's honor but was different that year. The people marching called for change and attention.

Two years after the march, the Chamber of Commerce set up the Urban Enterprise Center to promote business activity and employment in the Central Area. It has helped find jobs for about 7,650 welfare recipients from the Central Area, Rainier Valley and Duwamish Corridor through training and placement programs. The center also organizes four or five forums on race relations each year.

At the same time, the city set up two community development agencies to boost business activity: the Central Area Development Agency (CADA) and Community Capital Development.

CADA receives much of its money from the city, the Seattle Foundation, Washington Mutual and Impact Capital and Neighborhood Reinvestment — nonprofit groups that support community development groups. It has worked with dozens of businesses in the area and helped bring in about 10 new businesses.

Community Capital Development, also funded by the city, provides financial and technical assistance for businesses. It has given 260 loans totaling $11 million since it started in 1997.

About 60 percent of the loans — ranging from $500 to $100,000 — have gone to small businesses in distressed areas such as the Central Area, Rainier Valley and the Chinatown International District. The group gives money to about 90 percent of the Central Area businesses that apply.

"We recognize that we're lending to a market that's not bankable," Thomas said. "The real key is, what will that entrepreneur do when things go bad? What's the credibility of that entrepreneur sitting across the table?"

Community Capital has about a 5 percent default rate; commercial banks default rates are usually about 2 percent.

"There's definitely challenges as far as financing small businesses," said George Staggers, chief executive of CADA. "But there's money available and technical training available."

Not everyone takes advantage of those resources, Staggers said, because the programs require business owners to fill out stacks of paperwork and disclose their business and personal financial information.

"It's time consuming. It's imposing. It frightens people," he said. "It can be a very intimidating process."

A struggle

Colorful storefronts and neat parking lots signal commerce throughout the area mixed in with dilapidated and abandoned buildings.

Starbucks coffee shop is one cornerstone of development in the Central Area. It took two years of lobbying for CADA to convince the coffee giant in 1997 to build a store in a neighborhood just a few miles from its headquarters.

Businesses did not want to come into an "untested market," Staggers said.

"No one was sure it would work," he said.

The corner, at 23rd Avenue South and South Jackson Street, is home to Walgreens drug store, Hollywood Video, a Washington Mutual branch, Flowers Just 4u, and the Welch Plaza Apartments and Condominiums. Nearby is a shopping area called the Promenade.

"We brought businesses that should be here," Staggers said. "We didn't push anybody out.

"Ten years ago, all you had here was a pile of dirt with discarded wine bottles and hypodermic needles. You go from dirt to having people here to socialize."

Outside businesses were reluctant to come into the area because it had an underserved "bad reputation" and was considered a poor, black neighborhood, he said.

Starbucks' risk-taking paid off. The Central Area store is one of its busiest in Seattle, Staggers said.

"We still don't have a ghetto — we never have," Staggers said. "Even in the worst of times, it hasn't been that bad."

"We plan to stay"

Not everyone cheered when the Starbucks opened. Rosie and Woody Jackson, owners of Catfish Corner, wanted the spot at 23rd and Jackson.

The couple made an old Southern favorite into a 20-year enterprise on the corner of East Cherry Street and Martin Luther King Jr. Way, but they were ready to move. Their hopes were dashed when CADA said a coffee shop was its priority.

Seven years later, the Jacksons still run their restaurant in its original location. It continues to thrive as the home of hush puppies, deep-fried fish and an original tartar sauce customers can buy by the jar. The tables fill with young and old customers who walk up to the owners to praise the catfish.

"In 20 years, we've seen it all," Woody Jackson said.

From the window of his restaurant and from his home a few blocks away, he has seen new buildings replace decaying ones, modern condominiums fill residential space, and national franchises move in and edge out small, local businesses.

The Jacksons have seen many businesses come and go, but "we plan to stay."

Woody Jackson likes larger businesses entering the neighborhood because they bring customers.

"People have to eat," he said, and they often come to Catfish Corner for that.

But he hopes more small enterprises survive even if there is a big-box next door.

"It's going to continue to change," Woody Jackson said. "We welcome it. My bottom line is that we want to be here — we were here when it was run-down."

DeCharlene Williams has juggled her roles as Central Area business woman and civic leader for more than 30 years. She knows change is inevitable but believes outside developers and businesses are usurping her neighborhood.

She has seen many Central Area residents migrate south to Federal Way, Kent and the Duwamish Corridor, another depressed area.

"This is the new downtown," she said. "They're trying to run us out — seniors, poor people, black folk."

At age 25, Williams brought property and opened a beauty shop at 2108 E. Madison St. It was 1968, a time when few women — even fewer black women — owned real estate or started their own businesses.

She started the Central Area Chamber of Commerce in the 1970s and is its president. The chamber has had 150 or so members at times but is down to about 50, she said.

The mammoth building under construction across from her shop will house a Safeway, condominiums and a parking garage. Williams doesn't like the way it changes the area's character.

"This is a neighborhood with families and microbusinesses," she said.

But change or no, she's staying. She plans to open a beauty school at her current location.

"I love my work and I'm in it for the long haul," Williams said.

Adapt or die

The University of Washington has used the Central Area to teach business students since 1995. The school matches students to work as consultants for businesses.

Professor Michael Verchot has been involved in the project for several years. He sees the neighborhood changing, he said, but recognizes that the change has been uneven.

"There are still significant pockets of poverty here, but there are still significant gains in household income," Verchot said. "The resistance is dying down. They see there's money to be made."

Long-standing businesses in the Central Area, he said, have to adapt to the neighborhood's changing demographics and become part of the Seattle business community.

To do that, Central Area small businesses need more opportunities for training and capital, said George Vallery, co-owner of the National Effective Employee Training Institute, a Seattle-based company that teaches workers to be more productive.

New owners who open businesses hope luck will help them survive, Vallery said, but what they need is preparation.

"You have to create your own fire and when you do that, you control the burn," he said.

The neighborhood also needs different kinds of enterprises, such as technology companies and supply vendors.

"If another restaurant opens up," he began, shaking his head. "It's time for something other than the restaurants and nail shops. How many of these businesses do we need?"

Thompson, owner of Thompson's Point of View, has participated in the UW program and knows he has to think ahead to stay alive.

The main challenge he faces is attracting new customers while preserving the restaurant's status as a community hangout. He doesn't want to alienate customers who come three or four times a week, but he does want newcomers to feel welcome.

"I've seen some businesses fail because they weren't flexible enough to change," Thompson said. "It happens everyday."

Blanca Torres: 206-515-5066 or btorres@seattletimes.com

Copyright © 2004 The Seattle Times Company

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