The impact of light rail construction on neighborhood business activity in the Rainier Valley, Seattle, Washington

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The impact of light rail construction on neighborhood business activity in the Rainier Valley, Seattle, Washington
Krieg, Alexandre
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[Gainesville, Fla.]
University of Florida
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1 online resource (89 p.)

Thesis/Dissertation Information

Master's ( M.A.U.R.P.)
Degree Grantor:
University of Florida
Degree Disciplines:
Urban and Regional Planning
Committee Chair:
Steiner, Ruth L.
Committee Co-Chair:
Jourdan, Dawn
Committee Members:
Macedo, Joseli
Blanco, Andre
Graduation Date:


Subjects / Keywords:
Business ( jstor )
Business development ( jstor )
Business operations ( jstor )
Community development ( jstor )
Formalization ( jstor )
Informal sector ( jstor )
Light rail transit ( jstor )
Neighborhood change ( jstor )
Neighborhoods ( jstor )
Rail lines ( jstor )
Urban and Regional Planning -- Dissertations, Academic -- UF
bibliography ( marcgt )
theses ( marcgt )
government publication (state, provincial, terriorial, dependent) ( marcgt )
born-digital ( sobekcm )
Electronic Thesis or Dissertation
Urban and Regional Planning thesis, M.A.U.R.P.


This research examines the impact of light rail construction on neighborhood business activity in the Rainier Valley neighborhood of Seattle, Washington. The Central Link light rail line traverses 13 miles from Tukwila to downtown Seattle, with a 4.5 mile at-grade segment running through the Rainier Valley. This is the only at-grade segment that runs through a residential neighborhood. The line runs down Martin Luther King Jr. Way South (MLK), the commercial corridor serving the neighborhood?s large ethnic, immigrant, and low-income populations. The construction of this segment of Central Link included placing the light rail tracks in the middle of MLK. Major construction operations lasted for 44 months, and greatly reduced access and parking along MLK. The literature review situates these issues in megaproject, environmental review, neighborhood change, ethnic economies, and business informality literatures. A before-and-after study design that utilizes demographic, socioeconomic, and data related to the businesses along the MLK corridor establishes neighborhood business activity in the Rainier Valley pre- and post-construction. The role of business assistance programs in place during the construction process is also considered. Findings from the data suggest that the character of the businesses?i.e. small-scale, minority-owned, independent, and ethnic-serving?has largely remained the same. The businesses appear to have formalized, however, as measured by the proportion of businesses with business licenses and the increase in the number of businesses identified by the Seattle agency responsible for taxing and licensing. The findings suggest that the conditions for receiving financial assistance necessitated the formalization of businesses so that they could survive the construction process. ( en )
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Thesis (M.A.U.R.P.)--University of Florida, 2009.
Adviser: Steiner, Ruth L.
Co-adviser: Jourdan, Dawn.
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by Alexandre Krieg.

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2 2009 Alexandre Krieg


3 ACKNOWLEDGMENTS I am most thankful to everyone who assisted me with this research in Seattle. This th esis would not exist if not for Martina Guilfoil hiring me to work at the Rainier Valley Community Development Fund in the summer of 2008. Charleete Black and the rest of the staff at the CDF Greg Anderson, Dave Essig, and Tina Houston were more than helpf ul in answering my countless questions over the past two summers. I would also like to acknowledge Theresa Barreras, Brooke Belman, Jennifer Lemus, Ron Lewis, Nora Liu, and Nancy Yamamoto for taking time from their busy schedules to assist me in completing this research. I am grateful to my thesis committee Ruth Steiner, Andres Blanco, Dawn Jourdan, and Joseli Macedo for their support and assistance in helping me develop, refine, and produce this thesis. Finally, I must acknowledge Kate for her constant love, support, and assistance, thesis and otherwise.


4 TABLE OF CONTENTS page ACKNOWLEDGMENTS ................................ ................................ ................................ ............... 3 LIST OF TABLES ................................ ................................ ................................ ........................... 6 LIST OF FIGURES ................................ ................................ ................................ ......................... 7 LIST OF ABBREVIATIONS ................................ ................................ ................................ .......... 8 ABSTRACT ................................ ................................ ................................ ................................ ..... 9 CHAPTER 1 INTRODUCTION ................................ ................................ ................................ .................. 11 2 LITERATURE REVIEW ................................ ................................ ................................ ....... 19 Megaprojects ................................ ................................ ................................ ........................... 19 Environmental Impact Statements ................................ ................................ .......................... 25 Neighborhoods and Neighborhood Change ................................ ................................ ............ 35 Ethnic Economies ................................ ................................ ................................ ................... 39 Informality ................................ ................................ ................................ .............................. 43 Conclusion ................................ ................................ ................................ .............................. 46 3 METHODOLOGY ................................ ................................ ................................ ................. 48 Before ................................ ................................ ................................ ................................ ..... 49 After ................................ ................................ ................................ ................................ ........ 50 Before and After Comparisons ................................ ................................ ............................... 50 Business Assistance Programs ................................ ................................ ................................ 50 Limitations ................................ ................................ ................................ .............................. 51 Summary ................................ ................................ ................................ ................................ 52 4 FINDINGS ................................ ................................ ................................ .............................. 54 Demographic and Socioeconomic Data ................................ ................................ .................. 54 Business Data ................................ ................................ ................................ .......................... 56 Before ................................ ................................ ................................ .............................. 56 After ................................ ................................ ................................ ................................ 57 Tax and Revenue Data ................................ ................................ ................................ ............ 59 5 DISCUSSIO N ................................ ................................ ................................ ......................... 65 Light Rail and the Rainier Valley ................................ ................................ ........................... 65 Before ................................ ................................ ................................ ................................ ..... 67


5 After ................................ ................................ ................................ ................................ ........ 68 Tax and Revenue Data ................................ ................................ ................................ ............ 69 Business Assistance Programs ................................ ................................ ................................ 71 Changes ................................ ................................ ................................ ................................ ... 73 Summary ................................ ................................ ................................ ................................ 74 6 CONCLUSION ................................ ................................ ................................ ....................... 76 Why? ................................ ................................ ................................ ................................ ....... 76 Implications ................................ ................................ ................................ ............................ 78 Future Research and Limitations ................................ ................................ ............................ 79 APPENDIX A ESRI DATA ................................ ................................ ................................ ............................ 81 B INFORMED CONSENT FORMS ................................ ................................ ......................... 84 LIST OF REFERENCES ................................ ................................ ................................ ............... 86 BIOGRAPHICAL SKETCH ................................ ................................ ................................ ......... 89


6 LIST OF TABLES Table p age 4 1 Population in Rainier Valley and Seattle, 2000 2008 ................................ ........................ 60 4 2 Inc ome in Rainier Valley and Seattle Metropolitan Statistical Area, 2000 2008 .............. 60 4 3 Population of Foreign born and Not a Citi zen in Rainier Valley, 2000 ............................ 60 4 4 Rainier Valley Population by Race, 2000 2008 ................................ ................................ 60 4 5 Businesses by Race, Pre construction ................................ ................................ ................ 60 4 6 Bu sinesses by Race, Post construction ................................ ................................ .............. 61 4 7 Business by Type, 2003 2009 ................................ ................................ ............................ 61 4 8 In dependent Businesses, 2003 2009 ................................ ................................ .................. 61 4 9 Licensed Businesses, 2003 2009 ................................ ................................ ....................... 61 4 10 Revenue by Year, Adjusted for Inflation ................................ ................................ ........... 63 4 11 Businesses Above/Below Taxable Threshold, 2001 2008. ................................ ............... 63


7 LIST OF FIGURES Figure p age 1 1 Central Link, Airport Link, and University Li nk Segment Map ................................ ....... 15 1 2 Map of Central Link and Airport Link Segments ................................ .............................. 16 1 3 Schematic Map of Central and Airport Link Segments ................................ ..................... 17 1 4 Rainier Valley Segment of Central Link ................................ ................................ ........... 17 1 5 Satellite Image of Rainier Valley Segment ................................ ................................ ........ 18 1 6 Conceptual Model ................................ ................................ ................................ .............. 18 3 1 Rainier Valley Neighborhood ................................ ................................ ............................ 53 4 1 MLK Commercial Corridor ................................ ................................ ............................... 62 4 2 Revenue by Year, Adjusted for Inflation ................................ ................................ ........... 63 4 3 Businesses Above/Below Taxable Threshold, 2001 2008. ................................ ............... 64 5 1 Business Interruption Paymen ts, 2003 2009 ................................ ................................ ..... 75


8 LIST OF ABBREVIATION S CDF Rainier Valley Community Development Fund DEA Department of Executive Administration EA Environmental Assessm ent EIS Environmental Impact Statement FIRE Finance, ins urance, and real estate MLK Martin Luther King Jr. Way South PSRC Puget Sound Regional Council SMA Supplemental Mitigation Assistance SOV Save Our Valley


9 Abstract of Thesis Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of M aster of Arts in Urban and Regional Planning THE IMPACT OF LIGHT RAIL CONSTRUCTION ON NEIGHBORHOOD BUSINESS ACTIVITY IN THE RAINIER VALLEY, SEATTLE, WASHINGTON By Alexandre Krieg December 2009 Chair: Ruth Steiner Cochair: Dawn Jourdan Major: Urban and Regional Planning This research examines the impact of light rail construction on neighborhood business activity in the Rainier Valley neighborhood of Seattle, Washington. The Central Link light rail line tra verses 13 miles from Tukwila to downtown Seattle, with a 4.5 mile at grade segment running through the Rainier Valley. This is the only at grade segment that runs through a residential neighborhood. The line runs down Martin Luther King Jr. Way South (MLK) the income populations. The construction of this segment of Central Link included placing the light rail tracks in the middle of MLK. Major construction operations lasted for 44 months, and greatly reduced access and parking along MLK. The literature review situates these issues in megaproject, environmental review, neighborhood change, ethnic economies, and business informality literatures. A before and after study design th at utilizes demographic, socioeconomic, and data related to the businesses along the MLK corridor establishes neighborhood business activity in the Rainier Valley pre and post construction. The role of business assistance programs in place during the cons truction process is also considered. Findings from the data suggest that the character of the businesses i.e. small


10 scale, minority owned, independent, and ethnic serving has largely remained the same. The businesses appear to have formalized, however, as measured by the proportion of businesses with business licenses and the increase in the number of businesses identified by the Seattle agency responsible for taxing and licensing. The findings suggest that the conditions for receiving financial assistance necessitated the formalization of businesses so that they could survive the construction process.


11 CHAPTER 1 INTRODUCTION In 1996, voters in King County and portions of Pierce and Snohomish Counties, Washington, adopted a long range regional transportatio n plan known as Sound Move. Sound Move was designed to address rising levels of traffic congestion by making strategic investments in high occupancy vehicle lanes, commuter rail, and a light rail system. The light rail system was the largest new constructi on portion of Sound Move. Upon completion, light rail would cover almost 20 miles, stretching from the Seattle Tacoma International Airport to the University of Washington. The system, known as Link (Figure 1 1), consists of three segments: the 13.9 mile C entral Link segment between Tukwila and downtown Seattle, which opened in July 2009; the 1.7 mile Airport Link that will connect the Seattle Tacoma International Airport with the Tukwila station and downtown Seattle in December 2009; and the 4.1 mile Unive rsity Link segment that will connect downtown Seattle with the University of Washington through the Capitol Hill neighborhood, scheduled to be completed by 2016. The Central and Airport Link segments are a sophisticated system. The line runs underground b eginning and terminating in the Downtown Seattle Transit Tunnel. It runs at grade through the SoDo neighborhood, before elevating and running through the Beacon Hill tunnel. After exiting the tunnel, it runs at grade for 4.5 miles through the Rainier Valle y. It elevates at the city limits until it reaches the Seattle Tacoma International Airport Despite the sophistication of the system, the impacts from the construction of Central Link light rail were not especially widespread. Central Link utilizes the D owntown Seattle Transit Tunnel, which was built in 1990. The use of the Transit Tunnel minimized construction impacts in the central business district. Proceeding south from the Downtown Transit Tunnel, Central Link runs at grade with a stop at the basebal l and football stadiums and one in the SoDo


12 neighborhood. This area is primarily industrial in nature, and created few impacts to human populations. From SoDo, Central Link enters the Beacon Hill tunnel, perhaps the most sophisticated portion of the light rail line (the Beacon Hill station is 160 feet underground). From the Beacon Hill tunnel, Central Link stops at the elevated Mount Baker station, before proceeding for 4.5 miles at grade on Martin Luther King Jr. Way South (MLK) Beginning at the Boeing Access R oad, Central Link elevates again, running approximately five miles, partly alongside I 5, to the Tukwila International Boulevard station. Central Link continues elevated for another 1.7 miles before terminating at the Seattle Tacoma International Airport. Figures 1 2 and 1 3 show the actual and schematic maps of the Central Link light rail system. Construction related impacts to human populations were less widespread than they might have been. Utilizing the Downtown Seattle Transit Tunnel prevented large s cale impacts downtown. The at grade portion just south of downtown Seattle traverses industrial areas, largely devoid of residential and business populations. The Beacon Hill tunnel section created massive engineering impacts, but confined construction act ivities below ground and within the immediate vicinity of the station. The elevated sections from Boeing Access Road to the Seattle Tacoma International Airport largely avoid populated areas and parallel major roads, which created traffic disruptions, but little else. The Rainier Valley segment resulted in the most direct and indirect construction related impacts. The decision to build a 4.5 mile at grade segment of Central Link in the middle of MLK necessitated the recon struction of this major north south arterial roadway to accommodate light rail running in both directions. Construction severely disrupted traffic, minimized access, and created congestion on MLK. Because MLK functions as a commercial corridor for the resi dents


13 of the Rainier Valley, there was also concern that a multi year construction project would undermine the businesses along MLK. The Rainier Valley (as defined by Figure 3 1) is a diverse, working class neighborhood in Southeast Seattle. Data from th e 2000 Census demonstrate just how diverse the neighborhood is: 41.6% is Asian, 22.3% is Black or African American, 24.4% is White, with the remainder made up of Hispanic and other ethnic groups. Furthermore, 38% of the population of the Rainier Valley is foreign born. Median income based on 2000 Census data show that the median income in the Rainier Valley was $42,993. This figure is 65% of the $65,800 median household income of Seattle Metropolitan Statistical Area in 2000. The decision to build light ra il at grade in the middle of a major Rainier Valley commercial corridor created tension between the neighborhood and Sound Transit, the regional transit agency responsible for constructing Central Link. One group of residents, called Save Our Valley (SOV) advoc ated a tunnel option for the Rainier Valley, arguing that an at grade system would divide the neighborhood and would create inequitable noise and vibration impacts (Save Our Valley, 1999a). A tunnel proposal was considered within the final Environmental Im pact Statement prepared for the project, but was ultimately rejected because of the added cost The final route selected for the Rainier Valley was a 4.5 segment running in the middle of the now 93 foot MLK Figure 1 4 and Figure 1 5 show the placement of stations on MLK and a satellite image of the Rainier Valley. In an effort to mollify the community that would arguably feel the greatest impacts from light rail construction, Sound Transit proposed the creation of a community development fund, capitalized with $50 million to assist the businesses impacted by light rail construction, and to promote transit oriented development in t he Rainier Valley.


14 Construction began in July 2004 and most major construction activities were completed by March of 2008. The purpose of this thesis is to examine the impact that light rail construction has had on neighborhood business activity in the R ainier Valley, specifically along the MLK corridor where light rail has been built. Residential demographic and socioeconomic data are examined for pre and post construction periods. The specific changes between the businesses open and operating in July 2 003, a year before light rail construction began, and the businesses open and operating in August 2009 are assessed. The impact of the business assistance programs in influencing the trajectory of business activity along MLK is also considered. Figure 1 6 shows the conceptual model used for this research. In the model, the construction of the light rail system acts as a catalyst resulting in a change in neighborhood business activity. The model also considers the impact that the various business assistance programs, which resulted from the decision to construct Central Link down MLK, had on neighborhood business activity. change in this activity would look like. Nei ghborhood business activity is a term specific to this research, and refers to the primarily small, minority and immigrant owned businesses that line the MLK corridor. It further refers to the informal nature of the businesses along MLK. This is not to im ply that every business on the corridor is informal, or even minority or immigrant owned, but that informality and ethnic ownership are characteristics of the business community. A change in this business activity would mean a shift away from small, indep endent, and minority and immigrant owned businesses. It would also mean a move toward business formality and regularization. The hypothesis, then, is that the construction of Central Link light rail changed neighborhood business activity in the Rainier Va lley in such a way that there are


15 fewer small, independent, minority and immigrant owned businesses, and that businesses are more formalized. The study will provide a comprehensive accounting of if and how neighborhood business activity has changed as a r esult of light rail construction. Chapter 2 considers the appropriate literature to address this topic, ranging from megaprojects and Environmental Impact Statements to issues of neighborhood change, ethnic economies, and business informa lity. Chapter 3 o utlines the methodology used as well as the methodological issue s in this research. Chapter 4 presents findings from the assembled data. Chapter 5 offers interpretations of the data, and comments on the efficacy of the business assistance pr ograms put in p lace. Chapter 6 offers a conclusion, and points a way forward for future research as Central Link light rail begins operations in the neighborhood. Figure 1 1. Central Link, Airport Link, and University Link Segment Map (Sound Transit, 2009)


16 Figure 1 2 Map of Central Link and Airport Link Segments (Sound Transit, 2009).


17 Figure 1 3. Schematic Map of Central and Airport Link Segments (Sound Transit, 2009). Figure 1 4. Rainier Valley Segment of Central Link (Sound Transit, 2009).


18 Figure 1 5. Satelli te Image of Rainier Valley Segment. Figure 1 6. Conceptual Model.


19 CHAPTER 2 LITERATURE REVIEW The construction of a light rail system and its impact on neighborhood business activity covers several distinct areas of the planning literature. This chapter examines five topics germane to this research. The first section looks at the literature on megaprojects massive, usually publicly financed infrastructure projects. The role of Environmental Impact Statements are discussed in the context of megaprojects g enerally and the Central Link light rail system specifically. Following this, the concepts of neighborhood and neighborhood change are considered. Next, the literature on ethnic economies is reviewed. Finally, the literature on business informality is exam ined. The literature is structured such that the level of analysis becomes more local with each subject considered. The megaproject literature looks at the political process and region wide benefits and localized impacts of proposed developments. Environm ental Impact Statements are used to assess potential local impacts from often massive development projects. The literature on neighborhoods focuses on that spatial scale. Ethnic economies are located within neighborhoods, and can be important components of these places. The section on business informality occurs at the firm scale, and examines what it means for individual businesses to not be part of the formal economy. The conclusion of the chapter articulates why these seemingly disparate literatures were reviewed, and how they inform the research question. Megaprojects All newly built transportation systems are megaprojects. The investment and infrastructure necessary for constructing these systems carry huge costs and result in both region wide benefits and localized impacts. While there are frequent deliberations on how these systems will be built and whom they will serve, once completed they have obvious beginning and end points, and are


20 part of a larger transportation network. A fundamental issue with the implementation of transportation projects is who pays for them and who benefits from them. Costs are typically measured in the time spent constructing the system, the financial outlays necessary for materials and labor, and the local impacts that are a result of the construction process. Benefits include a reduction of network wide congestion, reduced travel times, and the potential for investment opportunities because of new systems. Development projects of this size are a massive undertaking, befitti ng the term used to describe them: megaprojects. Megaprojects do not have a universal definition, but for the Rothengatter, 2 003, p. 3). existence, rather than the impacts wrought by megaproject development. Successful megaproject terns of initiative, support, and sector in initiating megaproject development, and includes generating support from within the local area as well as obtaining funding from higher levels of government. Altshuler and Luberoff advocating for megaproject development, and must include business interests. Altshuler and Lub eroff (2003) use the metaphor of venture capitalists to describe the relationship between the public entrepreneur and business interests, in which the public entrepreneur approaches business


21 leaders with a megaproject development, attempting to sell them o n the project. Enthusiastic support of a megaproject development from the business community greatly improves the chances of success. the desire to preserve (and whe re possible enhance) urban amenities and in place social proposed megaproject creates any negative impact on their lives. The support and resistance speaks to the abi lity of either group to act on behalf of a proposed megaproject; whereas business support coalitions can be especially influential in the passage of a megaproject, neighborhood / environmental groups can be similarly influential in its failure. This dichotom y is responsible for the emphasis on creating projects that minimize any negative impacts. The emphasis on successful megaproject development is shepherding a potential project through a political process in which initiative and support are enough to obvia te any resistance to a project. The calculus for winning approval of transportation megaprojects varies based on the mode. Because this study examines the construction of a rail based system, the literature here looks only at rail megaprojects. For rail ba sed transportation projects, it is necessary for megaproject promoters to demonstrate both cost efficacy and that there is demand for a proposed rail system (Flyvbjerg, et al., 2003). But because of the reality of megaproject construction, achieving approv al for and funding of megaproject development is based on contingent projections and the uncertainty inherent over long time horizons. To achieve support for a megaproject development, supporters typically advertise cost estimations that do not comport wit h reality (Flyvbjerg, et al., 2003). Cost overruns occur


22 because initial estimates of costs do not account for the risky nature of megaproject development and because they ignore certain realities: The length and cost of delays are underestimated, continge ncies are set too low, changes in project specifications and designs are not sufficiently taken into account, changes in exchange rates between currencies are underestimated or ignored, so is geological risk, and quantity and price changes are undervalued as are expropriation costs and safety and environmental demands. Many major projects also contain a large element of technological innovation with high risk. Such risk tends to translate into cost increases, which often are not adequately accounted for in initial cost estimates ( Flyvbjerg, et al., 2003, p. 12) Data suggest that cost overruns are endemic to transportation megaprojects. One comprehensive study examined the estimated and actual costs in transportation megaprojects, and considered 258 projects over a period covering 70 years (Flyvbjerg, Holm, & Buhl, 2002). underestimation of costs at the time of decision to build is the rule rather than the exception for 2002, p. 282). The reasons for these inaccurate cost forecasts are hard to pinpoint, and are exacerbated by strategies of project promoters to maintain the appearance of low costs. Some strategies include initially disregarding safety and environmental considerations that must be considered once the disincentives for cost underestimation and thus for cost overrun [that] may have taught project (Flyvbjerg, et al., 2003, p. 16). T he reasons for cost overruns themselves are less consequential In terms of cost overruns, Sound Transit, the regional transit agency responsible for the con struction and operation of Central Link light rail, is proud of the fact that they have brought


23 Central Link to completion on time and under budget. The May 2009 progress report for Link light rail issued by Sound Transit shows a difference of $705 million between the adopted budget ($2.07 billion) and the total committed to date ($1.995 billion) (Sound Transit, 2009). While the significance of this fact should not be downplayed especially considering the findings within the literature it should be noted th at the original light rail system passed by voters in 1996 was anticipated to cost $1.8 billion and span 25 miles. Demand forecasts and cost overruns go hand in hand. Cost estimates are contingent on a certain level of demand, meaning that for a cost es timate to be accurate, demand thresholds must be met to achieve those costs. If cost overruns occur, the demand predicted will no longer justify the costs of the project. This fact is doubly true when demand forecasts themselves have been inflated. Inaccur ate demand forecasts seem to be especially prevalent when it comes to urban rail. Flyvbjerg, et al. (2003) cite a United States Department of Transportation study that found cast ridership, meaning that forecasts overshot actual development by 38 to 578 per cent (average 257 per the divergence between forecast and actual alternatives that were compared, making it extremely unlikely that a rail project would have prevailed in the presenc rail infrastructure are highly, systematically, and significantly misleading (inflated). The result is


24 The structure of rail transit finance in the United States helps to create the conjoined issue of cost overruns and optimistic demand forecasts. Much of the funding for rai l based megaprojects comes from the federal government in the form of capital grants (Taylor, 2004). encouraging systems to replace labor with capital even when it is un 2004, p. 321). Politically, capital investments in rail are attractive because they appeal to politicians (in their high attract media attention; more fre quent service on a local bus line resulting from increased federal Thus, a situation where project proponents have learned that low cost estimates coupled with optimistic demand projects in a c ontext where federal grants emphasize capital creates a perfect storm of expensive, inefficient, and underused rail systems. This creates an incentive for cities to make their projects look better on paper in terms of costs and benefits, or else some other [suggesting that] the project may be started despite the fact it is not economically itself to yield higher returns than the project started, had the ac tual costs and benefits to both projects been known. Both cases result in result in inefficient use of of economic efficiency alone the argument that cost underestimation a nd benefit overestimation are justified must be rejected. (Flyv bjerg, et al., 2003, pp. 46 47) more megaprojects are built despite the poor performance record o et al., 2003, p. 6). And while the literature does little to explicate the equity questions between regional benefits and localized impact, the fundamental argument for a megaproject is that the regional benefit outweighs the l ocal impact. The literature suggests that the benefits promised from megaproject development are rarely what they purport to be. Therefore, neighborhoods where megaprojects are built experience no benefits from them, because they experience the


25 disruption associated with construction and an inefficient final product. What the literature does not do, however, is examine localized impacts from megaproject development to determine costs and benefits at this scale, and how procedural shortcomings affect local i mpacts. Environmental Impact Statements With the establishment of the National Environmental Policy Act (NEPA) in 1970, a framework for reviewing and mitigating the anticipated impacts from federally funded projects (and megaprojects) was created. Dependin g on the scale, governmental entities complete either an Environmental Assessment (EA) or an Environmental Impact Statement (EIS). The purpose of completing either process is to assess the possible impacts from a given project, and determine if the outcome of said project outweighs the impacts from its construction. If this is the case, measures are devised to minimize these impacts. EAs are documents less comprehensive in icient with NEPA when no EIS is required, [and] facilitate[] preparation of an EIS when one is An EIS will occur becaus e it is required (independent of the completion of an EA) or because the EA determines that a more thorough review of the expected impacts is necessary. An forcing device to ensure that the policies and goals of NEPA are incorpor & Herson, 1993, p. 43). The process of compiling an EIS is lengthy and frequently involves the collaboration of several governmental entities. The steps in the preparati on of an EIS include selecting the lead agency, conducting the scoping process, preparing the draft EIS, holding public review on the draft, preparing the final EIS, and adopting the final EIS (Bass & Herson, 1993, p. 48).


26 It is not uncommon for the adopt ion of a final EIS to take one year or longer. The work of preparing an EIS focuses on the anticipated impacts from a federally funded project. An EIS is functionally a predictive document that is based on the best guesses of a variety of actors involved w ithin the context of the proposed project. While much of the preparation process of an EIS attempts to identify probably impacts from a project and determine the best mitigation measures, there is not an equivalent process for the ongoing monitoring and au diting of both actual impacts and the mitigation of predicted impacts. The language in NEPA is decidedly weak in ensuring the implementation of mitigation activities and ongoing monitoring of these activities. In the federal statutes regarding the Record o f Decision (ROD), the final part of the preparation of an EIS, NEPA requires that the ROD alternative selected have been adopted, and if not, why they were not. A monitor ing and adopting a monitoring and enforcement program. Removing this phrase empowers the statute: Another section addresses monitoring and is similar in its less than compelling language: Agencies may provide for monitoring to assur e that their decisions are carried out and should do so in important cases. Mitigation (Sec. 1505.2(c)) and other conditions established in the environmental impact statement or during its review and committed as part of the decision shall be implemented b y the lead agency or other appropriate consenting agency (40 C. F. R. §1505.3) lackadaisical implementation. Parsing the language again demonstrates that creating a monitoring system for mitigation efforts is to the discretion of whichever agency completing the may


27 completing the EIS, the agency does not have to put in place a progr am that determines the efficacy of the mitigation. The lack of strict guidelines for the implementation of mitigation measures and monitoring programs unfortunately means that, however well intentioned lead agencies are in addressing impacts from projects enforcement of appropriate mitigation efforts is not required and therefore not always pursued. The Council on Environmental Quality (CEQ) established relatively simple actions to mitigate impacts: to avoid; to minimize; to rectify; to reduce; and to com pensate (Bass & Herson, 1993, p. 75). Unfortunately, the practice of mitigation, and the 75). Rather than the direct verbs listed above, mitigation measures in EISs use terms including Herson, 1993, p. 75). What is similarly problema decision stages and on preparation of the EIS, using [EA] purely to achieve development consent rather than as a tool The evolution of the EA process created a paradoxical situation where money, time, and energy et al. 1998, p. 733). looking, predictive decision paperwork exercise and et al., 1998, p. 734) that must be cleared for a project to continue.


28 Several articles have considered ways to improve monitoring in the EA process. One environmental protection restoration, enhancement, and mitigation efforts that must be monitoring mitigation strategies were written in a general manner, posing a challenge in identifyin g specific decisions, plans, and policies that might serve as evidence of implementation. While some of the strategies were relatively specific, a number of them failed to articulate the intent and desired 558). The failure to adequately articulate Furthermore, while greater attempts were made to enforce mitigation and monitor implementation, there was not one determining source of information on implementation, which Slotterback, 2008, pp. 557 559). The issue of a single implementation document guiding monitoring efforts that process itself, is comparable to another strain of EA literature that emphasizes standards and thresholds in the post EIS phase. Because EA is a means to allow or not allow projects based on anticipated impacts, there is always a measure of uncertainty in the process itself. Furthermore, the actual project approved in the EA process may evolve based on what occurs once ground is


29 recommendations on validating compliance of uncertain impacts from an imprecisely defined activity with ever The key determinant in this line of thinking is that there is a shift from predicted impacts to actual, physical impacts once a project begins. Relying solely on an EIS for follow up and monitoring allows for the possibility that actual impacts will be ignored: Firstly, we are dealing with actual rather than planned or predicted phenomena, which naturally give us more certainty in determining whether a particular standar d or threshold is met. Secondly, these standards and thresholds assume a very high degree of specificity They relate to certain components of given ecosystems and/or to specific facilities or activities. Thirdly, the standards and thresholds in this conte xt are often management rather than science oriented, in particular relating to targets and objectives rather than on impacts which are normally difficult to trace and verify (Cherp, 2008 p. 443, emphasis original) Rather than prioritizing the predictive aspects of EA, anticipating impacts, and thus emphasizing the inherent uncertainty of the process, policymakers should focus on establishing environmental management plans (EMP) that operationalize the EIS and allow for adaptation to conditions on the gro measures and arrangements such as budgets, timelines and responsibilities designed to ensure e the successful integration of an EMP in the post EIS/implementation phase, securing a budget is essential (Cherp, 2008). Another concern of the uncertainty dynamic in EA is that the technicians responsible for preparing the EIS for policymakers to revie w do not clearly articulate the level of uncertainty in makers get only limited access to information about the input data and assumptions used in the (Tenny, 2008, p. 450). Fortunately, a comprehensive review of the post audit


30 et al. 1998, p. 741). The concern remains processes poses different challenges on follow up and post unmitigated (Tenny, 2008, p. 458). A pattern of po or communication of the uncertainty of impacts and the adoption of poorly predicted impacts can create mistrust among policymakers (Tenny, 2008). If widespread, the entire EIA process is undermined. Conversely, if the uncertainty of anticipated impacts is clearly known, the possibility exists that policymakers will vest the findings with less importance. Similarly, policymakers are entrusted with deciding how to proceed based on incomplete environmental information. It is, therefore, difficult to create st andards based on highly contingent and uncertain information, and made even more difficult when these decisions fall to aiding, nes, Slinn, & Wood, 2007, p. 293). This situation also strengthens the argument for ongoing monitoring and auditing of the events on the ground: accuracy of informatio n supplied to the decision making process will remain largely unproven, Another means of addressing the inadequate monitoring of impacts is to more closely tie EA with the general planning structure. The desire to avoid the preparation of an EIS is understandable; it is a lengthy process involving many agencies at different levels of government and the public at large. When they are undertaken, however, there is frequently a missed


31 opportun ity in integrating both the process and the findings to the local planning framework. As [A]s planners begin to think about environmental review as a tool to support planning efforts, rat her than simply a tool to assess discrete development proposals, there may be an opportunity to more fully and consistently integrate the two efforts using environmental review information to inform the future land use plan and the content of the natural resources element. In addition, environmental review mitigation measures in the environmental review document and that are then in the implementation section of a community's c omprehensive plan (p. 560) Integrating local planning efforts with a federally required environmental review process may prove to be an invaluable shift in how impacts are mitigated. The next section examines the Environmental Impact Statement prepared for the construction of Central Link light rail in Seattle. Particular attention is paid to how identified impacts were to be mitigated. Central Link Light Rail EIS Sound Transit, the regional transit agency that built the Central Link system, was respons ible for preparing the EIS, the final draft of which was released in November of 1999. S ound Transit 1999, p. S 3). The focus here is on Segment D, which covers the MLK corridor. In Segment D, light rail will run at is 5 to 6 percent or less and there is adequate room within reserved street right of way or off S ound Transit 1999, p. S 6). The preferred alternative, and the route design eventually selected, has the at grade line running along the median of Martin Luther King Jr. Way South (MLK) where it elevates just before the Mount Baker station.


32 Before summarizing the environmental consequences that light rail construction would S ound Transit 1999, p. S 21). Perhaps inauspicious ly, despite mentioning the various studies considered, the response to comments, and the use of preliminary studies in the preparation of the final EIS, there is no mitigation plan. In the preferred alternative ts to transportation, property acquisition, non S ound Transit 1999, S 26). The EIS subsequently lists the impacts from the preferred and other alternatives stion at intersections, access and circulation, changes to bicycle and S ound Transit 1999, pp. S 26 27). The brief mentions of how these impacts would be mitigated seem reasonable, and the impacts range from an addit ional minute in travel time along MLK to the increased walking distance of pedestrians who must know cross at signalized crosswalks. An impact given only cursory consideration in the Executive Summary of the final EIS is residential and business displacem ents. The preferred alternative would require the acquisition of 84 properties, with the other alternatives requiring a range between 63 and 191. Mitigation in this area is described as such: Overall, land use and economic impacts would be lower for the D1 .1 alternatives [including the preferred alternative] and for Alternative D1.3, compared to D3.3 or D3.4. In all alternatives, displaced single family residences would likely be replaced by multi family and retail/commercial uses, increasing the density of development in the corridor. Each of the station areas in this segment may be developed or redeveloped into denser, more intensive, transit supportive land uses, as proposed in the Draft Southeast Seattle Neighborhood Plans. For all Segment D alternatives some businesses may incur economic losses as an indirect effect along MLK Jr. Way S. and Rainier Avenue S. These potential impacts could be countered by redevelopment in the vicinity of displacements and increased activity in station areas ( S ound Transit 1999, p. S 27)


33 In a section that follows on the significant unavoidable adverse impacts, the only references made regarding the preferred alternative in Segment D are the residential and business by the construction of light rail ( S ound Transit 1999, pp. S 33 S 34). The primary mitigation program offered by the EIS the impacts to businesses from light rail construction was the creation of a $50 million community development fund. The initial local fund to support light rail related community development, ridership and appropriate mitigation activities in th S ound Transit 1999, p. S 5). A more descriptive passage later in the EIS mirrors the earlier discussion of poorly articulated mitigation programs: As part of the preferred alternative, the Sound Transit Board has proposed to establis available to mitigate impacts of building and operating the light rail preferred alternative in southeast Seattle. The fund could be used to increase ridership and improve the community. The funds can be used to leverage local, state and federal dollars for transit related and supportive investments. A community advisory panel would be established to set priorities and make recommendations to the Sound Transit Board for application of the fun d. The Fund will be available to the community for physical and economic improvements to the southeast Seattle light rail corridor ( S ound Transit 1999, p. 4 36) could be used fund itself, now known as the Rainier Valley Community Development Fund (CDF) was established in 1999, it did not begin operating until 2002, three years removed fro m the publication of the final EIS. While the Central Link Final EIS demonstrates some of the unfortunate habits related to imprecise mitigation activities, especially related to the businesses along MLK it does attempt to address gen eral planning activities occurring in the impacted areas. It accomplishes this at


34 varying levels: because the construction of light rail is an attempt to bring a regional benefit through improved connectivity between regional destinations and lessening tra ffic congestion, an statewide plans ( S ound Transit 1999, p. 4 light rail system, in general, is consistent wi th the land use goals and objectives of all S ound Tr ansit 1999, p. 4 15). After the preferred alternative light rail route was selected, the City of Seattle began a process to update the Neighborhoo d Plans of the various neighborhoods that would soon have light rail. This process has begun again as the operation of light rail approaches (N. Liu, personal communication, March 12, 2009). The EIS for Central Link light rail demonstrates certain traits evident in the literature, but not others. While the EIS required the creation of a $50 million community development fund, it did not specifically require how that money would be used. Further, the language describing the impacts from both light rail cons truction and light rail operation was vague. And while the proposed community development fund was ostensibly the primary mitigation against the anticipated impacts, it is doubly problematic when both the anticipated impacts and the primary mitigation meas ure are not clearly articulated. There was also no indication of a monitoring infrastructure for impacts identified in the Environmental Impact Statement. There was, however, evident coordination with various planning documents at state, regional, and loca l levels within the EIS. While the construction and environmental review process of transportation megaprojects is crucial in understanding how these megaprojects become a reality, context is paramount. The process in establishing transportation megaproj ects produces tremendous consequences for the


35 places where they are situated. The following sections examine the physical contexts related to this research and help to elucidate the areas that light rail construction would affect. Neighborhoods and Neighbo rhood Change It is difficult to create a universal spatial definition for a neighborhood. As spatial units, neighborhoods are singular to the physical and social processes of the cities they are within. The characteristics that make up the physical (stree t network, building type, quality of infrastructure) and social (land use, demographic and socioeconomic character) processes are different from city to city and neighborhood to neighborhood. It is possible, however, to say that neighborhoods households, businesses, property owners, community groups, and the government; all these 2113). The physical characteristics and social processes define the spatial context of a neighborhood. These characteristics and processes are on a spec trum where one end represents static and the other end represents dynamic. Certain physical characteristics like building type or street network stay relatively stable over time. The land uses and demography of neighborhoods, however, are more likely to un dergo shifts in shorter periods of time. As a result of this dynamic, Galste predictions about future changes in these less durable features will play a major role in determining decisions about mobility, financial investmen ts and material culture neighborhoods as commodities means that actors pref er short term benefits


36 to longer term payoffs when considering neighborhoods. Another assumption that Galster (2001) makes is that neighborhoods are dynamic: Neighbourhoods would change (i.e. their attributes would be altered) based on the risk laden decis ions by consumer/producers that influence the on going flow of resources to a neighbourhood. These decisions are based heavily on relativistic, interneighbourhood comparisons and futuristic expectations embedded within a highly interactive, multiactor cont ext. (p. 2117) The link to these assumptions is that while neighborhoods are dynamic, and thus constantly changing in some capacity, the influential forces behind this dynamism are the less durable features that influence resource flow. As much as reside nts, property owners, businesses, and government consume neighborhoods, these actors are similarly responsible for the production of neighborhoods: Households consume a neighborhood by choosing to occupy it, thereby producing an attribute of that location status, civil behaviours, participation in local voluntary associations and social networks, and so forth. Property owners consume a neighbourhood by buying land and/or buildings in it; they subseque through their decisions regarding property construction, upkeep, rehabilitation or abandonment. Business people consume a neighbourhood by operating firms there, thereby producing attributes related to structure types, land use, pollution and accessibility. Local governments consume neighbourhood by extracting property tax revenue and, in turn, produce attributes associated with pub lic services and infrastructure. (Galster, 200 1, p. 2116) The result of this activi ty within a spatially defined context is a highly differentiated, and at times specialized, flow of resources into and out of neighborhoods. The decisions by the various participants within the neighborhood context are determinative of the direction that a neighborhood takes. While Galster (2001) claims that changes in neighborhoods occur because neighbourhood changes are externally induced sis original ). The most influential external change that Galster (2001) identifies is the metropolitan


37 neighborhood change. Filtering refers to the idea that as housing stock age s, fewer resources are invested in their maintenance, while new housing is constructed on the periphery of developed areas. Income groups filter through these various housing stocks, relative to their purchasing power (Galster, 2001; Temkin & Rohe, 1996). The construction of new housing affects the wide equilibrium is restored, the model predicts a series of changes in demographic and physical attributes of neighbourhoods constituting sub mark Temkin and Rohe (1996), like Galster (2001), take a materialist view of neighborhoods position itself favorably with external sour ces of financial, political, and social resources and that this ability is largely dependent on the physical, social, and locational characteristics of the from e process in which neighborhoods are involved in a competition for scarce resources necessary to promote neighborhood stability bounded by the political and social environm ent of the 166). changes in national economic and social conditions and policies; and metropolitan area maturation (p. 1 65). The characteristics of the individual neighborhoods where these forces are operationalized determine the impacts of them. Typically, however, the various components the street network, the level of community cohesion, or the economic conditions of a n eighborhood are necessary, but not sufficient, conditions for maintaining the stability of a neighborhood in the face of the outside forces (Temkin & Rohe, 1996, p. 167). The key


38 s rejection of any citywide change is distributed across neighborhoods as residents of neighborhoods interact with p. 168). Both Temkin and Rohe (1996) and Galster (2001) are quick to point out that neither side always has access to information that might result in different outcomes. If decision makers do not understand the particular intricacies of a neighborhood, Rohe, 1996, p. 168). Relatedly, residents of a neighborhood may misjudge what is actually happening in their neighborhood to the d etriment of the community. Galster (2001) uses the example of a panic in home sales. If residents believe that a neighborhood is declining, they may attempt to sell their homes. They may accept below market prices, spurring the same belief among their neig hbors, leading them to also sell their homes. Galster (2001) uses this example to point out two characteristics of neighborhood change: the inefficiency possible in the neighborhood change process; and the non linearity of neighborhood change. The panic e xample demonstrates just how inefficient an allocation of resources panic behavior is (Galster, 2001). Panic also produces different outcomes depending state t o another is often non neighborhoods and neighborhood change occur because of the decisions of various actors and agents, these decisions can influence the behavior of everyone else, culminating in panic behavior or self


39 The reality is that neighborhoods are contingent by nature and the process by which they change is rarely predictable or efficient. Furthermore, the line between external forces and internal change is unclear. In the Rainier Valley context, the construction of light rail was undertaken by the local transit agency, a governmental entity. Seemingly though, from the reactions of residents and businesses, this was an external change foisted upon them. of actors more so than mo re stable features like the street network or infrastructure quality. The construction of fixed rail necessarily changes these stable characteristics, and will undoubtedly affect the less durable features as well. Galster (2001) does not consider how this might affect a neighborhood or the process of neighborhood change. Regardless, the inherent dynamism and contingency of neighborhoods requires the cooperation and coordination of many diverse actors and interests for healthy neighborhoods, whether they are stable or undergoing dramatic change. Ethnic Economies The concern behind the construction of the Link light rail system through the Rainier Valley was that scope and duration of the construction process would imperil the existing, and largely independen t and ethnically owned, businesses along the alignment. Because of the racial and ethnic composition of the businesses along the MLK corridor (to be covered in more detail in Chapter 4), it is necessary to discuss the role that ethnic econom ies play to the individuals and businesses within them and the larger spatial context where they are situated. The concept of ethnic economy is fluid. Indeed, the literature itself utilizes a litany of by or including other terms to describe this phenomenon. Light and Gold (2000) describe three that is clustered around a terri employed,


40 controlled mainstream economy The establishment of ethnic economies typically results from the inability of ethnic and disadvantages associated with immigrant status, such as poor English proficiency and the 2004, p. 1047). Barriers to the mainstream economy mean that ethnic minorities and immigrants face fewer options in terms of economic advancement, and frequently leave participation in an et sheltered ethnic economy, workers may find employment despite their deficits (such as poor English, lack of formal education, or unfamiliarity with the labor market), while those with better qualifica Stults 2003, p. 348). While working within an ethnic economy or operating a small business in a minority ethnic entrepreneurship would not enhance ethnic economic welfare so much as would economic incorporation into the wage earning mainstream. Wage jobs in the mainstream are deemed more likely to pay more than ownership of small businesses, and jobs outside the ethnic community are deemed better than jobs within it" (Light & Gold 2000, p. 11). Indeed, the jobs and/or entrepreneurship opportunities available to those within an ethnic economy typically require more labor power: businesses operate with relatively low capitalization, relying in part for their profitability on the long hours that self employed people are willing to commit to work (i.e. self et al. 2003, p. 349). Ethnic entrepreneursh ip may not


41 impart equal levels of income and benefits as mainstream economic employment on minorities, status recognition, nurturing entrepreneurial spirit, prov iding role modeling that inspires others to 2004, p. 1060). On an individual level, the above quotations are likely true. It is important to recognize, however, the benefits that an ethnic economy confers on the community both as a physical and social construct can be great. As it relates to ethnic enclave economies, locational clustering y to generate more money for participants than the participants would have been able to obtain 2000, p. 15). This clustering brings something resembling a monopolistic advantage to an ethnic enc lave economy where 2000, p. 24). Beyond the benefits felt by individual member s of ethnic economies and communities as a whole, the locational concentration of businesses inherent within an ethnic enclave economy spawning further business development, (2) the promotion of ethnic identity through cultural dominance of an area, and (3) the development of an export platform from which ethnic firms 1990, p. 113). The difficult y in achieving this type of success from an ethnic economy is that the physical contexts communities where business is strictly neighborhood linked is that the ethnic mark et can support


42 only a limited number of firms in part because it is quantitatively small, and in part because the et al., 1990, p. 112). For continuing success and expansion of a n ethnic economy into the mainstream economy, businesses must grow and serve larger markets beyond the ethnic enclave where they are found (Waldinger, et al., 1990). Successful ethnic enclave economies are crucial in creating opportunities for t he members of minority and immigrant groups. Moreover, the very existence of an enclave in which an ethnic economy can develop has important consequences for minorities and immigrants that the enclave is more than just a shelter for the disadvantaged who are forced to take on either self employment or marginal wage work in small business. Rather, the ethnic enclave possesses the potential to develop a distinct structure of economic oppo rtunities as an effective alternative path to social 2004, p. 1045). As an ethnic enclave economy first develops, the relationship between the entrepreneurs, businesses, and members of the enclave are essential for the growth of the economy and the dispersion of the benefits associated with them. A successful ethnic enclave economy includes the following characteristics: First, the group involved has a sizeable entrepreneurial class. Second, economic activities are not exclusively commercia l, but include productive activities directed toward the general consumer market. Third, the business clustering entails a high level of diversity, including not just niches shunned by natives but also a wide variety of economic activities common in the ge neral economy, such as professional services and production. Fourth, coethnicity epitomizes the relationships between owners and workers and, to a lesser extent, between patrons and clients. Last and perhaps most importantly, the enclave economy requires a physical connection within an ethnically identifiable neighborhood with a minimum leve l of institutional completeness. (Zhou 2004, p. 1044) As one part of the larger ethnic economy framework, the ethnic enclave economy presents a specifically spatial cont ext for the working out of ethnic economic activity. In doing so, though,


43 labor market segmentation upside down, unveiling a set of nuanced ideas so unconventiona l and 2004, p. 1045). Informality Informal economies and informal economic activities are common both to ethnic economies and economies in general. This section introdu ces the concept of economic informality, briefly discusses what it means for informal businesses to formalize, and what this might mean for informal businesses in the Rainier Valley. An informal economy exists in relation to the formal economy that it dep arts from. While there is not a rigid definition of what an informal economy is, they all share a common feature, in because there is a formal economy (i.e., an institutional framework of economic activity) that we Because informal economies exist in relat ion to formal economies, there is a great deal of variation between informal economies across local, state, and national borders. There are informal economies in both the United States and in Colombia, for example, but the size, shape, and activities produ ced in these informal economies depend on the regulatory framework that underpins the formal economy. Because regulations of the formal economy vary greatly from place to place, informal economies are incredibly heterogeneous. Moreover, informal economies can vary within state and national boundaries as well, depending on how state and local economies are regulated.


44 The two general features of informal economies are that they exist because of the existence of a formal economy and that they are heterogeneou s and context specific. Despite the fact that these two fundamental characteristics make it difficult to generalize about other features small scale, avoidance of state regulat Benton, 1989, p. 2). The small scale of informal businesses allows for liminality between the informal and formal economies. Very small businesses may technically be a part of the fo rmal provide the most appropriate setting for casual hiring, unreporting of income, and other informal ses are also in a much better position to become totally informal than businesses with more employees (Castells & Portes, 1989, p. 21). Immigrant communities, especially in the United States, are commonly sites for informal vide much of the requisite labor for informal activities and even immigrants provide resources to the extant informal economies, but informal economic activities freq services inside the community, including the needs of immigrants residing in other neighborhoods that may lack commercial facilities. These goods and services may be of a kind not provided by the larger economy, or provided at too high a price, or provided in locations that Koob, 1989, p. 71). By describing the basic characteristics of an informal economy, it is possible to speculat e what formalization might look like. For very small businesses, they may grow and add employees, and determine that operating informally is not in their best interests. Informal


45 economies in immigrant communities may formalize as immigrant groups become m ore established and are assimilated into the dominant culture. Finally, the relationship between formal and informal economies may change in either direction depending on the state regulatory regime. activities that determine frequently state action that increases or reduces the level of informality within an economy. Strengthening certain regulatory features (e.g. taxes or fees that become prohibitive for a formal, profitable existence) may encourage businesses to avoid state regulation. Conversely, a state or local government may recognize the benefits of moving firms toward formalization. In this situation, in terms of regulatory voids rather than violations in a strict sense, given an increasingly problematic relation between newly shaping economic processes and regulator y frameworks p. 95). The Rainier Valley context presents an interesting example within this discussion of informality. The data will show that the businesses along the MLK corridor share certain featur es that appear within informal economies; they are largely small scale businesses in and serving a diverse, immigrant neighborhood. However, one does not immediately suspect that the businesses located along the corridor are part of an informal economy. Th is fact brings another feature of informal economies to light: appearances can be deceiving. The absence of legal, social, and institutional regulations economic formality is not always easily adduced. Traversing the MLK corridor, one notices that the busi nesses are serving specific clientele in


46 many cases, but the businesses themselves mostly signal normal business activity (e.g. signage, posted business hours, etc). Conclusion The construction of the Central Link light rail system through the Rainier Val ley has dramatically changed the transportation character of this neighborhood. The five subjects covered here megaproject development, EIS monitoring, neighborhoods and neighborhood change, ethnic economies, business informality are all salient factors. T aken in isolation, however, these subjects are inadequate in addressing the depth and complexity of the research question. The megaproject literature demonstrates a focus on region wide benefits at the expense of localized impacts. It shows that the fina ncial cost outweighs the predicted benefits of megaprojects, but says little about whether localized benefits are achieved. The EIS process is meant to address localized impacts, but the absence of ongoing monitoring and auditing can mean ineffective mitig ation measures. The literature considered here on neighborhoods and neighborhood change is helpful in elucidating the complex nature of these spatially amorphous places. The ethnic economy literature reveals the importance of an ethnic economy to the ethni c enclaves while also establishing how difficult it is to explicate their specific impacts. Business informality is shown as a fluid concept that depends on the existence of the formal economy. Formalization occurs primarily based on the decisions of indiv idual firms and the role of the The construction of Link light rail is an example of a transportation megaproject that required the completion of an EIS. The EIS created a mitigation measure the CDF because of the anticipated impacts on the Rainier Valley neighborhood. Many feared the possible changes light rail could bring to the neighborhood, especially to the many minority and immigrant


47 owned businesses operating along MLK. The individual subjects reviewed do not give an i ndication as to what the literature itself might say about the research question. Taken together, however, the literature review provides a thorough, comprehensive account of the relevant context in which the research question is situated.


48 CHAPTER 3 METH ODOLOGY This research is a case study examining the impact of light rail construction on neighborhood business activity in the Rainier Valley, and specifically the business es along Martin Luther King Jr. Way South (MLK) A before and after research design is employed to examine neighborho od business activity pre and post light rail construction. The business assistance programs in place during the construction phase one operated by the Rainier Valley Community Development Fund (CDF) and one operated by Sound Transit are also examined. This chap ter details the methodology utilized in examining these various components. Perhaps the most important methodological aspect of this research is defining and the Link light rail system through the Rainier Valley on neighborhood business activity, it is necessary to clearly state what neighborhood business activity means. The Rainier Valley is a historically working class neighborhood rich with the experiences of a wide variety of ethnic and immigrant groups. The MLK business community reflects the diversity of the neighborhood it serves. Neighborhood business activity refers to businesses that serve the Rainier Valley community at large, and reflect the inherent di versity of the neighborhood. Furthermore, it does not require that specific businesses remain open throughout construction, but that certain characteristics of businesses exist. These specific characteristics include not only small, independent, and ethnic /immigrant owned businesses, but also an informal character possessed by the businesses along the MLK corridor. Creating a typology of neighborhood business activity germane to the Rainier Valley neighborhood requires the following characteristics: that a majority of businesses are owned and operated by minorities and immigrants; that the businesses likely cater to an ethnic population;


49 that there are very few national chains; that the businesses are small in terms of revenues; and that the businesses lack certain features of business formality. The businesses along the MLK corridor are used as a proxy for the Rainier Valley as whole, based primarily on their proximity to the construction of the Link light rail system as well as the massive in vestment in these businesses made by the city of Seattle, Sound Transit, and King County. Other relevant data on the businesses in the Rainier Valley neighborhood are used to augment the specific findings along the MLK corridor. Figure 3 1 shows the Rainie r Valley neighborhood, with the red line signifying the MLK/Link light rail corridor. Before Determining the impact of light rail construction on neighborhood business activity requires establishing exactly what neighborhood business activity was before li ght rail construction. Census 2000 data on the eight tracts that make up the Rainier Valley neighborhood shows the residential demographic and socioeconomic characteristics. Data on the businesses come from the CD F which was responsible for mitigation assistance to the businesses during light rail construction. For a business to be eligible for mitigation assistance from the CDF, it needed to be open on or before July 2003, a year before light rail construction b egan. A majority of the business data is drawn from a database that the CDF maintained of businesses operating along the MLK corridor before light rail construction began. I was able to gain access to this data because of the two summers I s E xecutive Administration (DEA) are used to indicate whether these businesses were licensed to operate in 2003. Tax and revenue data from the Seattle DEA is also used to show how many businesses were officially identified by the City in one segment of the MLK corridor. Finally, interviews with key informants supplement the data regarding business activity along MLK and in the Rainier Valley before light rail construction commenced.


50 After The data that represent the period after light rail construction attempts to mirror the pre light rail construction period as much as possible. I use 2008 data estimates from ESRI and the Puget Sound Regional Council (PSRC) to determine the residential characterist ics of the eight Census tracts that make up the Rainier Valley neighborhood. Data collected from a personal inventory of the MLK corridor are used to document businesses that are open and operating, as of August 2009. The data from this inventory includes business name, address, and business type. I also utilize data from the Seattle DEA on business licensing and the number of businesses officially recognized in one portion of the MLK corridor. Finally, I supplement all these data with interviews with indiv iduals knowledgeable about neighborhood business activity in the Rainier Valley. Before and After Comparisons Because the purpose of this study is to determine the change in neighborhood business activity as a result of light rail construction, diligent ef forts are made to ensure the comparability of data pre and post construction. Before and after comparisons are made across a variety of contexts at different levels of aggregation. Demographic and socioeconomic comparisons are made between Census tracts for 2000 Census data and 2008 ESRI and PSRC estimates. Comparisons of employment by industry are examined and presented for every year between 2003 and 2008. Data regarding the businesses along the MLK corridor pre and post construction are essentially th e same. Differences are addressed where applicable. Business Assistance Programs While this research does not purport to be a program evaluation of the two business assistance programs instituted and operated during the construction phase in the Rainier Va lley, a measured consideration of the programs is essential in considering whether a change in


51 neighborhood business activity occurred because of light rail construction. A more thorough examination is given to the Supplemental Mitigation Assistance (SMA) program operated by the CDF influential of the two programs under consideration because it was operated by the CDF, which was created as a result of Environmental Impact Statement process, and because it disbursed more than $15 million to impacted businesses. Interviews are used to supplement the literature and data from the CDF, and interviews are the primary source in considering Sound Tran business and technical assistance program. Limitations One of the primary limitations of this study is that it does not include the perspective of the businesses that make up the MLK corridor or the Rainier Valley generally. Part of this stems from t he scope of the research question and the difficulty of sampling such a diverse universe of businesses. Furthermore, reframing the research question to more directly account for the perspective of business owners likely would require an ethnographic lens a nd an investment of time beginning with the final siting and design of the Link segment through the Rainier Valley. Beyond that, the cultural and language barriers that exist with many of the businesses similarly would require an investment of time and ene rgy. While the perspective of business owners is missing, it is not an essential part of the research question at hand. The intent of this research is to address the impacts of a large scale infrastructure project and subsequent policy responses on neighb orhood business activity. The perspective of business owners along the MLK corridor likely would not change the findings of this research, but it would help to deepen an understanding of the implications of construction projects of this scale on a micro le vel.


52 Finally, this study only begins to scratch the surface of the impact that the construction of light rail has had on neighborhood business activity on the MLK corridor and the Rainier Valley. Most of the data analysis is purely descriptive, and thus d oes not provide the force of argument that greater statistical analysis can. Furthermore, other data that could provide a more comprehensive understanding of the changes on how light rail construction has impacted changed neighborhood business activity are not considered. Perhaps the most important of these include ownership and rental rates of the businesses along the MLK corridor, and the movement of rental rates during construction. Summary This research examines the impact of light rail construction on neighborhood business activity along the MLK corridor and the Rainier Valley. I define the MLK corridor as those businesses open and operating in July of 2003 (pre light rail construction) and those open and operating in August of 2009 (post light rail co nstruction). I define the Rainier Valley as the eight highl ighted Census tracts in Figure 3 1. Neighborhood business activity is specific to this research and refers to characteristics including size, independence, minority/immigrant ownership, an ethnic c ustomer base, and an informal quality of businesses along the MLK corridor. Data on pre construction neighborhood business activity co mes from sources including the CDF the 2000 Census, and various local and regional sources. Data on post construction neighborhood business activity comes from primary data, ESRI and PSRC demographic and income estimates, and local and regional sources. Data on the business assistance programs comes from the CDF and interviews with Sound Transit officials. Interviews are used to supplement these sources. While this research and these methods allow for clarity in answering the question of whether the construction of light rail on M LK impacted neighborhood business activi ties, other methods would more deeply articulate the experiences of the business owners.


53 Figure 3 1. Rainier Valley Neighborhood. (Puget Sound Regional Council, 2009).


54 CHAPTER 4 FINDINGS This chapter provides findings from data regarding neighborhood business activity in the Rainier Valley Data is presented in both time contexts: before light rail construction and after light rail construction. Side by side comparisons of the data follow, where applicable. Finally, tax and revenue data for the busi nesses in one segment of the Martin Luther King Jr. Way South (MLK) corridor are examined. It is necessary to note that these data are at various levels of aggregation, and are thus difficult to easily marry together. While the different levels of aggregation present a problem for making location specific claims about what is occur ring in the Rainier Valley as a whole, taken together, these data allow for a satisfactory answer to the question of how light rail construction has impacted neighborhood business activity. Demographic and Socioeconomic Data For the purposes of this resear ch, the Rainier Valley neighborhood is defined as the eight Census tracts that directly abut the Link light rail line running on MLK (Figure 3 1). The best and most recently available demographic and socioeconomic data of the Rainier Valley neighborhood be fore light rail construction began come from the 2000 Census. The total population of these eight Census tracts in the year 2000 was 50,991, comprised of 17,257 households, with an average household size of 2.90. The individual tracts have a population ran ge between 4,560 and 9,002. The number of households range from 1,393 to 2,944. According to 2008 population estimates developed by the Puget Sound Regional Council (PSRC) the total population of the eight Census tracts that define the Rainier Valley neighborhoo d is 55,804. The population ranges between 4,625 and 9,551 at the tract level. The population grew by almost 9.5% between 2000 and 2008. This figure is much higher than the estimated 5.2% growth rate in the overall population of Seattle between 2000 (563,3 74) and


55 2008 (592,704). Table 4 1 shows the population in the Rainier Valley and in Seattle in 2000 and 2008. The median household income for the eight Census tracts in 2000 was $42,993. The HUD estimated median family income for the Seattle Metropolitan S tatistical Area (MSA) was $65,800 in 2000. The individual tracts ranged from a low of $36,754 to a high of $53,447. More than 40% of households earned less than $34,999 in 2000, however, with 17% earning less than $15,000. The 2008 estimate for median household income within the eight Census tracts, as estimated by ESRI, is $63,278. The HUD estimated median family income for the Seattle MSA in 2008 is $81,400. Income in the Rainier Valley grew by 47%, while the income of the Seattle MSA grew by almost 24% between 2000 and 2008. Table 4.2 shows the income for the Rainier Valley and Seattle MSA in 2000 and 2008, and the percentage change between them. These eight Census tracts represent an incredibly diverse area in the city of Seattle. The proportion of population in this area according to 2000 Census data was 41.6% Asian, 24.4% White, and 22.3% Black. The remainder of the population was split between individuals of Hispanic origin, multi racial individuals, individuals of another race, Pacific Islanders, and Native Americans. Census data for the city of Seattle in 2000 show the racial breakdown at 70.1% White, 13.1% Asian, 8.4% Black, and 5.3% Hispanic. The remainder is made up of multi racial individuals, individuals of another race, Native Americans, and Pacific I slanders. In contrast to the city, the Rainier Valley features an overwhelming amount of racial diversity. The Census data also show a large foreign born population in the Rainier Valley, with 38% of the total population made up of individuals born outside the United States. Table 4 3 shows the


56 foreign born population in the eight Census tracts, and also shows the percentage of foreign born individuals who are not citizens. The Rainier Valley remains a diverse neighborhood, according to ESRI estimates for 2008 The population breakdown is as follows: 44.1% of the population is Asian, 22.7% is Black, 20.7% is White, and the remainder, in descending order, is Hispanic, people of two or more races, some other race alone, Pacific Islanders, and Native Americans. Unfortu nately, there is no comparable data for foreign born and citizenship status for 2008. Table 4 4 shows the racial breakdown in the Rainier Valley for 2000 and 2008. Business Data Before The business data that follows was compiled by the Rainier Valley Commu nity Development Fund (CDF) in July 2003. The CDF compiled data on the businesses along the MLK corridor to establish eligibility for the Supplemental Mitigation Assistance (SMA) program that operated during the construction of Link light rail. The businesses along th e MLK corridor reflect the diversity of the Rainier Valley neighborhood. Of the 268 businesses open and operating on the 4.5 mile corridor in July 2003, 50.7% were Asian owned, 25.0% were White owned, 18.3% were Black owned, and 6 .0 % were Multi Ethnic Hisp anic, or Middle Eastern owned. At least 15 ethnic groups were represented among business owners along the MLK corridor. The largest group is Vietnamese owners, comprising almost 36% of all business owners along the corridor in 2003. Another six Asian ethni cities make up the total population of Asian owned businesses, including, in descending order of ownership, Filipino, Korean, Chinese, Cambodian, Japanese, and Laotian. Black owned businesses are made up of African American owned businesses (roughly 2/3 of the total of Black owned businesses) and East African owned businesses (consisting mostly of Ethiopians, Eritreans, and Somalis).


57 One hundred and thirty seven (137), or 51 .9 %, of the businesses are categorized as service related businesses, or businesses t hat provide services and not products. Service businesses along the MLK corridor include restaurants, beauty parlors and salons, entertainment establishments (e.g. billiard halls, bars), auto repair centers, and video rental establishments. Sixty two busin esses, or 23 .1 %, of the MLK businesses are categorized as retail establishments, or businesses in which merchandise is exchanged for payment. Most of the retail businesses along MLK are small scale grocery stores, convenience stores, and jewelry stores. Fin ance, insurance, and real estate (FIRE), construction, and manufacturing related businesses made up 13.1%, or a total of 35 total businesses along the MLK corridor. Health care and non pro fit businesses made up just over 12%, or a total of 33 businesses al ong the MLK corridor. These businesses were coded separately than their North American Industrial Classification System (NAICS) designations because they are more explicitly community serving. The health care businesses included general practitioners, dent ists, an elder care facility, and chiropractors, among others. The non profit businesses included an Elks lodge, a Veterans of Foreign Wars (VFW) office, and various ethnic serving non profits. The remaining business was an office for Sound Transit. Nine out of ten of these businesses (240 of the 268 total) are independent businesses. Even among those businesses that are not independent, several of them are franchises that are owned and operated by Rainier Valley residents. A large number of the businesses in the MLK corridor were not licensed in 2003. Only 152, or 57%, of the MLK businesses were licensed in 2003, meaning that 116 were unlicensed. After The construction of Link light rail resulted in the relocation of 57 of the 268 businesses on the MLK cor ridor. Of the 57 businesses that relocated, 18 relocated to a different location on the


58 corridor. Other businesses relocated within the Rainier Valley, but not on the MLK corridor, elsewhere in Seattle, or out of the city entirely. After all the businesses relocated, a total of 229 businesses were located on the MLK corridor. As of August 2009, there were a total of 234 businesses open and operating on MLK. Unfortunately, the 2009 data does not include a breakdown by race and ethnicity. The CDF staff made multiple contacts with the businesses along MLK before construction began, and were able to assemble data on ownership by race and ethnicity. It is possible to examine the racial breakdown of the businesses that remained open throughout the construction p rocess. Table s 4 5 and 4 6 show this breakdown. While there have been minor shifts in business ownership by race, the diversity is still apparent. Of the 88 businesses where racial and ethnic data on businesses owners are not available, a cursory examinati on indicates that the businesses continue to reflect the diversity within the Rainier Valley. New businesses include a large Asian American non profit organization; a Filipino ice cream store; various ethnic restaurants, such as Thai, Vietnamese, and Mexic an; several East African serving businesses such as money wiring, Halal groceries, and restaurants; and various ethnic serving FIRE related businesses. Service related business es account for 126, or 53.8 %, of the total businesses along the MLK corrid or in 2009. Retail businesses account f or 47, or 20.1 %, of the total businesses. Collectively, FIRE, construction, and manufacturing related businesses total 35 of the businesses along the MLK corridor, or 15% of the total. There are 26 total healt h care and non profit businesses, amounting to just over 11% of t he businesses in 2009. Table 4 7 shows the breakdown by business type for pre and post construction businesses. The number of businesses that are independent fell slightly between 2003 and 2009. Two hundred and three (203), or 87%, of the businesses open in August 2009 are independent. While


59 this proportion remains similar to the situation six years ago, a dramatic change has occurred regarding business licensure. Whereas just more than half of the businesses were licensed in 2003, as of August 2009, 190 of the 234 businesses, or 81% of the total, are officially licensed with the Seattle DEA, the city department responsible fo r business licensing. Tables 4 8 and 4 9 show the number of indepen dent businesses and number businesses operating with a license, respectively. Tax and Revenue Data The data that follow are from the Seattle D epartment of E xecutive A dministration (DEA) and show the revenues from businesses within one portion of the MLK corridor. The portion of the MLK corridor covers 20 blocks, or 1.3 miles. It also includes the Othello Station, which is surrounded by a large business cluster, and a cluster of businesses located at the intersection of MLK and South Graham Street. Figure 4 1 shows this area, as well as the locati on of the Othello Station and the two business clusters. The data cover gross revenues and the number of businesses officially recognized by the Seattle DEA between 2001 and 2008. Businesses only pay taxes if their gross revenues cross a certain threshold. This threshold was $50,000 between 2001 and 2007, and $80,000 for 2008. Table 4 10 and Figure 4 2 both show revenue totals for the businesses along this segmen t of MLK. Table 4 11 and Figure 4 3 both show the total number of businesses along this segment of MLK. The figures are broken down by the threshold at which businesses pay taxes. The revenue data show that, despite the intense construction in this area, total revenue reported by the businesses increased by a total of 30% between 2001 and 2008. The d ata on businesses on this corridor show both a remarkable stability among those businesses with revenues above the taxable threshold and a greater volatility in numbers of businesses with revenues below the taxable threshold.


60 Table 4 1. Population in Ra inier Valley and Seattle, 2000 2008 Population 2000 2008 % Change Rainier Valley 50,991 55,804 9.4% Seattle 563,374 592,704 5.2% Source: 2000 Census, Puget Sound Regional Council Table 4 2. Income in Rainier Valley and Seattle Metropolitan Statistical Area, 2000 2008 Income 2000 2008 % Change Rainier Valley 42,993 63,278 47.2% Seattle MSA 65,800 81,400 23.7% Source: 2000 Census, ESRI, FFIEC Table 4 3. Population of Forei gn born and Not a Citizen in Rainier Valley, 2000. Population Tract 95 Tract 100 Tract 101 Tract 103 Tract 104 Tract 110 Tract 111.01 Tract 117 Total Total Population 5717 8139 5943 6178 9002 6260 4560 5192 50991 Foreign born 911 3,307 1553 2052 3907 3340 2164 2136 19370 Not a C itizen 484 1758 851 1089 1735 1716 1241 1050 9924 % F oreign born 15.9% 40.6% 26.1% 33.2% 43.4% 53.4% 47.5% 41.1% 38.0% % Not a C itizen 8.5% 21.6% 14.3% 17.6% 19.3% 27.4% 27.2% 20.2% 19.5% Source: 2000 Census Table 4 4. Rainier Valle y Population by Race, 2000 2008 Race 2000 2008 White 24.4% 20.7% Black 2 2.3% 22.7% Asian 41.6% 44.1% Hispanic 6.3% 7.5% Other 5.4% 5.0% Total 100% 100% Source: 2000 Census, ESRI Table 4 5. Businesses by Race, Pre construction Race Total % of Total Asian 136 50.7% Black 49 18.3% White 67 25.0% Other 16 6.0% Total 268 100%


61 Table 4 6. Businesses by Race, Post construction Race Total % of Total Asian 82 56.2% Black 22 15.1% White 34 23.3% Other 8 5.5% Total 146 100% Table 4 7. Business by Type, 2003 2009 Business Type 2003 % of Total 2009 % of Total Constructio n 10 3.7% 5 2.1% FIRE 12 4.5% 20 8.5% Government 1 0.4% 0 0.0% Health Care 17 6.3% 12 5.1% Manufacturing 11 4.1% 10 4.3% Non Profit 16 6.0% 14 6.0% Retail 62 23.1% 47 20.1% Service 139 51.9% 126 53.8% Total 268 100% 234 100% Table 4 8. Independen t Businesses, 2003 2009. Independent 2003 2009 Yes 90% 87% No 10% 13% Table 4 9. Licensed Businesses, 2003 2009. Licensed 2003 2009 Yes 57% 81% No 43% 19%


62 Figure 4 1. MLK Commercial Corridor (Seattle Department of Executive Administration, 2009)


63 Table 4 10. Revenue by Year, Adjusted for Inflation Year Revenue 2001 $34,761,732.66 2002 $31,152,287.26 2003 $34,844,692.44 2004 $38,521,967.42 2005 $41,618,721.51 2006 $43,415,058.61 2007 $42,962,973.37 2008 $45,205,018.76 Source: Seattle Depa rtment of Executive Administration Figure 4 2. Revenue by Year, Adjusted for Inflation Table 4 11. Businesses Above/Below Taxable Threshold, 2001 2008. Businesses 2001 2002 2003 2004 2005 2006 2007 2008 Businesses above Threshold 36 37 46 48 48 47 48 49 Businesses below Threshold 33 44 48 57 66 91 82 73 Total 69 81 94 105 114 138 130 122 Source: Seattle Department of Executive Administration


64 Figure 4 3. Businesses Above/Below Taxable Threshold, 2001 2008.


65 CHAPTER 5 DISCUSSION C hapter 4 detailed the quantitative findings of this research. This chapter contextualizes those findings, and draws on a variety of qualitative sources to give a greater understanding of the research question. The chapter begins by examining the context of this res earch, with a specific focus on the debate that occurred before light rail construction began. Next, the pre construction period is examined, and the neighborhood business activity for this timeframe is considered. Following this, the chapter discusses the post construction period, and the ways in which neighborhood business activity has changed. The main findings are explicated and reinforced in this section. Finally, the chapter concludes with a consideration of the business assistance programs in operati on during the construction phase. Light Rail and the Rainier Valley The decision to construct the Link light rail system through the Rainier Valley was initially welcomed by most in the community. This sentiment changed as the final site design showed an a t grade segment running the middle of Martin Luther King Jr. Way South (MLK). The discourse was particularly impacted by a group called Save Our Valley (SOV), created specifically to advocate for the construction of a tunnel instead of an at grade alignmen t. SOV was especially vocal regarding the perceived injustices faced by the Rainier Valley in comparison to the rest of the overall Central Link alignment. One newspaper article, citing the family homes would be lost or affected, the Rainier Valley would lose again, 127 1).


66 SOV al so believed that the costs per mile (at the time) reflected an inherent bias towards the Rainier Valley, where the cost per mile of light rail totaled $47 million, compared to $129 pts to derail the at grade alignment were unsuccessful, they did influence the tone of the debate regarding the construction of light rail. According to their still online, but long dormant website, Save Our Valley claimed the support of 75 businesses thro ughout the Rainier Valley, a majority of which were located on the MLK corridor (Save Our Valley, 1999b). They brought a lawsuit (that was eventually withdrawn) against Sound Transit after the ratification of the Central L ink alignment, and contributed g ue st e cials have discriminated against minority communities. The desire for this to work has led to bad housing decisions and made for life (Quarnstrom, 2000, B 5). This discussion of the views of Sav e Our Valley demonstrates that, in the years before and realized the consequences of massive construction and trains running down the middle of the street, they began protesting. Many began to view the rail line, sold as an economic boon, as a 1). Charleete Black, a program officer at the Rainier Valley Community Development Fund (CDF) who performed outreach to inform the businesses of the work and offerings of the CDF, spoke about how, early on, many businesses] thought this whole thing was an experiment and they were


67 Before The de mographic data presented in Chapter 4 demonstrates the divers ity of this neighborhood when the 2000 Census was completed. There is a wide range of racial and ethnic diversity in the neighborhood, with a portion of it deriving from the large numbers of foreign born residents (Tables 4 3 and 4 4). The diversity is wid e ranging and consists of multiple racial and ethnic groups concentrated within a relatively small spatial area. Socioeconomically, the Rainier Valley is lower income community, relative to the Seattle Met ropolitan Statistical A rea (MSA) with residents in the eight Census tracts earning 65% of the income earned in t he Seattle M S A (Table 4 2). The businesses open in the MLK corridor during the pre construction reflect the demographics and socioeconomic status of the Rainier Valley neighborhood. Th e ethnic ownership figures mostly match the population demographics of the neighborhood (Table 4 5). And, the overwhelming number of independent businesses suggests that most regional and national chains had not found a reason to loca te along the corridor (Table 4 8 ). Finally, the large proportion of the businesses that were unlicensed in 2003 suggests a business community that is informal in nature (Table 4 9 ). The data presented above show the neighborhood business activity in the Rainier Valley during the pre construction period: a diverse both in ownership and in industrial sector business population, made up primarily of smaller, independent, and ethnic serving businesses that included large proportions of informal businesses (as measured by business licensure) serving a diverse, lower income population.


68 After The post construction data show that the Rainier Valley remains as diverse, if not more so, as it was in the pre construction period. All major racial groups saw growth in the period between 2000 and 2008 except for the White population (Table 4 4). From a socioeconomic perspective, the Rainier Valley experienced faster income growth over the same 2000 2008 timeframe, and, as of 2008, the median household income was only 78% of the Seattle MSA. Th e Rainier Valley neighborhood rema ins a remarkably diverse, lower income neighborhood; however, median household income has grown twice as fast as that of the Seattle MSA in the years covered by this research (Table 4 2). While t he total number of businesses post construction in the Rainier Valley has fallen compared to the number open before light rail construction started, there are a higher total number (234) than after all the construction related business relocations took pla ce (229). While there are not similar numbers in terms of racial and ethnic ownership, it is possible to examine which businesses have stayed open since 2003, and to break these totals down by race and ethnicity. Of the 268 pre construction businesses alon g the MLK, 146 remain open, as of August 2009. Table 4 5 shows the ownership by race of the businesses in the two time frames. T able 4 5 shows a remarkable consistency between the two time periods, although it is crucial to remember that there are 88 other businesses in the post construction period that are not considered in this table. However, Chapter 4 showed that most of these 88 businesses continue to serve the Rainier Valley neighborhood. There is also not a great variation between business types in the pre and post construction perio ds, as demonstrated by Table 4 7 For the most part, proportions have remained the same. The biggest gainer has been the FIRE sector, adding a total of eight firms and almost doubling as a proportion of the businesses on the MLK corridor. The growth in


69 FIRE related businesses may suggest that the area is beginning a shift toward more tertiary industries and perhaps away from secondary firms like construction and manufacturing. And while construction related businesses los t half the number of firms and almost the same percentage of businesses, three firms were relocated as a result of light rail construction, and subsequently left the Rainier Valley. The greatest change among the indicators measured between the pre and po st construction periods is the busines s licensure indicator. Table 4 9 presents this change most clearly. The dramatic increase in the number of businesses with licenses clearly demonstrates an increasing formalization among the businesses on the MLK corri dor. Tax and Revenue Data Despite major construction operations that lasted for 44 months between July 2004 and March 2008, gross revenue, even adjusted for inflation, increased 30% betw een 2001 and 2008 (see Table 4 10 ). This averages out to approximatel y 4.5% each year. Looking deeper at the numbers shows stronger revenue growth before 2005. Revenue growth between 2001 and 2005 is 19.73%, while revenue growth between 2005 and 2008 is 8.62%. Considering the size and extent of the construction impacts, it is not surprising to see revenue growth slow during this later period. This stagnant growth comes despite the dramatic increase in the total number of businesses, specifically businesses earning below the taxable threshold, beginning in 2006. As Table 4 11 demonstrates, 24 more businesses were found in this part of the MLK corridor despite massive construction impacts. Indeed, 2006 was the year with the greatest number of businesses open. Both 2007 and 2008 saw declines from this peak. This increase cannot be explained by any commercial developments coming online. The slight increase between 2002 and 2004 can be explained by the opening of a multi unit commercial/retail building that


70 currently houses 17 businesses, including the C DF Furthermore, 12 businesses within this segment of the MLK corridor were relocated as a result of light rail construction. Another development that opened during construction is located directly east of the Othello station on MLK, and houses e ight new businesses that have opened since construction began. What could explain the sudden expansion of businesses along the MLK corridor during a time of intense, ongoing construction? Rather than demonstrating an increase in businesses along this porti on of the MLK corridor, the number of total businesses more accurately reflects an actual count of the businesses along MLK. This can be demonstrated clearly by comparing the total number of businesses identified in 2003 revenue data (94) and the total num ber of businesses according to the CDF data in this same portion of the MLK corridor (153). Of this 153 total, 91 businesses (59.5%) were licensed in 2003 and 62 (40.5%) were not (a small portion of this segment include businesses that would not have techn ically been on the MLK corridor). Of the 62 unlicensed businesses, nine were relocated outside of this area of the MLK corridor. This means that 53 businesses were open past the relocation period but before light rail construction began. According to the A ugust 2009 inventory, 29 remain open. Twenty five (25) are licensed today, and of this 25, 20 received S upplemental Mitigation Assistance (SMA) from the CDF. According to August 2009 inventory, there are 144 businesses in this portion of the MLK corridor. The data for 2008 (Table 4 11) show that the Department of Executive Administration identified 122 businesses. Of this 144, 116 are licensed (80.6%), and 28 (19.4%) are not. Finally, 96 of the 144 businesses were open in 2003, and of this total, 86 (89.6%) are licensed. Of the 48 b usinesses not open in 2003, only 30 (62.5%) are licensed. I argue that the numbers are increasing not because new businesses are opening, but because formerly informal businesses are becoming formal in the sense that they are licensed and


71 (potentially) tax ed. The data show that business growth occurred for businesses below the taxable threshold for payment of taxes. Though they are not paying taxes, formerly informal businesses are now nominally part of the formal economy. Business Assistance Programs The impacts experienced in the Rainier Valley as a result of light rail construction did not go unmitigated. In seeking to defuse the opposition and controversy that arose because of the issues described at the beginning of this chapter, the Sound Transit Boar d of Directors included the creation of a Transit Oriented Community Development Fund capitalized with $50 million in the resolution that approved the final site design for the Central Link alignment in February 1999. This entity eventually became the CDF and was intended to directly assist the businesses during light rail construction and to transition to a more conventionally focused community development financial institution once construction was completed. The CDF offered a variety of products through its SMA program to a universe of 310 businesses not directly on MLK.) These products included: business re establishment payments, reserved exclusively for those businesses that were forced to relocate as a result of light rail construction ; business interruption payments, which went to businesses (both non relocating and those that relocated onto the alignment) that could show a loss on their tax returns; and various advances, designed as loan products for equipment, working capital, and im provements. The business re establishment and interruption payments were grants that did not have to be repaid. The SMA program disbursed a total of $15.1 million to 181 of the 310 elig ible busin esses Of this $15.1 million, just over $14 .8 million was distributed in the form of business re establishment and interruption payments. About $300,000 was given out as advances. The


72 reason for this relatively low figure, according to a recent report prepared by the CDF on the efficacy of the SMA it was especially difficult for businesses to demonstrate the ability to repay [them], given that Rainier Valley Community Development Fund, 2009, p. 4). Furthermore, most of the businesses rented their space and thus could not leverage much in the way of equity towards these loan products (Rainier Valley Community Development Fund, 2009, p.4). The pr imary goal for the SMA program was to assist the businesses along the MLK V alley Community Development Fund, 2009, p. 10). Charleete Black, the CDF employee esses would have been out of business because most of the businesses were micro personal communication, June 24, 2009). To be eligible for SMA payments, a business had to be open and operating on the MLK corridor on or before July 2003. This was the fundamental condition for the SMA program. Other conditions included previous tax return information, both federal and local so that the CDF could construct a baseline from which to determine businesses losses and thus SMA payments and a business license for the impacted periods. As construction wore on, business interruption payments were increasingly necessary. Figure 5 1 shows the yearly distribution of business interruption payments. The longer that construction went on, the greater t he impacts


73 information and business licensure. corridor, Sound Transit hired a consulting group to provide technical assistance to businesses available for businesses along the entire 14 mile Central Link alignment. Technical assistance consis basic accounting, bookkeeping, and introduction to Quickbooks, as well as an overarching n, June 4, 2009). A total of 32 businesses utilized the services provided by the consulting group, for a total of 44 trainings (J. Lemus, personal communication, June 4, 2009). The Community Outreach staff from Sound Transit that helped administer this tec hnical assistance program offered a number of explanations for why participation was so low, including cultural and language barriers and the time and staff constraints on small business owners (personal communication, June 4, 2009). Charleete Black, a CDF employee, offers another reason, and explains that the products being 22, 2009). Changes The central research question of this thesis How has the construction of Link light rail impacted neighborhood business activity in the Rainier Valley was initially borne out of the issues described at the beginning of this chapter. The intention was to determine to what extent light rail construction resulted in the fears o f business displacement held not only by the more impassioned opponents of an at grade option, but also by more impartial community members, public officials, and the business owners themselves. The answer is that light rail construction


74 has not resulted i n an especially meaningful change in neighborhood business activity, as measured by the size, type, character, independence, and ethnic owned and serving businesses that continue to line the MLK corridor today. The findings suggest that the potential impac ts were offset by the business assistance programs, and particularly the CDF, operating during the construction process. Neighborhood business activity has changed in one crucial respect since light rail construction began in the Rainier Valley. As measur ed by the number of businesses with active licenses and the number of businesses recognized by the Seattle Department of Executive Administration it is evident that the businesses along the MLK corridor are becoming increasingly formalized and a part of the offic requirement for businesses to produce tax information and business licenses before receiving business interruption payments helps explain why these businesses might have felt compelled to become a part of th e formal economy. It remains to be seen whether the formalization observed was driven solely by the availability of financial assistance, and, now that the SMA program is over, whether businesses will re in formalize. Another indication of the increasing f ormality and participation within the mainstream economy is the 2008 formation of the M LK Business Summary The construction of the Central Link light rail system had a tremendous impact on the businesses along the MLK corridor. Construction went on for almost four years and tore up the street and sidewalks in front of many of these businesses, greatly reducing access to and parking around them. Many in the community were especially concerned with whether the businesses would survive the construction process, with some believing that construction was a means to


75 displa formed community development fund to assist businesses impacted by construction was intended both to satisfy the mitigation requ irements in the Environmental Impact Statement and to mollify community fear and opposition to the proposed route. The changes anticipated by the most vocal opponents of the light rail construction did not occur. The MLK business corridor remains primaril y a small, independently owned, ethnic serving, minority business corridor. Furthermore, the business community has become increasingly formalized since the period before light rail construction. The influence of the nical assistance offered by Sound Transit are difficult to quantify. The requirements necessary to receive financial assistance from the CDF, however, may account for the increasing formalization of the MLK business community. Figure 5 1. Business Interr uption Payments, 2003 2009.


76 CHAPTER 6 CONCLUSION The central research question of this thesis Did the construction of an at grade segment of a light rail system change neighborhood business activity in the Rainier Valley can be answered thusly: no, not r eally. The b u sinesses along Martin Luther King Jr. Way South (MLK) remain composed primarily of small, independent, ethnic serving, minority owned businesses. The neighborhood itself also continues to be an intensely diverse (and may be even more diverse than the pre constructi on period), working class neighborhood. While median household income has increased faster relative to the Seattle M etropolitan Statistical A rea (MSA) it is still substantially below the M SA s median household income. The most noticeable change appears to be the i ncreasing formalization of businesses along the MLK corridor. The dramatic increase in licensure, officially recognized businesses, and the recent formation of a business association specifically for the Rainier Valley, MLK corridor speak to this formaliza tion. It is important to remember that formalization can be deceiving. Indeed, without the data on licensing and tax and revenue, the conclusion of this study would be that neighborhood business activity has not changed. Why? This research sought to explai n whether a change in business activity occurred in a specific neighborhood as a result of the construction of a megaproject. The findings, as given above, suggest that not much of a change has happened. While the scope of the research was not to answer wh y, this study concludes with some thoughts on why neighborhood business activity has remained largely similar post construction as it did pre construction. Perhaps the most concise explanation can be offered vis vis the quote from Galster (2001) on self fulfilling prophecies: For a variety of reasons inherently associated with the concept of neighbourhood, changes in the flows of households and resources across space will produce


77 socially inefficient outcomes. There is thus a prima facie case for some sor t of collective intervention, whether it come from informal social processes, non profit, community based organizations or the governmental sector. Informal social processes might take the form of sanctions and rewards meted out by neighbours that are desi gned to enforce compliance with collective norms regarding civil behavior and building upkeep. Community based organisations might politically organise, establish neighbourhood bonds of mutual solidarity or promote a positive public image of the neighbourh ood. Governments might offer financial incentives, regulations and investments of infrastructure and public services, and target them to neighbourhoods at crucial threshold points. In concert, these actions can help to alter perceptions of key neighbourhoo d investors, to provide compensatory resource flows, to minimise destructive gaming behaviours, to internalise externalities and to moderate expectations, thereby defusing self fulfillin g prophecies. (p. 2122, emphasis original) Before light rail construct ion began in the Rainier Valley, there was organized opposition from the Rainier Valley community on the proposed site design for Central Link in the neighborhood. The opposition capitalized on widespread fears about what might happen with the construction and operation of light rail in the Rainier Valley neighborhood, specifically that construction would result in mass business closures, and that the operation of light rail would entice higher income individuals into the neighborhood, displacing the reside ntial population. The creation of the Rainier Valley Community Development Fund (CDF) was both a mitigation measure and an acknowledgement by the various governmental entities that the Rainier Valley would experience disproportionate impacts relative to other n eighborhoods along the Central Link alignment. Thus, the combination of community opposition, the creation of a community development fund, and the injection of millions of dollars by local governmental entities all signaled a commitment to maintaining nei ghborhood business activ i ty along M LK The prophecy that many residents and businesses believed coming was a hackneyed populations, and new develop ment intended for higher income, white populations. Instead, the


78 neighborhood itself has become more diverse, and the businesses along MLK continue to serve the various ethnic, immigrant, and minority populations in the greater Rainier Valley. It is problematic defending this conclusion without verifiable, testable data. The difficulty lies, fundamentally, in not knowing what might have happened along the MLK corridor had Save Our Valley (SOV) not been so vocal in its opposition or if there had been no multi million dollar commitment to the foundation of a community development fund, or if there had been no large scale financial assistance program in place. Implications The increasing formalization of the businesses along the MLK corridor may be a sho rt lived occurrence resulting from the financial incentive offered by the CDF, or it may be a new feature of this business community that was encouraged by the financial incentive offered by the CDF. Regardless of the duration, this finding raises the ques tion of whether formalization is a good thing for the MLK businesses. While operating a business informally comes with the possibility of fines or penalties for this informality, formality requires costs in the form of licensure and taxation, which may be too great a cost for some informal businesses. The decision to formalize will occur, then, when the benefits from formalization outweigh the costs saved from informality. Undoubtedly, one of the benefits of economic formalization is the ability to leverage the benefits of economic formality (e.g. the ability to organize and make demands In the case of the MLK business community and the Rainier Valley generally, economic formality is a g oal that should be pursued. The construction of a fixed rail transit system, and the plans to increase considerably the system in the next several years, requires a reconfiguration of the land use transportation relationship, especially in the areas abutti ng the rail system. Like the construction of Link light rail had different impacts for the region and for those areas adjacent to


79 construction, the operation of Link will have different impacts. It is important for those adjacent to Link to have a voice in how Link operates. Indeed, these adjacent actors have a vested interest in seeing Link be successful. Now that the Initial Segment of Link is up and running, and as development around the stations in the Rainier Valley segment begins, it is in the intere sts of the MLK business community to influence how this development occur s If the business community returns to pre construction levels of informality, it will be difficult for these businesses to legitimately participate in these discussions. By maintain ing indicators of formality, and participating in the recently formed MLK Business Association, the MLK businesses can have a voice in the way that their neighborhood develops. Successful development around the light rail stations in the Rainier Valley rai ses another implication for both the CDF and the MLK business community. The CDF believed the S upplemental M itigation A ssistance (SMA) program was successful because there were not large numbers of business closures and vacant storefronts along MLK. This success meant that businesses largely remained in one and two story buildings within auto oriented developments. If the success of the SMA program meant keeping businesses in places potentially incompatible with successful light rail development, short term and long term goals and policies ma y have operated at a cross purpose. Because the SMA program was a short term program, the CDF can recalibrate its future efforts at ensuring a compatibility between supporting the extant MLK business community and neighborhood business activity, and encour aging the long term success of the Link light rail system and the development necessary for this success. Future Research and Limitations This study was not without limitations. First and foremost, there is no direct voice from the businesses in the Rainie r Valley, either from interviews or tax and revenue documentation


80 ethnographic perspective would have enriched this research. Data examining whether business es owned or rented their space should also be examined. The rents that businesses paid throughout the course of the construction process should also be considered. Furthermore, the various levels of aggregation of the data considered in this research means that there are no easy spatial boundaries to draw. Any future research in the Rainier Valley context or beyond should attempt to address these limitations. There remain, however, an abundance of future research opportunities related to the construction a nd operation of the Link light rail system in Seattle, Washington. This same study could be replicated in the future by asking whether the operation of light rail has changed neighborhood business activity in the Rainier Valley. Particular attention could also be paid to the new orientation of MLK. The construction of a fixed rail transit system has necessarily switched the orientation of the roadway from the automobile to transit. Assuming that land use begins changing to meet this reality, it will be curi ous to know if businesses located in auto oriented developments fare better or worse than those in transit oriented developments. This fact is especially relevant because of the large undeveloped parcels surrounding the Columbia City and Othello stations. A deeper, more comprehensive study could more specifically examine the degree of formalization among businesses in the MLK corridor. Furthermore, a study could be undertaken to determine if this increasing formalization is a lasting phenomenon or whether i t was simply the result of the availability of business assistance and thus survival. Additionally, the same study could be applied to the construction of future light rail systems in various cities throughout the United States, as it relates to neighborho od business activity.












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89 BIOGRAPHICAL SKETCH A lex Krieg was born in Hershey, Pennsylvania in 1982. He has lived in various Florida cities and towns since then, beginning with Merritt Island, Florida in 1996, where he completed high school. Alex moved to Sarasota in 2000 to attend New College of Florid a. He studied Sociology and graduated in May 2004, after writing a thesis on the formation of automobile dependence in the United States. Since graduating from New College, Alex has worked in various respectable and semi respectable professio ns before de ciding to pursue a M aster of Arts in Urban and Regional Planning at the University of Florida. Upon graduation from UF, Alex will move somewhere on the west coast of the United States, in hopes of working in the planning field.