East Twin Cities

Small businesses in Woodbury face unique challenges in a city where businesses are booming and rapidly growing. 

Unlike Stillwater or Hudson, Woodbury is a young suburb that's been attracting big business and chains. But the city still has a few older businesses with loyal customers, such as Travel by Nelson, a travel agency that has been in the town since 1986. 

Crystal Bakker, co-owner of Bridgeman's Ice Cream, decided to open a new but small business with her co-owners. Her siblings, Brian Appeldoorn and Brittany Grove, and their cousin, Meggan Kerkenbush, own the ice cream parlor together. 

“If we didn’t have (an established business), I don't think we could’ve opened in Woodbury,” Bakker told rivertowns.net. “If we were starting from scratch and it was going to be, you know, you’re opening your store and you’re hoping it works, it’s so expensive that I don’t know we could have taken that risk.”

The co-owners have owned the ice cream shop since 2015, but the ice cream brand has been in the state since 1936. The franchise once had hundreds of locations, but now has a single location in Duluth. Bakker and her co-owners hope to begin licensing franchises across the state. 

Finding a location for their ice cream shop was no easy task. It took two months of negotiation for the co-owners to secure a location in an older strip mall by Angelina's Kitchen and Pino's Pizza. Bakker said if they had not found this spot, they would have had to look at locations outside of the city. 

The location Bakker now has costs just over $7,000 a month, she said, and increases at 2.5% a year with a minimum 10-year contract. Other businesses in the strip mall are Caribou Coffee/Einstein Bros. Bagels, Bank of America, Qdoba and more. 

Tom Palmquist, retail broker, said the location was the only CityPlace vacancy that had never been occupied. 

One of the biggest challenges for small businesses is the average rate of commercial rent, Washington County representative for Open to Business, Tyler Hilsabeck, said. Growth in the county makes more competitive rent prices for start-up businesses, he said. 

“It’s doing well — that’s why (the rent is high),” Hilsabeck told rivertowns.net.

The co-owners chose Woodbury for their ice cream parlor, because their family was a part of the community and they wanted to be in a "more affluent area," Bakker said. 

But high commercial rent can also cause businesses to leave the area. 

Hilsabeck counsels business owners on how to start a company. He said businesses have looked into Woodbury, but didn't have the finances to open in the city. 

“I would say that the highest barrier to entry here in Woodbury is that cost of business here,” he said. “You go up to another community like Hugo or Forest Lake or something like that, it’s just easier from a rental rate standpoint and a space standpoint.”

Ze's Diner in Inver Grove Heights is owned by Moody Arafa and his wife, Zeze Arafa. The couple opened another diner in Eagan, then expanded into Woodbury in 2014. 

Their location in Woodbury was the only space the couple could afford in the city, Moody Arafa said. He said the couple got the rate because the landlord was having trouble renting the spot out for some time. 

“I got some discounts on rent, but I’m still paying nearly $40 per square foot,” Arafa said. “It’s not a cheap rent. I mean, my bill here is like $10,000 a month, just rent."

Arafa's $10,000 is a reasonable rent for Woodbury, he said. At his location in Eagan, he pays $7,000 a month and $3,000 for his Inver Grove Heights location. 

The price of monthly rent isn't the only challenge for small businesses wanting to open in Woodbury. Regulations and permits can vary depending in the city. Small business owners in Woodbury have said the city seems to have more regulations and permits than other cities. 

“If you can find the right person, they seem to be very helpful,” Bakker said.

Bakker contacted the city to see if a "beautiful" front entrance would be approved for her ice cream shop. She received a 16-page document of the regulations for it. 

“It’s just different because some places, basically, you own the land, get your permits, do whatever you want,” she said. “And then there’s places like Woodbury where you have to meet certain standards of uniformity, and they just have so much more control over that and they want it to look a certain way — which is great for Woodbury, it’s helped it prosper, but it also, I think, prevents there from being as much character. Certainly less small, family-owned businesses and that type of stuff.”

The owner of Angelina's Kitchen, Angela Verrastro and Arafa, said the city is strict about business aesthetics. 

“I think that other municipalities might be more favorable to small business than Woodbury, and I’m hoping that that will change so we can attract more small businesses, because I think really that’s what adds flavor to any city, to any municipality: having things other than the chain restaurants and the chain businesses for people to choose from,” Verrastro said.

Eric Searles, Woodbury city planner, said he was surprised from the response of small business owners about business aesthetics. 

“We really haven’t heard this from our business community,” he said. “What we have heard when we’ve engaged the business community is to keep our architectural standards high, as our existing commercial property owners have invested in the community, and their concern is that that continued investment occur at the same level that they made.”

Searles said he would talk to the owners about their concerns with regulations if they were open to it.

Verrastro said some rules are outdated and the city should go through them. She said odor suppression systems is one requirement that should be reviewed, because they can be expensive for businesses owners to purchase. Odor suppression systems are required in restaurants near residential housing, Searles said. 

But Verrastro said keeping community is above rent costs. 

“Yes, the rent here is very high — I could probably lease more space for less in the city of St. Paul,” Verrastro said. “But I’ve found that Woodbury was my community, still is my community — it’s where I raised my family and this is where I wanted to be. I know my customers, Angelina’s is a part of the community. That’s really important to me. I decided that it was worth it.”