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  • Amelia Birch had to close her cafe down after only a few weeks of the Sydney Light Rail construction starting. (SBS)
Infrastructure is a necessary burden for businesses and communities, but the construction phase can sometimes have a devastating impact on small operators.
Source:
SBS Small Business Secrets
13 Sep 2017 - 3:44 PM  UPDATED 30 Jan - 11:15 AM

Sydney's South East Light Rail project will be completed in 2019, but heavy construction work has seen some small businesses along the route fall by the wayside.

The NSW Government anticipated the project will boost $3 billion in economic benefit for the state.

However, many small businesses aren’t seeing the benefits yet.

After nearly 20 years of serving customers in Surry Hills, The Book Kitchen closed its doors a few months ago after construction in the area saw a dramatic drop in traffic.

Former owners Amelia and David Birch ran the cafe together for more than 10 years.  They found that when the barricades for the construction went up, so did business.

Their weekly revenue dropped from $22,000 a week to $14,000 a week.

“We anticipated a lot, we put in a grocer as a measure to basically keep our loyal customers engaged and we were selling all the fresh produce we were using in the restaurant,” Amelia says.

“I decided at that point we needed to be creative, that we couldn't just stand back and let it happen so I came up with another idea to utilise the space better. We partnered up with a couple of startups for the kitchen space and the coworking space - it just needed time.”

But just six weeks after construction started the company was liquidated and 12 workers lost their jobs.

Just across the way from The Book Kitchen, Bourke St Bakery’s business has dropped significantly since the construction started, but they are still operating through the works.

“We're probably down about 30 per cent at this site, and the worst is still yet to come," says David McGuinness, co-owner of Bourke St Bakery.

"At this moment we're still sitting at tables out the front but these will be gone soon. We're lucky we have a number of outlets, so those other outlets will help support this, but a lot of businesses on this street do not have that luxury.

“There's going to be winners and losers and it's very sad that there will be people that lose from it. I would have hoped that we would have had compensation from the government."

Other businesses facing a similar fate as The Book Kitchen's have appealed to the government for rental assistance.

“There's going to be winners and losers and it's very sad that there will be people that lose from it. I would have hoped that we would have had compensation from the government.”

However, Transport For NSW CBD Coordinator General Marg Prendergast says: “Our conundrum, is that we know that property values are going up along the route already, and we really look to landlords to support those businesses, we look to them to give them a bit of rent relief because it is in their best interests, and ours, to keep these businesses going.”

“We can't compensate small businesses while we build a major project, because quite simply, if we have to compensate small businesses while we build a big transport project, or indeed, when you refurbish a building, you simply wouldn't be able to do the development.”

The NSW Government has however engaged an independent accounting firm and advisor - to assess the financial loss of the affected businesses on the light rail route - but only where construction zones have taken longer than originally planned.

City of Sydney Councillor Angela Vithoulkas runs VIVO Café on George Street, which has seen construction for the past two years. She plans on taking the state government head on.

“What I'm looking at doing, along with other small business owners, is putting together a class action suit and take on the state government. It's something that I'm initially funding myself to get it off the ground, and then to look if we can get someone to take it on spec, but we're not giving up,” says Cr Vithoulkas.

“They've said, ‘short term pain for long term gain’. We know it will be difficult and it won't be easy, that it will be better in the long run, but there won't be any small businesses left in the long run.”

For The Book Kitchen, the Birches don’t plan on opening another business in the near future, and Amelia is looking to focus her efforts on a new hospitality startup.

Her advice to other small businesses?

“It's not to put your head in the sand; if you just ignore the signs it can be really damaging. I feel glad that we got on top of it and pulled the pin when we did.”

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