Mill Avenue businesses inch toward recovery after construction and pandemic setbacks

TEMPE, AZ — Businesses along Mill Avenue were counting on two things to turn their fortunes around: the return of Arizona State University students from summer break and the end of a lengthy downtown construction project. Both have arrived. But for many storefronts and restaurants, the customers have not fully followed yet.

Jesse Salazar, general manager of the breakfast and lunch spot Daily Jam, said sales fell as much as 70 percent during the Downtown Tempe Refresh construction period and the extreme summer heat. He says there has been a slight uptick since then, but not the surge he had been hoping for.

Salazar noted that many restaurants build their model on turning first-time customers into repeat guests.

"You got to get them in the door first. And that's always a struggle," Salazar said.

The Downtown Tempe Authority acknowledges that the road to recovery has been a long one, shaped by one setback after another.

"It's a multi-year challenge, a series of challenges, I like to say, that's built up over a couple of years where we just haven't had a break to recover," President and CEO Lori Foster said.

The challenges began with streetcar construction, followed by the pandemic, and then roughly two years of work on the Downtown Tempe Refresh project. Each one chipped away at foot traffic and turned customers away from the corridor.

"We need more people on the street to come back and think that, when they want to eat, when they want to shop, when they want to do things, downtown Tempe and Mill Avenue is the place to be," Foster said.

Events and marketing campaigns have been the main tactics the authority, the Tempe Chamber of Commerce, and the city have used to try to draw foot traffic back to the historic corridor. The Mill Avenue Coalition has also formed to unite the businesses along the corridor to work out shared solutions for bringing customers back. Foster said the authority has not had any formal communication with the coalition but would be happy to get involved.

"The businesses are the best ones to tell their story, and we are happy to help amplify that," Foster said.

There are signs of progress. The Downtown Tempe Authority says 17 new businesses will open within the next eight months, which it expects will nudge the corridor's vacancy rate down. That rate has already eased from 12 percent earlier this year to 10 percent. Foster said two of those leases were signed in the last three days alone.

For newer shops, success has come from carving out a niche and leaning on word of mouth from loyal customers. Lizard Head Trading Company, which expanded to its Mill Avenue location in March, is one example. The store, which buys, sells, and trades clothes and accessories, opened its current location just three years after its Durango, Colorado, shop first opened.

"First, you have to let the community get to know that you're around. And then from there, take it to the next step where you're participating in the community," CFO Rubi Vega said.

For Lizard Head, that participation looks like community-oriented clothing swaps. One such event is scheduled at the storefront this Sunday from 12 to 4 p.m.

With cooler weather on the way and ASU students beginning to venture back out, there is cautious optimism along the corridor.

"We're eager to have more ASU students around, but they're the ones that we're seeing slowly trickle in," Vega said.