Surviving downtown Flagstaff’s small business slump

Illustration by Christian Ayala

Flagstaff was established as a historic town in 1884 and has become a place not only for its residents but for tourists and students from all over. One of Flagstaff’s major draws is its small downtown businesses. Whether it be Flagstaff General Store or Flagstaff Chocolate Company, there seems to be something for everybody if they know where to look.

Despite its charm, downtown has seen better business in the past than what it is currently seeing. According to the Arizona Department of Revenue, despite business increasing exponentially in Flagstaff overall, the introduction of larger corporations has made local businesses feel the pinch. Flagstaff businesses such as Cuvee 928, Street Side Saigon and The Commerce have closed their doors recently, and there seems to be no end to the closures.

Many members of the community and business owners have expressed they are also critical of the parking meters put in place by Flagstaff City Council. According to The Arizona Daily Sun, while the meters have generated over $282,557 in revenue in the first year to put toward future parking, it has been less popular with business owners like Downtown Diner’s owner Mark Gent. He said that the parking meters are hurting his business.

“In a sense, they think that it’s the community kind of taking from [regular customers], and they are no longer willing to support that,” Gent said. “We have lost a lot of business [and] a lot of regular customers from the pay-to-park. But I don’t know how the city collects their revenue, so it’s up to them I guess.”

Conversely, there are also many business owners in support of the pay-to-park machines. Many argue that it makes parking more convenient since there are more spots open. Flowbird, the company responsible for implementing the machines, reports that over 95% of businesses support the ParkFlag program. They also report that over 20% of the revenue collected from the machines also goes to future parking programs.

Brittany Montague, manager of Mountain Sports Flagstaff, supports the current parking system and disagrees that it negatively impacts local business.

“We seem to be doing quite well,” Montague said. “Parking has actually opened up spaces for people [who] are actually shopping, instead of downtown employees, or city and county employees that are in those spaces all day.”

Another issue that is linked to decreased profits is the minimum wage hikes in Flagstaff over the last few years. In 2018, the minimum wage was $10.50 and has been raised continuously since. The minimum wage increased in 2019 to $11 and has since increased to $12 in January after voters approved Proposition 141.

Business owners like Annie Brewer, owner of 22 LeRoux, attribute the increase in the minimum wage on the struggles of businesses throughout Flagstaff.

“The price pay [is] going up constantly, which is good,” Brewer said. “I mean people are making more money, but our products also have to go up in order to kind of weigh out the price you have to pay your employees now.”

However, there are also those who argue in support of the minimum wage increases.

House Committee on Education and Labor is a major proponent of increasing minimum wage not only on a local level but on a national level. It also reported that increased minimum wages lead to lower job turnover, decreases in absences from work, and overall better and more productive work. The committee said that roughly 60% of small businesses supported a higher minimum wage.

Despite these statements of small businesses supporting the increases of minimum wage, many local businesses have called for the city to reconsider these policy changes.

Besides minimum wage and parking, there are many other factors that could be affecting local businesses downtown. One of the factors could also simply be the time of the year.

“The downtown business is very seasonal,” Brewer said. “March through October is really, really good and then you hit the slow season and it just gets worse from there.”

One failsafe method to support downtown Flagstaff businesses remains. Shopping at local stores will always help, but there are also other ways to help a favorite local store. Many stores incentivize paying in cash, as doing so requires no fees or payments to credit card processing companies.

“One thing we try to push for is trying to spend money locally and paying in cash — it’s a big thing that we try to promote here at the Downtown Diner,” Gent said. “We actually give a cash discount for our customers who are willing to pay in cash.”

There is also the matter of being active in the local government, which can ultimately have an impact on local businesses. Montague said being active in local government can help provide small business loans and resources to help local businesses thrive.

“Shop local, be involved in your community [and] show up to city council meetings when they are talking about major things that affect downtown or the city,” Montague said.

Local Flagstaff businesses have been feeling the pressures of increasing wages and city intervention. Other factors like being able to make it through the slow seasons of January through March have also played a large factor in these small businesses ability to keep their doors open. However, if people make a conscious effort to shop local and support their local shops, it is more likely that their favorite mom-and-pop shop will stay open for business.