Detroit’s Hispanic business community weathering time of economic crisis
By Cecilia Híjar
The Latino Press explored the effects of the current economic crisis in Detroit on the business environment of the Hispanic community. Mexicantown in Southwest Detroit, is where the Hispanic community of the region is primarily settled. It is a vibrant community of neighborhoods, parks, schools, and churches.
One of the anchors of the community and of its success has been the burgeoning small business economy, which has been vital to the area’s growth. Statewide, Latino-owned businesses in 2013 had sales and receipts of almost $4 billion and employed well over 18,000 people.
As Detroit negotiates its way to a better economic future, the Latino investment in that effort will be critical to its success. With that in mind, the state of Latino small businesses is a barometer not only of the health of the Latino community, but of Detroit as well.
In these interviews with different business owners we ask about the difficult reality that our community is facing and of the potential solutions to be considered by elected leaders. Here, we highlight some of those interviews.
Silverio Lopez is a long-standing businessman in Detroit. His family business, Lopez Tire, has been well known in Mexicantown since he opened his doors in 1990 at the corner of Vernor Highway and Dix.
Silverio says the economic crisis in Detroit has not affected his business very negatively, and on the contrary, business has been good. Lopez Tire prides itself on loyal customers who keep returning for his competitive rates and fast service, but Silverio does see how people are being affected by the economic crisis and are opting to buy used tires and wheels elsewhere.
That’s understandable, he says. People need to save where they can in difficult times. But what Silverio is concerned about, and cannot understand, is the city’s recent efforts to have its various agencies charge fees for practically everything. This is being carried out on the backs of small business owners, and the Hispanic business community feels it is being particularly exploited and singled out for this scrutiny.
As a case in point, the Lopez family recently bought a food business in Detroit and has had to go through multiple challenges because of Detroit city inspectors. “They abuse their power,” Silverio says. The business ran smoothly before the Lopez family bought it, but now with these new policies, Silverio feels there are too many obstacles. Worse, he feels it is due to the fact that they are Hispanic. “We want them to let us work” is all the Lopez family asks.
As with most in the tightly knit community in Southwest, Silverio does not complain to the government or the police. He hopes these difficulties with the city and economy are temporary, and that things will get better. He does have faith in Mayor Duggan, however, and he trusts that the new mayor will move Detroit forward.
Maria International Travel
Lourdes Arzola has had her travel agency operating in Detroit for 15 years. María International Travel is located on Campbell Street close to Vernor Hwy. Over the years, the travel agency has become a community institution, a place many Hispanics visit on a daily basis, not only for their travel needs, but also for questions and advice on travel, immigration and procedures.
With the economic crisis, Lourdes has had to reduce the number of her employees and has also experienced a decline in sales. Things are different now than four or five years ago. Her family and employees work longer hours and have to tend to more responsibilities in order to survive. No one is spared from a declining economy, especially businesses that rely on non-essential services.
Still, some of the hardship could be eased and businesses would be encouraged if the city paid more attention to, and developed policies to help small businesses. There is an urgent need, Lourdes believes, for Detroit to support the small business entrepreneurial environment by cutting fees and taxes that currently affect them, by creating enterprise zones and other policies to encourage small business, and by creating safe and secure neighborhoods.
But for her and for the Southwest Detroit neighborhoods in particular, it is not all just about the economy. As an active member of the community, always involved with people and events, Lourdes is acutely aware of the social hardships her neighbors face every day because of the relentless persecution of families by immigration authorities.
As a small business owner, Lourdes feels Hispanic-owned businesses have been much more affected than others by these challenges, and she strongly believes in the need for a speedy immigration reform law that would undoubtedly encourage immigrant families, investment and growth in the City and beyond.
Las Cazuelas Mexican Grill
In 2006, with a great deal of effort and hard work, Maria Cristina Aldana and her husband, Sergio Orozco, opened their first food business, on Ford Road in Detroit.
Initially, things were going very well. The business was growing fast and Maria Cristina and Sergio began seriously looking for other locations to expand their business. But just as they were making their plans, the recession hit and halted any thoughts for expansion.
In fact, the poor economic conditions forced Maria Cristina and Sergio to relocate their business to the corner of Livernois and Michigan Avenue, where they hoped to find better customer traffic.
The couple has no current or foreseeable plans to expand their business to new locations. They face the same challenges as do other businesses that rely on discretionary spending. When times are tough, people save by cutting on luxuries such as going out to eat.
Recent policies toward small business owners by the city of Detroit add to an already difficult situation. In a common refrain heard from many business owners in Southwest, the increased cost in permits, taxes, fees, paperwork and constant regulatory reviews by the city of Detroit have made a challenging business environment worse.
Maria Cristina also believes the bad economy has created a wave of violence in Detroit, forcing businesses to use security measures, resulting in substantial additional expenses. Crime, and the city’s challenges in dealing with it, has made people feel unsafe in their own neighborhoods, and has also made it harder to attract new customers or rely on regular customers for a night out at a restaurant.
“We have had to create a new lifestyle, work harder to earn income and pay bills, having to put aside plans to grow,” the couple said. “We see the future with uncertainty, fearing for the safety of our families, employees and customers. This forces us to look for ways to attract more customers in order to survive.”
La Jalisciense Tortilla Factory
La Jalisciense Inc. opened in 1946 by Damaso Abundis and his son, Raymond, in a small storefront on Bagley Street in Detroit. Over the decades, the family business has stayed in the family and has grown substantially, much as the neighborhood around it has.
The Abundis family has seen six decades of changes, from a time when the area was predominantly residential, to the Ambassador Bridge expansion, to the resulting strong business presence that is still there.
With such a long history, La Jalisciense Inc. has seen many boom days and also economic downturns, and although the business has been affected by the current economic crisis, it has not been hurt as much as others. The owners feel fortunate the Bagley Street Mexicantown area has remained busy and their factory is surrounded by other business owners who are conscientious and have invested in keeping the area safe, clean and friendly.
The key concern for the Abundis family has been the issue of crime. Businesses rely on a safe walking and shopping environment, and any threat to that sense of security has a direct negative impact on business. The closing of the 3rd Precinct police station on Vernor Hwy. was a huge disappointment for the Bagley Street area merchants and residents who felt much more secure when that police presence was in place.
The Abundis family has seen how the Mexicantown community, one of the most vibrant areas in the city, has been affected by the economic crisis and the general rise in crime. La Jalisciense customers have been very supportive and loyal through all the changes in the city, but without proper lighting, police patrols, street maintenance and vacant building demolition, visitors feel unsafe and avoid visiting the area. The Abundis family fears many businesses won’t survive if these conditions persist.
Changes and the future
The Latino minority is the fastest growing segment of the American population nationwide, and also in the city of Detroit where it has grown by 70 percent over the past two decades while the city has shrunk by 25 percent.
It is a diverse community, coming from many parts of Latin and South America, and it is also young and highly entrepreneurial. In many ways, the Latino community is one of the most powerful financial assets of Detroit, especially in these times of bankruptcy.
While the city cannot pay its creditors, the investment in Southwest Detroit is estimated at $200 million, with over 250 businesses employing thousands of people. Given the positive impact the Latino business community has for the city, it is particularly troubling that time and again, our interviews brought up complaints about the city’s harsh treatment of small business owners.
The city’s new administration needs to review its policies for the oppressive atmosphere they create in the small business community. What is in fact needed, every business owner agrees, is an entirely different approach, one that encourages small entrepreneurial ventures whether with tax incentives, repayment programs, microloans, ease of permits or enterprise zones, and a greater focus on safety and security in the community.
Every business owner we interviewed was, despite challenges, proud to be a Detroiter. The Hispanic community has been in the city for almost 100 years. It has been an integral part of the city’s great growth, and is now committed to helping build the city’s future.
The day after bankruptcy will require everyone’s best efforts, and the Detroit Hispanic community will be, as it always has been, a vital partner in Detroit’s renewal.