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Support your local developer… lose your business

By 5 June 2009 No Comment
Photo by Alice Ju

Rights of passage: Stuffed animals make way for a new subway station | Photo by Alice Ju

When Luo Lei and his wife signed a five-year lease last year on a small storefront in Beijing’s historic East Town District, they thought they had found the ideal place to fulfill their dream of launching their own line of stuffed animals. They had planned to open branch stores by 2010, followed by a themed restaurant. Now the couple’s big plans have slammed into an immovable object — a new city subway station.

In April, Luo and his fellow business owners discovered that they would be forced to relocate within two months when the local authorities would begin demolishing their neighborhood to accommodate the new facility. The shopkeepers will have to start over in a new area, losing the time and money invested in their local clientele.

“More or less, there [will] be some loss,” Luo said.

None of the storekeepers received individual notices — the news was announced through flyers posted in the neighborhood. By whatever the means, the verdict appears final: “We will have to move when they tear down the buildings,” said Su Santang, a local gallery owner.

The new subway location is close to Nanluoguxiang, a local street popular for its distinctive bars and cafes. With the constant influx of tourism, there is a growing need for neighborhood parking space. East Town District officials claim that public transportation access will reduce local traffic and bring more tourists.

Yet the district owes its success to more than its historical monuments. “Our stores make this street more prosperous than before,” Luo said. If the subway station replaces local stores, Nanluoguxiang alone may not be able to support the local economy.

Luo’s experience is not uncommon in Beijing, where old neighborhoods and even relatively new buildings often give way to government-mandated urban redevelopment programs. Luo knew of this possibility when picking his store location, but thought East Town’s status as a historical preservation area offered protection from displacement.

Not everyone plans to leave the neighborhood passively. Luo and some fellow shopkeepers are trying to negotiate with East Town officials for higher compensation. The average store’s remodeling fees cost around 60,000 RMB, Luo said — approximately a year’s worth of income for an average Beijing citizen, according to 2008 city statistics. Without the negotiation, the compensation received may not cover their investments.

Yet Luo is very positive about the response he anticipates from the government. ”The government is moving toward building more friendly relationships with its people than ever before,” Luo said. “[The officials] will be considerate and reasonable.” If East Town officials handle his appeal the way they notified the neighborhood, however, there is a chance that Luo’s view may again prove to have been overly optimistic.

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