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Small businesses wary of AUC move to New Cairo

CAIRO: For almost 90 years, the American University of Cairo (AUC) has defined the identity of Cairo’s Downtown area. Its 5,600 students and faculty, most of whom are wealthier than the average Egyptian, frequented local businesses, pumping huge amounts of money into the dozens of shops located along Mohamed Mahmoud Street, which runs through the …


CAIRO: For almost 90 years, the American University of Cairo (AUC) has defined the identity of Cairo’s Downtown area. Its 5,600 students and faculty, most of whom are wealthier than the average Egyptian, frequented local businesses, pumping huge amounts of money into the dozens of shops located along Mohamed Mahmoud Street, which runs through the heart of AUC’s several downtown premises.

But with the university’s move to its new campus in the New Cairo suburb slated for Sept. 1, the local economic status quo will be disrupted. Overnight, a major source of customers will disappear, and the economic character of Mohamed Mahmoud Street could be significantly altered.

But according to Ed Simpson, AUC Vice President for Continuing Education, the university will continue to retain a significant presence at the Tahrir location.

AUC is hardly “deserting the City Center or leaving anyone behind, Simpson told Daily News Egypt.

The Downtown campus will continue to host 500 employees and thousands of school of Continuing Education students, Management Center enrollees, and Engineering Services Students, and several graduate programs, says Simpson, who will head the downtown Campus after the move.

“We will also be looking to have cultural events, lectures and a variety of activities in the evenings. And, we hope to expand our offerings in the mornings and throughout the day at the Tahrir Campus.

AUC Professor of Economics John Salevurakis, however, believes that the move “will have at least some impact upon the economy of the downtown area.

Businesses that do not directly specialize in education-related goods and services will be less affected. For example, Pizza Hut and Hardees, located just off Tahrir Square, will be impacted “but probably not enough to reduce the number of workers they employ because they likely see sufficient tourist traffic through Tahrir Square to maintain operations as normal, says Salevurakis.

Simultaneously, he says, the non-AUC downtown population is sufficient to support the smaller (and more authentically Egyptian) businesses in the area. “I doubt, for instance, that AUC provides even 10 percent of the total revenue for Koshari Tahrir around the corner from the Greek Campus, he adds.

Branches of Egyptian and international café chains are also in a better position to survive the expected short-term decline in revenues as a result of the campus move.

The AUC community is the prime source of customers at the Mohamed Mahmoud Street branches of upscale cafés such as Beanos, Cilantro and Costa.

Noura Mohamed, manager at Costa café, estimates that 75 percent of her customers are students at the University. A few blocks down the street at Cilantro the average is at about 50 percent. Managers at each place anticipate a decline in sales.

But all will remain indefinitely, with the expectation that eventually other businesses will replace AUC and will bring new sources of customers.

Since Beanos, Cilantro and Costa are part of multi-million dollar chains, they have the resources to withstand short-term losses. And since Beanos and Cilantro were opened in 2005 and 2006 respectively, almost a decade after AUC first announced its intention to move, its owners clearly view the Mohamed Mahmoud location as having long-term profit potential regardless of AUC’s presence.

But for smaller businesses, especially those who specialize in university-related goods and services, such as selling notebooks or making photo copies, the future is dire.

Walid Abdel Rasul, 28, sells school supplies at a two-employee shop first opened by his father in 1981. Given that 85 percent of his customers are AUC students, he is deeply pessimistic about the future and predicts a neighborhood depression.

Ayman Salahedin, owner of Copy Center, a small print shop, would move his business to the new campus if given the chance. Other owners of similar stores, such as Amr Al-Arabi of the Arabic Library, expressed similar thoughts.

But such a move is unlikely, and if it were possible, they would not be able to afford it.

Soaring real estate prices at the new campus location make it nearly impossible for these types of shops to relocate their business. “How could I afford to pay tLE 20,000 per month for rent at the new campus, Salahedin told Daily News Egypt.

The geography of the new campus is also less favorable for small business owners. At AUC’s current congested downtown location, stores are literally positioned feet from the university gate, giving direct access to potential customers.

However, the new 260-acre campus is at a rather isolated location with no obvious place for store owners to relocate. Even if they could afford the rents, it is not clear they could find a profitable enough location.

Although Saleverakis predicts that many of these small copy shops will be forced to close in the fall, Simpson still maintain a more positive outlook.

“I think the storekeepers may be pleasantly surprised at just how much business AUC will continue to bring downtown, as well as in New Cairo.

Abdel Rasul wishes the University would provide some kind of economic assistance to help owners like him, who have served the AUC community for decades, relocate to the new campus. But this is only wishful thinking. He cannot recall any store owner, including himself, who has attempted to petition the University for such assistance.

What will he do?

“Rabenna ysahhil, he says.

Topics: Aboul Fotouh

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https://www.dailynewsegypt.com/2008/06/15/small-businesses-wary-of-auc-move-to-new-cairo/
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