COOS BAY - A visitor’s comment while passing down Central Avenue last month epitomizes the challenge that Melvin Lesher says face business owners in downtown Coos Bay.

The 73-year-old owner of Little Coyote Cafe watched as the woman pointed to the plywood-covered windows on the Chandler Hotel across the street. She told her companion they must be in the bad part of town.

He quickly corralled her and invited her into his cafe. He wanted to explain. Yes, the building is in need of structural repairs, but the area is generally good, he told her.

She left satisfied with her meal and a better appreciation for downtown, Lesher said. But some business owners feel like the cards are stacked against them, when they have to woo customers in the shadow of empty buildings and deteriorating exteriors.

“This business cannot survive without investing money into the appearance of the general area,” Lesher said.

So he’s working with his landlord, James Tarantino of Coos Bay, to give the cafe a better look -- or as he puts it, installing gingerbread.

“It’s all in eye appeal,” he said.

Workers recently started reconfiguring the exterior, with stucco pillars and brick adornments replacing tilework. Lesher plans to replace wood coverings with obscured, fluted glass on the second story. He also wants to put an awning with heating and music speakers all around the Coke Building with the help of a grant from Coos Bay. Tarantino’s looking to lease upstairs rooms for mixed use purposes after years of vacancy.

Lesher and Tarantino aren’t the only ones making improvements to the downtown and Empire business areas. Dozens of businesses have taken advantage of virtual business incubator and facade improvement grants from the city. The program was designed to keep businesses afloat during the downturn and could entice new entrepreneurs to the area, said Mayor Jeff McKeown.

Many of the empty storefronts are within walking distance of both the Chandler and the condemned Lockhart Building, which both dampen the appeal of the area, said Realtor Andy Nasburg

“That makes a real hole in the thing,” he said.

McKeown agrees the city needs to deal with the two buildings. The city has hired a structural engineer to figure out a way to tear down the Lockhart, but there are concerns about damaging neighboring properties. City officials also have been talking with the Chandler’s owner about fixing it.

“The Chandler is a great asset, but a complex issue,” he said. “We want to deal with it without it becoming a liability for the city.”

Nasburg said downtown businesses face the other challenge of competing against the department stores that have parking lots. Even though parking is readily available downtown, people automatically go to places with parking lots, he said.

McKeown said parking really isn’t a problem. Instead, he wants to find ways to get people to visit the downtown area, as well as the Empire’s business center. He sees the new visitor center, the up-and-coming Boat Building Center and the pedway project as examples of future attractions.

“It’s a tough economic environment, but I think we need to be prepared when this turns around,” he said.

The problem for potential landlords is tenants are few and far between, Nasburg said. But it’s a good time to buy, because prices have come down, he said.

To capitalize on that, the city has assembled a list of more than a dozen vacant storefronts available for rent once investors come looking for space.