The Brainwash Cafe and Laundromat, beloved for its salads, eclectic burgers and cheap suds, is stuck in a bit of a spin cycle thanks to a huge construction project on Folsom Street between Seventh and Eighth streets.

At the end of 2017, the business could be the most profitable it’s ever been — if it survives.

But, its owner says, it may be forced to close within months, ending a nearly 30-year run in the South of Market area.

The issue is the nearly block-long construction project for 99 Rausch, a 112-unit residential complex being built next door. Since work began in late February, Brainwash’s business has slowed to a crawl, due in part to the construction debris, the sounds of jack-hammers and increased truck traffic.

“We need the housing in this city,” Brainwash owner Jeff Zalles said. “I get it. I just didn’t expect it to be this bad.”

Brainwash’s situation will sound familiar to San Franciscans — a small business with razor-thin profit margins can’t outlast a nearby construction project that could eventually bring it new customers.

Susan Schindler founded Brainwash in 1989 before selling it to Zalles a few years later. Over the decades, she watched musicians, college students, day laborers and startup CEOs walk through the door.

She still owns the two-story building, the bottom floor of which is occupied by Brainwash. And for the first time since she took over the property, she’s having trouble finding tenants for upstairs office units.

Schindler said it’s because of the construction.

Her real estate broker advised her to lower rent for the spaces by 20 percent, which she eventually did. They remain empty, despite the building having a history of 100 percent occupancy.

“It is a sad irony to me that the business which helped make a depressed neighborhood more desirable is now being destroyed by the gentrification it inadvertently helped to create,” she said.

Zalles said he knew there would be slow months once construction began. The 5 percent decline in revenue earlier in the year was expected, he said. It wasn’t until the site moved beyond foundation work to above-ground construction that problems surfaced.

This year has been a blur of traffic cones, work trucks and storage containers. A makeshift tunnel of pipes and wooden panels was built, extending past the construction zone to Brainwash to shield pedestrians.

On a recent Friday afternoon, there were more construction workers sitting in Brainwash’s patio area than customers.

In October, Brainwash revenue was down by more than 20 percent — about $27,000 — compared with October 2015. From November through mid-December, it was down 18 percent.

The location has lost $47,000 in the last two months, said Zalles, and could end 2016 with a deficit of close to $200,000.

“I’ve poured my savings into this place just to stay afloat,” Zalles said. “But I’m tapped out now.”

The city doesn’t have construction mitigation policies in place concerning private projects and the short-term impact they have on small business.

This month, Zalles sent a letter to the city, specifically to Supervisor Jane Kim, who represents his district, explaining his situation.

The residential complex is a private development. And while the city doesn’t usually get involved in these types of projects once they are approved, there are plans for officials to have a bigger role when it comes to construction mitigation, according to Gloria Chan of the Office of Economic and Workforce Development. For now, though, the city just maintains the lines of communication between construction companies, marketing agencies and business owners.

“It’s important that private developers work in good faith within the community to support local businesses so that they can continue to thrive throughout the short-term construction impacts and beyond,” Chan said.

Zalles said the conversations, while helpful, must lead to some type of change, and the change needs to happen immediately. Brainwash, he said, is struggling to make the rent for the first time in its existence.

Zalles met this month with Angela Cheung, president and broker for Pillar Capital, which represents the developer for 99 Rausch. After the meeting, Cheung took action to aid Brainwash as construction continued.

A temporary storage shed was relocated away from the Brainwash patio.

Lights were added to the temporary walkway leading to Brainwash to help illuminate it at night. A broken streetlight was fixed near the site. And a banner was hung, directing drivers to the open-during-construction Brainwash.

Finally, Cheung instituted a system in which the developer, Belrich Partners LLC, would purchase $1,000 worth of food from Brainwash each month in the form of “Brainwash bucks” to be be handed out to subcontractors and local businesses.

Pillar Capital is also trying to establish relationships with other nearby businesses, including the Bike Connection shop just a half block away from the site. The complex is expected to have storage for at least 104 bikes.

“Our goal is to help give business to the neighbors as much as we could,” Cheung said in an email. “After the new condos are being occupied, we expect that would help boost our neighbor’s businesses and the overall neighborhood.”

The complex won’t be complete until late next year, and as hundreds of bedrooms continue to take shape on the upper floors, construction will only increase in the coming months.

Zalles said all he can hope to do is weather the storm.

“This isn’t anyone’s fault,” Zalles said. “For me, it’s just wrong place, wrong time.”

Justin Phillips is a San Francisco Chronicle staff writer. Email jphillips@sfchronicle.com Twitter: @JustMrPhillips