Stakeholders and Money Donna Ann Harris, Heritage Consulting Inc. & Diane C. Williams, Business Districts Inc.
Introduction Brief overview of Main Street Four Point Approach Integration of NYMS Housing point Involvement and role of stakeholders (owners/merchants) in downtown revitalization Overview of commercial district economics
Introduction Expectations of return, role of incentives and willingness to invest Motivating owners to invest, breaking down barriers to encourage participation What is really possible Q and A
Review: Main Street 4 Point Approach What it is: Volunteer driven, historic preservation based economic development program Why we do it: Downtown s role in the community s tax base, heart/soul of town
Review: Main Street Approach How it gets done: Comprehensive approach to downtown revitalization; stresses incremental, quality improvements; self help Who does it: Volunteer committees do the work, manager as orchestra conductor
Comprehensive approach to revitalization Promotion sells the image and promise of downtown Organization gets people working together Design makes downtown clean, safe and attractive to shoppers ER strengthens and diversifies downtown s economic base
4 Committees--Design educates others about good design provides design advice encourages quality improvements to public and private properties plans downtown s development motivates people to make improvements through incentives
4 Committees-Organization raises money for projects and administration recruits and manages volunteers helps manage the staff promotes the program to the public manages the money
4 Committees Economic Restructuring learns about current economic conditions and opportunities for growth strengthens existing businesses & recruits new finds new uses for traditional MS buildings develops incentives and capital for rehab monitors economic performance of district
4 Committees--Promotion understands the changing market and competition identify downtown assets defines your market niche creates new image campaigns retail promotions special events
Board of directors/ms Committee is responsible for raising all the money sets direction through annual work plan hires, fires, rewards the manager comprised of 4 committee chairs and other stakeholders information flow via committees
Why MS has been so successful across the country is comprehensive success is incremental action oriented, not planning oriented encourages partnerships
Success. builds on existing assets stresses quality acknowledges that change is hard promotes self help
2006 Reinvestment Statistics Dollars Reinvested:- Total amount of reinvestment in physical improvements from public and private sources.$41.6 Billion Average reinvestment per community (i):$11,083,273 Net gain in businesses:77,799 Net gain in jobs:349,148 Number of building rehabilitations: 186,820 Reinvestment Ratio:- the average number of dollars generated in each community for every dollar used to operate the local Main Street program.$25.76 to $1
Role of housing in the mix Main Street encourages downtown living and upper story renovation, but not storefront living residents add vitality and shoppers to downtown housing development is an outgrowth of Main Street success
More on housing housing is often a later stage product after owners have begun to invest in storefront rehab economic integration of downtown is essential for a viable business mix to thrive
A variety of organizing vehicles for downtown revitalization through an existing nonprofit Merchants association Chamber BID CDC NPC RPC
Variety of organizing models free standing new local nonprofit organization hybrids of all of these
Who is a stakeholder in downtown? property owners merchants all community residents local government
More stakeholders community organizations (garden club, service clubs) local/regional economic development/planning groups schools media (radio, TV, newspapers, bogs)
More stakeholders downtown churches/synagogue s/mosques chamber/merchants/ biz association banks OTHERS?
Why stakeholders must be involved are the main investors and users of downtown real estate pay a substantial portion of town s real estate and sales tax avoids complaints and ill will; encourages transparency promotes inclusion and forward focus
How stakeholders benefit increasing foot traffic will lift all merchants addressing crime and safety problems, and sprucing up helps the entire town commercial rents increase, better quality retail tenants
Ways to build formal stakeholder involvement As a board members of your existing organization As MS committee members (if an already existing org) As members of a new advisory committee As committee members of 4 MS committees
What to ask stakeholders for Their time Be explicit about volunteer time commitments for board or committee members Provide real orientation, in person and on paper
What to ask for Their vocal support in public/private In the press, and as advocates to others in downtown Make connections to their network Their financial support Become a member of your organization Match the NYMS funds
Grafting a Main Street agenda onto your existing organization Bring together public and private interests Establish tasks/agenda exclusively for the revitalization of downtown
Grafting Main Street on Maintain focus on issues that affect downtown and local issues Develop new activities, become a symbol of renewal and future for downtown
The Money Stakeholders Who has what at risk? Do property owners and business owners have the same goals? Maybe What about owner-occupied properties? How can New York s housing point enable more money?
The Money Stakeholders (cont) Balancing pragmatic needs- Of owners for return Of LPA/local community for building and housing improvements Of NYMS for enabling statewide housing
Economic Success Principles for Downtown Access Sufficient commercial activity Pedestrian traffic Vehicular traffic Strong businesses Strong leasing interest Demographics Target Geography Ongoing Investment Ongoing Revenue Generation
Considering Downtown Economics Largest roles for key stakeholders-business owners, property owners, and local government Characteristics of successful commercial districts What are the obstacles? What inspires confidence? What constitutes sustainable financial models? When can investment occur?
Retail Attraction Retail follows Residential Concentrations, clusters, and destinations Visibility Potential for bonus revenues Relationship to center standards Right size Right mix Match to potential customers
Real Estate Ownership Investors: Active and Legacy Owner-Occupied Perspectives on Investment Return Income, Appreciation, and Asset Management Tenanting Ownership Strategies: Cash Cows, Owner Fun, etc. The Role of Speculation-Real and Perceived
What Presents an Obstacle? Regulatory Requirements--Too much or too little Building Code and Life Safety Business Friendly Emphasis on Process versus Result Local/Regional Construction Costs I m from government and here to help. Unfamiliarity with Historic Preservation
What Inspires Confidence? Commitment to change, or a plan for change Local government commitment Visible evidence External investment--increased activity, new owners, or employment changes Internal investment--individual business growth Improving real estate market
Local Business Models Retail Operation Existing Sustainable $150,000 $400,000 Merchandise $75,000 $200,000 Wages $39,104 $56,160 Rent $9,600 $35,000 Repairs $2,500 $2,500 Advertising $3,600 $24,000 Supplies $4,500 $12,000 $15,000 $40,000 $696 $30,340 Sales Other Profit Before Tax Considerations Local median incomes Upper floor tenants Sustainable business practices Building owner maintenance
Local Business Models Restaurant Operation Existing Sustainable Sales $300,000 $800,000 Food $135,000 $280,000 Wages $109,200 $356,720 $16,000 $70,000 $3,500 $24,000 Supplies & Disposal $15,000 $40,000 Profit Before Tax $21,300 $29,280 Rent Advertising Considerations Local median incomes Upper floor tenants Sustainable business practices Building owner maintenance
Project Hypothetical Average Downtown Building Total Project Cost of $133,000 2,500 SF Footprint Ground Floor Retail Space 2.5 Upper Story Rental Units $75,000 Façade Improvement $68,000 Upper Story Rental Unit Improvements Project Eligible for NYMS Grant Funding
Project Hypothetical (cont) What dollar income justifies a Total Project Cost? What realizable market value justifies a Total Project Cost? Is this familiar?
Role of Incentives What is the goal? Where is your Main Street effort? Who owns the real estate in your downtown? What s in it for property owners? Are they amenable to incentives? Do the incentives match the goal and serve property owner objectives?
Role of Incentives Matching NYMS processes and owner expectations Matching other incentives with NYMS Providing gap versus first in incentives Considering the status of local revitalization and local market
Emphasizing the possible Identify your best opportunities Strong owner-occupied businesses Strong, local tenant businesses Engaged local property owners Determine their plans for their buildings Bring them together when announcing the program For NYMS grantees serving multiple commercial districts, recognize differing economics and markets Act quickly to address any program or process issues
TOP TEN TIPS 10. Sell your own program 9.Find an excellent rehab specialist, but do not cede all authority to him/her
TOP TEN TIPS (cont) 8. Use a rehab specialist to sell technical aspects of the program, especially preservation elements 7. Tell applicants immediately if there are delays
TOP TEN TIPS (cont) 6. Include updates on project status in newsletter/web site etc. 5. Stop by to see them 4. Send a simple monthly update to every applicant about the status of their project
TOP TEN TIPS 3. Put everything in writing 2. Over communicate with potential applicants 1. Be honest about requirements and timelines
Understand the rules before you promote the NYMS program Get clarity about all the NYSMS requirements Establish rapport with NYMS regional staff, but ask the hard questions Do not reinvent the wheel, get help from other LPAs
Understand the rules Share your paperwork with other LPAs
Promote all completed projects Ribbon cuttings with elected officials, especially state officials Newspaper stories Radio interviews
Promote completed projects On your web site/newsletter To other economic development groups in the region
Summary Main Street Four Point Approach Involvement and role of stakeholders Overview of commercial district economics Expectations of return, role of incentives and willingness to invest Motivating owners to invest, breaking down barriers to encourage participation Top ten tips
Please ask questions