Institute for Local Self-Reliance (ILSR) new report suggests a dozen ways that civic leaders can use the American Rescue Plan Act (ARPA) to strengthen local economies by supporting small business development.
By Kennedy Smith – January 24, 2022 Small businesses build local wealth, with benefits for nearly every aspect of the community and region. They offer a path to prosperity for hard-working entrepreneurs. They keep a larger share of their economic output within the community than businesses with outside ownership, putting that output to work to support schools, public safety, roads, parks, affordable housing, and many other vital public needs. And young, small businesses create the bulk of the nation’s new jobs.
But one of the biggest challenges facing America’s communities is leveling the playing field for small businesses and intentionally moving away from the past decade’s Amazon-take-all trajectory. The $1.9 trillion ARPA provides America’s towns and cities with the money and encouragement to do so.
Our report suggests twelve ways in which communities can use some of their ARPA allocations to strengthen and grow small businesses. It spotlights towns and cities that are already using ARPA money to cultivate small-scale manufacturing, provide affordable commercial space, close the racial entrepreneurship gap, support employee business ownership, improve small business procurement programs, and more.
January 12, 2022 | 10 Predictions for 2022 | By: Matthew Wagner, Ph.D., Chief Program Officer, Main Street America |
Making predictions is always a risky proposition. Given the accelerated nature of change brought on by COVID-19, understanding trends in real-time and forecasting the impacts on the work of place management and small business development can be challenging. However, having some idea as to what to keep an eye out for and where to apply some additional focus represents a valuable pursuit given our time limitations and the volume of work inputs. As such, rather than position this purely as a set of predictions, I would suggest this collection of thoughts represent areas for further consideration, investigation, experimentation, and discussion throughout 2022.
From agriculture to manufacturing, as industry sectors mature, the drive to increase productivity and lower labor costs results in the development and infusion of new technology and automation solutions. As a result, employment migrates to other growing sectors such as technology, service, and retail/hospitality industries. This worked fine in an economy with a fundamentally greater labor supply than demand. However, COVID-19 has greatly accelerated workforce shortages, with particular impacts on the retail, restaurant, and hospitality sectors. To drive this point even further, 4.5 million workers left their jobs in November 2021. Restaurants and hotels represented the largest segment of separations. However, they also logged the biggest decline in openings.
As such, I predict that structural shifts have occurred that are driving an accelerated integration of technologies and business model shifts to diminish the need for labor in more of our Main Street retail, restaurant, and hospitality businesses. National chains are already seeing movement in this area. As consumer acceptance rises, we can expect these shifts to scale and become accessible and adaptable to Main Street businesses.
The future may be closer than we think. Already, many Main Street restaurants are shifting to a counter service model rather than having to rely on waitstaff. Many businesses have also scaled-down menu items to limit cook staff needs and control for supply chain hiccups. Look for retail and restaurant platforms like Shopify, MenuPad, and Ritual to increasingly bring technology solutions to a scale that better fit the needs of mom-and-pop businesses in everything from QR code dining/shopping, self-checkout, contactless payments, and “Buy Online, Pick-up in Store” (BOPIS).
I predict that rather than a full migration to showrooming concepts along our Main Streets, we will begin to see a movement toward hybrid formats that take concepts from showrooming and “webrooming” (the act of researching products online and then buying in-store). This will allow mom-and-pop businesses to carry slightly less inventory, decreasing floor space needs, while remaining accessible to traditional shoppers. In addition, this hybrid format will further accelerate more cooperative retail concepts as complementary stores look to co-exist in one space. As I travel across Main Street communities, I continue to see interesting combinations ranging from a barbershop and apparel store combo in Altavista, Virginia, to a bike store and coffee house in Rock Springs, Wyoming.
Research suggests it can take anywhere from 18 to 254 days for a person to form a new habit and an average of 66 days for a new behavior to become automatic. Given the length of COVID, many of us have developed a whole host of new habits, many of which revolve around consumer spending habits.
Looking ahead at opportunities for continued growth in our downtowns and commercial corridors, we should anticipate that retail spending around health and fitness (e.g., sporting goods up 29.9 percent), home improvement, furnishings (e.g., furniture up 28.2 percent), décor, and gardening will continue to grow in 2022.
And while counter to popular belief that apparel was stuck in 2021, the most recent Census data indicates a 51.2 percent increase in apparel spending over 2020. I suspect much of that was in leisure and sporting wear as people migrated their apparel spending from business/office wear to being at home and using their Peloton. As such, I would suggest that the pace dramatically drops as our wardrobes have become more balanced.
Keeping with the new habits theme, consumers also have found acceptance in year-round outdoor dining and even delivery from the local grocery store. One of the largest shifts has been in the growth of BOPIS. In fact, nearly 67 percent of all shoppers used BOPIS during the first six months of 2021, and by 2025, 10 percent of all retail sales will be through this method of shopping. Check out this great infographic covering the BOPIS consumer movement here. With habits such as delivery and BOPIS remaining sticky and growing in demand, it is only a matter of time before new business endeavors at the local scale—either led by entrepreneurs or Main Street programs—begin to establish cooperative delivery services or a one-stop pick-up location for BOPIS purchases made through downtown or district corridor. And finally, I predict that we will see more growth in food truck hub developments and communal dining “parks” with delivery from participating downtown restaurants, becoming a more permanent fixture to our public gathering areas.
Based on the groundwork research from Robert Putnam’s “Bowling Alone,” we know that civic engagement and participation have been declining for many decades. COVID-19 certainly impacted our work in Main Streets and our grassroots model in principle. Based on a survey of Main Street Program directors, 58 percent reported “some decrease” or a “substantial decrease” in actual volunteer hours served.
I predict we’ll take what we learned about “volunteer efficiencies” during the pandemic to inform how to better both attract, engage, and retain volunteers. Using newer technologies such as Zoom for meetings and touching base have set the stage for making it easier to reach and communicate with volunteers.
We are also getting far more used to “project-based volunteering” in which volunteers are given an activity to complete and then when finished the opportunity to do something else. Project-based volunteering often occurs at the volunteers’ own time and convenience, rather than the expectation of coming to a committee meeting. This has become more widely used in promotions/event planning, but I anticipate migration across the Four Points.
I also think we should anticipate that Main Street organizations will seek to partner with other local organizations that represent areas of engagement on the Four Points in order to leverage capacity and resources. As such, work planning should also evolve into more joint planning efforts, resulting in more holistic work planning for our downtowns and commercial corridors and reflecting the entirety of revitalization activities.
The “Great Business Model Pivot” will continue throughout 2022. According to data from American Express’ Entrepreneurial Spirit Trendex survey, 76 percent of business owners have pivoted or are in the process of pivoting their business model to maintain revenue, and among those that already pivoted, 73 percent expect to pivot again in the next year.
In 2022, look at the primary pivot that is occurring as a result of the accelerated integration of technologies to adjust for workforce and supply chain issues. As place management professionals, one of our greatest strengths is connectivity. Start building your database of resources in these areas as part of your ecosystem-building efforts.
Second, focus on helping your businesses diversify revenue streams beyond walk-in traffic to strengthen and grow the economic base of your district. It’s important to view our downtowns and commercial corridors as layered markets in order to build revenue resiliency for small businesses. This includes common markets like local markets and tourism, and growing into e-commerce, subscription box services, and even wholesaling. See this previous blog suggesting other growth market areas for small businesses.
Every data point suggests remote work will sustain much of its COVID-related captures as a percent of the overall workforce. This has only been reinforced by the Omicron variant, with further companies delaying return to the office timelines. Beyond the impacts on remote worker migration patterns that are often reviewed and discussed, for place professionals, we should also be thinking about impacts relative to impacts on uses and functions of downtown spaces.
According to the Commercial Real Estate Association, office vacancy rates currently stand at approximately 15 percent nationally. I would argue that while there may be some stability coming to this sector, it does not necessarily translate to people coming back and occupying the space. For example, for a number of businesses, there may be lease obligations not currently showing up in the vacancy numbers. And for office users, many are maintaining their spaces but projecting fewer people due to hybrid remote work options and moving to greater space per person requirements reversing the trend to shrink over the past many years.
As such I predict we will see more commercial movement in repurposing office space to housing or longer-term stay Airbnb managed units.In December 2021, month-long stays at Airbnbs increased by 68 percent, according to the company. These opportunities are best positioned for smaller communities within a two- to three-hour drive time of major metropolitan areas that offer amenities such as co-working spaces, internet connectivity, a pleasant downtown with third spaces, and outdoor recreation access.
Currently, consumers’ psyche suggests travels to any destination will largely involve a few quick refueling stops at a highway interchange, limiting opportunities to attract visitors to your community or neighborhood. However, with electric charges taking anywhere from 20 minutes to 8 hours—a drastic increase from the time needed to refuel at a highway gas station–there is a great opportunity to leverage that wait time for shopping, dining, and touring opportunities in close proximity to the charging stations. In other words, the density of activity will be a critical test as to where electric car tourists will make their stops.
Aligned with electric car users are those interested in more sustainable tourism. New research released from Booking.com, containing insights gathered from more than 29,000 travelers across 30 countries, suggests that the pandemic has been the tipping point for travelers to finally commit to their own sustainable journey. The desire for local community experiences is high on the list as almost three quarters (73 percent) want to have authentic experiences that are representative of the local culture when they travel, 84 percent believe increasing cultural understanding and preservation of cultural heritage is crucial and 76 percent want to ensure the economic impact of the industry is spread equally in all levels of society.
One of the big shifts in place management is our focus on structural shifts in the workforce. Workforce constraints and lack of workforce housing have reached a crisis point in the U.S. Unfortunately, there remain very few national policies and programming that will impact these issues in the short term, and greater innovation is needed as to long-term solutions. As such, look for continued experimentation, fail fast activities, and creativity to address this issue such as micro-living units and 3-D printed homes.
I predict one such innovation that will gain traction is tiny house developments, largely as part of near-end downtown infill. This housing option would likely be attractive not only for younger workers at an affordable price but also for remote workers seeking a work-from-anywhere experience near business services and social activities found in our downtowns.
One example is the Cass Community Tiny Home Development, a nonprofit development in Detroit, Michigan, consisting of 25 tiny homes ranging from 250 sq. ft. to 400 sq. ft. The project will also offer a rent-to-own program.
As such I predict two areas of growth for small-scale producers: The first comes from providing unique goods to smaller retail and wholesalers that unlike Walmart and Amazon are not in a position to control their supply chain destinies in keeping inventory on shelves for consumers.The second is as a third-party manufacturer for larger industries needing regional parts providers during this time as supply chain issues persist through 2022.
Without a doubt, the global pandemic has been the greatest accelerator of economic and societal shifts, impacting everything from the way we work, recreate, and engage with each other. Effectively, no part of our lives remains exactly the same as in February 2020. For place managers, these accelerated shifts have meant fundamental changes in our work, from how we work to the issues needing to be addressed, and opportunities to leverage. As we launch into 2022, I look forward to seeing how place professionals and mom-and-pop businesses across the country adjust, experiment, and innovate, once again demonstrating our Main Streets’ profound resiliency in the face of change.
Meet the Author
Matthew Wagner, Ph.D., Chief Program Officer: Matthew Wagner, Ph.D. serves as Chief Program Officer at the National Main Street Center, Inc. In this role, he is responsible for driving the Center’s field service initiatives including the development and delivery of technical services for Main Street America and Urban Main programs, directing the Center’s research agenda, as well as the recently launched New Business Development work to focus on national partnerships, brand leveraging and new business growth areas.
Source: New Research from Brookings and the National Main Street Center on the Value of Main Street Organizations | By: Mike Powe, Ph.D., Director of Research, NMSC, and Hanna Love, Senior Research Analyst, Metropolitan Policy Program, Brookings Institution – December 1, 2020
The National Main Street Center and the Brookings Bass Center for Transformative Placemaking released new collaborative research focused on the role that place governance organizations, like Main Street programs, play in revitalizing rural downtowns and promoting equitable rural economic and community development. The research briefs represent in-depth insights from on-the-ground data collection conducted in three Main Street communities between February and March 2020—Emporia, Kansas; Laramie, Wyoming; and Wheeling, West Virginia.
Capturing insights directly from residents, small business owners, and leaders, the series illuminates ways local Main Street programs are at the vanguard of rural downtown revitalization and the ways Main Street can be critical to community resilience and recovery. In addition to their potential for inspiring new ideas, we hope the series can serve as a tool for Main Street organizations to advocate for greater support for your programs.
Click here to learn more and read all four of the briefs.
The Arizona Downtown Alliance in partnership with the Arizona Preservation Foundation hosted a FREE webinar, “How Communities are Pivoting for the Holidays” on Tuesday, November 10 ,2020 from 1:00 PM to 3:00 PM. As we know, communities across Arizona have spent much of their pandemic downtime reimagining their events and most currently planning for upcoming holiday activities. During this webinar, representatives from four rural communities shared how they have pivoted over the last few months in response to the pandemic, talked about their efforts and programs they have implemented to support their local businesses during these challenging times, and highlighted some of the events and promotions they have planned for this year’s winter season and into 2021.
Panelists: • Vance Bryce, Executive Director, Graham Chamber of Commerce • Sarah Ferry, President, Kingman Main Street • Gina Gavazzi, Program Coordinator, Kingman Main Street • J.J. Lamb, Executive Director, Vail Connects/Vail Preservation Society • Holly Rakoci, Executive Director, Casa Grande Main Street • Danny Smith, Board Member, Safford Downtown Association
Welcome to the 2020 edition of State of Main, the annual publication of Main Street America. This year’s edition celebrates the broad diversity of champions that make up our powerful network and offers resources and solutions for leading revitalization efforts. We encourage you to check out our Main Street Forward campaign for the latest guidance on how to navigate the COVID-19 recovery process.
Our Year Together
The Main Street American Network has accomplished so much together over the past 40
years—not only in good times, but also in challenging times. This is a difficult period for our country and our communities, but our collective work over these past four decades, especially our accomplishments in 2019, shows that Main Streets have the power to persevere. Now more than ever, we have a crucial role to play in supporting small businesses, maintaining and improving quality of life for all, and ultimately restoring the vitality of commercial districts.
Please note: Clickable links only work in PDF version, not in reader mode.
Thank you to the following Allied Members for their support of this year’s publication:
AirNetix, LLC | Discovery Map International, Inc | Distrx | PoasterBoard.com | Resonance, LLC | Rileighs Outdoor Décor | Urality | W.F. Norman Corp
It may be tempting, in coping with revenue losses brought on by the pandemic, for governments to reduce funding for community economic-development organizations, but it would be short-sighted.
PATRICE FREY, MAIN STREET AMERICA | MAY 1, 2020 | OPINION
With the recent replenishment of the Paycheck Protection Program, Congress and the Trump administration hope to avert a massive and catastrophic closure of small businesses amid the economic devastation of the COVID-19 crisis. But while the additional funds for the PPP are desperately needed, a successful rebound will require more than a one-time infusion of cash.
State and local elected officials will soon find that they are the next — and last — line of defense in protecting their communities (and tax rolls) from a failure of small businesses at a scale unlike any ever seen in this country. A recent study by our organization found that as many as 7.5 million small businesses are at risk in the coming months, especially those employing fewer than 20 people.
These businesses urgently need hyperlocal support systems that link businesses to resources that will aid them through the next 18 to 24 months. Fortunately, such support systems already exist in thousands of cities and neighborhoods across the country in the form of Main Street Programs, Business Improvement District associations and other kinds of downtown organizations. The local economic-development leaders who head these organizations are typically well known in their communities as trusted sources of information and as “connectors” to business support resources. They are also extremely knowledgeable about their communities’ business environments and the local “players,” which is invaluable in helping to broker creative solutions to get businesses through challenging times ahead.
And creative solutions will be in high demand. Small-businesses that survive stay-at-home orders, whether aided by the PPP or not, face a long and difficult recovery. Dramatic unemployment figures suggest that many Americans simply won’t have the spending power they did before the crisis. Even where consumers are able to spend, their behavior is unlikely to return to pre-pandemic norms anytime soon. After stay-at-home orders are lifted, residual concerns regarding coronavirus transmission are likely to slow the recovery of the restaurants and retail and service businesses that are the heart of communities.
Business owners are likely to encounter a confusing patchwork of local, state, federal and philanthropic funding sources, and they are going to need help identifying suitable programs and navigating often-cumbersome application processes. They will also need advocates in their corner to work with property owners and negotiate lower or deferred rents, and they’ll need assistance, where feasible, in transitioning some of their business to e-commerce. On this latter point, our research indicates that approximately two-thirds of small businesses have no online presence, a troubling figure given that online sales are likely to be a lifeline in the coming months.
The risk as state and local leaders look to trim budgets in the coming weeks and months is that they will cut any program that is not directly tied to health, human services and education. We’ve seen this before, post-Great Recession, when governments reduced or eliminated dollars for local business-support efforts. Such moves are short-sighted and have painful consequences, largely in the form of lost jobs and reductions to state and local revenue from taxes and fees. Ultimately, elected officials in many places elected to restart these programs, acknowledging that aid to local economic-development programs has a return on investment that far exceeds their cost.
In coming budget negotiations, elected officials will be wise to recognize that they are playing the long game in bringing their communities back from COVID-19. We can coax that recovery to a faster and stronger outcome if we can keep the focus of our support as hyperlocal as possible and if we can maintain the connector organizations that help small business on the ground, community by community. Ultimately, modest expenditures to support local economic-development organizations now will deliver a healthier and more stable tax base in the months and years to come.
Governing‘s opinion columns reflect the views of their authors and not necessarily those of Governing‘s editors or management.
Source: Arizona Heritage Alliance Press Release – May 28, 2019
Arizona Senate Bill 1241 (state parks board; heritage fund) – introduced by Senator Kate Brophy McGee (R-Paradise Valley) and co-sponsored by Senators Paul Boyer, Heather Carter, Sine Kerr, Tony Navarrete, Lisa Otondo, and Frank Pratt – has been transmitted to Governor Doug Ducey for his review and signature. SB1241 restores the Arizona State Parks Heritage Fund to be funded by grants, donations, and direct appropriations until Arizona Lottery encumbrances are repaid and removed.
House Bill 2701 (state parks; lottery; heritage fund) as also introduced this session by Representative Joanne Osborne (R-Buckeye) and co-sponsored by her House colleagues Andres Cano, Regina Cobb, David Cook, Tim Dunn, Charlene Fernandez, John Kavanagh, and Ben Toma, as well as Senator Sine Kerr. Although this bill whizzed through committees and the House and Senate, it was held as a budget bill. HB2701 would not only have put back the Heritage Fund into statute, but it would have provided full funding of $10 million from the Arizona Lottery – its original funding source from 1991 to 2009.
“It has been ten years since the State Parks Board was forced to cancel or suspend $11.7 million in Heritage Fund grants already awarded and contracted. It has been a long, hard journey to restore the Heritage Fund, but we finally did it,” said Janice Miano, Arizona Heritage Alliance Board President. “This year, building on past efforts, hundreds of our members and friends voiced their support for one or both bills via the Legislature’s Request to Speak system and hundreds more communicated through phone calls, emails, letters, or attendance at committee hearings.”
“If anything, we’re tenacious. We won’t give up until the State Parks Heritage Fund is 100% whole again. We’re thankful to our bill sponsors, all legislators, and our friends for making great progress this year,” said Russ Jones, Alliance Board Member and former State Representative who introduced bills in 2011 and 2012 to restore the Fund.
ABOUT THE ARIZONA HERITAGE ALLIANCE
Formed in 1992, the Arizona Heritage Alliance is a non-profit 501-c-3 organization that is funded solely with private donations, grants, and memberships. The Alliance’s mission is to protect, preserve, and enhance Arizona’s historic, cultural, and natural heritage by protecting the integrity and voter intent of the Arizona Game and Fish Heritage Fund; working to restore the Arizona State Parks Heritage Fund; monitoring state legislative and agency activity; and educating Arizonans about the benefits of wildlife, open space, parks, and historic and cultural resources.
The State Farm Neighborhood Assist® program awards $25,000 grants to 40 nonprofit organizations to help fund neighborhood education, safety and community develo pment projects. Each person may submit one cause in one of the categories:
EDUCATION – Education doesn’t end in the classroom. From book smarts to street smarts, we’re accepting causes that further education of any kind in your community.
SAFETY: Feel more at home by improving the safety measures in your community. From sidewalks to crosswalks, we’re accepting causes of any kind that make your neighborhood a safer place.
COMMUNITY DEVELOPMENT: Help your neighbors in your community by submitting a cause that bene ts the programs and places within it.
Submissions period opens o June 5 and open until 2,000 submissions are reached. State Farm Review Committee will then narrow the field to the top 200 submissions using a scoring rubric. Ultimately, voters will decide which community improvement projects win big. The public will have a chance to vote 10 times a day, every day for 10 days from for their favorite causes from the list of finalists. All the information you need to submit a proposal can be found at www.neigborhoodassist.com. Good Luck and let’s make Arizona proud!
The Art in the Alley program sponsored by Farmington New Mexico Main Street. Artwork by Tommy Singer.
Thank you to everyone who completed the 2018 Main Street America Trends Survey! The 347 Main Street America members who participated provided a range of valuable information about their organizations and Main Street communities. Click here for a short summary of the survey results, and keep reading to dive into the successes and challenges Main Streets identified.
Respondents named fundraising as one of their top successes in 2018. Eighteen percent of respondents indicated that their organization’s public and private funding had both increased in 2018. Average operating budgets also grew this year. Forty-one percent of respondents reported operating budgets of over $150,000, compared to 34 percent of respondents last year. Other top successes included partnerships, local buy-in, and accolades (including grants and awards).
This year wasn’t without challenges for survey respondents, who identified store variety, inconsistent store hours, vacancies, parking, and infrastructure as their biggest obstacles. Store variety and inconsistent store hours are new to the list in 2018.
Sixty respondents identified partnerships as one of their biggest successes in 2018, and many communities highlighted real estate development partnerships in their surveys. In West Point, Mississippi, a vacant downtown grocery store was purchased by the county for a new courtroom, which will draw more people downtown. The West Point Main Street Growth Alliance will work with the county on marketing and landscape efforts as they get closer to completing construction. Gardiner Main Street in Gardiner, Maine bought five buildings and three lots two years ago, and they are now under contract with locals who will open art galleries, restaurants, a brewery, and other high-end storefronts.
Main Street programs are continuing to foster small business growth in their communities, with more than half of survey respondents reporting that 90-100% of businesses in their communities are locally-owned. Communities offered a range of exciting entrepreneurship programs in 2018, including an Entrepreneurship Day in Mesquite, Texas. The City of Mesquite offered four roundtables on planning, opening, running, and expanding businesses, with panelists who provided expertise on each subject. Harrisonburg Downtown Renaissance in Harrisonburg, Virginia offered small businesses an economic gardening lite program that focused on building an online presence. Participants applied for free marketing, web design, and visual merchandising technical assistance and then applied for mini-grants to put their new ideas into action.
The Art in the Alley program sponsored by Farmington New Mexico Main Street. Artwork by Jamie Fairchild.
Main Streets also continued to nurture art and artists in their communities in 2018. Upham’s Corner Main Street in Upham, Massachusetts held a four-week workshop tailored to creative entrepreneurs and artists called “The Confident Creative Business Owner: A 4-Week Course for Creative Entrepreneurs.” Farmington Main Street in Farmington, New Mexico received a grant for an Art in the Alley project to make their alleyways more pedestrian-friendly and encourage business owners to beautify their back entryways.
Thanks again to everyone who participated in this year’s survey. Main Street America members can always learn more about what other Main Street programs are doing throughout the year, share successes, or ask for help with a challenge by starting a conversation on The Point.
Welcome to the 2019 edition of State of Main, the annual publication of Main Street America. Serving as both an annual report and an industry journal, State of Main provides a detailed look back on all that we have accomplished together and offers cutting-edge ideas and trends in the commercial district revitalization field.
This year’s edition is dedicated to celebrating the incredible depth and diversity of the Main Street experience and exploring the role of place in creating stronger communities.
With articles written by industry experts on topics ranging from the transformative placemaking to inclusive entrepreneurship, the publication is brimming with tools, tips, and strategies that will help you lead a results-oriented revitalization effort.