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2009 National State of Main Street Report
State of Main Street
By Doug Loescher Published: 05/06/2009
How Main Streets can STILL Thrive in a Down Economy.
The 2009 State of Main Street Report
By Doug Loescher, Director
National Trust Main Street Center
Despite all the bad news, we see some unique opportunities in the current economy that represent a unique opportunity for us as Main Street leaders to use our creativity and leverage change like never before.
The Trends Survey - conducted in January of 2009 - revealed that, despite a big jump in holiday promotions participation by merchants, and record attendance at holiday events, nearly half our districts reported a drop in sales. On the positive side, many saw a net increase in the number of businesses in their districts for all of 2008, with openings out-pacing closings... by nearly 2-1. The finance picture was more mixed... For real estate development, opinions on the availability of financing were roughly split. For business development, capital did seem harder to come by.
Although this is not very cheerful news, it is good to remember that it could be worse. A recent survey by the Institute for Local Self-Reliance -- of more than a thousand retailers across the country -- found that 2008 holiday sales at independents declined an average of 5% from the same time last year. Not great, but that's nothing compared to what many national chains suffered... with much steeper drops. High-end retailers did even worse. This contrast grows even sharper when we narrow the focus on independents who participated in "Shop Local" campaigns... a good testament to how coordinated strategies like Main Street can really make a difference.
In addition to businesses, local Main Street programs have also felt the pinch, and are coping by tightening budgets, and by fundraising more aggressively than ever. In Greenfield, Iowa, for example, current members were asked to increase their dues by 10% this year... a bold request in times like these, but one that paid off. About 85% increased their pledges... a definite show of confidence in the Main Street program there.
So... what's next? Here's what some industry leaders have to say:
Perhaps the most optimistic projections come from the National Retail Federation, which estimates less than 1% drop in retail sales for 2009. Of course, not everyone agrees... Main Street veteran Kennedy Smith thinks that retail sales will be down as much as 20-35% for the next few years... and then remain depressed... for at least a generation!
The National Association of Realtors sees a similar picture. They predict that the retail vacancy rates will shoot up to nearly 13% next year. And as a result, rents will take a dive, by at least 7% across the board.
And that's not good news for chains and shopping centers, in particular. At least 200,000 stores and as many as 3,000 malls will close in the United States in this year alone. According to forecasting firm Strategic Resource Group, in these more marginal malls, "a quarter to a half of the space will have the lights turned off [at first]... and then be abandoned altogether".
And recently, the Federal Reserve released it's official forecast for the "incredible shrinking economy', projecting high unemployment rates through at least 2011. Finally Atlantic Magazine this month features one of our favorite urban thinkers, Richard Florida, who writes about "How the Crash Will Reshape America". His bottom line: "on the other side of this crisis, America’s economic landscape will look very different than it does today". He's sees big winners and losers... in the competition between cities and regions...for people, talent, and prosperity.
"Doom and gloom" news? Yes, but it's not all bad news. Here are five good reasons for Main Streets to have hope:
1. Is there an upside to the down economy? In good times, it's easy to become set in our ways. But times like these can help us find a more receptive audience for some of our progressive ideas. This could be a once-in-a-lifetime opportunity to re-set priorities and get creative. I think we should seize it, and make the most of it.
2. There IS good news on Main Street... Our Trends Survey revealed a lot of resilience by local businesses and programs, with success stories across the board in 2008. Here are a few outstanding achievements:
* In Silver City NM, the Main Street program was recognized by the U.S. Department of Commerce, for preservation-based economic development excellence. We're proud that this local MS program became the first national recipient of the EDA Award!
* Fairfield CA has been getting great media attention for its annual Tomato Festival, now 18 years old. The Travel Channel's program "Taste of America" featured this event recently. So how did they find this Main Street? The producers scanned websites for food festivals, and chose Fairfield because of the historic town center location... instead of being on the outskirts of town.
* A community-wide effort to make Ripon WI the "best small college town in the U.S." has attracted the attention of a developer - who is also on the board of the local college. The resulting project was no small effort, which combined a total of 18 storefronts for unified rehabilitation. This historic tax credit project includes a new inn downtown. Of course, catalyst projects like this work best in the context of a bigger effort... and in this college town, that's the Main Street program.
* Need more good news for local MS programs? In 2008, volunteerism was steady or up in most districts, according to the Trends Survey. [see charts] What's more, nearly 3/4 of all districts reported stable or increased fundraising from donors. It was a similar story for local government funding, which primarily held steady for the year.
3. Do All Roads Lead to Main Street? Maybe not, but it DOES seem as if Main Street - and the community leaders who care about our downtowns -- is at the center of many important trends and public values. Consider these:
o Smart Growth -- 10 years ago, most of us had only heard the of the term "Smart Growth". Today, the principles of this movement have gone mainstream... and guess what... at the center of this philosophy... you'll find the center of our communities. So who are the leaders in the Smart Growth movement? We are.
o Sustainability -- And on a parallel track, environmentalism has matured into a refined concept of "sustainability"... a movement that is as much a lifestyle value, as it is a planning principle. And who has been building and preserving sustainable economies and communities all along? We have.
o Localism -- The trend toward "Localism" is just starting to "gel" with the media as a way of life ... where the distance between social interactions and commerce is as close as your next door neighbor - or your local merchant. Called "Shop Local", "Make Local", "Buy Local", "farm-to-table", "slow foods", "Local living economies"... you name it...but people are making a priority to "do it local". I don't need to tell you who lives by "localism" everyday. We do.
o Economic Priorities -- Suddenly, everyone agrees this is priority one... and entrepreneurship is becoming recognized as one of the most resilient and stable forms of commerce today. Yet, who has been the champions of economic development and small business all along? We have.
o Main Street vs. Wall Street -- "Main Street" has become a handy phrase to describe everything that is wholesome or "right" with our country used relentlessly - by the media and speechmakers - in recent months. Meanwhile, who is taking care of the "real" Main Streets across the country? We are.
So to sum this up: who is at the intersection of Smart Growth, sustainability, localism, economic development, and "MS values"? We are the ones, and now is definitely our time. With this many converging trends leading to Main Street, how can the future not be on our side?
4. Main Street "Momentum" -- This big upheaval in our economy means big change for us and that always makes for scary transitions. Occasionally, we may need to take a leap of faith - that might sometimes feel more like stepping off a cliff. But let's just remember... Main Street was born in adversity, when downtowns were considered relics ... and old buildings were being thrown away. We changed all that then, and we'll change the paradigm again. We know it is a time-tested approach ...that can help our communities cope with change... and adapt to new realities. In responding to our survey, Terry Lynn Smith from Hammond LA, put it this way:
"Tough economic times should be used as a lesson to all Americans. We are not lazy, we just get too comfortable.....this should sharpen the stone so to speak. Our Main Street program will learn from today's economy. Rising up from what could be a disaster will be better and more enduring programs. I firmly believe that [we] will get the job done..."
5. The Power of the Main Street Network -- Finally, you know you can count on your community to support you. And you can also count on your peers around the country, who can provide great ideas, inspiration and new energy to tackle today's issues. Finally, the state Main Street programs - and National Trust Main Street Center - will continue to provide support, research, new training and resources, to help you take the "long view", and leverage the mega-trends that can bring new vitality to the center of your communities.
