Downtowns Pin Hopes on Program

Mike Stone says he doesn’t need a government incentive to motivate him to keep his downtown Sanford grocery store viable and in tip-top shape. His business sense and pride of ownership are what make O’Connell’s Supermarket a successful operation that attracts customers, despite population trends that favor suburbs over downtowns.

But Stone’s independent approach is out of sync with many community leaders in Sanford, who have been skeptical of entrusting downtown revitalization to the autonomous efforts and decisions of business owners and managers.

Instead, in 1984, the city pinned its hopes on the N.C. Department of Commerce’s Main Street program, designed to support communities with less than 50,000 people. That put Sanford on track to receive advice and technical assistance on how to attract customers and new businesses to downtown by adhering to Main Street’s collective, structured approach. The program emphasizes uniform bricks-and-mortar improvements such as façade renovations, and shared marketing programs and themed special events as the keys to downtown vitality.

More than 50 N.C. cities and towns have taken Sanford’s route since 1980 when North Carolina was included in a six-state pilot project for Main Street, developed by the National Trust for Historic Preservation. The nonprofit NTHP created the program in response to what it viewed as failed federal urban renewal programs of the 1960s and ‘70s, and to address the growing suburban lifestyle it thought was devastating downtowns across the country.

“You had massive movement of people to the suburbs — a consequence of public policy and consumer choice — moving people out of downtowns,” said Rodney Swink, director of the Commerce Department’s Office of Urban Development, which administers North Carolina’s Main Street program. “Cities began to spread out and retail followed, leaving downtowns.”

Like many government programs, Main Street comes at a price, this time in the form of a potential new tax on businesses in participating cities. The state doesn’t levy the tax or provide funding itself, but it informs cities about the option to create a special Municipal Service District, as authorized by state statute. That’s government-speak for a tax that, in this case, can be levied on property owners within the designated downtown area, and then spent on renovation and promotional activities within the district.

About two-thirds of the state’s Main Street communities have implemented the taxing mechanism, Swink said. In Sanford’s case, the rate is 13 cents per $100 of tax value, on top of regular property taxes. Some cities supplement district revenue with other city funds.

For Stone, who describes himself as solidly committed to downtown Sanford even though he disagrees with his city’s strategy, the good news is that his store is outside the 17-block special district in which about 250 businesses pay the extra tax. He isn’t required to pay it and, therefore, isn’t subject to district rules either. That’s just fine for the man who views this kind of government involvement in business as a burden, not a blessing.

“I don’t want the city and county in my business. I already have enough things to deal with. The less they’re in my business, the better off I am,” Stone said.

David Montgomery disagrees with Stone’s point of view and is effusive about the projects he directs for Downtown Sanford, Inc., the nonprofit that manages Sanford’s revitalization effort. He touts DSI’s building improvements program, which offers district businesses a 50 percent match of funds, up to $1,500 per building, for improvements such as replacing old facades.

“Five hundred dollars can be life and death to a small business,” Montgomery said. “The fact that we’re matching is incentive enough for people to take that leap. It eliminates the risk.” The trade-off is that the new facade must meet DSI’s strict design scheme. At one point that meant an awning had to be red, blue, or green, but the rule was loosened when DSI’s committee decided the color restriction didn’t provide the historic ambience it wanted.

Since its inception, DSI has received and spent about $682,000: about $480,000 of district taxes and $200,000 of city dollars. Part of that was used to develop Depot Park, and Montgomery believes it is another demonstration of the program’s value. What once was a blighted area now contains a bandstand and gathering area, which has attracted businesses, he said. Future plans include a visitor information kiosk, period lighting, and an interactive fountain for kids.

While Sanford has been active in Main Street for 20 years, funding, staffing, and results have been inconsistent in other municipalities. In Wadesboro in Anson County, selected as an M.S. town in 1984 with Sanford, the effort sputtered when the town planner’s position was eliminated several years later. The program was reactivated in the early 1990s when the town formed Uptown Wadesboro, Inc. and hired an executive director. But last year, Wadesboro failed to fund the position. Uptown is now run by volunteers, said Anne Covington, president of Thrift Loan and Finance in Wadesboro and chairwoman of Uptown’s board of directors.

Wadesboro never imposed a special district tax, but Covington said her board is investigating and will pursue new revenue sources, including grants, donations, and possibly a tax. She acknowledged some might find a new tax hard to swallow. “Many times when you start talking about taxes, people do object but when they see the good, they get resigned to it,” she said.

Despite the on-again, off-again history in Wadesboro, Covington hopes the town will acknowledge past results and contribute again. “New businesses have opened. We have a restaurant downtown that wasn’t there before, and community pride. If a person came into the county, the fact that Uptown looks busy and viable, it makes us more attractive,” she said in describing her support.

That is precisely what the City of Southport hoped for when it was accepted into the program in 1988. Local officials planned to use state assistance to implement Southport 2000, an economic development plan for the picturesque city nestled at the mouth of the Cape Fear River. Southport needed help, said City Manager Rob Gandy, after the county seat moved from Southport to Bolivia in the late 1970s. Lawyers and other businesses that supported government activity left as well, leaving downtown “dried up with not a lot going on,” Gandy said.

When he arrived in 1993, Gandy took over a key revitalization project called Southport Riverwalk. The three-quarter mile stretch of sidewalks, boardwalks, and pedestrian access points was designed to attract tourists and Gandy said it is hugely popular with tourists. Work continues on the final piece of the $400,000 project, paid for not with a special district tax on businesses, but with city cash and in-kind services (25 percent) and state grants (75 percent).

In 2000, Southport determined it had outgrown the Main Street program and created its own Department of Tourism to signal the critical importance of visitors to its economy.

Neither Swink nor Gandy view Southport’s departure from the program as a negative reflection on its value.

“It was good for us to get where we wanted to be and find out which way we wanted to go,” Gandy said.

“I don’t think it was really meant for people to be in it forever.”

Donna Martinez is associate editor of Carolina Journal.