Any equitable commercial stabilization effort should begin with a planning process that involves a broad range of community stakeholders. This process should allow community members to identify the strengths and weaknesses of their district and create a shared vision for commercial district growth. It might be as simple as a handful of community meetings or it might be complex and longer-term, involving a year of meetings, customer surveys, and market analyses.
San Francisco's Mission District went for the long-term approach. Its commercial stabilization planning process was initiated by Mission Economic Development Association (MEDA), which supports local small businesses and has been one of several community organizations leading a struggle against gentrification in the neighborhood since the mid '90s. In the late '90s, MEDA began to notice that along with causing the eviction of hundreds of working families, gentrification was also displacing neighborhood businesses. So the group organized a community planning process to develop a comprehensive community-based plan for Mission Street.
Goals of the Mission Corridor Project
Excerpt from executive summary by MEDA The Mission is...in many ways a vibrant place, blessed with a rich diversity of cultures, income levels, and age groups, a fairly healthy economy, and well-established network of nonprofit and artist organizations. It also suffers from two seemingly contradictory problems: a perception of high crime and poor maintenance, and rising gentrification, which through increasing rents is displacing the Mission's traditional base of working class families and local businessess...
In finding ways to improve the social, physical, and economic conditions along Mission Street while simultaneously accommodating the needs of current residents and businesses, seven goals were synthesized from community input: Business Stability: perserve and expand the existing business base with an emphasis on local ownership of businesses and/or the buildings they operate in.
Resident Needs: ensure that new development serves the retail, service and employment needs of local residents.
Mission Street Identity: preserve and promote the identity, local cultural production, and significant architectural and mixed us character of Mission Street.
Local Jobs: ensure local employment and provide entrepreneurship opportunities for local residents. Affordable Housing: expand the housing stock along Mission Street, especially affordable rental and homeownership for low to moderate-income families.
Safe Activities: improve safety by increasing positive activities, particularly youth activities and nighttime family entertainment.
Walking Environment: promote sidewalk maintenance and improvements and nighttime safety, as well as development linked to the BART transit nodes.
The process took a year to complete and involved staff from MEDA and from Oakland's Urban Ecology, consultants from Bay Area Economics, and numerous community volunteers. Surveys were collected from more than 500 residents and 50 businesses. Input from two large community meetings and a series of small focus groups supplemented the survey material. The final 50-page plan, published in November 1999, outlined community goals for the physical, social, and economic development of the Mission corridor that would benefit the neighborhood's residents.
At the other end of the spectrum are brief community input processes like the one conducted by Mercy Housing for the Rose Hotel. In 1997, Mercy Housing opened the newly renovated Rose Hotel, a single-room-occupancy building with 76 rooms for very low-income individuals in the South of Market neighborhood in San Francisco. The ground floor of the hotel included about 1000 square feet of commercial space facing onto 6th street, one of the city’s most troubled commercial districts. Many of the retail spaces on 6th street were abandoned and drug dealing and other criminal activity on the street were affecting the neighborhood’s quality of life. How the retail space in the Rose was leased was important not only to Mercy and the new residents of the hotel, but to the entire community. Mercy worked with a local business support organization, the South of Market Foundation, which:
interviewed neighborhood residents and businesses and compiled a list of tenants that were generally desired (pharmacy, bike shop, pizza shop, deli) and others that people felt should be avoided (pawn shop, consignment stores, and grocery stores that sell liquor);
determined that people felt there were too many social service programs occupying retail space on 6 th street and decided not to lease the new space to a service agency, which Mercy might have otherwise considered; and
developed a leasing policy that was adopted by an oversight committee of building tenants, local service agencies, and other neighborhood leaders.
The community input for the Rose Hotel took a matter of weeks and resulted in a two-page policy. Although a longer process is probably necessary to produce anything like consensus on an entire commercial district, not every community has the time and resources to undertake a year-long planning process. The process for the Rose shows that even a quick and inexpensive input process can engage residents and allow them to proactively identify the kind of community change they want.
Historically, efforts to improve commercial districts have been led by merchants associations or chambers of commerce, either on a volunteer basis or through a staffed business improvement district (BID). Unfortunately, the demands of running small businesses have often limited the impact of revitalization efforts that rely exclusively on merchants. In addition, merchants, even when genuinely concerned about improving the community, will often focus on one aspect of a district's health, like increasing parking, to the exclusion of all others. Any balanced revitalization process is likely to require tradeoffs such as limiting liquor sales or making room for human service providers, which it may be unrealistic to expect merchants to make on their own. Successful community stabilization efforts include merchants and property owners alongside many other community stakeholders in their organizational structure.
Though the Main Street approach was created by the National Trust for Historic Preservation as a tool for preserving the historic buildings in small rural towns, community leaders in urban neighborhoods have increasingly been adapting it to the needs of their own communities. The Main Street strategy is structured around committees of residents, merchants, property owners, community institutions, and other stakeholders. The committees plan and implement comprehensive, incremental improvements based on the model's 'four point' approach: physical design to improve the appearance of the area; economic restructuring to strengthen existing businesses and attract new ones; promotion of the neighborhood to bring in new customers; and organization to coordinate the input and efforts of the full range of neighborhood stakeholders.
The Main Street 4-point Approach
Physical Design: Enhancing the physical appearance of the commercial district by rehabilitating historic buildings, encouraging supportive new construction, developing sensitive design management systems, and long-term planning. Economic Restructuring: Strengthening the district's existing economic base while finding ways to expand it to meet new opportunities and challenges from outlying development. Promotion: Marketing the traditional commercial district's assets to customers, potential investors, new businesses, local citizens and visitors. Organization: Building consensus and cooperation among the many groups and individuals who have a role in the revitalization process. National Trust for Historic Preservation National Main Street Center
Even a well-planned and supported commercial stabilization program can be stymied by a large percentage of absentee landlords who have no interest in the goals of the effort.
In many long neglected urban neighborhoods stabilization will be very difficult without substantial new capital investment in restoring or rebuilding commercial buildings. Often this commercial space is owned by absentee landlords with little interest in maintaining their properties or actively managing their assets for community benefit. Ultimately, this limits revitalization programs like Main Street. The programs struggle to get owners to make even minimal investments only to watch these same owners displace community-serving businesses as soon as improvements create an opportunity for higher rents.
One response to absentee ownership is to form a community development corporation (CDC) to own and manage neighborhood real estate for the benefit of the community. CDCs are nonprofit organizations governed by a board that generally includes both low-income neighborhood residents and outside professionals with both real estate, finance, or legal expertise and a commitment to strengthening communities.
Existing CDCs, though many have been focused on building housing, often have the basic real estate development capacity and entrepreneurial spirit necessary to play a key role in the development side of commercial stabilization. A number of CDCs have been gradually building portfolios of neighborhood-serving retail space, often on the ground floors of their housing projects. Others have undertaken large-scale projects such as supermarket-anchored shopping centers or major mixed-use projects like the Fruitvale Transit Village. A CDC with a clear development plan for a district can identify the types of complementary businesses that will serve the existing neighborhood residents and seek out commercial tenants that meet that need.
In Philadelphia, the community development corporation of Frankford Group Ministry has been managing an effort to strengthen the Frankford Avenue commercial corridor, which had been in decline for many years following the loss of many of the neighborhood's manufacturing jobs. The program grew out of the Frankford Plan, a comprehensive neighborhood plan developed by a coalition of community organizations. Over the past six years the effort has replaced sidewalks, installed new street furniture, organized cultural events, and succeeded in bringing new retailers into the area. As part of the effort, the CDC has purchased and renovated seven key commercial buildings on Frankford Avenue. Once renovations were completed, the CDC was able to attract retail tenants that fit with its vision for the sustainable growth of the commercial district. By controlling the leasing of these seven properties, it is able to exert a more direct influence over the total character of the district.
There is a whole industry of small business assistance organizations that provide training, counseling, and support, but their focus is usually different from the concerns of commercial stabilization. They generally work with start-up businesses or with those actively seeking financing, and are usually open to any business serving the neighborhood (or any minority- or woman-owned business) regardless of its location. Commercial stabilization programs, on the other hand, begin with a target commercial district and identify the local businesses that have the greatest potential to grow and contribute to the community. They then look for resources to support the specific needs of those businesses. This might involve matching the businesses with financing or counseling services offered by a business development center, or offering training on merchandising or window displays.
Façade improvement programs offer an inexpensive way to make immediately noticeable changes in the appearance of a commercial district. Often these programs involve grants or low-interest loans to merchants or property owners who use them to improve the exterior of their storefronts. The best of these programs offer design assistance and educate merchants about effective design and signage. If the programs are implemented on a large enough scale, they can create a more consistent appearance in a district, which reinforces a strong cultural identity vision for the identity of the neighborhood.
The identity of a neighborhood commercial district is often closely connected to the presence of important cultural facilities. Preserving or even enhancing these facilities can strengthen the neighborhood's existing cultural identity and provide an important centerpiece around which to plan other stabilization efforts. Plans for commercial stabilization of Third Street, in San Francisco's Bayview neighborhood, center around the historic BayView Opera House, the nation's first African-American opera house. Community residents envision an expanded opera house anchoring the commercial district, drawing residents into the area, and creating a central gathering place for the district. This kind of investment can serve a double purpose, strengthening the cultural life and identity of an area and bringing in additional customers for local businesses. [See Elmwood Theater case study for another example]
When you visit a commercial district you are not just visiting stores, you are visiting the streets and sidewalks in between them. In fact, you may spend more time in that in-between space out on the street than you spend in any store. Well-run stores in well-maintained buildings will suffer if the surrounding streets and sidewalks are allowed to decay. While the condition of this space is key to the success of neighborhood businesses, it is almost always the property and responsibility of city government, which doesn't always manage it well. Sometimes cities underinvest in certain districts, or invest in things other than what matters most to the existing community.
Cities, like everyone else, have to decide where to invest limited resources. Since cities like to target their investment to places where it will make a difference, organized community involvement in a commercial district can often result in dramatically increased public investment. A coordinated stabilization initiative that includes significant private investment will attract public dollars for things like sidewalk repair, new benches or trash cans, pocket parks, or improved parking. Over its first four years, the Fruitvale Main Street Program documented $2 million in new private investment in the district (mostly building renovations) and a corresponding $2 million increase in public investment in streets, sidewalks, and facades.
As important as this public investment is, it is also important to ensure that the investment actually contributes to the strength of the community. It is not uncommon to see cities respond to years of disinvestment in basic infrastructure by purchasing artistic banners, designer street lamps, or flashy signs designed to catch the eye of potential customers. But while quick and flashy aesthetic investments can help improve an area's appearance, they are no substitute for quality basic infrastructure and can actually be harmful if they promote an identity that does not match the local reality. Stabilizing without gentrifying a commercial district generally means focusing investment on the basic infrastructure rather than upscale "identity" hardware. (See Positioning the District in the Keys to Success section)
Certain changes can only come about through larger scale physical development, such as new construction and renovation. Although large redevelopment real estate projects have been one of the most powerful tools of displacement and gentrification, in the context of a community based stabilization initiative, "community initiated" commercial development can actually help prevent displacement. Community initiated real estate projects can grow out of a community planning process that first identifies a community's needs and then targets specific sites for construction to meet those needs.
Don't underestimate the potential for rehab to serve community commercial development needs as well. Although a new building can create a new sense of opportunity, it is the hard work of finding and convincing retail tenants to take a chance on a neighborhood that makes the real difference. A CDC with a clear development strategy could have a large effect by buying existing buildings at key "catalyst" locations and leasing those spaces in a way that is sensitive to equitable development.
