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Façade appearance is a critical aspect of the overall aesthetic appeal and unique character of downtown. Designing, promoting and facilitating quality historic preservation and façade improvement projects are common activities undertaken by design and economic restructuring committees, and significant effort is dedicated to developing tools to make this type of project simpler and less costly for property owners. While reducing the burden to businesses and property owners considering investment is a worthy objective on its own, the decision to invest in a property will remain an economic one, based on the individual financial situation and property condition. Fortunately, the results of a recent case study analysis provide a wealth of individual business experiences that make the business-based decision to invest much simpler.
Although it seems intuitive that an aesthetically appealing storefront will translate into additional customers and sales, there has been little research done that would allow a business to estimate the return on this investment. One frequently cited University of Wisconsin Extension study on the topic dates from 1986. In order to provide updated information and relevant information, Wisconsin Main Street partnered with the UW Extension on an updated 2014 study. The resulting report "An Analysis of Downtown Storefront Improvements: A Selection of Wisconsin Case Studies", although not a statistically significant sample, provides multiple present day insights on the value of property improvements from the perspective of the individual property or business owner. The survey included 24 interviews with property owners from around the state who recently completed projects and were able to provide information on the cost and scope of the projects as well as business operations before, during and after the improvements. Interview subjects included a broad cross section of industry types and also included projects in communities of all sizes. The results validate the findings of the original study while also providing additional context for business owners contemplating an investment.
The most compelling result from the study was the confirmation that even a small investment in the exterior of a property has measurable impacts on business sales as well as on the ability of a business to attract new customers. The vast majority of businesses (80%) saw an increase in the number of first time customers, with an average of 10 percent more new customers. An even larger number (90%) experienced increased overall sales, with an average increase of 20 percent.
While nearly all case studies resulted in positive economic benefits for commercial space performance, some types of businesses benefitted to a greater degree than others. For instance, restaurants found the greatest positive benefits, with personal and professional service businesses experiencing positive but slightly lesser returns in the short term. Property owners with upper floor residential units also indicated increased interest from prospective tenants. Not surprisingly, businesses that simultaneously invested in interior improvements and marketing initiatives together with façade improvements experienced greater benefits than those with exterior improvements alone. However, it is important to keep in mind that a façade update cannot make up for a poor business plan, and that different types of businesses will experience different levels of benefits depending on the nature of their business. Representative results are illustrated in the excerpted findings below.
Case Study 1: Bagels & More
Community: Beloit, Pop 36,888
Cost: $25,000
Impact: >10% increase in first-time customers, 20% increase in sales
Case Study 2: Sequels
Community: Monroe, Pop 10,827
Cost: $7,000
Impact: 15-25% increase in first-time customers, 10-15% increase in property value
Case Study 3: Bradley Realty
Community: Menomonee Falls, Pop 35,924
Cost: $20,000
Impact: >25% increase in first-time customers, 30% increase in residential rents.
Although the financial returns are undeniable, a full fifty percent of the projects relied on local incentive grant and loan programs to make the project a reality. A majority of projects utilized multiple funding sources including local incentives, private bank financing, historic tax credits and other equity sources in order to complete a larger and more cost effective project. Designing local tools and financing structures to support these projects is essential for both jump starting and sustaining investment in historic properties. The findings from this study can be used to help better connect local incentive programs with desired outcomes as well as to convince individual businesses and property owners to take the leap and invest in their property. Where a typical facade incentive program is designed based on desire to achieve property appreciation and higher economic rents, these goals often cause concern among the audiences they are hoping to entice. In many cases, businesses (especially those that rent) are hesitant to improve properties that they do not own, fearing that rents will increase beyond what they can afford on an upgraded space. Similarly, property owners similarly fear negative tax implications from substantial property improvements will not be offset by increased rents. However, this study demonstrated that although property values and rents do increase as a result of improvements, in no instances were these increases not offset by comparable income gains at the business or property.
The study also provided unique insights into individual returns on façade investment, it also reinforced many commonly held beliefs regarding broader community benefits that can result from individual property improvements. Multiple interviewees identified one or more of these intangible ancillary benefits as some of the most rewarding elements of their project, over and above business revenues. Commonly identified benefits included;
• Increased sales and traffic at adjacent businesses,
• Additional interest in vacant commercial spaces in adjacent buildings,
• A catalytic effect, with one or more improvements to properties elsewhere in downtown.
• Gains in community pride and civic appreciation among businesses, property owners and customers.
Ultimately, the study was able to demonstrate that investing in external property improvements on downtown properties is justified not just as a community development tool but also from a business growth and expansion perspective. Organizations which are able to portray façade improvements as a calculated investment in enhancing the future of the business and increasing the value of individual properties will find it easier to catalyze investment to the benefit of the overall community.
Errin Welty is a Downtown Account Manager with the Wisconsin Economic Development Corporation, working with Main Street Communities, businesses and property owners on economic development projects. Errin has significant downtown experience, having been on staff with downtown organizations in both St. Cloud, MN and Denver, CO, with other relevant experience in real estate development and brokerage and market analysis.
REV Birmingham and Woodlawn United share how they work to reenergize spaces and places in Birmingham, Alabama, through civic infrastructure projects in the city’s historic commercial corridors.
Learn how this Louisiana town has used an accessibility-first approach to build a welcoming and inclusive community.
Downtown Ruston, Louisiana. Photo by Henry McCoy.
Learn how the Little Five Points neighborhood of Atlanta uses this unique mural program to celebrate Valentine's Day and raise important funding for their work.
Learn how micromobility can increase access, equity, and inclusion in your Main Street with examples from local programs across the network.
This Washington Main Street is encouraging people to brave the rainy weather with their free umbrella share program.
Parking is a challenging problem for many Main Streets. We explored the arguments for and against free parking, and a method for conducting an inventory of parking in your downtown.
Miami, FL © Matt Alaniz
Learn how Bainbridge Island Downtown Association leverages their connection to the ferry to create a walkable and vibrant downtown.
Bainbridge Island, WA © Anna Carson
An innovative artistic project brings new life to the alleyways in Billings, Montana.
Billings, MT © Downtown Billings Alliance
In big cities and small towns, people face increasing danger when navigating communities on foot. As advocates for connected and walkable downtowns, Main Streets have a crucial role to play in increasing pedestrian safety.
Lansing, Michigan © Lansing 5:01
Learn how you can participate in the Thriving Communities program as a capacity builder or how you can receive support from the program.
To celebrate National Parks and Recreation Month, we explored three innovative and interesting parks-based projects and collaborations in Main Street communities.
Waterloo, Iowa, shares advice and lessons learned from their e-scooter program.
Learn how you can harness design principles and strategies to create a cooler, more welcoming downtown.
Main Street America was awarded $5.9 million to support 20 communities in the Main Streets Community of Practice through the Department of Transportation's Thriving Communities Program over the next two years.
The City of Leeds, AL welcomed a new downtown mural over the holidays that has brought a sense of excitement and anticipation for the continuing efforts to focus on the Leeds downtown district.
Leeds, AL © Jeremy Dove
What is more Iowan than turning grain bins into public art? Learn how Main Street Coon Rapids created these beautiful murals to celebrate their downtown.
Coon Rapids, IA © Main Street Coon Rapids
Pollinator gardens are fantastic ways to increase green space, promote sustainability, and educate your community on the local environment.
Crofton, MD © Kerry Kelly
The AARP Community Challenge program gives out quick-action grants to activate public spaces. Meet some of the Main Streets awarded grants through the program this year.
Learn how these outdoor microspaces can contribute to more vibrancy in our public spaces.
Chairman Emeritus Ed McMahon explores the power of place in creating spaces people love.
Boise, ID © christiannafzger
To support Georgia Main Streets throughout the recovery process and position them for long-term sustainability, Main Street America launched the Georgia Main Street Innovation Grant Program, made possible through generous support from The Williams Family Foundation of Georgia.
Thomasville, GA © Thomasville Main Street
Intentional placemaking has had many unexpected benefits for this Alabama town.
Wetumpka, AL © Jenny Sue Stubbs
We heard from organizations across the nation about the incredible impact their markets have had on community engagement, entrepreneur and small business support, and keeping their district vibrant.
Appealing to mobility-challenged shoppers yields benefits beyond the store.
In contrast, the Main Street Program in Laramie, Wyoming, is thriving, having successfully cultivated millions of dollars to help fill these vacant, blighted spaces with permanent structures.
In this article we’ll explore the process of planning, funding, installing, operating, and enjoying music on your Main Street.
In 2016, the North Carolina Main Street & Rural Planning Center partnered with the University of North Carolina at Greensboro’s Department of Interior Architecture (UNCG) to provide design assistance to Main Street communities.
Placemaking is a strategy that Six Corners Association has enthusiastically applied to our community development efforts because of its seamless integration with the Main Street Approach.
How one Wyoming Main Street implemented a free bike share program.
In 2015, the Wisconsin Economic Development Corporation (WEDC) partnered with the University of Wisconsin–Madison to engage Wisconsin Main Street organizations and farmers markets in the Metrics and Indicators for Impact – Farmers Markets (MIFI-FM) toolkit.
The local Main Street organization, Downtown Milford Inc., is trying to address these shifting demographics by creating a more inclusive sense of community.
This is the story of how a National Endowment for the Arts gathering in DC inspired the leaders of a small town in Appalachia to connect with those in Milwaukee to transform a neglected park.
Main Street communities across the country are no stranger to seeking creative strategies to solve their most nagging issues – vacant buildings, marketing downtown, bolstering retail to name a few.
This article is the second in a series on corridors and the important role they play in Main Street revitalization. The previous article focused on the historic origins of corridors, corridor types, and functions that they serve in our communities.
While the Main Street program may not take the lead in corridor enhancements, it can be a vital partner and advocate for improvements in overall community appearance.
Street pole banners preserve the historic character of main streets while fostering community awareness and engagement.
With strong community support, the Library Foundation was able to raise over $1.2 million dollars in private donations.
A lot of signs are necessary to make a downtown work well, but not every community knows what a good sign system looks like, or how instrumental it can be to the creation of a successful downtown.
A key goal of the Atlanta Streetcar is to attract investment to and revitalize the neighborhoods along the streetcar alignment.
