What goes around comes around: chain stores vs. traditional commercial districts in DC

In 2002, DC created the Main Streets program to support revitalization of traditional commercial districts such as H Street NE,, 14th and U Streets NW, and Barracks Row--8th Street SE. The program was a reasonable try but for a number of reasons, it hasn't worked very well (the biggest problem is that the power of the potential network of multiple commercial districts as a training and expertise and development platform was never adequately leveraged).

Plus, just as Democrat Deval Patrick junked Republican Mitt Romney's smart growth initiatives in Massachusetts and Republican Bob Ehrlich junked Democrat Parris Glendening's smart growth initiatives in Maryland, once Mayor Fenty took office, the Main Street program which had been created by Mayor Anthony Williams, seemed like dead weight and he wanted to junk it but for the interest in the program by Councilman Kwame Brown, who kept it around, and his Department of Small and Local Business Development around, but without the support of the Mayor.

At a presentation about the Main Street program in 2002 (and recognize that I was one of the founders of the H Street Main Street program), I did pipe up when a government official was patting himself on the back about it, that DC invested far more money in the Home Depot shopping center (now called Rhode Island Place) in northeast DC than they would ever pay out for the Main Street program.

Similarly, the local Main Street program is on the chopping block (see the Barracks Row Main Street press release) just as Walmart is posed to enter the DC market with four stores. Now the Walmart entry isn't greased with government incentives, but it's still ironic all the same.

From the press release:

Barracks Row Main Street urged the DC City Council on Tuesday, November 30th to maintain the funding provided in the original FY2011 budget for both the Main Street Clean Teams and DC Main Street operating funds. This amount was $1.6 million for the DSLBD and Main Street operating and business retention funds and $600,000 for Main Street Clean Teams. These programs, which rejuvenate and restore run down and deteriorating commercial corridors are revenue generators for the District of Columbia, returning many more dollars to the DC Treasury as compared to the minimal investment in the Main Street Programs.

Tip Tipton, President of BRMS, and a member of the Board since its inception testified to the dynamic changes his program has accomplished. Buildings have been renovated enhancing their value and the tax revenues to the City. Businesses and restaurants have attracted more residents to the Capitol Hill area where home improvements are booming. This growth has contributed to the development of a stronger tax base for the City, both in real estate taxes and income taxes.

Tipton further noted, “Tourists are coming by the busload from places like the Gaylord National Hotel and Convention Center, spending their dollars in our neighborhoods. And, with increased traffic by Metro and car, Metro and parking revenues are increased by visitors to the area. The Marine Barracks on Eighth Street has taken notice of our improvements and increased activities at the Commandants House and at the Barracks itself, again bringing more outsiders to our City, all spending their shopping, entertainment and food dollars with us in the District of Columbia rather than somewhere else.”

In his testimony, Martin Smith, Executive Director of Barracks Row Main Street concluded: “Investing in Barracks Row Main Street is investing in a renewable income source with quantifiable returns.” Main Street leaders from across Washington presented to the DC City Council’s Committee of the Whole on Tuesday evidence that a reduction in funding of Main Street programs results in an actual increase in the deficit through reduced sales, property and wage taxes produced in these commercial corridors if this funding is reduced or eliminated.

Even so, the Main Street program didn't work all that well. Part of it was due to the hermeticism of the individual programs, a big part was that DC Government just doesn't know how to work with small businesses and traditional commercial districts. Much of the success of the 14th and U and H Street commercial districts didn't come from the Main Street program, but from other DC government programs, and the strong real estate market.

It's interesting that for the most part, DC Business Improvement Districts thrive comparatively speaking, why DC Main Street programs languish (a number of the programs have closed up over the years). Partly this is due to the lack of adequate funds, and therefore the lack of personnel, not to mention the difficulty of maintaining mostly volunteer efforts. (On the other hand, BIDs aren't known for the ability of citizens who aren't property owners or merchants to be able to participate.)

But it's just not within the makeup of the city and of local government to figure out how to make a commercial district revitalization program truly work within the city. But that says a lot about the understanding (or lack thereof) of elected and appointed officials and economic development, and the difference between "economic development" and "building a local economy."

Previous writings on the DC Main Street program:

- (Yesterday's) Testimony on the DC Main Streets program, 2007

- I hope New Orleans('s urban Main Street program) can learn from DC, 2006 -- this is my analysis, as of 2006 about what was working and what mostly wasn't, with the DC Main Streets program