by Seth Gaines

Is there an upside for downtown during the economic downturn? According to the people I have met working in revitalization, the answer is yes. On Thursday I completed my final annual evaluation after having spent about 6 weeks on the road visiting numerous Ohio communities working to keep their districts vibrant. Inevitably conversation turned towards managing the changing economy and in every instance the group I was meeting with decided this potential obstacle was really an opportunity. Are they right or are is their optimism blinding their better judgment? It is my experience that people work in downtown revitalization are eternal optimists, but I don’t think that explains everything.

A number of things contribute to the feeling that downtowns and urban districts are going to come out of this situation ahead. The overarching sentiment seems to be that we can’t keep doing what we did to get ourselves into this mess. This countries approach has favored sprawl and big business for half century and it apparently has come at a price. So what are the specific reasons downtown folks are so optimistic? The decline of big business, the push towards energy independence and a reduction of the amount of money in the system all contribute to this feeling. The decline of big business and the rise of small business is the issue that has had the greatest impact and possibly creates the greatest opportunity for downtown.

The decline of big business has become painfully obvious over recent months. The market takes a nose dive on a weekly basis as rumors of major institutions nearing insolvency surface. These banks, insurance companies and investment companies have grown too big to succeed. So unwieldy have they become that no one seems to be able to grasp the health of the organization or make decisions based on long term sustainability. The profit at any price mentality has replaced stability so executives and shareholders get rich building a house of cards. Companies this large also have created a situation where they can demand Washington bend to their will to much to their own demise. A local bank has little political capital to call in favors in DC, but Bank of America can pay for any legislation it wants. Politicians are beholden to these companies because of the power they wield in terms of jobs, revenue and taxes. Special treatment is granted to them that no small business could hope to receive. What hurts the most is that so many of the smaller towns Main Street works with are dependent on local financial institutions. They fund local non-profits and volunteer their time, they make loans to local developers and small businesses, they are a real part of the community and act in an ethical manner. The big companies often times don’t have the ability to make decisions on a local basis and have limited room to assist within the community. Had more bankers had to sit across the desk from the person applying for the loan the housing situation might not be so dire.

In tough economic times more people start their own businesses. This may be due to the loss of a job, or decreasing income or general uncertainty. Communities also unite in times of crisis and it appears that communities are uniting now to support local. Shop local campaigns are growing in popularity and scope. People are coming around to the fact that their town or city will not be saved by someone else. If their district is going to survive they must be prepared to do it themselves. I was very pleased to see a number of communities retool their economic restructuring committees to focus on business assistance programs and away from market analysis and business recruitment programs. This back to the basics approach is a very smart way to maintain during tough times. These efforts will ultimately lead to business expansion and easier business recruitment in better times. Tough times have kept people closer to home for shopping and looking for better deals. Small businesses have a great opportunity. The challenge Main Street programs have is how to assist them in capitalizing on this opportunity.

The staff and volunteers of revitalization organizations are right to be optimistic, bigger isn’t always better and the country is moving towards smaller business and next time our economy grows it is going to grow more organically. The optimism of this group is also part of the equation. If only one group is out there saying their investment is the safe one, where do you think the money is going to move? There are already some signs that this positive attitude is starting to pay off. Optimism is a self fulfilling prophecy and downtown organizations know that.