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Supporting Small Businesses to Survive and Thrive in Changing Neighborhoods: The Commercial Corridor Challenge

11.03.2017

The Context & The Challenge

Shopping streets filled with local businesses are the hearts of communities. They serve neighborhoods’ daily needs, provide economic opportunity to local entrepreneurs and workers alike, and serve as a commons to meet, greet, or merely watch neighbors. They are also keys to building and retaining local wealth in communities. Neighborhood-serving stores tend to hire locally—and owners often live locally, too—so dollars spent in these shops wind up being pumped back into the neighborhood, multiplying their economic impact. Locally owned businesses play an essential role in developing economically secure and resilient communities.

But many of New York City’s commercial corridors are struggling, especially in communities that have seen under-investment for generations. Many lower income neighborhoods are finally seeing signs of renewed interest from developers and city officials looking to make targeted investments there. While this should bode well for these neighborhoods, the ironic fact is that after years of stasis, many businesses along struggling corridors are not prepared for change. They grapple with rent increases that come with improving living conditions. Or they are challenged with remaining relevant as new consumers with different expectations move into the area. As e-commerce expands, residents in all communities have more options available when their shopping street isn’t vibrant, or doesn’t feel safe and inviting. That puts many local businesses at risk of losing out to better positioned entities, like national or online retailers, at the exact moment that mom-and-pops deserve to take advantage of their sticking with their communities through their roughest periods.

Local Initiatives Support Corporation (LISC) NYC, Citi Community Development and the NYC Department of Small Business Services (SBS) Neighborhood 360° Program are collaborating to help businesses in low-income neighborhoods navigate this tricky environment. The Neighborhood 360° Program was created by SBS to identify, develop, and launch commercial revitalization projects in partnership with local stakeholders. Through proactive planning and targeted investments, Neighborhood 360° supports projects that strengthen and revitalize the streets, small businesses, and community-based organizations that anchor New York City neighborhoods.

LISC NYC and Citi Community Development are supplementing SBS’s public investment in three select neighborhoods with financial and expert technical assistance to community-based nonprofits to undertake the Commercial Corridor Challenge (Corridor Challenge). The program is a novel collaboration that leverages the most important skills and capacities of each partner to help local retailers in low-income neighborhoods stay competitive in the face of change, and to help these businesses benefit from new investments in their communities rather than risk being displaced by them.

“What set this program apart for us were the partners around the table,” says Eileen Auld, New York Tri-State Director at Citi Community Development. “In addition to their own national experience, LISC has brought together a group of expert consultants with intellectual firepower and experience that makes this a targeted, strategic approach that builds on the NYC Department of Small Business Services’ commitment to invest in the future of key commercial corridors.”

“The program helps communities bring a market-based mentality to each neighborhood’s corridor revitalization efforts, and to think strategically about what they want to do to improve the environment for local businesses,” says retail consultant and long-time LISC collaborator Larisa Ortiz, founder and principal of Larisa Ortiz Associates (LOA) and one of the program’s expert consultants. “In weak-market environments in particular, real thought needs to be given to the details of improvements—including where they are located, which businesses will be supported, and how different interventions reinforce each other—to ensure that limited resources have amplified impact.”

Follow-up research and field observations have consistently demonstrated the importance of addressing customer-focused fundamentals along commercial corridors, including cleanliness and safety, to help challenging retail environments to revitalize. LISC has also found that supporting and growing existing small business clusters helps makes a district more appealing to local customers, which drives retail sales to existing businesses. In fact, the LISC philosophy depends on helping these clusters enhance their visibility with new signage and storefront and streetscape improvements at targeted locations in a way that amplifies the impact of even small investments.

In early 2017, LISC New York City worked with SBS to select three neighborhoods and local partners from among Neighborhood 360° grantees for inclusion in the Corridor Challenge. They are: the Staten Island Chamber of Commerce in Stapleton; WHEDco along Southern Boulevard in the Bronx; and Cypress Hills Local Development Corporation along Fulton Street in East New York, Brooklyn. Significant private investment is coming to all three areas. Fulton Street has already been rezoned to allow denser residential development, including city-sponsored affordable housing, along the longstanding shopping street. Southern Boulevard is being considered for a similar upzoning and is currently undergoing significant and long-awaited water and sewage upgrades. And on Staten Island, a number of major commercial and residential developments around the ferry terminal stand to bring thousands of people to the area daily; the question is how to get some of them to also shop locally.

The Corridor Challenge has three stages, each of which builds upon the previous one:

  1. Diagnosing the particular situation in each corridor, including assets and challenges;
  2. Choosing the right intervention(s) for each corridor to address its particular needs; and
  3. Measuring the impact of the interventions to validate their effects and inform future corridor investment strategies.
     

Stage 1: Diagnosis

The Corridor Challenge builds upon critical work supported by SBS investment of almost $9 million over 3 years to launch Neighborhood 360°, which aims to more deeply understand, and develop strategies to address, small business and commercial district challenges in low-income neighborhoods. “Neighborhood 360° is helping us to understand commercial district needs by working with local nonprofit partners to gather comprehensive, community-level data,” says Michael Blaise Backer, deputy commissioner of SBS’s Neighborhood Development Division. “That has helped us identify where we can focus our support with deeper, more sustained investments over time that will benefit small businesses and neighborhoods,” he said, including multi-year operating grants to hire full-time program staff in each of the local nonprofit organizations where the on-the-ground work happens.

Stage 2: Intervention

With $525,000 in funding from LISC and Citi Community Development, LISC is deploying expert consultants—planners, architects, and community development professionals—to help local partner organizations to assess the physical and market conditions along their corridors, and to determine the particular strategic interventions that are the most appropriate to spur revitalization in their corridor. These experts will help design and implement highly visible, strategic interventions in the very short-term—within 12 months. These early-action projects are an essential part of the Corridor Challenge model. The goal is to shift perceptions and leverage additional investment while building credibility for the neighborhood partners helping to facilitate these interventions.

The capacity-building technical assistance being coordinated by LISC at each site will ensure that proven market-informed solutions serve as the basis for strategically selected early actions—and take advantage of lessons learned in other communities. “Because we have done this work all over the country, and have national experts on staff, LISC brings a wealth of expertise to the table,” says Eva Alligood, Deputy Director of LISC NYC.

In addition to LISC’s national experience supporting commercial corridor work, they bring an expert perspective on crime prevention through environmental design (CPTED) to help businesses and local partners alike understand how small physical changes like clear sightlines through storefront windows and modest lighting changes can yield big improvements in safety for each district. LOA specializes in retail and corridor revitalization strategies in low- and moderate-income communities. The firm Dadras Architects has extensive experience helping communities revitalize their main streets and retail corridors. They are helping Corridor Challenge participants consider visually impactful façade improvements.

These interventions are a great example of how important LISC’s partnerships are not just for the technical experts they can bring in, but the complementary funding. “These large-scale efforts require public, philanthropic and community-based partnership,” explains SBS’s Backer, whose agency has funded staff positions in local partners to help coordinate this work but can’t fund the physical improvements to private property. “Citi Community Development and LISC’s contribution makes the public investment go a lot farther.”
 

Stage 3: Measurement

An essential part of the Corridor Challenge is measuring impact of the interventions and making adjustments to the early action projects quickly, if warranted. LISC is partnering with SBS and each local partner to collect information from merchants and survey data from shoppers along each corridor to track:

And because nothing encourages engagement more quickly than seeing positive changes in the neighborhood, the Corridor Challenge will celebrate the outcomes of this work by documenting the process of working with businesses, and the program’s outcomes, and communicating results in the press. This builds long-term credibility for the work of neighborhood partners with other retail businesses—and with funders. Foggin Strategies and Anat Communications are helping the local partners to tell the stories of their successes, which will increase their credibility with other business owners as well as funders.

What’s Next

In the coming weeks, additional pieces will explore each of the three corridors in more detail, including specifics on their early action projects. Here’s a preview of each:

Early in 2018, we will follow up in each neighborhood to see what has changed and share that as well.

Researched and written by Mark Foggin.