Down and out on Main Street | Despite widespread interest in reviving Maine's downtowns, some say the state has chronically underfunded the Main Street Maine program

The Waterville Paul Boghossian knew as a Colby student in the mid-1970s didn't offer much in the way of opportunities to keep him in town once that tassel turned. Mills were closing and the city was reeling in the aftermath. Jobs were scarce, as was morale.

Nearly three decades later, though, Boghossian reluctantly returned to Waterville after a friend suggested he investigate the vacant C.F. Hathaway building as a potential redevelopment project. The city he remembered as downtrodden and dull seemed different: Boutiques sold everything from dresses to didgeridoos; eclectic eateries dished out hummus platters and Caribbean spiced duck; and a movie theater had found a following by showing art films. As a Rhode Island-based developer who "turns old buildings into neat places," Boghossian suddenly saw Waterville's downtown as a development opportunity. Since 2004, he has been working to renovate the 236,000-square-foot former shirt factory into what he envisions as the Hathaway Creative Center, a home for Maine's much ballyhooed creative economy, complete with sunlit studios and loft living space.

Boghossian isn't the only investor interested in Waterville, and the Elm City isn't the only Maine downtown trying to blossom from dud to developable. Waterville is one of eight communities attempting a rebirth through the Main Street Maine program, which is managed by the Maine Downtown Center based on an economic development model created by the National Trust for Historic Preservation. So far, Saco, Norway, Bath, Eastport, Gardiner and Waterville have taken steps to revitalize their centers with guidance from the program, which in 2005 also took Skowhegan and Van Buren under its tutelage.
Together, those projects have generated $23.5 million in public and private investment in physical improvements, and helped create 95 new businesses and 531 jobs, according to Lori Allen, program director for the Maine Downtown Center.

But while the Maine Downtown Center devotes its days to resuscitating town economies, the program is struggling to keep itself above water. Since the Legislature created the center in 1999, it has all but abandoned it. Not since 2002 has the MDC received a cent from state appropriations. As a result, MDC operates with just two part-time employees and an annual budget of $80,000. In comparison, New Hampshire's Main Street Program has four full-time staffers, one part-timer and an annual budget of $544,000. "We're hanging on by our fingernails basically," Allen laments. "In reality, the amount of money we are asking for in comparison to the results is nothing. For me, it's not just about fixing up old buildings. It's really about the future of the state of Maine."

House Speaker John Richardson, a Democrat from Brunswick, says the MDC has been a "victim of timing and financial considerations." He says few in Augusta were aware of the MDC's funding needs until recently, when Richardson sponsored a bill seeking $300,000 to support the program for the next three years. That request for funding didn't make it into the state's supplemental budget this winter, and, as this issue of Mainebiz went to press, the Legislature's appropriations committee had not yet decided how much money, if any, the MDC would receive from a total of about $700,000 in state funding left available for a host of programs. Still, Richardson says legislators now have a clearer picture of MDC's funding needs. "For me, it's not a question of if, but when the funding will come," he says. "All this recent discussion has really brought this issue up front and center [and] this program has a head start for the next biennium budget."

But while many legislators, small business owners and economic development officials tout the economic and social significance of vibrant downtowns, experts say few in Maine may comprehend the impact of underfunding downtown revitalization efforts. "After years of being handicapped because of an absence of funds, Maine has suffered in a number of ways," explains Teresa Lynch, a program officer with the National Main Street Center of the National Trust for Historic Preservation who also sits on the Maine Downtown Center's advisory board. "They are doing so well with such little resources one can only imagine the phenomenal things they could do with adequate resources."

Passing the hat
The Main Street program, active in 45 states, emphasizes promotion of downtowns as unified commercial areas, bustling with unique stores and special events. Preserving and highlighting historic architecture is another focus of the program, which is credited with adding more than 300,000 jobs and $23.3 billion in investment in the 1,800 communities that have employed the Main Street approach since 1980.

Administering that program in Maine costs the Maine Downtown Center around $50,000 over a three-year period per community to provide in-depth assistance and technical support, such as bringing in retail experts. The local fundraising requirements for communities themselves vary: Towns with populations of more than 5,000 must hire a full-time downtown manager to oversee and coordinate local efforts. In the first year of the program, those costs could range from $30,000 to $60,000, depending on the manager's salary and whether things like office space can be donated. Communities with fewer than 5,000 residents can hire a part-time manager.

Although finding $30,000 or more in tight municipal budgets can be tough, those who have joined the program say the investment is worth it. "People are already starting to say 'Things are really going to change' and 'Things are finally happening,'" says Audrey Lovering, downtown manager for Skowhegan's Main Street Maine project, which began last fall.

Given the response from the Main Street Maine communities, Allen believes the MDC should be a fixture in the state's budget, instead of being dependent on handouts from the Department of Economic and Community Development, the Maine State Housing Authority, the Maine Department of Transportation and the Maine State Planning Office, all of which have supported Allen's program in the past. "Each year, we have to pass the hat to state agencies and frankly, that's a problem because nobody has any money," Allen explains. "For me, it's a catch-22. Do I spend my 20 hours a week delivering the program services or do I go out and run around trying to raise funds?"

Federal funding also is finicky. Last summer, the U.S. Department of Agriculture awarded the center $100,000 through the Rural Community Development Initiative Fund, but when Hurricane Katrina plowed into the Gulf Coast, the USDA suddenly had a more pressing problem. Maine was all but forgotten, and Allen didn't receive the check until February, delaying training for new Main Street towns.

MDC also gets support from Maine businesses with a vested interest in downtowns, like retailer Reny's, the engineering firms Wright-Pierce and Harriman Associates, and Bath Savings Institution. But in a program that's all about perception ˆ— whether it's tidy main streets bustling with small businesses or downtowns abuzz with optimism that piques the interest of developers like Boghossian ˆ— some fear Maine's financial neglect for the MDC makes it hard for the private sector to buy into its vision. "When taxpayers ask what the state is doing to support the program and hear 'Nothing,' it shows that the state is skeptical and that makes them skeptical. It leaves me holding my breath," admits Skowhegan's Lovering. "I don't think the Legislature grasps the true multiplier effect of having a solid downtown. When you have a rundown downtown, you simply can't attract industry."

Sen. Peggy Rotundo (D-Lewiston), the senate chair of the appropriations committee, says she understands the issue. "I agree this would make a terrific investment and so do others. But with 186 people, it doesn't always work out because of differences in philosophy and differences in priorities," Rotundo says. "Many of us feel this sort of investment pays dividends, but there is a lot competing for this funding. It's certainly not for lack of interest."

Suffering by comparison
The concern for Allen and others involved with the MDC is that Maine will never realize the full potential of the Main Street Maine program until it has more funding. For example, low startup funding meant Maine wasn't able to adequately train the downtown managers in its earlier Main Street communities, Teresa Lynch explains. Nor has Maine been able to offer free design assistance for its Main Street towns, as other states do. Those design specialists would help communities work within their budgets to complete facade improvements, rehab buildings and develop a more consistent look.

In order to be effective, Maine's program needs at least $300,000 a year, Lynch believes, and certainly more staffing. She cites Arkansas' program, with its six full-time staffers and $840,000 budget, as a state to look to. With two times the population of Maine, Arkansas puts up 10 times the resources, with impressive results. Since its inception in 1984, Main Street Arkansas cities have gained 4,247 jobs, 811 businesses, and 810 business expansions and

relocations into downtown. A total of $71,234,341 in private investment has financed 2,510 facade renovations, rehabilitations and new construction projects, according to a 2005 annual report.

With more funding, the Main Street program could become a significant force in Maine's economic development too, Lynch believes. And as the state looks to develop its creative economy and woo more businesses with tax incentives like the Pine Tree Zone program, developers like Boghossian hope Maine doesn't overlook its downtown opportunities. The Main Street Program, supporters say, can help show developers and businesses that communities would embrace new investment. "A lot of other organizations in Waterville have come and gone. What the Main Street program has been able to do that no other group has is really build a sense of pride that goes community wide," explains Shannon Haines, Waterville's program director. "There is a sense of forward momentum and it's what attracted [Boghossian]. He sees the community support for downtown revitalization."

Boghossian agrees. "Creative people want a downtown experience. No one is going to move back to Maine because of Western Avenue in Augusta, because it's just like everywhere else," he says. "We're losing what makes Maine special and downtown revitalization is the answer."

Yet Maine's shortchanging of downtown revitalization doesn't end with its wallet, Boghossian says. He echoes the concerns of Lori Allen and other downtown revitalization experts who say the state's codes make it easier to build new rather then renovate, especially when it comes to major projects. And new means sprawl. For example, Boghossian cites a state historic tax credit that is nonrefundable, nontransferable and limited to only $100,000 per year. That program is so unworkable, it's only been used 13 times, Allen says. And when two amendments to the tax credit were introduced in Augusta this session to make it more business friendly, they were killed.

Meanwhile, some developers are finding that after major investment to meet municipal codes, projects don't pass muster with the State Fire Marshall's office, meaning more time and money to become compliant with an entirely separate ˆ— and sometimes contradictory ˆ— set of codes. "Maine is a wonderful place to live, but you make a sacrifice to do business here," Boghossian says.

But the MDC's ability to expand the program remains Allen's biggest concern. She wonders how she can accept more communities without a significant boost in state funding, and is considering charging additional fees to participate in the Main Street program. (See "Pay to play," this page.) Eight other communities are interested in the program, Allen says, and adding more communities would make the MDC more visible. But she also accepts that when stacked up against needs like prescription drugs for the elderly and fuel assistance for low-income residents, downtown revitalization doesn't seem as pressing.

But Lovering says Maine can't afford to look at it that way. After all, she says, the revenue generated directly and indirectly from downtown revitalization could not only be self-supporting, but it might just benefit the state's entire fiscal picture. "I don't think people truly understand the vital importance of revitalizing our downtowns," Lovering says. "We're not just waiting around for someone to give us millions of dollars. We need a hand up, not a handout."