Forgiving loans | New business program aims to spark innovation, investment in downtown Waterville
Executive director, Waterville Main Street
The city of Waterville has identified the revitalization of its downtown as a top priority and it is putting its money where its mouth is. Having established a downtown tax increment financing district in 2005, the city has accumulated a pot of money that can be used in a variety of ways to spur downtown development. While the money has been used fairly traditionally in the past to match federal funding for streetscape improvements and to help fund organizations and programs focused on economic development in the downtown district, the city and Waterville Main Street recently launched an innovative Downtown Forgivable Loan Program.
The Downtown Forgivable Loan Program is designed to provide financial assistance to business and property owners interested in creating new businesses or significantly expanding existing businesses within the downtown district. Through this new program, business and property owners are eligible to apply for loans ranging from $15,000 to $50,000 to fund physical improvements, including façade work and interior renovations, equipment and other fixed assets. While structured much like a traditional loan, these loans will be forgivable, meaning that borrowers will make interest-only payments and — provided they meet the obligations established in their application regarding job creation and filling vacant space — the principal of the loan will be forgiven over time.
Priority will be given to projects that fill first-floor vacancies and align with the target uses identified through consumer, employee and business surveys conducted by Waterville Main Street. Loosely based on examples from other downtowns throughout the country, this forgivable loan program is the first of its kind in Maine and is intended to incentivize business development and expansion that will not only address some of the challenging vacancies in downtown, but do so by targeting businesses that are the right fit for the downtown mix.
Selected by the Maine Downtown Center as one of the four inaugural Main Street Maine communities in 2001, Waterville has been diligently working at its downtown revitalization efforts for nearly a decade, sometimes through investments that have involved some degree of innovation, risk and public scrutiny.
In 2005, for example, the city of Waterville invested $80,000 to construct an outdoor dining patio on Silver Street, the long-standing site of three prominent downtown restaurants. While this investment was criticized by some, the patio was recommended in every local downtown redevelopment study conducted over the past 20 years and has become a popular attraction for hundreds of visitors and residents alike. The investment positively impacted not only the restaurants but adjacent businesses as well, and has contributed to Waterville’s reputation as a dining destination.
Another example of innovative downtown investment is the creation of Barrels Community Market, a nonprofit retail market owned and operated by Waterville Main Street. We began exploring the venture in 2008 as a way to address the need for a downtown grocery store, which we had been unable to attract despite the desire expressed in every consumer and business survey conducted for the past five years. After conducting an extensive feasibility study and searching for the right space, we found our opportunity when a beautiful first-floor space became available in the heart of downtown in January of 2009.
With support from area residents, foundations and businesses, Waterville Main Street raised approximately $50,000 to start the retail market, which opened in June 2009 and now sells locally produced food, crafts and goods from more than 250 Maine farmers, crafters and vendors. This business venture was incredibly risky for Waterville Main Street from both a financial and a public relations standpoint. Some argued that we should not compete with for-profit businesses, others said the business would never make it. A year and a half after opening, Barrels now attracts more than 100 visitors a day, has received state and national recognition and works with area hospitals and schools to integrate local food into their menus. Furthermore, we get several calls a month from other communities across the state and the country looking to us as a model for community-based enterprise.
What’s next for downtown? We hope to encourage further investment through innovative programs and incentives like the Downtown Forgivable Loan Program. We plan to launch a comprehensive marketing campaign in conjunction with the city of Waterville, which recently conducted a community branding initiative to establish a bold new brand and image for the city. In December we welcomed three new businesses — Amici’s Cucina Italian restaurant, Jin Yuan Chinese Restaurant and Dress Me Bridal — to the downtown district, and over the next six months or so MaineGeneral Health and Inland Hospital will fill over 20,000 square feet with doctors’ offices.
We like to remind people that it took decades for our downtowns across Maine and the country to reach a point of crisis that eventually stirred communities to action. Likewise, it will take time, focus and investment for us to build them back up. Slow and steady (and innovative!) wins the race.
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