Main Street Works: Economic Impact Study of Main Street Iowa

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The Main Street Four Point Approach gets results—tangible, economic results. That’s the clear message conveyed by a new report, “Getting Results: The Economic Impact of Main Street Iowa, 1986-2012.” Conducted by PlaceEconomics of Washington, D.C., the report analyzes two and a half decades of data, which demonstrate the success of Main Street Iowa in helping Iowa communities use their historic downtowns and neighborhoods as effective vehicles for local economic development.

The report, says Iowa Downtown Resource Center Director Thom Guzman, “provides valuable confirmation about the success of the program so that there won’t be any doubt going forward that the state should continue to fund and support the program.” It also adds credibility, says Guzman, “to local programs to demonstrate the power of their work.”

Guzman conceived the idea for the report after hearing Donovan Rypkema of PlaceEconomics speak about the economic impact of historic preservation programs in other places. “All of them were from the coasts,” he says. “Wouldn’t it be cool, we thought, if we could do one on the economic impacts of the [Iowa] Main Street program over its first quarter century of operation. We knew the raw numbers because we have done a good job requiring monthly reports but what else could we glean from them if we could get a consultant deep into the data?”

Main Street Iowa chose PlaceEconomics because it has conducted similar studies throughout the country.

Powerful Numbers

The 26-year old Main Street Iowa program has become a singular success story. Since the program began:

  • 11,500 net new jobs have been created in Main Street Districts.
  • More than 3,800 businesses have been established, expanded, or relocated to Main Street districts.
  • $1.1 billion have been invested in Main Street buildings, including $300 million in acquisition and more than $800 million in building renovation.
  • Projects in Main Street districts have generated an average of 623 jobs and more than $19 million in paychecks in Iowa every year since the program began.
  • In spite of a recession and a shaky economy, Main Street rehabilitation projects in the last 10 years have created more than a thousand jobs each year, on average, and generated worker earnings of nearly $35 million.
  • Local governments annually gain $10.8 million in property taxes from the rehabilitation investment in Main Street districts alone.
  • Conservatively, the net new businesses and business expansions in Main Street districts generated state sales tax revenues of $43 million in 2012.
  • For every $1 spent on the state program, nearly $72 in private investment has been spent on the acquisition and rehabilitation of buildings in Main Street districts.

Powerful numbers indeed! And this report delves deep into the meaning of these numbers. It shows the differences in capital investments made in rural, mid-size, and urban communities, as well as urban neighborhood districts. It demonstrates the cost of an empty building to all sectors of the community, from the building owner to local and state government, banks, utilities, professional services, media, and workers. There are separate sections on jobs, businesses, living on Main Street, and an especially in-depth section on real estate investment, which the report considers “a critical measure of success for Main Street for two important reasons.”

“Since real estate is a long-term asset,” says the report, “the willingness of the private sector to invest is a reflection of confidence in the future of the community. Secondly, Main Street is economic development in the context of historic preservation. If there is no investment in the historic buildings on Main Street, the program could not be considered a success from either an economic development or a preservation perspective.”

With more than $800 million invested in building rehabilitation, Main Street Iowa has clearly demonstrated its success in this area.

Beyond the Numbers

But Main Street is far more than just statistics, and this report focuses on the qualitative as well as the quantitative side of the research, profiling six Main Street Iowa communities, from rural towns like Bloomfield and Woodbine to metropolitan areas such as Dubuque and Valley Junction, an urban district in West Des Moines. The communities not only represent different sizes but also different regions of the state. Each case study showcases a specific aspect of the town’s Main Street program:

  • Bloomfield, says the report, shows that “the ability to do business around the world isn’t limited to large cities or giant corporations. It can happen on the Main Street of a rural town in Iowa.” MPA Computers, which renovated and moved into a historic downtown building, provides software and other computer services to clients worldwide, while a nearby gift and floral shop delivers tulips to Iowa communities within five days after they are harvested in the Netherlands.
  • Dubuque has become a model of sustainable development, notes the report, by merging “the concepts of smart cities, downtown revitalization, and historic preservation.” Embracing sustainability helped bring IBM—which located in a historic building—and hundreds of employees to downtown Dubuque.
  • Valley Junction, West Des Moines, illustrates the evolution of an urban commercial district “from a cluster of antique shops and hobby businesses to the largest concentration of specialty stores in the Des Moines metro area and a premier arts, entertainment, and cultural district.”  The report also showcases Valley Junction’s rehab of the 1905 City Hall into a model of environmental sustainability.
  • Woodbine may have a small annual budget, says the report, “but that hasn’t prevented it from dreaming—and then acting—big.” The town commissioned a  Sustainable Community Master Plan and, subsequently, has seen an investment of more than $6.5 million in 25 buildings in the three-block downtown.

The Next Phase

While the data in this report is critical in showing the value and benefits of Main Street Iowa, getting the findings out to the public and to the state and local governments is equally important.

After presenting the findings to the 49 Main Street towns at a workshop, “we held a public symposium where we invited the development and preservation world to hear firsthand from Rypkema about his findings.” says Guzman. “We also held a private meeting with the Governor and Lt. Governor where Don discussed the results.” The symposium was also videotaped so that it can be shared with a larger audience.

Governor Branstad has said that “Main Street is the most successful and effective economic development program in Iowa,” says Guzman, “and that it has been for 25-plus years because it is the most cost-effective.”

Now Main Street Iowa has sound research to support that.

To download a copy of “Getting Results: The Economic Impact of Main Street Iowa, 1986-2012,” click here.