Downtowns suffer and there are no easy answers

Once that cycle begins, it’s difficult to stop.

In response to that dynamic, a lot of towns do major renovation projects in a bid to lure in new business investments to downtowns. That was done in Commerce some years ago; Jefferson did a major upgrade last year; and Winder is looking to do a similar project in the near future.

In addition to that, Jefferson recently set up a deal with the city’s development authority to have $20,000 set aside for the city to create a revolving loan fund that would loan money to business owners who plan to expand or renovate a downtown business.

While I admire the grit and determination of towns that try to improve their downtown areas, I’m somewhat of a cynic when it comes to governments getting too deeply involved in private business projects. What often looks good on paper may not, in the real world, work.

Part of the problem in these downtown development efforts is that every town in the state always wants to be the same thing: Every town is trying to replicate the look and feel of Madison Georgia and a few other similar towns where little restaurants and antique stores cater to tourism.

It’s cute, but not every town can be Madison. That community is unique in ways that other communities simply can’t copy.

A lot of the problems being faced by traditional downtowns are really no one person’s fault. The growth in strip shopping centers has supplanted many of the businesses that in previous generations might have located in a downtown. Better parking is part of that, but in many strip centers, there is also a synergy of businesses that bring in shoppers.

Jefferson’s Kroger shopping center, for example, has far more businesses and shopping traffic than the traditional downtown area. There is no way any downtown can replicate that dynamic.

Because of that, a lot of downtowns have tried to go to the Madison format of small restaurants and antique or niche stores. Some, like Lawrenceville, have been rather successful.

But that is a very difficult business model for a downtown. Because of high overhead costs, those types of businesses require a lot of foot traffic. In densely populated areas, there may be enough local business to survive, but in a rural area, that traffic has to come from outside tourism.

Several mountain towns, like Dahlonega, have been successful in luring tourism and supporting a number of small downtown shops. But Dahlonega has a college campus in town and the community is a major gateway to those traveling into the North Georgia mountains. That’s unique and difficult to copy.

Another major aspect of this issue is that small businesses locating downtown are typically started by individuals and not part of a corporate system. But typically, individuals lack the financial resources to survive long enough to establish a new business. The large corporate businesses that typically fill a strip shopping center have the resources to ride out tough times and to stay around long enough to build a business.

Frankly, I don’t think the future of most downtowns will be in the restaurant and antique businesses. Jefferson is now down to one fulltime restaurant downtown. Others have come and gone about as often as I change socks. Restaurants in many small towns are failing.

It’s likely that most downtowns will continue to lose traditional retail businesses. Some will see a growth in professional businesses, such as lawyers, real estate, etc. But the old buildings in most downtown areas are too large for those type enterprises; the taxes are too high and it costs a lot to heat and cool larger facilities.

A lot of area towns, including Jefferson, Commerce and Winder, have a slew of empty storefronts now. Some of that may be due to ongoing economic problems, but it is also due to the changing way consumers shop.

I’m uncertain about the city government getting into the loan business for downtown projects. If a business defaults, who will pay the city back?

It might work, if the rules are tight enough. But the success of small downtowns will depend on getting a number of businesses to locate and to create a synergy. One restaurant won’t do it. One antique store won’t do it. Creating $20,000 in loans won’t do it. It takes a critical mass of such businesses to create the kind of downtown our local communities are looking for.

Many downtowns are suffering and there is no easy quick fix. Just because we wish things were different won’t make it so.

Mike Buffington is editor of The Jackson Herald.

Mike Buffington is editor of The Jackson Herald. He can be reached at mike@mainstreetnews.com.