Advocacy Spotlight: Proposed Pilot Program Would Spur and Sustain Development of our Nation’s Business Districts

Business districts are critical to our nation’s economic vitality, acting as catalysts for entrepreneurship, community hubs, and centers of commerce and civic life. But the growth and development of our business districts, as well as the small businesses within them, depends on the capacity of the local organizations that serve them. Now, new legislation offers a pathway to strengthen local business district organizations, accelerating their efforts to build thriving businesses, create high quality local jobs, and revitalize towns and neighborhoods. 

Main Street America (MSA) and Local Initiatives Support Corporation (LISC) are proud to support the Capacity Building for Business Districts Pilot Program, which would create a competitive grant program within the Economic Development Administration (EDA) to support business district organizations in rural and underserved areas through the national nonprofit networks in which they participate.

The Importance of Supporting Local Business Districts

Small businesses are often found clustered in our business districts: neighborhood commercial corridors, Main Streets, downtowns, and other dense concentrations of small business development. Small businesses located in business districts are typically locally-owned, have under 20 employees, and hire locally, creating opportunities to build wealth and sustain a community from the ground up. The importance of these businesses cannot be overstated: research from the Association for Enterprise Opportunity indicates that if one-third of ​“microbusinesses” hired just one additional employee, unemployment in the country would be eliminated. 

Beyond their direct economic impact, small, locally owned businesses create communities where people want to live, work and visit, providing vital spaces for social connection, opening opportunities for new entrepreneurs, and reinvesting back into their neighborhoods. But successful small business ownership in these places requires supportive networks, resources, and a community commitment to their growth. Often, economic development activities focus on resources and incentives to attract large industry, but research indicates that quality of place and customized support for small businesses are more effective strategies to promote economic growth. From rural downtowns to historically disinvested urban areas, creating thriving communities requires a hyperlocal approach. 

Business district organizations (BDOs) support the local small business community by advancing solutions throughout the district. Every business district revitalization effort needs a durable local organizational structure with sufficient staffing to develop strategies and execute plans to create place-based support for small businesses. In many communities, and particularly in rural communities, BDOs are the only local economic development entity connecting entrepreneurs to resources, capital, and physical space for business growth. Capacity building for these entities is essential to ensure the success of hyperlocal, place-based economic development efforts. Unfortunately, there is currently no federal program dedicated to supporting business district organizations, with most economic development programs focused on larger, better resourced entities. 

Solution – Capacity Building for Business Districts Pilot Program

With our decades of work to support business district organizations nationwide, LISC and MSA applaud Representatives Mike Ezell (MS-04) and Troy Carter (LA-02) for introducing a bill to create the Capacity Building for Business Districts Pilot Program. The program would enable BDOs to better support small business owners and build thriving communities in small towns and neighborhoods across the country — particularly those that face barriers to participating in existing EDA programs. The legislation would also direct resources and technical expertise to communities that have identified commercial corridors and main streets as economic assets in need of revitalization.

The program would deploy resources through national organizations that already partner with BDOs and other locally based small business support organizations. This approach would leverage the capacity of these larger organizations to apply for EDA funding, ensure compliance with federal regulations, and provide training and support to locally based BDOs to enhance their impact. This would enable BDOs to expand the small business support programs that are so critical to their communities.

Supporters Amplify the Need for Capacity Building for Business Districts

Thousands of organizations across the country could benefit from the resources provided through the Capacity Building for Business Districts Pilot Program. For example, since 1985, Downtown Hattiesburg Association in Hattiesburg, Mississippi, has worked with city and county partners to revitalize Hattiesburg’s historic core. Bringing people back to the community through events and placemaking paves the way for strategic investment in downtown properties and small businesses, generating increased tax revenue for the city. Under the umbrella of the Mississippi Main Street Association, the organization receives support and guidance, but additional resources for local economic development are needed to expand and continue this success. 

In New Orleans, in the wake of Hurricane Katrina, neighbors organized to rebuild, forming Broad Community Connections to create a thriving commercial corridor across several historic neighborhoods. Now, the organization supports over 120 small businesses along the Broad Street business district, along with creating investment in high-impact projects. Through their work in property and business development, the organization has activated over 100,000 square feet of vacant or blighted property into active use as commercial space, creating over 300 jobs. 

A broad range of national organizations that promote business ownership and locally-driven economic development have already endorsed the Capacity Building for Business Districts Pilot Program, including: 

• Association for Enterprise Opportunity 
• Center on Rural Innovation 
• Local Initiatives Support Corporation 
• Main Street América 
• National Association of Affordable Housing Lenders 
• National Alliance of Community Economic Development Associations 
• Small Business Anti-Displacement Network
• Mayoría de pequeñas empresas 
• Small Business Roundtable

Congress has a Critical Opportunity to Support Small Businesses and Communities

This legislation addresses a long-term need for direct support for the hyperlocal approaches that have been a missing link in federal support for economic development. Currently, the Economic Development Administration is set to be reauthorized for the first time in twenty years through inclusion in the Water Resources Development Act (WRDA). Reauthorization of EDA is essential to advancing broad economic development goals nationwide and will be beneficial for BDOs. The goals of the Capacity Building for Business Districts Pilot Program further advance this need by using nonprofit intermediaries to extend support to business district organizations. 

If you’re interested in learning more about federal policies impacting Business District Organizations, email Kelly Humrichouser at khumrichouser@​mainstreet.​org or Lauren Rosenbaum at lrosenbaum@​lisc.​org. 

For more information on this legislation, read press releases from Representative Mike Ezell and Representative Troy Carter.