Obama 2012 v. City of New London Revitalization

The truth on downtown development: Federal, State, and Local Government direct-action policy makes very little difference in helping. The current banking system is a formula that has destroyed downtowns in America. What are needed are human beings to take individual risks, open up their retail stores, and put the work in.

 

What do we want to do? Open a bookstore. Or rather get a loan for a couple hundred thousand dollars to be paid back in ten years. Not a big deal right? The government hands out hundreds of billions of dollars to banks that keep messing up. What do the banks do with this money? They could use it (pretty please) to help finance downtown retail development. By help I mean lower the equity requirements for borrowers. Instead, the banks use it to gamble again and again with the same failing business models. Casino of America.

When David Collins of The Day called our business idea "The Holy Grail" of downtown New London, it struck me as almost comical how much the financial system really is pitted against any sort of downtown revival. The problem isn’t Wal-Mart or the mall, it is the banks that bet on Wal-Mart against downtown. Most Main Street businesses cannot reach their potential due to one major obstacle - financing. An unemployed person with nothing can qualify for a $200,000, thirty year mortgage, but cannot qualify for a $10,000, five year business loan. At this point home foreclosures are occurring at double the rate than small business loan defaults. Even with a 90% SBA backing, the banking system may hold the community "Holy Grail" hostage to satisfy it’s own illogical and senseless greed. I imagine across the country a thousand "Holy Grails" never came to be as a result of this problem. But they will prey on homeowners, whom they can pass 100% of the debt to the government with ease. They bet and gamble on ridiculous stock speculations with your money, and if they lose, they can claim they are too big to fail and cry like babies to get all of their money back for free. They raise your credit interest for a few months to pay back the government, then they roll the dice again! This is the game they play with your money and it does not involve you except for when the slot machine runs low. They are not in the business of helping Main Street.

What about incentives? No. People don't sit around wishing a tax incentive would pop up and then yes, that's when they would start a business. I would start my store no matter what the incentives, or lack thereof. What attracts business is a market. End of story. For the retail and cafe businesses we so desire on State Street, there are very little regulations to stop them, but is there a market? Looking at my cash flow balance sheets I cannot apply the political ideologies on Fox or MSNBC in any meaningful way that will be helpful to me. I don't see Rent Subsidy in New London and think “aww shucks, gotta put my store there.”  Nope.  The rent subsidy program is enticing but a similar program exists in Norwich. I do not think “employee health care insurance premiums are gonna hurt me so I cannot open up shop” as they are a tiny fraction of a tiny bracket of expense. These things do not attract nor prevent business formation. What retail entrepreneurs need to see is that there will be customers.  

Given the tentative committee-approval nature of government programs, we cannot count on them when working the startup first year budget projections. A subsidy is a reward but not an incentive. The subsidies that currently exist are those that help businesses that have already raised capital and have already signed the lease agreement. A reward well deserved to get to that point but not the right kind of reward for anybody to want to start a business. Gina and I will potentially go into debt for the rest of our lives not because we love downtown, but because we see the potential market. We have done our homework. We are confident in our odds.

Can New London support a bookstore? Well, yes...but not technically. I hate to break this to city loving residents but the current foot traffic is not a viable market. The real market is the 20 minute drive economic radius of a population of 274,000. So it seems obvious. The downtown business makeup must compete with other retailers to draw customers in to do their shopping/entertainment. A good indicator of what would succeed downtown? Well, what do people leave downtown for? And then we can begin the list.

In our journey to open a bookstore, we did market research on every town in the county, as well as some in Rhode Island. New London consistently ranked as the best place to do business for a multitude of factors. We were sold on the vision that New London’s vision of a city that can be revitalized and become a thriving center for all things cultural and artistic.. The population wants a bookstore downtown.

We have 14 art galleries. Considering the size of our city, that ratio is unheard of in this country. We can be the exception to many rules. There's no reason that little downtown Mystic can pack in shoppers in overpriced stores because of an outdated Julia Roberts movie and bad pizza, and New London cannot. New London has the potential to become a tourist destination that can surpass downtown Mystic. At the same time it must also serve its residents.

Retail is challenging these days, but nowhere is that challenge felt greater than in the giant chain stores. Mom and pops now have the internet. We have the ability to adapt and change quickly. No more musty stores. No more stacks of papers. Technology can make small stores efficient and tidy little operations. Grassroots marketing. Guerrilla advertising. Giant stores simply cannot do this, and they are now being shut down by Amazon. Nobody is holding their breath. The independent bookstore industry has seen a 500% increase in store openings month after month since Borders shut down. Independent bookstores are taking it back.

While our store will increase the living standard and benefit the community in more ways than I can count on fingers and toes, it won't be "the holy grail" as David Collins so eloquently put it.  Homegrown is a beautiful concept. Not some anonymous developer and giant corporation that requires that the city knock down the homes of our own citizens to make room. Not some angel investor that's going to save everybody. Homegrown means investment from within. As long as we continue to rely upon those hopes of salvation from outside forces, we will continue to spiral downward and ignore the institutions that make this city great, The Hygienic, The Garde, the elngee, 2wives, Carusos, Sarges, the Bean and Leaf, Treehugger, Eastern CT Symphony Orchestra, Sailfest, IAM Festival, Crocker House, Telegraph, the Drunken Palette,  are all homegrown built and staffed by local people. And who are the biggest investors? Local companies.

We can waste so much energy trying to draw in one big investor, or we can be efficient and grow from within. Groom entrepreneurs to open more awesome little places. Recruit, inspire, do what it takes. I repeat, Pfizer and EB are not Main Street and anything built on the Fort Trumbull peninsula is not Main Street. You put all of your eggs in that one basket and it is trouble. A politician can get re-elected helping to buy a few more years of a military base’s existence only to see it closed the next election cycle. A community cannot sustain this short-term thinking.

Downtown groups such as New London Main Street, New London Local First, and most recently, Upper Bank Think Tank, are seriously considering how to brand the city. Economic Development. Sure, there is a government office titled this. But what are they doing about the empty storefronts? Nothing. Well actually, they are telling chain stores they cannot open up here. (ahem, Subway?)

Mayor Finizio, at a recent meeting, was right when he said “It’s difficult to open a business in New London because there is no one place to go for potential entrepreneurs to get resources.”

And so we stare at block after block of empty storefronts and all we hear is crickets, because nobody is doing anything real to find the actual people that will fill them. This needs to be changed. There are many among our own ranks that are smart enough, hard working enough, and talented enough to open up numerous retail businesses downtown. If the city or nonprofit economic developers want nothing to do with it, that is fine. We must take this into our own hands. Recruit entrepreneurs. Get them access to financing. Encourage them to write inspiring business plans. This is what true economic development is about. I am willing to work for and would like to see a group of business-wise individuals to perform just this task. It's an emergency to me. I believe in New London. I believe the people that can fill those shops as business owners live among us. Absolutely, we must combat this willful ignorance that unfortunately is the status quo. For folks like me who want to see the city be great again and possibly pay our bills, it is the fight of our lives.