10 Reasons Why Vermont’s Homegrown Economy Matters Economy.pdf · Why Vermont's Homegrown Economy...

Reasons Why Vermont’sHomegrownEconomyMatters

10

and 50 Proven Ways to Revive It

By Stacy MitchellInstitute for Local Self-Reliance

P U B L I S H E D B Y T H E P R E S E R V A T I O N T R U S T O F V E R M O N T

10 Reasons Why Vermont'sHomegrown Economy Matters

and 50 Proven Ways to Revive It

By Stacy MitchellInstitute for Local Self-Reliance

Forward by Stephan A. Morse

Published by the Preservation Trust of Vermont

October 2003

This publication is made possible by grants from The Vermont CountryStore, The Barre-Montpelier Times Argus, The Rutland Herald, and TheWalter Cerf Community Fund with the Vermont Community Foundation.

The Preservation Trust of Vermont is a statewide nonprofit organization founded in 1980 thatworks to save and actively use our historic places. This includes working with a wide variety ofpartners to meet challenges like saving and using historic buildings, downtown revitalization,building stronger community centers, minimizing sprawl, developing affordable housing, andcrafting better building codes, and maintaining the essential character of Vermont. For moreinformation, contact the Trust at 104 Church Street, Burlington, VT 05401, Tel: 802-658-6647,Web: www.ptvermont.org.

The Institute for Local Self-Reliance is a national nonprofit organization providing research,analysis and innovative policy solutions for building strong local economies and sustainablecommunities. ILSR maintains several content-rich web sites; publishes electronic newsletters andbooks, including The Home Town Advantage: How to Defend Your Main Street Against ChainStores and Why It Matters; and has advised small business groups, community organizations, andpolicymakers in cities and towns nationwide. For more information, contact ILSR at 1313 5th St.SE, Minneapolis, MN 55415, Tel: 612-379-3815, Web: www.newrules.org

© 2003 Institute for Local Self-Reliance.

Table of Contents

Preface............................................................................................................................................. i

Introduction..................................................................................................................................i i i

Overview .........................................................................................................................................v10 Reasons Why Vermont's Homegrown Economy Matters............................................................. v

50 Proven Ways to Revive Vermont's Homegrown Economy ......................................................... vi

The Current Trends......................................................................................................................1Trends are Not Destiny...................................................................................................................1

Why Vermont's Homegrown Economy Matters .........................................................................3Local Character and Long-Term Prosperity...................................................................................3

Community Well-Being..................................................................................................................3

Keeping Dollars in the Local Economy..........................................................................................4

Jobs...............................................................................................................................................5

Entrepreneurship...........................................................................................................................7

Public Benefits and Costs...............................................................................................................7

Environmental Sustainability.........................................................................................................8

Competition and Consumers..........................................................................................................9

Planning for a Homegrown Economy........................................................................................11Leveling the Playing Field...........................................................................................................11

Planning Policies that Support Locally Owned Businesses...........................................................11

The Comprehensive Plan: Envisioning a Strong Locally Owned Economy ..................................12

Steering Commerce Downtown....................................................................................................13

Ensuring Appropriate Scale.........................................................................................................14

Assessing Community and Economic Impacts .............................................................................15

Ensuring Diversity .......................................................................................................................16

Meeting Community Needs ..........................................................................................................17

Creating the Ideal Habitat for Local Ownership...........................................................................17

Regional Cooperation .................................................................................................................19

Fostering Revitalization .............................................................................................................21Downtown Revitalization .............................................................................................................21

Vermont Downtown Program ......................................................................................................22

Downtown Designation................................................................................................................22

Keeping Public Buildings Downtown...........................................................................................27

Community Rooted Economic Development................................................................................28

Favoring Local Businesses in Government Purchasing................................................................29

Maintaining Affordable Commercial Space.................................................................................31

Creating New Independent Businesses..........................................................................................31

Independent Businesses Unite...................................................................................................33Purchasing and Marketing Cooperatives .....................................................................................33

Think Globally, Eat Locally.........................................................................................................34

Vermont Alliance of Independent Country Stores.........................................................................35

Independent Business Alliances ...................................................................................................37

Encourage Independent Businesses to Support One Another .......................................................40

Reward Local Shopping ..............................................................................................................41

Localizing E-Commerce ..............................................................................................................42

Conclusion....................................................................................................................................45

Resources......................................................................................................................................47

Notes..............................................................................................................................................51

Why Vermont's Homegrown Economy Matters | i

Preface

Just as I was in the process of writing thispreface, I learned that 50 granite workers weregoing to be laid off by a company that willlook to China—instead of Vermont—forstone in the future.

It's one more bit of evidence thatVermont's homegrown economy is veryfragile.

Every time we lose the sale of a granitemonument , we lose a bit of our economicstrength. We lose again when we lose alocally owned hardware store, a locallyowned pharmacy , bookstore, village store. .. or any other homegrown bus iness . In thisworld of big boxes and big chains, it's harderand harder for our homegrown smallbus inesses to make it.

That is exactly why we commissioned thisnew work by Stacy Mitchell of the Institutefor Local Self-Reliance. She has provided uswith ideas and policies to revive the locallyowned economy that have been implemented

in places across the United States. She givesus reason for hope. It is now in our hands.

Our special thanks to Stephan Morse,former Speaker of the Vermont House ofRepresentatives and current President of theWindham Foundation, for his introduction tothe publication. Stephan's leadership in thisand in many other arenas is a key piece to thefuture of Vermont.

We hope this publication will helpencourage a bigger and broader dialogue aboutthe importance of our homegrown economy.

Like all of our work, we need the supportof contributors. In this case, the VermontCountry Store, the Barre-Montpelier TimesArgus, the Rutland Herald, and the WalterCerf Community Fund with the VermontCommunity Foundation have made thisinitiative possible. . . we're most grateful!

We hope you find the enclosedinformation informative and useful.

Paul BruhnExecutive Director

Preservation Trust of Vermont

ii | Preface

Why Vermont's Homegrown Economy Matters | iii

Introduction

When we hear someone talking about whata special place Vermont is, we all have ourown ideas about what that means.

For me, I think about our small villagesand towns, resourceful people committed totheir families and communities, the agriculturallandscape and the farmers who often struggleto maintain field and forest, Vermont foods,and great places to bike ride. I also remembergrowing up in the heart and hub of a smallVermont community as the son of the ownerof the local grocery store.

I know others think about other equallyimportant aspects of our state. . . our richcollection of historic sites and downtowns,the Long Trail and Vermont's mountains,church and community suppers, the magic offall, the Vermont spirit and ingenuity, and thetradition of civil discourse. You, I'm sure, haveyour own insights and notions about whatmakes our Vermont special.

This new publication from thePreservation Trust of Vermont suggestsanother aspect of what sets Vermont apart—apart of our communities we sometimesoverlook—locally owned businesses.

These businesses give our communitiestheir local character. When we shop at locallyowned stores or use a locally owned service,more money stays and recycles in thecommunity. A strong local economy with lotsof businesses is the best way to ensurecompetition. If we support local ownership,we support the opportunities ofentrepreneurship. Local ownership breedsleadership and financial support forgovernment, nonprofits, and communities.

On the following pages, author StacyMitchell from the Institute for Local Self-Reliance provides us with the reasons whythis local economy is important, but moreimportantly, she describes dozens ofexamples of what other communities, states,and business associations are doing to supporttheir homegrown businesses. Adopting manyof these methods of support could help us tomeet the myriad challenges faced each day byVermont’s locally owned businesses. All ofthe strategies are useful in stimulating our ownideas for solutions.

Despite the appearance of nationalretailers, banks, and restaurants, we continueto have a healthy collection of locally ownedbusinesses in Vermont. So far our marketplaceis not entirely dominated by companies basedelsewhere. That said, we do need to bevigilant. The nationwide trends are disturbing,but as Stacy says, "Trends need not bedestiny." We do need to make sure wemaintain a healthy balance of local andnational ownership. Maintaining a healthybalance means we need to develop andincorporate new ways to strengthen ourlocally owned economy. . . we can't sit backand simply wish. We will all need to workhard, and we will all need to buy localwhenever we can.

I commend the following pages to you,and hope they will be part of the dialogueabout the future of our favorite state.

Stephan A. MorseGrafton, Vermont

iv | Introduction

Why Vermont's Homegrown Economy Matters | v

Overview10 Reasons Why Vermont's Homegrown Economy Matters

1. Local Character and ProsperityIn an increasingly homogenized world,communities that preserve their one-of-a-kindbusinesses and distinctive character have aneconomic advantage. (p. 3)

2. Community Well-BeingLocally owned businesses build strongcommunities by sustaining vibrant towncenters, linking neighbors in a web ofeconomic and social relationships, andcontributing to local causes. (p. 3)

3. Local Decision-MakingLocal ownership ensures that importantdecisions are made locally by people who livein the community and who will feel theimpacts of those decisions. (p. 3)

4. Keeping Dollars in the Local EconomyCompared to chain stores, locally ownedbusinesses recycle a much larger share of theirrevenue back into the local economy, enrichingthe whole community. (p. 4)

5. Job and WagesLocally owned businesses create more jobslocally and, in some sectors, provide betterwages and benefits than chains do. (p. 5)

6. EntrepreneurshipEntrepreneurship fuels America’s economicinnovation and prosperity, and serves as akey means for families to move out of low-wage jobs and into the middle class. (p. 7)

7. Public Benefits and CostsLocal stores in town centers requirecomparatively little infrastructure and makemore efficient use of public services relative tobig box stores and strip shopping malls. (p. 7)

8. Environmental SustainabilityLocal stores help to sustain vibrant, compact,walkable town centers—which in turn areessential to reducing sprawl, automobile use,habitat loss, and air and water pollution. (p. 8)

9. CompetitionA marketplace of tens of thousands of smallbusinesses is the best way to ensureinnovation and low prices over the long-term.(p. 9)

10. Product DiversityA multitude of small businesses, eachselecting products based, not on a nationalsales plan, but on their own interests and theneeds of their local customers, guarantees amuch broader range of product choices. (p. 9)

vi | Overview

50 Proven Ways to Revive Vermont's Homegrown Economy

The following provides an overview of thestrategies described in this report, organizedunder each of the report's three main sections:planning, downtown revitalization, andcooperative local business initiatives. Turn tothe page number indicated for more details.

Planning for a Homegrown Economy

1. Avoid zoning too much land for retail.Most communities have far more land,particularly along major roadways, zoned forretail than they need or can support. This canlead to haphazard commercial sprawl anddrain downtown vitality. (p. 11)

2. Provide public services only indesignated business districts.

Establish a defined geographic area withinwhich water, sewer, and other municipalservices will be provided in order to maintainthe vitality of the downtown and preventchain retail strip development along outlyingroadways. (p. 11)

3. Target tax incentives to local stores.Bar the use of tax breaks and other subsidiesfor "big box" stores and sprawling shoppingcenters. Provide incentives only forhomegrown businesses in the town center thatconform to the scale and character of thecommunity. (p. 11)

4. Incorporate support for localbusinesses into the master plan.

Communities, such as Kent County,Maryland, have listed supporting locallyowned businesses, limiting the proliferation of

national chains, and maintaining a vibrantdowntown as goals in their comprehensiveplans. (p. 12)

5. Temporarily halt retail development.Avoid being caught off guard by an out-of-the-blue proposal for a large-scale shoppingcenter. Easton, Maryland, placed a 3-monthmoratorium on retail development and usedthe time to study the impacts of big boxstores and revise its planning policiesaccordingly. (p. 13)

6. Funnel new retail growth downtown.St. Petersburg, Florida; Hailey, Idaho; and SanLuis Obispo, California; are among the citiesthat require developers to infill downtownvacancies and open lots before building on theoutskirts of town. (p. 13)

7. Limit the size of retail stores.Dozens of cities and towns prohibit theconstruction of retail stores over a certainsize. Some have banned only the biggest of thebig boxes, while others, like Ashland, Oregon,have mandated even smaller stores. (p. 14)

8. Examine potential impacts beforeapproving new retail stores.

Retail proposals in some cities, such asGreenfield, Massachusetts, must undergo acomprehensive economic and communityimpact review before gaining approval. (p. 15)

9. Engage experts in relevant fields toreview retail development proposals.

Middletown, Rhode Island, requiresdevelopers proposing retail projects largerthan 30,000 square feet to submit traffic,

Why Vermont's Homegrown Economy Matters | vii

environmental, fiscal, and other impactstatements and to pay the cost of hiringindependent experts to review thosestatements. (p. 15)

10. Foster an appropriate balance of smalland large businesses.

Santa Cruz, California, reviews all proposalsfor stores over 16,000 square feet andapproves only those that will contribute to adiverse and balanced mix of businesses (localvs. national and small vs. large). (p. 15)

11. Prohibit 'formula' fast-food outlets.Port Jefferson, New York, and Bainbridge,Washington, prohibit formula fast-foodrestaurants within their borders. (p. 16)

12. Minimize the number of cookie-cutter'formula' outlets allowed.

Coronado, California, limits the number offormula restaurants and retail stores allowedin its commercial district. (p. 16)

13. Establish community-servingcommercial zones.

Palm Beach, Florida, mandates that new retailstores must be geared towards meeting theneeds of local residents, not tourists. (p. 17)

14. Require that new developmentresemble traditional retail districts.

Brunswick, Maine, insists that newcommercial development resemble itstraditional downtown by mandating two-story buildings, no set-backs, parking in therear, glass storefronts, and frequent pedestrianentryways. (p. 17)

15. Support sales tax fairness.More than thirty states, including Vermont,are pushing for a federal policy change thatwould require internet and mail order retailers

to collect sales taxes—putting them on anequal footing with local stores. (p. 18)

16. Partner with neighboring towns.Hood River, Oregon, has undertaken a city-county agreement that prevents big box retaildevelopers from playing the jurisdictionsagainst one another. (p. 19)

17. Establish regional guidelines.Cape Cod's region wide planning commissionreviews all proposals for retail constructionlarger than 10,000 square feet, "considers anynegative impacts that the project would haveon the Cape Cod economy," and works to"encourage businesses that are locally ownedand that employ Cape Cod residents." (p. 19)

Fostering Revitalization

18. Take advantage of proven strategies.Hundreds of communities around the countryhave turned their dying downtowns intothriving centers with the help of the NationalMain Street Center. There's no need toreinvent the wheel; take advantage of thelessons they've learned. (p. 21)

1 9 . Reinforce the downtown's sense ofplace.

Successful revitalization programs amplify thedistrict's sense of place by building on itsunique natural, historic, and cultural assets.(p. 21)

2 0 . Foster a mixture of uses in thedowntown.

Encouraging a variety of different types ofactivity and uses downtown ensures vibrantstreet life throughout the day and evening, anddiversifies the district's economic base. (p. 22)

viii | Overview

21. Encourage pedestrians.Pedestrians are both a barometer and catalystfor downtown vitality. Relatively simple andinexpensive steps can make a town centermore pedestrian friendly. (p. 22)

22. Enlist help from the VermontDowntown Program.

The Vermont Downtown Program can helpyour community develop and implement aneffective downtown revitalization plan. TheProgram offers technical assistance, training,and a variety of supporting resources. (p. 22)

23. Reap the economic rewards ofbecoming a designated downtown.

Several Vermont towns have applied for andbeen granted the status of "designateddowntown" under state law. This entitles thetowns, as well as downtown propertyowners, to grants, tax credits, technicalassistance, and other benefits. (p. 22)

24. Learn from Vermont success stories.Bellows Falls and Brattleboro are amongseveral Vermont towns that have succeeded inturning their struggling downtowns around.Find out how they did it. (p. 23 & 25)

25. Keep public buildings downtown.A growing number of communities recognizethe economic and community value of keepingcity buildings, post offices, schools, andlibraries downtown. (p. 26)

26. Identify opportunities for localretailers.

Conduct a market analysis to identifyopportunities for new entrepreneurs and localbusinesses seeking to expand. (p. 28)

27. Expand local merchants' skills.Offer training and technical assistance for localretailers in areas such as merchandising andinventory control. (p. 28)

28. Establish a small business revolvingloan fund.

Some communities provide local businesseswith matching grants and low-interest loans tofund storefront renovations and otherimprovements. (p. 29)

29. Promote support of local stores anddowntown shopping.

Consider organizing a marketing campaign andevent to encourage local shopping. (p. 29)

30. Help with succession planning.Identify and connect local business ownersnearing retirement with aspiring entrepreneursin need of a good opportunities. (p. 29)

31. Give city contracts to local businesses.Many communities are using their purchasingpower to boost the local economy. (p. 29)

32. Help local businesses fill new nichesand meet local needs.

A no-interest loan from the PreservationTrust of Vermont enabled a Middlebury storeto triple its size and provide affordable familyapparel after Ames closed. (p. 30)

33. Protect affordable retail space.Communities are exploring several strategiesto alleviate the problem of rapidly rising rentspushing local stores out of the market. (p. 31)

34. Establish a commercial land trust.The Community Land Trust model, which hasbeen very effective for affordable housing,could be used to keep commercial spaceaffordable for independent businesses. (p. 31)

Why Vermont's Homegrown Economy Matters | ix

35. Harness creativity and initiative tobuild new independent businesses.

Perhaps not as simple as enticing a chain, butit's infinitely more rewarding. Examples, suchas the Orono Community Pharmacy,demonstrate how to build a new local businessthat meets community needs. (p. 31- 33).

Independent Businesses Unite

36. Connect local retailers with nationaland regional purchasing cooperatives.

Thousands of independent retailers—including grocers, hardware dealers, bicycleshops, lighting stores, and pharmacies—haveformed purchasing groups to gain some of theeconomies of scale and clout with suppliersthat chain retailers enjoy. (p. 34)

37. Establish local purchasing co-ops.Independent restaurants in Tucson, Arizona,have cut their food costs by 10-20 percentthrough a cooperative buying program. (p. 35)

38. Use catchy slogans and humor toencourage dining at local restaurants.

In Tucson, Arizona, and Kansas City,Missouri, independent restaurants arecountering the rise of chains with clever andoften humorous joint advertising campaigns.Slogans include "Preserve Tucson's culinarysense of place," and "If the idea of a drive-thruexcites you, go away." (p. 35)

39. Get help forming an independentrestaurant alliance.

Contact the Council of IndependentRestaurants of America for assistance forminga local restaurant alliance to cut costs andorganize joint advertising campaigns. (p. 36)

40. Link your country store with theVermont Alliance of IndependentCountry Stores.

This new statewide group is working toaddress the challenges facing country storesthrough cooperative buying and marketingprograms, and technical assistance. (p. 36)

41. Organize an Independents Weekcelebration.

Retailers in Tampa, Florida, drew on the spiritof the July 4th holiday by organizing asuccessful, weeklong celebration of localbusinesses under the banner "IndependentsWeek." (p. 37)

42. Bring locally owned businessestogether to solve common challenges.

In many communities, locally ownedbusinesses from different sectors (such ashardware stores, banks, and bakeries) areforming Independent Business Alliances(IBAs) to address common challenges anddevelop shared strategies. (p. 38-41)

43. Launch a public education campaign toencourage residents to support locallyowned businesses.

Several IBAs have developed highly visibleand compelling marketing tools—like windowdecals, bumper stickers, coffee cups, andbookmarks—that highlight the importance oflocally owned businesses. (p. 38-41)

44. Pool resources for joint advertising.Several IBAs have helped member businessespool funds to buy print, radio, and televisionads, giving them a much broader reach thanthey could attain on their own. (p. 38-41)

x | Overview

45. Publish a local business directory.One way to counter the extensive advertisingof national chain retailers is to publish adirectory of local businesses. Sprinkle thedirectory with messages about the benefits oflocally owned businesses. (p. 38-41)

46. Create a voice for independentbusinesses in public affairs.

An IBA can provide a powerful voice for localbusinesses in government decision-making, asIBAs in Duluth, Minnesota, and Salt LakeCity have done. (p. 39 & 41)

47. Get a head start by joining a nationalnetwork of independent businessalliances.

The American Independent Business Allianceprovides technical assistance and resources tohelp independent business owners form IBAsin their communities. (p. 41)

48. Encourage local businesses to supportone another.

In the day-to-day grind of running theirstores, many business owners overlookopportunities to support one another andkeep dollars in the local economy. (p. 41)

49. Provide discounts and rebates tocustomers who support local retailers.

Joint loyalty cards, such as the CommunityBenefit Card, work at dozens of local storesand encourage local shopping by rewardingcustomers with discounts and rebates. (p. 42)

50. Create a community-wide e-commerceweb site for local retailers.

Business owners could share the expense ofcreating and marketing an e-commerce site bydeveloping a community-wide portal, whereresidents could shop at any local store. (p. 43)

Why Vermont's Homegrown Economy Matters | 1

The Current Trends

As global retail chains have expanded,they've absorbed substantial market share anddisplaced tens of thousands of locally owned,independent businesses. The pace ofconsolidation over the last decade isstaggering. More than 11,000 independentpharmacies closed; chain drugstores nowaccount for more than half of all pharmacysales.1 More than 40 percent of independentbookstores failed. Barnes & Noble andBorders Books capture half of all bookstoresales.2 Local hardware stores are likewisedisappearing; Home Depot and Lowe’scontrol 40 percent of that market.3 Five firmsaccount for 42percent of all grocerysales, up from 24percent just fiveyears ago.4 Small andmedium-sized officesupply stores havedeclined from 20 tojust 4 percent of themarket.5 More than 4,100 independent videoretailers have gone out of business since 1998.Blockbuster and Hollywood Video have acombined 8,500 stores and account for nearlyhalf of all rentals.6 More than 40 percent ofrestaurant spending is captured by the top100 chains.7 Perhaps most striking, a singlefirm, Wal-Mart, now captures 7 percent of allU.S. retail spending—that includes everythingwe buy from books and computers to clothingand groceries.

Trends are Not Destiny

The current trends are sobering, but theyshould not be overstated. Although

independent retail has declined in recent years,locally owned businesses still command asubstantial share of economic activity andresources. This is especially true in Vermont.For a variety of reasons—including the state'srural character, popular commitment tohomegrown businesses, and scrutiny of large-scale development under Act 250—Vermonthas not yet undergone the level chain storesaturation experienced elsewhere in thecountry.

Throughout Vermont, one can findhundreds of independent, locally owned retailstores. Many are among the state's oldest and

m o s t b e l o v e dbusinesses. Vermont ishome to more than150 country stores,many more than acentury old and eachas unique as thecommunity it serves.The state also boasts

roughly 200 independent hardware stores;dozens of locally owned grocery andconvenience stores, including half a dozenfood co-ops; at least 60 independent videostores; 70 locally owned bookstores; andapproximately 100 independent pharmacies.Collectively, Vermont's independent retailbusinesses still control a substantial share ofthe state's retail sales, jobs, and economicinfrastructure. As we shall see in the comingsection, they contribute a great deal to thestate's health and well-being.

Vermont not only retains a strongindependent business base, but there is agrowing realization throughout the state andnationally of the economic and social

Although independent retailhas declined in recent years,locally owned businesses stillcommand a substantial share ofeconomic activity and resources.This is especially true in Vermont.

| The Current Trends2

consequences of losing locally ownedbusinesses. The current trends may be dismal,but they are not destiny. People have comeface to face with what losing locally ownedbusinesses means to the health of theircommunities and growing numbers are actingto stem that loss. Over the last few years,citizens across the country have organizedgrassroots campaigns to block big box andchain retail developments. Hundreds of citiesand towns have adopted new land use and

economic development policies to limit chainstore sprawl and support homegrownretailers. Local businesses are finding ways towork together to solve common challenges andto help one another survive and thrive. Thisreport outlines all of these strategies, with thegoal of providing citizens, policymakers, andbusiness owners in Vermont with proventools for protecting the state's distinctivecharacter and local economic vitality.


Why Vermont's Homegrown Economy Matters

Locally owned businesses yield significantdividends for Vermont's communities and thestate as a whole. This section outlines theeconomic, social, and environment benefits ofstrengthening and expanding the state'shomegrown businesses.

Local Character and Long-Term Prosperity

In an increasingly homogenized world,communities that have preserved their one-of-a-kind businesses and distinctive characterhave an economic edge. They have a strongsense of local identity. They are moreinteresting places to live and visit. And theyare, according to a growing body of economicresearch, better able to attract entrepreneursand new investment, and thus prosper overthe long-term.

Communities with a strong base of locallyowned businesses are also more economicallystable. They are less vulnerable to fluctuationsin the global economyand decisions made indistant boardrooms.Their economies arecomposed of manysmall businesses andare, as a result, muchmore diversified androoted. They are able to withstand the loss ofany one of these small businesses—unlike somany towns today that have become overlydependent on a few large superstores, whichmight raise prices, demand a tax break,threaten to move to a nearby town, or, likeAmes or Kmart, enter bankruptcy, withpotentially devastating consequences for thelocal economy.

Community Well-Being

Locally owned businesses build strongcommunities. They create a sense of place.They maintain the utility and vitality of towncenters. They foster an active street life. Theystrengthen the web of personal interactionsessential to a healthy community. These vital,but often happenstance, interactions with ourneighbors are becoming less common aspeople spend more time alone in their carstraversing highways and strip mall parkinglots for basic needs.

There's much to be said too for the civicvalue of doing business with ourneighbors—people who greet us by name,send their kids to school with ours, and have avested interest in the long-term well-being ofthe community. Local merchants oftensponsor cultural events and take a leadershiprole in community organizations. Although wehear a lot about the charitable giving of big

corporations, onestudy has found thatsmal l businessesactually give morethan twice as muchper employee tocharitable causes as dolarge companies.8

Local ownership ensures that importantbusiness decisions affecting the well-being ofthe community—whether to carry producefrom local farms, stock a controversial book,pay a living wage, protect natural resources,or contribute to a local charity—are made, notin distant boardrooms, but locally by peoplewho live in the community and who will feelthe impact of those decisions.

There's much to be said for thecivic value of doing business withour neighbors. One study foundthat small businesses give twice asmuch per employee to charitablecauses as do large companies.

| Why Vermont's Homegrown Economy Matters4

Keeping Dollars in the Local Economy

One of the most significant economicbenefits of locally owned businesses is thatthey recycle a much larger share of theirrevenue back into the local economycompared to national chains. Local retailersnot only keep profits local, but they supporta variety of other local businesses. Theycreate opportunitiesfor service providers,like accountants andprinters. They dobusiness with thelocal bank. Theyadvertise through local newspapers and radiostations. They purchase goods from localcompanies and small manufacturers. In thisway, a dollar spent at a locally ownedbusiness sends a ripple of economic benefitsthrough the community and helps to sustain adiversity of local jobs and opportunities.

In contrast, chain stores centralize thesefunctions at their head offices. They keeplocal spending to a minimum. They bank withbig national banks. They bypass local media

in favor of national advertising. They dealalmost exclusively with large manufacturersand offer few opportunities for local firms. Inthis way, much of a dollar spent at a chainstore leaves the community immediately.

To take just one component of thesesecondary economic losses, a recent article inEditor and Publisher documented the deadlyimpact that retailers like Wal-Mart and Home

Depot are having ons m a l l t o w nnewspapers. Not onlydo these companiesr a r e ly adve r t i s elocally, relying instead

on national advertising and direct mail, butthey usually force dozens of local stores toclose, eliminating significant sources ofadvertising revenue. Take Kirksville, a townof 17,500 in northern Missouri. The arrival ofWal-Mart a few years ago put numerous smallbut reliable advertisers out of business,including four clothing stores, four grocerystores, a stationery store, a fabric store, and alawn-and-garden center. The Kirksville DailyE x p r e s s has struggled ever since.9

Big Business and Community Welfare

In a country hypnotized by themythology of bigness, there have been fewempirical studies of the social and civicimpacts of economic consolidation and theloss of locally owned businesses. Oneexception is a recent study, “Big Business andCommunity Welfare,” by Dr. Thomas Lysonof Cornell University. He examined 225counties nationwide, comparing those witheconomies dominated by a few largecorporations to those with many small, localenterprises.

Lyson found that counties dominated bybig businesses had greater income inequality,fewer owner-occupied homes, higher levels ofworker disability, lower educationaloutcomes, and higher crime rates. Not onlydid the small business counties score higher onall of these socioeconomic measures, they hada larger independent middle class and higherrates of civic engagement, as measured byvoter turnout and membership in communityorganizations.

Local retailers not only keepprofits local, but they support avariety of other local businesses.


Local banks suffer as well. Commentingon the shift from locally owned businesses tonational chains that has occurred alongBurlington's Church Street Marketplace,Merchants Bank president Joe Boutin noted,"We used to lend money to all thosebusinesses on Church Street. Now very fewof them have local banking relationships.They're just a subsidiary or a branch of acompany that's owned and financed by one ofthe big banks out-of-state. So we've lostopportunities to reinvest money and makemoney on loans to those businesses."10

The total value of these secondaryeconomic impacts is significant. A recentstudy in Austin, Texas, by the firm CivicEconomics, found that local book and musicstores contributethree times as mucht o t h e Austineconomy as a BordersBooks & Musicoutlet. Spending $100at Borders creates$13 worth of local economic activity, thestudy found, while spending $100 at the localstores Book People and Waterloo Recordsgenerates $45 in local economic activity. Thedifference was due to three factors: The localstores kept profits in the community; theypurchased more goods and services locally;and they maintained a larger local payroll.11

Jobs

As the Austin study found, independentretailers often employ more people locallyrelative to their overall revenue than do chainstores. This is because managementfunctions—such as purchasing, accounting,and marketing—are handled by the owner orother local employees. Chains house most ofthese functions at their head offices.

Job creation is one of the main reasonsthat cities court big box stores and otherchains. As the evidence from the Austin studysuggests, local businesses are better jobcreators. Moreover, cities often overlook thefact that a new big box store will not onlycreate, but also eliminate jobs. This is becauseretail spending is a relatively fixed pie. Itgrows only incrementally as population andincomes grow. Just because Target builds anew store, it doesn't mean people will needmore pairs of socks or gallons of milk. As aresult, the arrival of a big box store almostinvariably causes sales to decline at existingbusinesses, some of which will downsize orclose. The resulting job losses can equal oreven exceed the gains from the new store.

Studies by Dr.Kenneth Stone, aneconomics professora t I o w a S t a t eUniversity, who hastracked Wal-Mart'simpact on Iowa towns

for more than a decade, have consistentlysupported the idea that retail growth is a"zero-sum-game." That is, gains in sales atnew big box stores are mirrored by saleslosses at existing businesses. More than 7,600local businesses have closed since Wal-Martfirst expanded into Iowa. Losses are felt notonly in the community that hosts Wal-Mart,but also in smaller towns nearby. Dr. Stonehas found that towns with fewer than 5,000people within 20 miles of a Wal-Mart tend toshoulder a large portion of the economicdislocations and downtown vacancies, leavingresidents with little choice but to travel longdistances for even the most basic dailynecessities. Dr. Stone has also studied HomeDepot’s economic impact and likewiseconcluded that it eliminates about as mucheconomic activity as it creates.12

Local businesses are better jobcreators. Moreover, cities oftenoverlook the fact that a new bigbox store will not only create, butalso eliminate jobs.


Other studies have reached similarconclusions. A study commissioned by theNational Trust for Historic Preservationexamined nine Iowa counties where Wal-Marthad located and found that 84 percent of thecompany’s sales were captured from existingbusinesses within the same county. "None ofthe nine case studies was experiencing a highenough level of population and income growthto absorb the Wal-Mart store without losses

to other businesses," the study found. Therewas no evidence that traffic at new big boxstores brought more shoppers downtown.Instead, "there were clearly identified losses indowntown stores after Wal-Mart opened.General merchandise stores were mostaffected. Other types of stores that closedinclude: automotive stores, hardware stores,drug stores, apparel stores, and sportinggoods stores."13

Wages and Benefits

Retail jobs generally pay low wages withfew if any benefits. According to the VermontDepartment of Employment and Training, themedian wage for the state’s retail sales clerksis $8.60 an hour, higher than the nationalmedian of $8.02, but still well below what’sconsidered a living wage. According to theVermont Joint Fiscal Office, a single personneeds to earn $11.78/hour to meet basic needs(housing, transportation, health care, etc.),while a single parent with one child needs toearn $18.83/hour.14

No reliable data exists that compares wagerates at independent and chain retailbusinesses. Compensation is probably fairlysimilar for many of both kinds of stores. But,while corporate chains must maximize returnsto shareholders, independent business ownersmay be guided by other considerations. Somehave opted to pay living wages and providehealthcare and other benefits.

Supermarkets are the only retail sectorwhere significant numbers of workers areunionized. They are represented by theUnited Food and Commercial Workers unionand, unlike most retail employees, haveincomes capable of supporting a family.Although Vermont supermarkets are for themost part non-union, the independent stores

and regional chains that operate in the state(including Shaw’s, Hannaford, Price Chopper,and P&C Foods) either have unionized storesin neighboring states or are influenced by theprevailing union wage level. As a result, thestate’s full-time supermarket employees earnabout $14 an hour and have benefits likehealth insurance and pensions, according theUFCW’s northeast regional office.

Supermarket employees' relatively highwages are threatened by the entrance of Wal-Mart and Target into the grocery industry.Both firms pay substantially lower wages andhave fought efforts by their employees toform unions. Wal-Mart generally pays about$7 an hour. Most jobs are part-time, but evenat 40 hours a week, an employee earns onlyabout $14,000 a year. Many Wal-Martworkers qualify for food stamps and otherpublic assistance. Although the companyoffers health insurance, most of its employeescannot afford the annual out-of-pocket cost.Wal-Mart supercenters have been cited byadministrative law judges for numerousviolations of federal labor law. Lawsuits arepending against the company in more thanthirty states for falsifying employee timecardsand failing to pay employees for all of the hours they worked.15


As local stores close following the arrivalof a superstore, the community often loses asmuch active retail space and as many jobs as itgains. An economic impact study of aproposed Wal-Mart store in Greenfield,Massachusetts, for example, found that thestore would cost existing merchants $35million in sales. Many of these businesseswould close, leaving the community with239,000 square feet of vacant retail space.16

Another study of a proposed Wal-Martstore in St. Albans, Vermont, concluded that76 percent of the new superstore's saleswould be captured from existing businesseswithin the county, leading to a net loss of 167jobs over a ten year period.17

Even when a new big box store does createa small gain in employment, these added jobsmight not be ofsufficient benefit tooffset the costs ofsuch things as chronicdowntown vacanciesand loss of localcharacter.

A study in NorthElba, New York, forexample, found that 68 percent of a new Wal-Mart's sales would be captured from thetown's existing businesses. As these storesdownsized or closed, the community wouldlose 112 jobs, but Wal-Mart would create 134jobs. Nevertheless, the Planning Boardrejected the development, noting, "The projectwill likely result in a large amount of impactedretail space, over 20,000 square feet of whichcould become chronically vacant. Thesepotential impacts would have a significantunmitigatable adverse impact on the characterand culture of the community by resulting invacant storefronts, a loss of 'critical mass' inexisting downtown areas, and an adversepsychological, visual and economic climate."18

Entrepreneurship

The shift from small, local stores to largechains has not only made little difference interms of overall retail employment, but it hasdramatically reduced opportunities forentrepreneurship. Until recently, smallbusinesspeople were the backbone of theAmerican economy and way of life.Entrepreneurship is a great equalizer: beingable to start a business offers a means for low-income, minority, immigrant, and otherdisadvantaged families to fulfill their dreamsand move out of low-wage jobs and into themiddle class. Entrepreneurs' hard work,personal investment, and creativity in turnfueled the nation's economic innovation andprosperity. Today, however, few families run

their own businessesand even fewer youngpeop le cons ide rbusiness ownership aviable occupation.Once a nation ofshopkeepers, we arerapidly becoming anation of clerks—with

potentially devastating social and economicconsequences.

Public Benefits and Costs

Downtown businesses are very cost-effective users of public infrastructure andservices. They generate relatively highproperty taxes, while their compactarrangement ensures efficiency in the deliveryof services such as road maintenance, waterand sewer, and police and fire protection.

When commerce shifts from the towncenter to big box and chain stores on theperiphery, the community’s fiscal health maysuffer. Tax revenue from the downtown will

Entrepreneurship is a greatequalizer: being able to start abusiness offers a way for manyfamilies to fulfill their dreams andmove out of low-wage jobs andinto the middle class.


decline as local businesses downsize andclose. As vacancies multiply, existing publicinfrastructure will become underutilized andthe delivery of public services less efficient.The community will also incur a variety ofnew costs to provide roads, sewer, police, andother services to the sprawling newdevelopment, which may not generate enoughtax revenue to cover these new costs.

In its "Exploring Sprawl" series, theVermont Forum on Sprawl noted, "Incommunities with downtown shopping areasand commercial strips, the tendency ofbusinesses to migrate to the strips increasedroad maintenance and repair costs. Somecommunities are now providing services totwo different commercial zones, with the stripdevelopment more costly to maintain becausethe roads are often longer, wider, and involvecomplex drainage and engineering issues."

In the National Trust for HistoricPreservation study of Iowa communities citedabove, the authors concluded, "Although thelocal tax base added about $2 million witheach Wal-Mart, the decline in retail storesfollowing the opening had a depressing effecton property values indowntowns and onshopping s t r ips ,offsetting gains fromt h e W a l - M a r tproperty."

A recent fiscalimpact analysis inBarnstable, Massachusetts, a city of 48,000on Cape Cod, found that big box stores,shopping centers, and fast-food restaurantscost local taxpayers more than they producein revenue. The study, conducted by Tischler& Associates found that big box storesgenerate a net annual deficit of $468 per 1,000square feet. Main Street businesses, on theother hand, have a positive impact on pubic

revenue (i.e., they generate more tax revenuethan they cost to service). These storesproduce a net annual return of $326 per 1,000square feet. "This study shatters the commonmisperception that any sort of growth createsrevenue," said Christopher Cullinan ofTischler & Associates. The two main factorsbehind the higher costs for big box stores,shopping centers, and fast-food outlets arehigher road maintenance costs (due to a muchgreater volume of car trips per 1,000 squarefeet) and greater demand for police services.19

Environmental Sustainability

Small-scale, locally owned stores help tosustain vibrant, compact, walkable towncenters—which in turn play an essential rolein limiting sprawl and automobile use, andreducing related problems like habitat loss andair and water pollution.

As commerce shifts to large chain stores,more and more open space is being consumedfor retail uses. According to some estimates,retail space per capita in the U.S. has tripled

in the last twentyyears.20 That's noteven counting theacres of parking andmiles of roadwaysneeded to access thesestores.

Although somechains have begun to pursue downtownlocations, big box buildings and strip malls inoutlying areas continue to be an essentialfeature of the expansion strategies of mostretailers. And for good reason: rolling outidentical boxes and acres of asphalt onundeveloped land is cheap, fast, and efficient.It's far less costly than adapting a highly

Downtown businesses generaterelatively high property taxes,while their compact arrangementensures efficiency in the delivery ofpublic services.


refined retailing formula to an existing buildingin an established commercial district.

Unlike centuries-old downtown buildings,these new developments may last only a fewyears before being deemed obsolete as thechains move on to newer and bigger formatsfurther out on the perimeter. About one-thirdof all enclosed malls are in financial distress.Even big box stores are closing as companieslike Target and Wal-Mart abandon their olderstores to build even larger “supercenters.”Wal-Mart alone has more than 300 vacantstores nationwide. Altogether, more than 500million square feet of retail space in the U.S.sits idle.21

This inefficient use of land has significantenvironmental consequences, including loss ofhabitat and biological diversity, andmushrooming automobile use and relatedpollution. A typical big box store requires1,000 parking spaces and generates 10,000 cartrips every day. Evensmaller-scale chains,like Walgreen’s andBlockbuster, tend tofavor locations andstore designs thatfoster driving anddiscourage walkingand public transit.

"From an environmental standpoint,parking lots rank among the most harmful landuses in any watershed," notes Tom Schuelerof the Center for Watershed Protection. "Noother kind of surface in a watershed. . .produces more runoff and delivers it faster [toa local waterway] than a parking lot," Schuelersays. Parking lot runoff contains pollutantsfrom cars and the atmosphere, and has beenfound by researchers to contain extremelyhigh concentrations of phosphorous, nitrogen,trace metals, and hydrocarbons.

Severe water quality degradation occurswhen the amount of impervious surface(roads, parking lots, buildings) in a watershedreaches as little as 10-15 percent of total landarea. Schueler believes the best way tominimize the impacts of development is "toconcentrate it in high density clusters orcenters"—compact downtowns, rather thanlow-density sprawl.22

Competition and Consumers

The best way to ensure innovation,vigorous competition, low prices, and broadproduct selection over the long-term is amarketplace composed of tens of thousandsof independent businesses, each making his orher own decisions based on the needs andtastes of local customers.

Today, however, most product categoriesn a t i o n a l l y a r econtrolled by two orthree companies. Insome local markets,consumers have littleor no choice aboutwhere to purchasecertain kinds of goods.

The growth of national chains has actuallyreduced, not increased, competition.

There are two main reasons to be alarmedby these trends. One is the price of goods.Although chains may come into a marketsporting deep discounts, some evidencesuggests that these low prices last only aslong as the local competition. As Barnes &Noble and Borders Books have gained marketshare— the two companies account for abouthalf of bookstore sales—they’ve sharplyreduced the number of books offered at adiscount. Blockbuster's rental fees are higherin markets where it has a near monopoly. One

Unlike centuries-old downtownbuildings, chain stores and mallsmay last only a few years beforebeing deemed obsolete as retailersmove on to newer, bigger formatsfurther out on the perimeter.


survey in Virginia found prices at differentWal-Mart outlets varied by as much a 25percent depending on whether there were anylocal competitors left.23

The other major concern has to do withproduct diversity. At one time, a multitude ofsmall businesses, each reflecting thepreferences of their customers, collectivelyensured the availability of a wide range ofgoods and services. Today, a few buyers at

major retail companies exert growing controlover what goods are produced—a particularlydisturbing trend in the context of books,music, and other forms of expression. Thedisappearance of local retailers, combinedwith the fact that large chains generally dealonly with large manufacturers, has meant thatsmall companies, no matter how innovativetheir products, are having an increasinglydifficult time obtaining shelf space.


Planning for a Homegrown Economy

Most people assume that there’s littlethat can be done to stem the decline ofindependent businesses. In fact, hundreds ofcommunities around the country are adoptingnew planning and economic developmentpolicies that strengthen and foster the growthof locally owned businesses. They areeliminating hidden subsidies for corporatechains, revising their comprehensive plans,and enacting new zoning provisions thatsupport small-scale, community-based retail.This chapter describes these approaches.

Leveling the Playing Field

Many communities are examining existingpolicies to ensure that they are not favoringchains over local businesses by facilitatingsprawling development patterns andundermining the viability of town centers.How policy decisions will impactcommunity-based businesses should be aroutine consideration for state and localofficials. For example:

ß Roads — Consider whether road andhighway construction or expansion will affectlocal business districts or fuel commercialsprawl. Avoid zoning large swaths of landnext to new or expanded roadways forcommercial retail. This can lead to ahaphazard development pattern that fosterschain store proliferation and drains life fromtown centers.

ß Municipal Services — Establish aclearly defined geographic area within whichmunicipal services, such as water and sewer,

will be provided. Sewer lines placed alongmajor roads in a linear fashion with no limit onthe number of hookups will encourage retailsprawl. Developers may offer to pay for lineextensions outside the service area boundaries,but this should not be allowed by themunicipality.24

ß Public Subsidies — State agenciesand communities should consider banning theuse of tax breaks and other subsidies tounderwrite sprawling retail development. Anypublic incentives should be limited todowntowns and town centers.

Planning Policies that Support LocallyOwned Businesses

One of the most important actions acommunity can take to ensure that its locallyowned businesses continue to have anopportunity to compete and thrive is to reviseits comprehensive plan and zoning code.Many Vermont towns lack comprehensiveplans altogether or have land use policies inplace that are decades old and ill-equipped todeal with the challenges posed by big box andchain retail development.

It's common too for towns to have farmore land zoned for commercial retail than thecommunity actually needs or can support.Large swaths along every major road andhighway are often zoned for retail, allowingchain stores to sprout up willy-nilly withlittle or no opportunity for citizens or localofficials to review, alter, or turn-downdevelopments that will undermine the localeconomy. This "over-zoning" has much to do

| Planning for a Homegrown Economy12

with the glut of retail space and the epidemiclevel of vacancy currently facing the U.S..

Over the last few years, hundreds ofcommunities have revised their comprehensiveplans and zoning rules to support small-scale,local businesses. Cities and towns have broadauthority over land use, provided that theirdecisions reflect a commitment to protectingpublic welfare, rather than arbitrary orcapricious treatment of a particular landowner or developer. The courts haveconsistently granted local governmentsconsiderable leeway to exercise this authorityto defend the community's quality of life,natural resources, historic character, localeconomy, and downtown vitality.

Zoning makes many people uneasy due toconcerns that government should not impingeon private property rights. But it's worthremembering that all residents have a stake intheir community. Through work, homes,taxes, and a myriad of other ways, they haveinvested both personally and financially in thecommunity's future.As stakeholders, theyhave a responsibilityto ensure that thecommunity developsin ways that protectexisting assets andquality of life. Overtime, sensible landuse planning enhancesproperty values and encourages investmentby fostering stability and orderlydevelopment.

The following are examples of the kinds ofland use policies communities are adopting tocurb chain stores and support localbusinesses. All of these policies have beenupheld by the courts as valid uses of localauthority, and are permissible under Vermontstatutes governing municipal planning.

The Comprehensive Plan: Envisioning aStrong Locally Owned Economy

There are two primary pieces of local landuse policy: the comprehensive plan, which isessentially a vision statement containinggeneral guidelines for development, and thezoning code, which implements the planthrough concrete rules governing land use.

A number of communities have included intheir comprehensive plans an intention topreserve and strengthen local businesses, limitcommercial development to the downtown orother existing retail districts, and restrict theproliferation of corporate chains.

ß Kent County, Maryland — Thecomprehensive plan lists among its objectives"support [for] small, locally ownedbusinesses" and "prevent[tion of] commercialsprawl outside the county's existingtraditional commercial centers."

ß Skaneateles,New York — Thetown's plan states," R a t h e r t h a nestablishing competingshopping centers inthe Town to providebasic goods andservices, the Villagecommercial center. . .

should remain the center for shopping in thecommunity."

Although comprehensive plans on theirown lack the force of law, having a strong planthat clearly articulates a commitment to small-scale, locally owned businesses anddowntown commerce yields several importantbenefits. Such a plan will serve as the policyfoundation for drafting and enacting

Kent County, Maryland'scomprehensive plan lists among itsobjectives "support [for] small,locally owned businesses" and"prevent[tion of] commercialsprawl outside the county's existingtraditional commercial centers."


enforceable zoning regulations. It will provideclear guidance for local officials trying todecide whether to approve a particularproject. It will also protect the communityfrom lawsuits; a decision to reject a particulardevelopment proposal because it conflictswith goals outlined in a comprehensive plandemonstrates an adherence to establishedpolicy rather than arbitrary and unequaltreatment of a particular developer.

Steering Commerce Downtown

A number of communities have adoptedland use rules that steer new development toidentified growth areas in or adjacent to thedowntown or other established businessdistricts. Instead of allowing scattered

commercial development on the outskirts oftown or sprawling shopping strips alongmajor roads, only land in designated growthareas is zoned for retail. This supports a morecompact and contiguous pattern ofdevelopment and thus a more efficient use ofland and resources. It also ensures that newgrowth compliments existing businesses ratherthan shifting customer traffic and economicactivity to a previously undeveloped area.

ß St. Petersburg, Florida — The city'splanning policy states, "The City has anadequate supply of commercial land-use tomeet existing and future needs. Futureexpansion of commercial uses shall berestricted to infilling of existing commercialareas and activity centers except where a needcan be clearly identified."

Development Moratoria

If your community's existing zoningpolicies are out-dated and inadequate withregard to big box and other chain retaildevelopment, consider adopting a temporarymoratorium on commercial development whilelocal planning and zoning policies are revised.

Like most states, Vermont allows its citiesand towns to temporarily suspend newdevelopment while they evaluate and revisetheir planning policies. Under state law,development moratoria must be used forplanning purposes—such as conductingstudies, revising the comprehensive plan, ordrafting new zoning ordinances—and may notlast for more than two years.

Many communities have used moratoriato suspend retail development while theyinvestigate the impacts of large-scale retailstores and revise their zoning rulesaccordingly. Easton, Maryland, for example,placed a 3-month moratorium on development

of stores larger than 25,000 square feet in1999. During the moratorium, the PlanningCommission studied superstore impacts, helda series of public hearings, issued a report, andadopted permanent zoning rules restrictingnew retail stores to no more than 65,000square feet.

The US Supreme Court has uphelddevelopment moratoria as valid uses of localauthority. In 2002, in Tahoe-SierraPreservation Council v. Tahoe RegionalPlanning Agency, the Court ruled that adevelopment moratorium does not constitutea taking of property requiring compensation.

See "Interim Bylaws" in Vermont Statutes24 V.S.A. § 4410. Both the National Trust forHistoric Preservation (www.nthp.org) and theAmer i can P l ann ing Assoc i a t i on(www.planning.org) have published guidelinesand information for communities consideringdevelopment moratoria.


ß Hailey, Idaho — The town'scomprehensive plan states that the downtown"should be the primary commercial center ofthe community." The city's policy clearlydelineates the downtown's geographicboundaries and calls for developing anyvacancies in the downtown district prior toallowing commercial growth in other areas. In1995, the Idaho Supreme Court upheld thispolicy, noting that "preserving. . . theeconomic viability of a community'sdowntown business core can be a properzoning purpose."25

ß San Luis Obispo, California — Thecity's planning policy includes a clearlydelineated area designated for development.The plan allows the City Council to limitcitywide growth in commercial space to nomore than one percent annually, unless thedevelopment occurs in the downtown core.

Ensuring Appropriate Scale

Dozens, maybe even hundreds, of citiesand towns have enacted zoning rules thatprohibit stores over a certain size. They havedone so in part because they recognize thattheir economies canabsorb only so muchnew retail withoutcausing significantd i s l o c a t i o n s o fexisting businesses. Large-scale stores mayalso be out-of-scale with existing buildings andthus detract from the town's character. Theycan cause traffic congestion and undulyburden public roads and services.

Limiting the allowable size of retail storeswill keep out some national retailers thatrefuse to build stores smaller than theirstandard formats; others will opt to construct

stores more appropriately scaled for thecommunity. What constitutes an appropriateupper limit for the size of retail storesdepends on many factors, including the size ofthe community, the scale of its existingbuildings, and its long-term goals with regardto retail development.

Some communities have banned only thebiggest of the big boxes, while others havechosen a much lower threshold:

ß Northampton, Massachusetts —Allows stores of no more than 90,000 squarefeet, about the size of two football fields, butsmaller than a typical Wal-Mart or HomeDepot store.

ß Belfast, Maine — In 2001, votersendorsed a referendum capping retail stores at75,000 square feet.

ß Easton, Maryland — After studyingthe issue for several months, city officialsconcluded, "Once a big box retail store exceeds65,000 square feet, it is of such a scale that itsnegative impacts outweigh its positive ones."Easton now limits stores to no more than65,000 square feet.

ß Ashland,Oregon — Bars storesover 45,000 squarefeet (about the size ofa Borders superstore).

ß Boxborough, Massachusetts — Set itslimit at 25,000 square feet.

To prevent large-scale developmentsbarred from a city from simply locating justbeyond its borders on county land, in someplaces, cities and their surrounding countieshave enacted identical size policies:

Dozens of cities and towns haveenacted zoning rules that prohibitstores over a certain size.


ß Hood River, Oregon — In 2002, thecity and county concurrently adopted ruleslimiting retail uses to 50,000 square feet.

Assessing Community and Economic Impacts

Cities and towns commonly makedecisions about new retail developmentwithout sufficient, objective information onthe potential costs and impacts. A new free-standing chain pharmacy on the edge of town,for example, might look like a good deal atfirst. The developer promises two dozen newjobs and has agreed to pay for necessaryinfrastructure, including a turning lane andtraffic signal.

But a more detailed investigation revealsthat the local market cannot support both thenew drugstore and two existing independent,downtown pharmacies. Given the chain’sdeep pockets andstaying power, alikely scenario is thatone of the localpharmacies will close,eliminating jobs andtax revenue, andreducing spillovertraffic for other downtown businesses.

Moreover, the new pharmacy is likely toencourage additional auto-orienteddevelopment nearby. The on-going cost ofmaintaining the road network needed to servethis growth will be greater than the additionalproperty tax revenue. Once all of the facts areon the table, the development no longer seemslike such a good idea.

To ensure adequate review of proposalsfor new retail development, manycommunities are adopting zoning rules thatrequire comprehensive impact reviews. Togain approval, the development must meet

specific criteria outlined in the law. Thecriteria vary depending on the concerns andgoals of each community.

ß Greenfield, Massachusetts — The cityrequires that proposals for stores that exceed20,000 square feet or are expected to generatemore than 500 vehicle trips per day mustundergo a comprehensive review and obtain aspecial permit. Approval hinges ondemonstrating that the development will notcreate traffic congestion, lead to a net declinein employment or tax revenue, unduly burdenpublic services and infrastructure, harm theenvironment, undermine the downtownbusinesses district, or detract from thecharacter of the community.

ß Middletown, Rhode Island — Requiresdevelopers to submit impact statements forprojects larger than 30,000 square feet and to

pay for the cost ofhiring independentconsultants to reviewthe statements. Thescope of the reviewincludes impacts onthe health, safety andgeneral welfare of

residents, including negative effects on theenvironment, property values, infrastructure,demand for services, traffic, and localcharacter.

ß Santa Cruz, California — Proposalsfor stores larger than 16,000 square feet mustundergo review and obtain a special permit.The goal of the law is to protect the city’sunique character and maintain a diverse mix ofretail businesses. To gain approval, a newstore must demonstrate that it 1) adds adesired type of business, 2) contributes to an"appropriate balance of local or non-local

The ci ty o f Greenfield,Massachusetts, requires thatproposals for stores that exceed20,000 square feet must undergo acomprehensive economic andcommunity impact assessment.


businesses," and 3) contributes to an"appropriate balance of small, medium andlarge-sized businesses."

In addition to enhancing the overalldiversity of the downtown business district,the new store must be a "good neighbor" andcontribute to community life by becoming amember of a business or neighborhoodorganization, hiring local residents wheneverpossible, and participating in festivals andevents. The ordinancefavors maintaining thetown's authenticityand local character,and presumes locallyowned businesses are more likely toaccomplish this. Other guidelines for grantingpermits include reducing the amount of profitthat leaks out of the city and encouragingdowntown investment and employment.

Ensuring Diversity

Global retail chains are no longer confinedto shopping strips and big box “powercenters” on the edge of town. Many, like TheGap and Starbucks, are moving into towncenters and urban neighborhoods. In somecases, these companies have helped toenergize ailing commercial districts and havemaintained a balance with locally ownedbusinesses. But elsewhere, the pendulum hasswung too far. Some commercial districts arelosing their sense of place and local identityand becoming little more than outdoor malls.As Richard Moe, president of the NationalTrust for Historic Preservation, has said,"More and more. . . every place in Americalooks like every place else, and that meansevery place looks like no place."26

While mandating impact assessments canprovide a means of reviewing and rejecting

harmful development and maintaining abalance of national and local retailers, sometowns have concluded that “formula”businesses are rarely if at all acceptable due totheir impacts on community character and thelocal economy. These communities haveenacted local land use rules that limit or banthe proliferation of “formula” business, whichare defined as businesses required by contractto adopt standardized services, methods of

operat ion, decor,uniforms, architectureor other featuresvirtually identical tobusinesses elsewhere.

While banning formula businesses doesnot prevent Starbucks from setting up shop, itdoes require that the Starbucks not look oroperate like any other Starbucks in thecountry. This creates a significant deterrent tomost chains, which refuse to deviate fromtheir standard formats. To date, a handful ofcommunities have enacted some kind ofrestriction on formula businesses.

ß Port Jefferson, New York; Bainbridge,Washington; and Arcata, California — Allthree towns prohibit all formula fast-foodrestaurants from locating within their borders.

ß Coronado, California — Allows nomore than ten formula restaurants in the cityat one time and requires that formula retailstores obtain a special use permit before beingallowed in. Approval hinges on demonstratingthat the store will be compatible with thecommunity. The ordinance notes that the“establishment of additional formula retailuses will unduly limit. . . opportunities forsmaller or medium sized businesses, many ofwhich tend to be non-traditional or unique,and unduly skew the mix of businessestowards national retailers in lieu of local or

Some towns have concludedthat “formula” businesses arerarely if at all acceptable.


regional retailers, thereby decreasing the. . .diversity of retail activity."

Meeting Community Needs

Communities that have become touristdestinations often have difficulty maintainingretail businesses that serve everyday needs.The local hardware store or grocery might bereplaced by an upscale national brand or achain coffee shop. For these towns, acommunity-serving requirement may be aworthwhile addition to the zoning code.

ß Palm Beach, Florida — Residents ofthis island community converted their maincommercial district into a "town-servingzone." Businesses must demonstrate to theCity Council that at least 50 percept of theiranticipated customer base will be "townpersons: those living, or working in PalmBeach.”

Creating the Ideal Habitat for LocalOwnership

Most locally owned businesses prefer tolocate in downtowns or in other compact,walkable shopping districts. These areasprovide ideal habitat for growing locallyowned businesses. Small storefronts can beleased for less than the cost of building a free-standing structure on the urban fringe.Belonging to a cluster of small shops createssignificant synergies and benefits. Customertraffic generated by one business will benefitthe others. This spillover traffic, combinedwith the visibility of a downtown location,can be especially helpful to a new businesslacking the draw of a national brand or a largeadvertising budget. Traditional commercial

districts also provide “one-stop shopping,”allowing residents to obtain many goods andservices within a compact, walkable area.

Unfortunately, many communities havezoning regulations in place that prohibitdevelopers from replicating the structure anddensity of traditional retail districts. Thezoning code might, for example, requirebuildings to be setback from the sidewalk andhave on-site parking. As growth occurs, newdevelopment, rather than resembling thehistoric core, will be much more suburban andautomobile-oriented in design.

Communities that want to revitalize andexpand their downtowns in a manner that bestsupports locally owned businesses shouldreview and revise their zoning code to ensurethat regulations allow, encourage, or require:

ß multiple-story buildings;

ß a mixture of uses, such as second-story apartments or offices;

ß small lot sizes (a Vermont Forum onSprawl survey found that many Vermonttowns have minimum lot sizes for commercialdevelopment of 0.5 to 2 acres, much largerthan lots in traditional village centers);

ß a high building-to-lot-size ratio (intraditional downtowns, buildings cover 60 to80 percent of the total lot area, while currentzoning in many Vermont communities setsupper limits of 15 to 50 percent, guaranteeinga spread-out land use pattern);

ß maximum, not minimum, frontage andsetback requirements (commercial zoningoften mandates a minimum of 200 feet ofstreet frontage and setbacks of 50 to 150 feetfor the fronts and sides of buildings, while


traditional commercial districts have narrowfrontages and small or no setbacks);

ß maximum, not minimum, parkingrequirements (zoning often requires anunnecessarily large number of spaces for retailstores, which inhibits more compactdevelopment); and

ß an accelerated permitting process forinfill development to further encourageredevelopment of empty lots downtown.27

A growing number of New Englandcommunities are incorporating theseprovisions into their zoning codes:

ß Brunswick, Maine — Developmentstandards for the downtown district mandatethat all new buildings and additions shouldabut the front property line, be at least twostories high, and include at least 50 percentglass in the first floor façade. Buildings maynot have horizontal expanses of more than 40feet without a pedestrian entry. Site plansmust be pedestrian-friendly and parking lotsmust be located at the rear of buildings.

Sales Tax Fairness

The US Supreme Court has ruled thatstates cannot compel out-of-state companies,including internet and mail order retailers, tocollect state and local sales taxes. The Courtconcluded that requiring companies to complywith the various rules and rates governing thenation's 7,600 local tax jurisdictions would betoo complex and would unduly burdeninterstate commerce. This policy effectivelygives out-of-state companies, whichcontribute little to Vermont's communities, afive percent price advantage over local stores.

It is also harming the state's finances.Untaxed internet sales cost the state anestimated $21 million in lost revenue in2001—enough to substantially offset the2001 budget shortfall of $28.8 million. As on-line shopping grows, annual sales tax lossesare expected to reach $87 million by 2011.28

A major multi-state endeavor, called theStreamlined Sales Tax Project (SSTP), is nowunderway to remedy this situation. Theproject aims to eliminate the burden ofcomplying with multiple taxing jurisdictionsby establishing uniform definitions andadministrative procedures that all

participating states will follow. Currently, forexample, a marshmallow might be defined astaxable candy in one jurisdiction, but asuntaxable food in the next. Although the SSTPcalls for states to harmonize theadministrative aspects of sales tax collection,it preserves the authority of states to decidewhat types of goods (e.g., food, clothing, etc.)to tax and at what rate.

Vermont is one of 31 states that haveenacted legislation to participate in the SSTP.Once the participating states reach anagreement on common definitions andprocedures, legislation will be presented ineach state to bring the state’s tax rules intocompliance. A bill will likely be introduced inthe Vermont legislature during the 2003session. Once states adopt these uniform salestax rules, the burden of collecting andremitting sales taxes for multiple jurisdictionswill largely be eliminated. In its second phase,the SSTP will lobby Congress to level theplaying field for internet and hometown storesby lifting the sales tax exemption that out-of-state companies currently enjoy.

For more, see www.nga.org.


Regional Cooperation

Big box stores and shopping centersusually have economic, community, andenvironmental impacts that are felt wellbeyond the borders of the municipality inwhich they are located. Big box developerssometimes use the threat of locating in aneighboring jurisdiction to pressurecommunities into accepting a developmentthey do not want out of fear of having to livewith many of the negative impacts withoutgaining any of the tax revenue.

For these reasons, there is a pressing needfor neighboring communities to work togetherto develop shared policies for large-scale retaildevelopment. Vermont pioneered acooperative approach to large-scaledevelopment on a statewide level in 1970 withAct 250, which requires developments ofregional impact toobtain a permit fromone of nine regionalcommissions. In mostcases, retail projectsrequire Act 250review when theyencompass ten ormore acres of land.Approval depends onmeet ing severa lconditions that focus on the project's fiscaland environmental impact. Act 250 specifiesthat developments must not placeunreasonable fiscal burdens on the ability ofmunicipalities to provide education and otherservices, must not exhaust the town's abilityto accommodate growth, must be consistentwith local land use policies, and must notharm historic sites. Act 250 discouragesscattered development by requiring a projectto be contiguous to existing settlements unlessthe tax revenue generated by the project

exceeds the additional cost of providing publicservices. A few big box developments havebeen denied under Act 250 and some of thosethat have been built are smaller, more centrallylocated, and better designed than typical bigbox stores because of Act 250 review.

Act 250 has limitations. The threshold forreview, usually ten acres, is fairly large,exempting many developments that do have abroader, regional impact. Over time thecumulative impact of the development ofmany smaller parcels of outlying land forauto-oriented retail can be just as severe as theimpact of one large shopping center. Act 250also does not explicitly deal with the impactof large-scale commercial development onlocal economies.

A state law may not be the best place toaddress these issues. Rather than trying toalter Act 250, a better approach might be to

fill the gaps with inter-municipal and city-county agreementsthat establish a jointvision and policyg u i d e l i n e s f o rdevelopment that is ofregional concern butfalls below Act 250review.

ß Hood River, Oregon — Under a town-county agreement, whenever the town adoptsa land use ordinance, the county is obligatedto consider the ordinance as well. So, whenthe town banned stores over 50,000 squarefeet last year, the county soon followed. Themove prevents big box developers deniedentry into the town from locating onundeveloped land just beyond the town'sborders. The city of Flagstaff, Arizona, haslikewise worked with Coconino County tocraft shared policies on big box development.

Cape Cod's Regional PolicyPlan states that the Commission"should take into account anynegative impacts that the projectwould have on the. . . economyand should encourage businessesthat are locally-owned and thatemploy Cape Cod residents."


ß Cape Cod, Massachusetts — In 1990,the residents of Cape Cod voted to create theCape Cod Commission, a regional planningagency that has the authority to approve orreject proposals for new retail constructionlarger than 10,000 square feet and changes ofuse for commercial sites that exceed 40,000square feet. The review process involves apublic hearing and focuses on the project'simpact on the environment, traffic,community character, and local economy.Cape Cod's Regional Policy Plan, which

provides the Commission with guidelines forreviewing development applications, statesthat, when reviewing a project, theCommission "should take into account anynegative impacts that the project would haveon the Cape Cod economy and shouldencourage businesses that are locally-ownedand that employ Cape Cod residents." Severallarge retail stores, including Wal-Mart, Sam'sClub, Costco, and Home Depot, have beendenied as a result of this review process.

Download Policy Examples at www.NewRules.org

Examples of all of the policies describedhere can be found on the New Rules Projectweb site at www.newrules.org. The NewRules Project is a five-year-old program of theMinneapolis- and Washington, DC-basedInstitute for Local Self-Reliance. The goal ofthe Project is to research and promote polices

that build strong local economies andcommunities. The Project has identifiednumerous polices that can strengthen locallyowned businesses, and is working withcommunity groups to build support for andimplement these polices in cities and townsnationwide.


Fostering Revitalization

Recognizing the long-term economic andsocial benefits of a strong, locally rootedeconomy, a growing number of communitiesno longer focus their economic developmentefforts on attracting large out-of-state firms.Instead they are finding ways to revitalizetheir downtowns, strengthen and expandhomegrown businesses, and foster the creationof new local enterprises.

Downtown Revitalization

A healthy downtown creates a richgrowing medium for locally owned businesses.Over the last few decades, however, there hasbeen very little public and private investmentin most downtowns. Resources have insteadbeen directed to commercial development onthe fast-growing periphery. Manydowntowns have fallen into a self-reinforcingcycle where disinvestment leads to vacancies,which leads to furtherdisinvestment andmore vacancies. Evenpopular, profitableb u s i n e s s e s h a v edifficulty surviving insuch a climate.

In recent years,thousands of cities and towns have reversedthis cycle and implemented successfulrevitalization programs under the guidance ofthe National Main Street Center, a division ofthe National Trust for Historic Preservation.The Main Street Center helps communitiesdevise revitalization strategies that build onunique local and historic assets. Main Street'sfour-pronged approach focuses on building

the capacity of a local revitalizationorganization, enhancing the commercialdistrict's physical appearance, strengtheningits economic base, and promoting thedowntown as a destination . It ranks as one ofthe most effective economic developmenttools in the country and has beenimplemented in more than 1,400 towns andcities.

Downtown revitalization efforts aregenerally undertaken locally by a communitynonprofit organization. To succeed they musthave broad public participation and support,as well as a city government dedicated to andactively involved in revitalization. Reviving atown center is an incremental and cumulativeprocess. Over time, community efforts andpublic involvement build confidence in thedowntown, encouraging first small and thenlarger private investments and improvements.The following strategies have been identifiedby studies as essential components of an

effective downtownrevitalizationprogram:

ß ReinforceDowntown's Sense ofPlace — Successfulrevitalization

programs reinforce a community's sense ofplace by building on i ts uniqueassets—natural, historic, and culturalresources that set it apart from other placesand shopping areas. This might involveestablishing a waterfront park; facilitating thepreservation and renovation of historicbuildings and downtown storefronts;enhancing or creating a square or other public

Over time, community effortsand public involvement buildconfidence in the downtown,encouraging first small and thenlarger private investments andimprovements.

| Fostering Revitalization22

space; establishing design standards in keepingwith the community's geography and history;or enhancing the role of an important culturalevent or institution.

ß Foster a Mixture of U s e s —Successful revitalization programs pursueopportunities to diversify the range of uses intheir town centers. Downtowns thrive whenthey are the center of both commerce andcommunity life. The healthiest downtownsare places where residents can not only obtaina wide variety ofgoods and services,but can also live,work, take in acultural event, strollin the park, check outa book at the library, pick-up the mail, attendreligious services, or go to a city councilmeeting. A mixture of uses ensures activestreet life throughout the day and evening, andhelps diversify the downtown's economicbase. A local café, for example, can count onoffice workers at lunch time and downtownresidents for dinner.

ß Encourage Pedestrians — The level ofpedestrian activity in a town center is a goodindicator of its vitality. Pedestrians also tendto attract more pedestrians by improving theperception of the downtown. Successfulrevitalization programs work to make thetown center more pedestrian friendly throughsuch things as wider sidewalks, easier-to-crossstreets, buffers between pedestrians and cars,and streetscape improvements like benches,trees, and signage and lighting designed forpedestrians instead of cars. Facilitatingpedestrian use also means maintaining thehistoric densities of town centers, so that avariety of services are available within walkingdistance.

Downtown revitalization is not analternative to strong land use planning. It'svirtually impossible to simultaneouslypromote downtown commerce while pursingsignificant commercial growth on the outskirtsof town. There are only so many dollars to goaround. The precarious situation many NewEngland communities have fallen into is toallow substantial big box and chain retailgrowth on the periphery, while convertingtheir downtowns into places that areprimarily oriented towards serving tourists.

The risk is that overtime residents willwithdraw support fordowntown investmentas the district nolonger meets local

needs or serves as the center of communitylife.

Vermont Downtown Program

There are excellent state and nationalresources available to Vermont communitiesseeking to develop downtown revitalizationprograms. At the state level, the VermontDowntown Program provides localcommunities with technical assistance, a five-year training program, statewide conferences,and a variety of other resources to help thembuild skills and implement effectiverevitalization strategies. The program wasestablished by the state in 1994 and isaffiliated with the National Main StreetCenter.

Downtown Designation

Vermont offers among the best downtownrevitalization incentives of any state in the

Downtown revitalization is notan alternative to strong land useplanning.


nation. Under the Downtown DevelopmentAct, enacted in 1998 and amended in 2002,Vermont communities that have developed along-term strategic plan for strengthening theirdowntown or village center may apply to bedesignated downtowns or village centers.Official designation confers a number offinancial and other benefits for propertyowners, businesses, and the community. Theadvantages to the district include:

ß Grants for Capital Improvements —Designated downtowns are eligible for loansand grants of up to $75,000 to cover one-quarter of the cost of transportation andcapital investments to spur economicdevelopment.

ß Priority Consideration by StateAgencies — Designated downtowns have

priority consideration for any grants orprograms administered by state agencies,including Community Development BlockGrants, and as locations for any new statebuildings.

ß Traffic Calming A u t h o r i t y —Communities with designated downtowns orvillage centers have the authority to postspeed limits of less than 25 mph to help calmtraffic and make the downtown morepedestrian-friendly.

ß Signage Authority — Communitieswith designated downtowns or village centershave the authority to post alternative signs toguide visitors to transportation centers, andunique educational, recreational, historic orcultural landmarks.

Bellows Falls Reborn

Ten years ago, Bellows Falls, acommunity of 3,700 people along theConnecticut River in southeastern Vermont,was struggling. Once the center of a bustlingindustrial economy, Bellows Falls hadexperienced little in the way of newinvestment since its paper and machine millsbegan closing in the 1930s. By the 1990s, thecommunity was riddled with idle buildingsand vacant storefronts. Its self-image waspoor and a sense of pessimism about thefuture pervaded.

In the late 1990s, Bellows Falls underwenta dramatic rebirth. The transformation was soremarkable that in 2000 the VermontCommunity Development Association held aday-long conference showcasing the village asa model of revitalization.

The arts and citizen involvement havebeen the primary keys to the community'scomeback. Several events provided the initialsparks, including the restoration of the town'shistoric clock tower by a grassroots civicorganization called Our Town and theformation of a community theater group,Front Porch Theatre Company, in 1997.

But the most significant catalyst forchange was Robert McBride, a New Yorkartist who first visited Bellows Falls in themid 1980s and made it his permanent home in1995. Described by Vermont Life as a "tirelesspromoter of the arts. . . [with a] knack forbringing people and resources together and [a]seemingly unshakable conviction that BellowsFalls is a treasure just waiting to bediscovered," McBride founded theRockingham Arts and Museum Project


(RAMP) and has been a driving force behindmany of the projects and events that haveenabled residents to take charge of their futureand bring the village back to life.

In 1997, RAMP organized a premiereshowing of Vermont filmmaker Jay Craven'sStrangers in the Kingdom and launched theFront Porch Music Series. In 1999, RAMPbrought the Bread & Puppet Theatre toBellows Falls for a 10-day residency. Thetroupe worked closely with residents todesign costumes, puppets, choreography, andmusic for the spectacular finale held in thedowntown square. More than 300 residentsparticipated in the week-long workshops and100 performed in the finale, which drew anaudience of more than 1,000.

During that year, RAMP also hosted theWomen's Film Festival, helped Bellows Fallsbecome the ninth community in the state toreceive official Downtown Designation withits numerous benefits (see page 22), andworked with artist Charlie Hunter to launchFlying Under Radar (FUR), asinger/songwriter series that has put BellowsFalls on the national folk music circuit. FURproduces the annual Fred Eaglesmith/Roots onthe River Weekend, now in its fourth year,which brings dozens of nationally-touringartists to downtown Bellows Falls for a four-day extravaganza.

RAMP's most tangible, bricks-and-mortarimpact on the community came in 2000 withthe unveiling of the restored Exner Block, aderelict architectural jewel that had sat vacantand deteriorating for decades. In 1998,Housing Vermont, a statewide organizationworking to expand affordable housing,approached McBride about a possiblepartnership to restore the building. McBridesuggested housing for artists with retail andgallery space on the first floor. HousingVermont and Rockingham Area Community

Land Trust bought the building, and two yearslater, the $1.9 million renovation wascomplete. Grants and loans to finance theproject came from HUD, First Vermont Bank,Chittenden Bank, the Vermont Housing andConservation Board, and HOME loan. Thebuilding, fully occupied within two months ofopening, includes ten affordable live/workspaces for artists and six small storefronts.

The restoration of the Exner block gavethe community a powerful sense of just howmuch a small group of dedicated citizens couldaccomplish. It has inspired several otherrenovations. On the other end of town,renovation of the Howard block, a prominentbuilding on the village square that has beenvacant since 1996, is in its final stages. Likethe Exner renovation, funding for the $2.7million project has come from a mix of localand state government sources and nonprofitorganizations. The building will includethirteen affordable apartments and up to sixground floor retail spaces. The Town Hall hasalso been renovated and construction is nearlycomplete on a Waypoint Interpretive Centerfor the Connecticut Scenic River Byway.

Meanwhile, RAMP continues to launchinnovative community arts projects. In 2000,the organization commissioned a 32-by-40-foot mural on the side of the Flat-Iron buildingthat depicts the downtown as it was in 1910.In 2001, it created a four-month artist-in-residency program that brought Seattle artistBeliz Brother to Bellows Falls to produce aseries of artworks in partnership with localresidents. RAMP's on-going Senior ArtsProgram helps keep older residents involvedwith the community.

All of this activity has helped nurture amuch more vibrant local retail economy. Longestablished businesses that managed to hang-on during the lean years—including ahardware store, pharmacy, movie theater,


diner, and barbershop—are doing well onceagain. New businesses, such as Oona'sRestaurant, have opened. Rock & Hammer, alocal jewelry store recently expanded. A frameshop on Route 5 left its highway location fora downtown site. Another good sign is thatmerchants who decide to move, including theformer owners of Village Square Booksellers,are finding buyers for their stores. Not longago, leaving town meant going out of business.

The downtown's renewed vitality was oneof the main factors behind ChromaTechnologies' decision to build a plant outside

Bellows Falls, where the median annual wageis about $70,000. The optics company's movedemonstrates just how critical having a vibrantcommunity life and strong downtown are toachieving long-term prosperity.

In many ways, Bellows Falls was anunlikely place for a arts-based revival. "It wasnever thought of as an art community," saysMcBride of the once-dying mill town. Buttoday, Bellows Falls is a thriving culturalcenter and a testament to how creative ideas,energy, and, above all, communityinvolvement can transform a village.

Benefits of downtown designation forproperty owners and businesses include:

ß Historic Building Rehabilitation TaxCredits — For buildings that qualify for theNational Register of Historic Places and arelocated in a designated downtown, the stateprovides a 10 percent income tax credit forsubstantial renovation projects (on top of theexisting 20 percent federal tax credit). Over7,500 buildings in downtowns and villagesthroughout Vermont are pre-qualified for thecredit, and many more can qualify.

ß Older Buildings Rehabilitation TaxCredits — For buildings constructed prior to1983 that do not qualify for the NationalRegister and federal tax credit, the stateprovides a 25 percent income tax credit, up to$25,000, for projects that bring the buildinginto compliance with access and safety codes,develop previously unoccupied space, orrestore a façade that contributes to theintegrity of the downtown

ß Tax Credits for Access and Life SafetyImprovements — A 50 percent state incometax credit is available to property owners and

lessees for installing or improving an elevator,platform lift, or sprinkler system to meetbuilding codes. The credits for an elevator orsprinkler system are each capped at $25,000,and $12,000 for a lift. The state also providesa $2,000 rebate on permit fees paid to theDepartment of Labor and Industry forinstallation of sprinklers.

ß Act 250 Threshold — The Act 250threshold for reviewing mixed income housingand mixed use projects is eased from thecurrent limit of 10 housing units. In adesignated downtown, the new threshold is ona sliding scale that ranges from 20 units intowns with a population under 5,000, to 100units in those with a population over 20,000.

ß Employee Training Tax Credit — Anemployer can claim up to $400 in tax credits(per employee per year) for trainingeconomically disadvantaged employees if theemployer does business in a designateddowntown with the intent of providingpermanent jobs. The employer must payannual wages of at least $14,000 plus benefits.


ß Technical Assistance — The VermontDowntown Program provides technicalassistance to help property owners developstrategies for rehabilitating buildings andbringing them into compliance with access,life, and safety codes.

To be eligible for downtown designation,communities must have an organization inplace to carry out a long-term, comprehensiverevitalization program; dedicated financialresources, including a capital improvement

plan and a reinvestment agreement by theprivate and public partners leading the effort;and a commitment to land use planning, in theform of an official historic or design reviewdistrict covering the downtown, and adevelopment review board authorized toundertake local Act 250 reviews.

Vermont currently has several designateddowntowns, including Barre, Bellows Falls,Bennington, Brattleboro, Burlington,Middlebury, Montpelier, Poultney,Randolph, Rutland, Springfield, St.Johnsbury, Vergennes, and Windsor.

Building a Better Brattleboro

Four years ago, downtown Brattleborowas filled with vacancies. Several business andcommunity leaders decided to form anorganization to bring the community's centerback to life. They named the group Building aBetter Brattleboro (BABB), raised public andprivate funds, and hired a full-time director.

BABB's approach is based on the four-pronged strategy developed by the NationalMain Street Center: economic developmentthrough business retention and recruitment;developing promotions and events to drawpeople downtown; improving the district'svisual appearance; and expanding the capacityof the organization by building bonds ofsupport with residents and the city.

Typically, revitalization programs startsmall and build towards larger projects. ButBABB saw an opportunity in an abandonedRite Aid building downtown and opted tostart with a big project. The group bought thebuilding and redeveloped it as the RiverGarden, a glass-enclosed garden atrium withviews of the Connecticut River. The Gardenhosts art exhibits, performances, and events."It really changed the perception ofdowntown. People began to believe things

were looking up," notes Nelle Hanig, formerExecutive Director of BABB.

BABB's first success recruiting a newbusiness came in 2000 when DragonflyDrygoods opened on Main Street. The store'sowner initially planned to locate in eitherHanover, NH, or Northampton, MA, butultimately was persuaded by BABB to investin Brattleboro. After BABB succeeded inrecruiting a few other new businesses, thedowntown began to gather its own momentumand demand for storefronts picked up.

The downtown has developed a strongniche in home furnishings, with about tenstores offering furniture and related goods.This special focus has made Brattleboro adestination for shoppers from a wide area.

BABB has organized numerous events,including two years of jazz performances andseveral holiday celebrations. This year BABBobtained state grants to help nine Main Streetproperty owners rehabilitate the facades oftheir buildings.

Today, there are no storefront vacancieson Brattleboro's Main Street and only threethroughout the downtown. Almost all of thestores are locally owned businesses.


Keeping Public Buildings Downtown

Municipal offices, post offices schools,libraries, and other public buildings rank highin the mixture of uses essential to a healthydowntown. Unfortunately, in recent yearsmany federal, state, and local governmentagencies have been moving public buildingsout of downtowns to sprawl locations on theoutskirts of the community.

The closure of a public building reducesdowntown activity and can have a harmfuleffect on local businesses. A 1993 survey bythe National Trust for Historic Preservationfound that 80 percent of Iowa residents whoshopped in downtowns planned their triparound a visit to the post office. Other studieshave found that when communities close acentrally located school in favor of a newfac i l i ty on theoutskirts of town or aconsolidated school ina nearby district,downtown commercesuffers. Sales fromstudents and teachersevaporate and parentsdo more of theirshopping near theirchildren's new school. When consolidation ledto the closure of the high school in Lund,Nevada, retail sales dropped eight percent.29

In North Dakota, a survey of residents incommunities that underwent schoolconsolidation in the early 1990s found thatmost residents believed that retail sales, aswell as the number of businesses in town, haddeclined. Two of the towns lost their localgrocery stores.30

Rather than site new public facilities onundeveloped land on the outskirts of town,communities should consider rehabilitating orexpanding an existing structure or locating a

new structure on a vacant lot in or adjacent tothe town center.

ß Municipal Buildings — Cities andtowns should consider making a formalcommitment to keeping public facilities, suchas the town hall, fire station, or communitycenter, in the downtown. This commitmentshould be reflected in the comprehensive plan,zoning code, and municipal bylaws.

ß State Facilities — In recent years,Vermont state agencies have become muchmore sensitive to how the location of publicbuildings can affect local economies. Statepolicy requires that, where appropriate, newfacilities be located in designated downtowns,village centers, or new town centers.

ß PublicSchools — Afterd e c a d e s o fconsolidation andever-larger schools, agrowing body ofresearch is findingthat small, centrallyloca ted schoolsprovide a better

education and are more cost-effective (whenthe full range of costs including such things ashigher graduation rates and reducedtransportation budgets are taken into account)than their larger counterparts.31

Some states are now adopting policies thatsupport small schools. For example, somehave el iminated minimum acreagerequirements and other regulations thateffectively prohibit the construction orrenovation of small, centrally located schools.Some have made renovating small schools apriority over new construction in theallocation of state building funds.

Municipal offices, post officesschools, libraries, and other publicbuildings rank high in the mixtureof uses essential to a healthydowntown.. . . Unfortunately, inrecent years, many governmentagencies have been moving publicbuildings out of downtowns.


A growing number of Vermont towns arerecognizing the value of keeping their centrallylocated schools. Residents of Newbury, forexample, voted overwhelmingly to renovatetheir historic school rather than build a newfacility. St. Johnsbury is currently in theprocess of closing outlying elementaryschools and shifting students to a downtownbuilding.32

ß Post Offices — From 1996 to 2000,the US Postal Service categorized about thirtyVermont post offices as being deficient andmoved to relocate them with littleconsideration of the impact that decisionwould have on the local communities ordowntown commerce. Citizens have beenlobbying Congress to enact the Post OfficeCommunity Partnership Act, which wouldprovide for community input into decisionsabout closing, relocating, or building a postoffice and would require that the USPScomply with local land use laws.

In the meantime, several Vermontcommunities have successfully fought to

prevent the closure of their downtown postoffices. If the Postal Service wants to moveyour community post office, contact thePreservation Trust of Vermont, the VermontLeague of Cities and Towns, and the StateHistoric Preservation Off icer forassistance—and be sure to ask for a copy of ALocal Official’s Guide to Developing BetterCommunity Post Offices.

Community Rooted Economic Development

Rather than focusing economicdevelopment efforts on recruiting outsidefirms, communities should consider puttingtheir resources to work expanding existinglocal businesses and fostering the creation ofnew locally owned enterprises. Such anapproach yields far greater economic andcommunity dividends over the long-term.

There are numerous ways a municipalityor community nonprofit could help localbusinesses survive and grow:

San Diego Office of Small Business

San Diego's Office of Small Business(OSB), established in 1992, has developed avariety of programs to strengthen the city'ssmall businesses.

One of the most successful is itsStorefront Improvement Program. Businessesin designated areas are eligible to receive up to$5,000 in a one-to-two matching grant and tenhours of professional design assistance torenovate their facades. Since its inception, theprogram has renovated more than 100

storefronts, leveraging $1 million in privateinvestment and improving the appearance andappeal of the city's retail districts.

San Diego also has a Small BusinessAdvisory Board that advises the mayor, citycouncil, and city staff on how their policydecisions will affect local businesses.Although Vermont's communities are muchsmaller than San Diego, similar programsmight be established on a smaller scale withinexisting municipal, county, or state offices.


ß Conduct a Market Analysis or ResidentSurvey — Are there certain types of goods orservices needed or desired that are currentlylacking in the community? These needsrepresent opportunities for local businesses toexpand their stores or add product lines tomeet local needs and improve sales.

ß Provide Training and TechnicalAssistance — Individual small businesses canafford little in the way of training andtechnical assistance. Communities couldbridge the gap by hiring experts and organizingworkshops and on-site assistance for all of thestores in town.Topics might includemerchandising,inventory control,storefront displays,and new technologies.

ß Establish aRevolving Loan Fund for Rehabilitation —Some communities have established a fund toprovide matching grants and low-interestloans to finance storefront renovation, newtechnologies, and other capital improvements.These programs stimulate private investmentand enhance the attractiveness and vitality ofthe town center as a whole.

ß Organize Joint Marketing Campaigns— Communities might organize marketingcampaigns and promotional events that buildpublic awareness of the importance ofsupporting locally owned businesses andencourage residents to keep their dollars in thelocal community. (See the next chapter onIndependent Business Alliances for examplesof marketing tools.)

ß Help with Succession Planning —Many local businesses disappear not because

they aren't viable but because their owners areretiring and there's no one to take over thebusiness. Communities should identify andconnect business owners nearing retirementwith aspiring entrepreneurs in need of goodopportunities. Communities might alsoprovide financial and technical assistance toaid the transition.

Potential sources of funds for municipalprograms that support local businessesinclude the Vermont CommunityDevelopment Program, which providesfinancial and technical assistance for local

economic developmentprojects; communitybanks, which have aninherent interest inexpanding locallybased commerce; andsmal l businessesthemselves through a

Business Improvement District (BID), suchas Burlington's Church Street Marketplace.

Financial and technical assistance is alsoavailable directly to local businesses throughthe Vermont Economic DevelopmentAuthority, the Vermont Economic ProgressCouncil, and the Vermont Small BusinessDevelopment Center.

Favoring Local Businesses in GovernmentPurchasing

Many cities and states have adopted lawsthat give preference to local businesses for allcity contracts and purchases if the bid fromthe local business is within a certainpercentage (e.g., five percent) of the lowestbid received. The logic behind these rules isthat the added jobs, tax revenue, and otherfinancial benefits that accrue from locally

Some communities haveestablished a fund to providematching grants and low-interestloans to finance storefrontrenovation, new technologies, andother capital improvements.


based economic activity is worth spending alittle bit more.

Vermont law authorizes state agencies toconsider the location of a business in making apurchasing decision, provided that all otherthings, including price, are equal (". . . thecommissioner may consider . . . the interestsof the state relating to the proximity of thesupplier and the costs of transportation, andrelating to the economy of the state and theneed to maintain and create jobs in thestate").33 Some states more heavily weightbids from in-state businesses. Montana, forexample, awards contracts to resident

businesses if they are within three percent ofthe lowest bid received from any responsiblevendor, or within five percent of the lowestbid if the goods are not only sold but alsomanufactured by a Montana business.

Counties and municipalities may also optto use their purchasing power to boost thehomegrown economy. Officials in WashingtonD.C., for example, choose local businesseswhen their bids are within five percent of thelowest price available. Ketchikan, Alaskaprovides a seven to ten percent preference forpurchases under $200,000 (no preference isgiven above this amount).34

Smart-Marts: Green Mountain Shoe and Apparel

Squeezed by strip malls and big boxstores, many downtowns have focused onentertainment, the arts, restaurants, boutiques,and services. This new mix of activities canmake a successful downtown, but for manyresidents there is a missing piece: a traditionallocal department store that sells everydaygoods for the whole family. Such a store canprovide a critical anchor, helping to ensurethat the downtown remains a vital center forcommerce and community life.

As part of its mission to preserve andrevitalize downtowns, the Preservation Trustof Vermont is developing strategies tosupport the creation of "smart-marts"—small,locally owned, downtown department storesthat provide basic goods at affordable prices.

Last year the Preservation Trust identifiedan opportunity to support such a store. TheShoe Center in Middlebury was considering amajor expansion. Founded by Angie and ScottWade in 1997, the Shoe Center providedreasonably priced family footwear, filling a

need not satisfied by any other business indowntown Middlebury.

After Ames closed its Middlebury outletin the fall of 2002, residents had no place intown to buy affordable, basic apparel. TheWades decided to address this critical need bymoving to a space three times the size of theiroriginal store and offering both shoes andapparel. The new store, renamed GreenMountain Shoe and Apparel, is 2,800 squarefeet and sells jeans, underwear, sweaters, andother basic items for the whole family.

"People are really excited we are bringingthe basics back into the downtown," saysAngie Wade, who orders inventory based onwhat customers tell her they want. So far,business has been pretty good, she says.

The Wades received a $15,000, five-year,no-interest loan from the Preservation Trustto cover the cost of the new merchandise. ThePreservation Trust and the MiddleburyBusiness Association also organized a pressconference to publicize the new store.


Maintaining Affordable Commercial Space

Rising commercial rents are generally asign of good health in a retail district. But insome communities, rents are rising too fast forlocal businesses that serve everyday needs,like the hardware store and barber shop, tokeep up. They are being priced out of themarket by chain retailers and upscaleboutiques that serve tourists or leisureshoppers, while residents must shop outsidethe town center for basic items. Communitiesfacing this problem should consider thefollowing strategies:

ß Encourage Owner Occupancy — Thebest way for a local retailer to ensure a stablelocation at a reasonable price is to buy thebuilding his or her store occupies. Cities andthe state could encourage this throughproperty tax or income tax incentives, or low-interest loan funds dedicated to this purpose.

ß CommercialL a n d T r u s t —Community LandTrusts (CLTs) havebeen used effectivelyin cities around thecountry to establishand maintain affordable housing. The CLTmodel could be adapted and applied tocommercial buildings with the requirementthat buyers or lessees be independentbusinesses. CLTs are funded largely byCommunity Development Block Grants,which are available for both housing andeconomic development projects.

ß Publicly Owned Space — A city couldbuy a commercial building and contract for itsmanagement with the stipulation that space beleased only to local businesses. Rents would

be stable and below market, reflecting thecity's actual costs of owning and maintainingthe building. A town could also lease acommercial building and sub-lease the spacesto local businesses at subsidized, belowmarket rates.

ß Identify Spill-Over Space — Are thereunderutilized, perhaps run-down, commercialdistricts in the community where localbusinesses pushed out of high-rent areasmight relocate? If so, the community mightfocus revitalization and development effortson making these districts viable alternativelocations for local stores.

Creating New Independent Businesses

The best way to encourage newindependent businesses is to create the kind ofenvironment that will enable them to thrive.

Communities thathave demonstrated ac o m m i t m e n t t obuilding a vibrantdowntown and astrong homegrowneconomy, and havemade progress in that

direction, will gradually attract newenterprises. The biggest challenges for start-ups are typically lack of expertise in launchinga business and lack of sufficient capital.Communities should identify and maintain aclearinghouse of resources for prospectiveentrepreneurs, including technical assistanceprograms, likely sources of capital, books,web sites, and a listing of available commercialspace. Communities might also look forcreative ways to get local banks on board.Three banks in a small Wisconsin town

The Community Land Trustmodel could be adapted forcommercial buildings with therequirement that buyers or lesseesbe independent businesses.


at one time held an annual contest for the bestnew business plan. The winner received a$5,000 grant and a no-interest loan.35

Here are two examples of the creativeapproaches taken by communities seeking aparticular kind of store for a particular site,but unwilling to settle for a chain:

ß Orono Community Pharmacy — In1999, Rite Aid decided to close its downtownOrono, Maine, location after failing to winapproval to open a large, free-standing, drive-through store on a prominent corner. Townofficials and residents felt a pharmacy was anessential component of the downtown, butthey did not want another footloose chain.They preferred an independent, locally ownedpharmacy. So, the town sent letters to some1,200 pharmacists licensed by the state,asking if they might be interested in opening apharmacy in Orono. They got about half a

dozen responses and soon identified the rightcandidate. A few months later the OronoCommunity Pharmacy opened for business.

ß Berkeley Bowl Supermarket — InBerkeley, California, residents of thesouthside neighborhood were left with nosupermarket after the local Safeway closed.For a time the city tried to recruit a chainsupermarket for the site, but none wereinterested in the low-income, largely minorityneighborhood. The city finally discovered asmall grocery store called the Berkeley Bowlon the other side of town that was looking toexpand. With technical and financial supportfrom the neighborhood and the city, theBerkeley Bowl moved and opened a large,full-service supermarket on the site. The storenot only serves the neighborhood, but drawsshoppers from the entire city.


Independent Businesses Unite

Independent businesses of all kinds arefacing very similar challenges brought on byconcentrated economic power, rapidtechnological change, limited capital resources,and public policies that often tilt the playingfield in favor of their big competitors. Manyare realizing that they could benefitsubstantially from sharing ideas, and findingways to work together to solve commonproblems, reduce costs, broaden awareness ofthe value of supportingl o c a l l y o w n e dbusinesses, and gain astronger voice in publicpolicy decisions. Agrowing number ofindependentbusinesses nationwideare in fact joining forces. This section willlook at several of these cooperativeapproaches, which are proving highlysuccessful and demonstrating thatindependents businesses, although struggling,together still command vast resources andconsiderable clout in the marketplace.

Purchasing and Marketing Cooperatives

One way that independent retailers cangain some of the economies of scale enjoyedby the chains is to form a wholesalecooperative (sometimes known as apurchasing or shared services cooperative orbuying group). Like all cooperatives, theseenterprises are owned by their members—inthis case retail businesses—all of which havean equal say in decision-making and receive ashare of any profits generated.

Wholesale cooperatives give localmerchants greater purchasing power andleverage with suppliers, enabling them tolower the cost of goods and negotiate betterterms. Co-ops often negotiate directly withmanufacturers, just as the chains do.

Some retailer-owned cooperatives serveonly as buying groups. Others operatewarehouses and distribution systems for theirmembers, an important function given that

there are fewerwholesalers anddistributors operatingnow because the largechains buy direct.M a n y p r o v i d em e m b e r s w i t hadditional advantages

that normally would be unaffordable to anindependent businesses, including a widelyrecognized brand name, national or regionaladvertising, in-store promotional tools,accounting and other professional services,and access to lower cost health insurance foremployees. Many wholesale cooperativeshave taken an aggressive stance towardscompetition from chain stores by setting uploan funds and providing on-site assistance tohelp their members install new technologies,redesign their stores, and improve operations.

Wholesale cooperatives have experienced aburst of growth in the last ten years as locallyowned businesses look for ways to surviveagainst the chains. The largest retailer-ownedco-ops are in the hardware and grocerysectors, where wholesale cooperatives havebeen active for more than century. Nationwidemore than 40,000 independent grocery storesown forty wholesale cooperatives, the top

Wholesale cooperatives givelocal merchants greater purchasingpower and leverage with suppliers,enabling them to lower the cost ofgoods and negotiate better terms.

| Independent Businesses Unite34

nineteen of which had combined revenue of$28.5 billion in 2000, up 4.5 percent over1999.36 In Vermont, about seventy stores,including ten supermarkets and dozens ofsmaller food and convenience stores, belong toAssociated Grocers of New England.

Most hardware stores are also affiliatedwith a cooperative, such as TruServ (TrueValue), Ace, or Do It Best. These co-opsreduce their members' merchandise costs byan estimated ten to twenty percent.37 In 2000,the top seven hardware coops took in $12.5billion in revenue.38

Most locally owned pharmacies likewisebelong to one of about 30 regional purchasinggroups, which negotiate with drugmanufacturers for volume discounts.Pharmacy buying groups have been around forabout 15 years, but they are more importantnow than ever. HMOs have dramaticallyreduced the reimbursement rates forpharmacies and the added cost savingsprovided by buying cooperatives has becomeespecially critical.39

These establishedco-ops are growingrapidly and manynew co-ops areforming in sectorstha t p r ev ious lylacked this option forindependent retailers. In 1999, several lightingstores formed a wholesale cooperative calledLighting One, which now has some 100member businesses. Lighting One hasnegotiated significant discounts fromsuppliers. The co-op provides training in salesand management, print and television ads thatcan be customized for local markets, extensivetechnical assistance, and a private label creditcard that allows member stores to offercustomers the zero percent financing thatmany chain stores provide. Other new

wholesale cooperatives include YaYa Bike,which formed last year and has a membershipof about 100 locally owned bicycle shops, andthe Coalition of Independent Music Stores,which has 74 member stores nationwide.

Several organizations that can helpindependent retailers form wholesalecooperatives are listed in the Resourcessection at the end of this report.

Think Globally, Eat Locally

ß Tucson Originals — Three years ago,a group of independent restaurant owners inTucson, Arizona decided to stop seeing oneanother as competitors and launched acollective effort under the banner TucsonOriginals to counter the rapid expansion ofchain restaurants.

It all began with an article in a localmonthly in 1998 by writer Michael Munday,who expressed concern about the city's

dwindling number oflocally owned eateriesand the explosivegrowth of chainrestaurants. The articletouched a nerve withCity Councilor StevenLeal, who convened a

meeting with the magazine's publisher, JohnHudak, and several restaurant owners. Thegroup met for several months and decided toform a coalition. Tucson Originals nowincludes more than forty restaurants, rangingfrom hot dog stands to high-end dining.

Tucson Originals has four goals. The firstis to lower costs for its members throughgroup purchasing. This has been accomplishedthrough the creation of a separate entity, theArizona Independent Restaurant Alliance(AIRA), which negotiates with food suppliers

Three years ago restaurantowners in Tucson, Arizona decidedto stop seeing one another ascompetitors and launched acollective effort to counter theexpansion of chain restaurants.


and has trimmed its members food costs by10 to 20 percent. AIRA is open to all of thestate's independent restaurants and nowincludes 120 members in Tucson, Phoenix,and Scottsdale. According to Don Luria,owner of Cafe Terra Cotta and foundingmember of Tucson Originals, AIRA saves hisrestaurant at least $100,000 a year.

The second goal is to encourage consumersto support Tucson's independent restaurants.Publisher John Hudak donated $50,000 in freeadvertising for this purpose. His magazine nolonger reviews or accepts ads from chainrestaurants. Member restaurants also include acard with each diner's check that lists thecity's local restaurants and describes theirimportant role in maintaining Tucson'sculinary sense of place.

The third goal is to raise awareness of thecommunity contributions of independentrestaurants, which the group accomplishesthrough high profilefund-raisers for localnonprofits. The finalgoal is to expose kidsto the experience ofindependent diningthrough var iousschool programs.

To join, restaurants must commit at least$50 in annual donations to a food bank andagree to actively participate in one committeeand one fund-raiser for a local nonprofit.

ß Kansas City Originals — As it turnsout, Tucson restaurant owners were not theonly ones turning to cooperation. In KansasCity, some twenty independent restaurantscame together in early 2001 and formed theKansas City Independent RestaurantAssociation, which has since changed its nameto Kansas City Originals. The coalition'smain goal is to market the idea of eating at

locally owned restaurants. Memberscontribute $90 each month to fundadvertisements in local publications. "Just likeSunday dinner at Mom's, only better food andless neurotic," reads one. Others say and "Ifthe idea of drive-thru excites you, go away."Members also sport business cards andtabletop tents that read "local food servedwith local flavor" and list each restaurant'sname and address.

ß Council of Independent Restaurants ofAmerica — These local coalitions have beenso successful that they inspired the creationof the Council of Independent Restaurants ofAmerica (CIRA), a national umbrella groupthat is working to seed local restaurantalliances nationwide and provide a network ofresources and support. "Chains are aboutmoney. Independent restaurants are aboutfood," says CIRA's founder, Washington, DC

restaurant ownerRobert Kinkead. "It'stime to fight back andunchain America."CIRA o rgan izesworkshops around thecountry, hosts anannual conference, and

is developing a comprehensive marketing andadvertising program. Local chapters haveformed in Atlanta, Indianapolis, Milwaukee,Minneapolis, Providence, Seattle, andWashington DC.

Vermont Alliance of Independent CountryStores

Vermont is home to more than 250country stores, many of which have been thecenter of their communities for well over acentury. Country stores are as varied and

"Our servers never sing HappyBirthday or wear stupid buttons,"reads one of Kansas City Originals'humorous and attention-grabbingnewspaper advertisements.


unique as the towns they serve. Many aresmall, cozy, locally owned, and housed inhistoric buildings. Their offerings includestaple products like newspapers and bread, aswell as goods geared to the local market, suchas fishing lures or gourmet cheeses. Theirowners tend to be deeply involved in localaffairs and the stores themselves oftenfunction as the town's main gathering place.

But Vermont's country stores arestruggling and many have closed in recentyears. Most operate on very thin margins andface a myriad of challenges ranging fromheightened competition from conveniencestore chains to lack of capital to make neededstore improvements.

In 2000, a group of country store ownersbegan exploring the idea of creating an alliancethat would enable them to work together tosolve mutual problems. Initial meetings

eventually grew into the Vermont Alliance ofIndependent Country Stores (VAICS), whichnow has a membership of some 50 countrystores. VAICS is run by a part-time executivedirector. Financial support comes from a $50annual membership fee and grants fromcommunity foundations.

Accomplishments include the creation of aweb site and a "rescue kit" for strugglingcountry stores. The kit includes a variety ofideas to expand sales and improve service, andoutlines financial incentives and fundingsources available to small businesses.

VAICS plans to develop advertising andmarketing tools for its members; work withsuppliers to gain volume discounts and betterterms; and ensure that remote stores continueto receive deliveries (a growing challenge forthose stores situated in isolated areas).

"Independents Week" Celebrated in Tampa

Posters declaring "Celebrate IndependentsWeek!" greeted customers of local stores inTampa, Florida, during the week of July 4th."As we celebrate our nation's independence,we invite you to join us in celebrating ourgreat local independents," the posters read.

Independents Week was conceived byCarla Jimenez, co-owner of Inkwood Books.For several years, Inkwood has usedIndependence Day as an opportunity toremind customers of the importance of locallyowned businesses to the community. "At thelast minute this year, I decided to see if otherlocal businesses wanted to get involved,"explains Jimenez.

She called around and seventeenbusinesses agreed to sign-on. They included arecord store, hardware dealer, severalrestaurants, a natural foods store, and a print

shop. In addition to displaying the postersand talking to customers, each business held adrawing at the end of the week, wherecustomers could win $60 in gift certificates forthe other participating businesses.

They also sent out a press release. TheTampa Tribune responded with extensivecoverage on the front page of the metrosection. The local Fox affiliate broadcast itsmorning news show from a differentindependent business every day that week.

"The key was that it was so simple. Therewere no meetings and very little timeinvolved," says Jimenez, who has long wantedto organize the community's local retailers forjoint promotional and educational events, buthas never found the time. Based on commentsfrom her own customers, she says, "It wasdefinitely worth it."


Independent Business Alliances

Not only have the last few years seen anexplosion of cooperation among similarbusinesses (whether restaurants or countrystores but, in several communities,independent business from different sectorsare finding there's strength to be gained fromworking together.

Although local business owners have longthought of themselves as entirelyindependent, they are in fact significantlyinterdependent. The success of any one localbusiness inherently improves the fortunes ofall the others. A thriving local retail store willincrease customer traffic and sales forbusinesses throughout the surroundingcommercial district. It will also help support avariety of other localbusinesses, such asbanks, accountants,media outlets, signdesigners, and thelike. Similarly, thefailure of any oneindependent businesswill negatively affect the others.

Moreover, the challenges facingindependent businesses, whether it's thehardware store or coffee shop, are not all thatdifferent. All would benefit from having anorganizational structure that would enablethem to share ideas and strategies, collaborate,and, perhaps most importantly, provide localbusinesses with a stronger voice in publicpolicy and community affairs.

These realizations have led independentbusiness owners in cities and towns aroundthe country to launch independent businessalliances:

ß Boulder Independent Business Alliance— In 1998, David Bolduc, owner of the

Boulder Bookstore, and Jeff Milchen, a long-time community activist, formed the BoulderIndependent Business Alliance (BIBA) in1998. Today, BIBA has a diverse membershipbase of 160 locally owned businesses,including food producers like Twisted PineBrewery and the Boulder County Farmer'sMarket, repair shops like Hoshi Motors,retail stores like Video Station, serviceproviders like Silver Star Printing, restaurantslike The Sink, and Boulder's only independentcommercial bank, Heritage Bank. The smallestare sole proprietorships. The largest, thenonprofit Boulder Community Hospital, hasmore than 2,000 employees.

BIBA's main goal is to make the choice"local or chain?" a significant consideration forresidents in their shopping and spending

decisions. To this end,the alliance has createda highly visible andeffective marketingcampaign. Populardecals displayed onthe windows anddoors of every BIBA

member serve to remind residents of the fullimpact of their spending whenever theyapproach a local business. One says, "We area locally owned, independent business. Buylocally. Strengthen our community and localeconomy." The other, BIBA's logo—twoarrows circling into each other, much like themark on a recyclable container—also conveysan important lesson in community economics:Compared to their chain competitors, locallyowned businesses recycle a higher percentageof their revenue and profits back into the localeconomy.

BIBA also distributes a bumpersticker—Put Your Money Where Your HouseIs!—and has developed several marketingtools designed for specific membership

The main goal of the BoulderIndependent Business Alliance isto make the choice "local orchain?" a significant con-sideration for residents in theirshopping and spending decisions.


segments. Bookmarks list nearly two dozenlocally owned book, music, and video storesin town and offer five reasons to supportthem. Number 4: Do you really want Wal-Mart (the fastest growing music seller)deciding what gets recorded? Eight local cafesuse BIBA coffee cups—for less than the costof buying generic cups—which list each cafe'saddress and offer customers a word of thanks:By buying this beverage from a localindependent business, you've just helped keepBoulder the great town we all love!

For residents and visitors alike, one ofBIBA's most useful creations is The BIBAGuide , a directory of local businesses. Ifyou're looking for atoy and all that comesto mind is the heavilyadvertised Toys 'R'Us chain, the guideoffers a solution:Grandrabbit's ToyShoppe. Or whatabout pet supplies?Instead of Petsmart, try Petland of Boulder.Issued twice yearly, the colorful directory issprinkled with answers to the question, Whyshop locally?

BIBA also advertises through many localmedia outlets. Initial ads built awareness ofthe alliance and recognition of its logo. Laterads made the case for buying local, rangingfrom conservative ads in the mainstreampaper to an edgier, "You're not a clone. Whyshop at one?" in the university-orientedColorado Daily. More recent ads focus onspecific membership segments, highlightingmusic and video stores, for example, orbusinesses in a particular neighborhood.

According to members, BIBA's publiceducation and marketing campaign hasbroadened awareness of the importance of astrong, locally rooted economy. It has

generated an on-going discussion amongresidents as well as city officials about waysto strengthen and expand Boulder'sindependent business base. One way tomeasure BIBA's impact is to skim thenewspapers. The number of businesses thatinclude "locally owned" in their ads has risensharply. The city's papers now featureadvertising sections specifically for locallyowned businesses. "Independent ownershiphas become a selling point," says Milchen.

ß Salt Lake Vest Pocket BusinessCoalition — In 1999, seven independentbusiness owners in Salt Lake City, Utah, came

together to form theSalt Lake Vest PocketBusiness Coalition,which now includesnearly 200 businesses.The coalition's goal isto prevent Salk Lakef r o m b e c o m i n g"Anyplace, USA" by

working to ensure the future of the city'shomegrown businesses and building publicawareness of their important economic andcommunity contributions.

The coalition has taken a three-prongedapproach. One is to strengthen memberbusinesses internally by providing technicalassistance and training sessions on such thingsas developing a business plan and creating aweb site. The coalition also hosts forums formembers to share ideas, and plans to establisha mentor program for new entrepreneurs.

Another prong involves providing a voicefor independent, locally owned businesses ingovernment decision-making. "Too often,when cities think about growth and taxrevenue, they focus on attracting large chains,"notes Elizabeth Guss, president of thecoalition's board. "We need a different

"Too often, when cities thinkabout growth and tax revenue,they focus on attracting largechains," contends Elizabeth Guss,president of the Salt Lake VestPocket Coalition. "We need adifferent approach."


approach." Several members of the coalitionhave served on a business committee thatadvises the mayor and the Department ofEconomic and Community Development onissues affecting local businesses. The coalitionscored a big victory two years ago when itworked with local environmental groups toblock a proposed shopping mall.

The final prong is to educate thecommunity about the value of locally owned

businesses, encouraging residents to shoplocally and to back policies that support thelocal economy. The group recently produced afull-color city map showing the location ofmember businesses. The back side of the mapincludes a business directory, information oncharities supported by coalition members,and highlights of various awards memberbusinesses have received. Some 50,000 copiesof the map have been distributed.

Tips for Starting an IBAby Jeff Milchen

1. Don’t try to sell the invisible. Get astarter kit from the American IndependentBusiness Alliance (AMIBA). It containsexamples of marketing materials andadvertisements, articles, and tips drawn fromthe successes and failures of earlier IBAs.AMIBA also conducts on-site workshops.

2. Master the issues. Study the impactsof chain stores on community identity, jobs,and the environment. A list of recommendedbooks and articles is included in AMIBA'sstarter kit.

3. Hit the pavement now, before a newmega-mall or big box store threatens yourtown. Stop by a few businesses directlyimpacted by the proliferation of chains.Coffee shops, grocery stores, and bookstoresare excellent starting places. Ask to meet withthe owner or manager. Describe how an IBAcan help support their business and bring asample of IBA material to leave with them.

4. Get a small group together thatincludes concerned and active community andbusiness members. Present some ideas howan IBA can benefit the attendees and thecommunity—then listen attentively.

5. Offer in-kind memberships for basicneeds. Some of the key services to line upearly are: independent media, offset printing,photocopying, banking, internet service,graphic art, and accounting.

6. Establish a membership dues scaleappropriate for your area. Once a fewbusinesses are on board, set up a (locally-owned!) bank or credit union account, hire astaff person, and you’re on your way.

7. Set up a database, accounting system,and business plan (templates are availablefrom AMIBA). Energy and idealism withoutthese fundamentals can only go so far.

8. Generate media coverage for yourcampaign. Business owners will take youreffort more seriously if you’ve been coveredin the media. Op-eds and letters to the editorcan be as valuable as reported coveragegenerated by your press releases because theygenerate community discussion.

American Independent Business Alliance222 South Black Ave., Bozeman, MT 59715Tel: (406) 582-1255, www.amiba.net


ß Austin Independent Business Alliance— In Austin, Texas, the new AustinIndependent Business Alliance (AIBA) hasattracted more than fifty members rangingfrom coffee shops and appliance dealers toopticians and motels. Started by Steve Bercu,owner of a large independent bookstore calledBook People, AIBA's main focus has been ongrowing its membership and marketing theimportance of supporting homegrownbusinesses. AIBA window decals identify abusiness as locally owned. Printadvertisements initially focused on recruitingnew member businesses and featured a"Dec la ra t ion o fIndependents."Future ads will beaimed at consumersand focus on theimportance of locallyowned businesses tothe local economy. Sofar, the ad campaignhas cost AIBAalmost nothing; theAustin Chronicle donated free ad space and alocal ad firm provided design assistance.

ß Northland Sustainable BusinessAlliance — In Duluth, Minnesota, more than100 locally owned businesses have joined theNorthland Sustainable Business Alliance(NSBA). Launched in 2001, NSBA advocatesa new approach to economic development.Instead of focusing city policies and economicdevelopment dollars on recruiting outsidecorporations—often to the detriment of theenvironment and community—NSBA believesthe city should find ways to strengthen localbusinesses and pursue sustainabledevelopment. NSBA has introduced itsperspective into discussions about economicgrowth through media interviews, newspaper

op-eds, and television and radio appearances.Its efforts began to yield dividends during lastfall's city council election. Several candidatesmade small business creation a cornerstone oftheir campaigns and talked about the need forsustainable, community-based development.Two of those who won seats are NSBAmembers.

ß American Independent BusinessAlliance — In response to a growing numberof inquiries from around the country,organizers involved in creating the BoulderIBA recently formed the American

Independent BusinessAlliance (AMIBA).AMIBA will serve asa national resource andnetwork to seed andsupport the formationof loca l IBAs.AMIBA offers anumber of helpfultools, including anintroductory "how-to"

packet; templates for brochures,advertisements, and other marketing materials;technical assistance; and on-site workshopsand consultation. See the Resources section ofthis report for contact information.

Encourage Independent Businesses toSupport One Another

A large and untapped source of customersfor independent businesses are otherindependent businesses. In the day-to-daygrind of running their stores, many businessowners overlook opportunities to supportone another and keep dollars in the localeconomy. They might be buying officesupplies at Staples rather than the local dealer;

In Austin, print advertisementsinitially focused on recruiting newmember businesses and featured a"Declaration of Independents."Future ads will be aimed atconsumers and will focus on theimportance of locally ownedbusinesses to the local economy.


picking up building materials for a storerenovation at Home Depot instead of the localhardware store; getting their copying done atKinko's instead of the local print shop; orobtaining internet service through a nationalcompany rather than a local provider.

Encouraging retailers to shift theirspending to local businesses where feasiblewould provide a significant injection offinancial resources into the local economy. Itwould also broaden awareness among businessowners about how their own spendingdecisions affect the community.

Such an effort could be undertaken by alocal chamber of commerce, an independentbusiness alliance, a downtown revitalizationorganization, or the municipality itselfthrough its community development orplanning office. Creating an directory of localbusinesses (see above) or an online databasewould provide retailers with a simple way oflocating a local supplier and service provider.

Reward Local Shopping

Shop locally or get the best deals? Whynot do both? One way to encourage residentsto shift more of theirspending to locallyowned businesses is toreward them withdiscounts, rebates, andother goodies. Formany years, majorchains have offered"loyalty cards" thatenable customers to earn points when theyshop and redeem them for discounts on futurepurchases. Most independent businessescannot afford the cost and time involved inadministering their own loyalty cardprograms—nor would consumers welcome thehassle of carrying a card for every shop on

Main Street. Thus was born the idea of a jointloyalty card—a single card that would work atevery independent business in town.Launched by IBAs or nonprofit communitygroups, joint loyalty cards have emerged inseveral cities. They've succeeded by rewardingloyal customers, shifting more spending tolocal stores, and helping independentbusinesses market themselves to thecustomers of other nearby businesses.

ß Community Benefit Card — Thesimplest and most straightforward approachcomes from the Boulder IndependentBusiness Alliance. For $15—less than theprice of membership at one warehouse buyingclub—residents can purchase a CommunityBenefit Card from a local business or one ofseveral nonprofit community organizationshelping to promote the cards in exchange for aportion of the purchase price. TheCommunity Benefit Card provides discountsand other benefits at more than 70 locallyowned businesses, with most knocking tenpercent off every product and service theyoffer. More than 6,000 Community BenefitCards are currently in circulation.

ß OhanaS a v e r s — T w odozen local stores onthe Hawaiian islandof Maui hit upon asimilar idea twoyears ago. With chainstores—including

Borders Books, Office Max Old Navy,Costco, and Home Depot—rapidly overtakingthe island, they created the Ohana Saversloyalty card program. The cards have amagnetic strip and enable customers toaccumulate points on purchases and redeemthe points at any of the participating

The Community Benefit Cardprovides discounts and otherbenefits at more than 70 locallyowned businesses, with mostknocking ten percent off everyproduct and service they offer.


businesses. The two dozen participatingstores range from a grocer to an appliancedealer. "We want to encourage people to shopat local stores first," says Joeline Trenholm,owner of Valley Isle Lighting, explaining that"Ohana" means family in Hawaiian. So far,it's been a success. More than 20,000 peoplehave signed-up and cardholder purchases totalseveral million dollars.

Localizing E-Commerce

Although the dot-com bubble has burstand countless e-tailers have disappeared, on-line shopping continues to expand at a steadypace. On-line retail spending rose to $30billion in 2001 and is expected to reach $39billion in 2002.40 For many people, the web isa convenient adjunct to in-store shopping,especially for certain types of items likebooks, music, and airline tickets. The typicalcustomer of an independent bookstore, forinstance, buys at least two books on-line eachyear. About one-thirdof adults—and over70 percent of all 18-24 year olds—shoponline.41

Small businessesaccount for only a fraction of these sales; thevast majority flow to big name web-onlycompanies like Amazon.com or major retailcorporations like Office Max. The challengefor independent retailers stems from the costand time involved in both developing an e-commerce web site and devising effectivestrategies for marketing the site to customers.There's good news on both fronts.

In terms of developing an e-commerce site,independent retailers in a number of sectorshave joined together and pooled theirresources to build sophisticated e-commerce

web sites. The technology is shared but salesare channeled to the customer's nearest localstore.

A good example is Booksense.com,developed by the American BooksellersAssociation, a trade group of 3,500 localbookstores. Booksense.com works much likeAmazon.com with a database of more thantwo million titles and easy browsing andordering, but every sale is credited to thecustomer's nearest independent booksellerbased on his or her zip code. Booksense.comenables bookstores to share many of theexpensive, back-end functions (the database ofbooks, the search engine, the security features,etc.) of an e-commerce site, but allows eachstore to create its own web interface with itsown logo and look, local store information,promotions, and author readings and eventslistings. (See, for example, Northshire Bookson-line at http://northshire.booksense.com orBear Pond Books on- l ine a thttp://www.bearpondbooks.com. Both utilizeBooksense.com behind the scenes.)

O t h e r l o c a lbookstores have optedto affi l iate withBooksite.com,developed by abookstore owner in

Delaware, Ohio. Booksite.com offers the samepowerful back-end funct ions asBooksense.com, but enables greater controland customization for the local store. Similarinitiatives have been undertaken in other retailsectors. Two of the hardware co-ops, forexample, have developed e-commerce sites fortheir members—DoItBest .com andTrueValue.com. Florists have also createdsites that enable customers to order flowersfrom their local florist.

Booksense.com works much likeAmazon.com, but every sale iscredited to the customer's nearestindependent bookstore.


Another approach is to organize not bysector but by community. All of the locallyowned businesses in one town could share inthe development of an e-commerce structurethat would enable them to sell their waresonline. Residents of Brattleboro orBennington could log-on to a central site andshop at any of their local stores. Two typesof businesses are obvious candidates fororganizing and financing such a venture. Oneis the local newspaper. Newspapers areamong the mosth e a v i l y v i s i t e dgeographically basedsites on the web (thatis, almost all of theirvisitors are locals).The other is acommunity bank,which has a strongself-interest in boosting local commerce and abuilt-in capacity for processing credit cardsand financial transactions. Other potentialorganizers of a community shopping siteinclude a local nonprofit organization, an IBAor Chamber of Commerce, or even themunicipality, which could also use the site tolet residents pay parking tickets or downloadtheir children's grades.

Developing an e-commerce site is half thechallenge. The other part is marketing the site.As the recent collapse of many dot-comstestifies, web-only retail companies face analmost impossible task. They must bank-rollan advertising campaign capable of creating a

name for themselves and all of their revenuemust come from on-line sales. Most fail. Thelesson here is good news for independentbusinesses: e-commerce works best when it isconducted in tandem with a physical store. Infact, according to Jupiter Media Metrix, two-thirds of the return on investment from an e-commerce web site comes from purchasesmade in the physical store and from theoverall "branding" value of building the store'simage, marketing in-store events, and reaching

n e w c u s t o m e r s .Jupiter 's researchsuggests that half ofconsumers use aretailer's web site forresearch before buyinga product in thestore.42 This in turn inmeans that a sizable

part of the marketing hurdle is reachingexisting customers by promoting the web sitein the store—a far more attainable prospectfor independent businesses that the massiveglobal advertising that many of the famous,and ultimately doomed, e-tailers undertook.Stores could promote their sites throughbanners and posters or by including a coupongood for on-line purchases with each in-storepurchase—something that lets customersknow that when they want the convenience ofbuying a hammer at 3:00 a.m. or a bookdelivered to their door, there's no need to sendtheir dollars out of the community.

The challenge for local retailersstems from the cost of developingan e-commerce web site anddevising effective strategies formarketing the site to customers.There's good news on both fronts.



Conclusion

A growing number of people around thecountry are recognizing the tremendous costsof losing locally owned businesses touncontrolled chain retail development: dyingtown centers; reduced job opportunities;economic instability; rising costs for publicservices and infrastructure; loss of openspace; expanding pavement; mushroomingautomobile use; homogenous landscapes; andweakened communities. Altogether, it's apretty high price to pay in order to save a fewbucks—and even that upside may not last forlong. Chain store prices tend to rise as localcompetition declines.

Although we often assume that the growthof chain retailers, big box stores, and large-scale shopping centers is the inevitable resultof market forces, in truth it is a trend drivenby both consumer and public policy choices.Many local, state, and federal policiesfacilitate chain store expansion and underminethe survival of local businesses. It's time tochange the rules. Communities have choices.They need not relinquish their local economiesto distant corporate control or accept a one-size-fits-all model of retail development.

This report outlines numerous concreteexamples of how local officials, community

organizations, and small businesses can takeaction to expand the local retail economy. Thethree primary approaches described—newplanning policies, downtown revitalizationprograms, and cooperative purchasing andmarketing strategies—work best if pursuedsimultaneously. Downtown revitalizationprograms have little chance of success if localplanning policies allow or encourage massive,competing retail developments on the fringe.Likewise, strong planning policies that limitexcessive chain store growth may not beenough to revive local commerce without aproactive revitalization plan. Cooperativeefforts by local business owners to improvecompetitiveness and communicate their valueto residents are essential to winning publicsupport for new planning policies andrevitalization programs.

For more information about the toolsdescribed in this report or assistance applyingthese approaches locally, explore theResources section, and contact thePreservation Trust of Vermont and theInstitute for Local Self-Reliance. We lookforward to working with Vermontcommunities to curb sprawl, revive localbusinesses, and rebuild thriving downtowns.

The Home Town Advantage Bulletin

Keep abreast of the latest research andinnovative strategies by signing up for TheHome Town Advantage Bulletin. This free,bimonthly email newsletter reports onsuccessful community efforts to limit chainstore proliferation and strengthen locallyowned retail businesses. Learn about new

approaches to planning and zoning, grassrootsactivism and public education campaigns,national trends, and new research on the costsof chain store sprawl. To browse back issuesand sign-up to receive the bulletin by email,visit http://www.newrules.org/hta/index.htm.

| Conclusion46


Resources

New Rules ProjectInstitute for Local Self-Reliance1313 5th St SEMinneapolis, MN 55414Tel: (612) 379-3815www.newrules.org

Preservation Trust of Vermont104 Church St.Burlington, VT 05401Tel: (802) 658-6647www.ptvermont.org

American Booksellers Association828 South BroadwayTarrytown, NY 10591Tel: (800) 637-0037www.bookweb.org

American Independent Business Alliance222 South Black Ave.Bozeman, MT 59715Tel: (406) 582-1255www.amiba.net

Cooperative SolutionsP.O. Box 51526Phoenix, AZ 85076-1526Tel: (800) 940-6027www.co-opbuilders.com

Council of Independent Restaurantsof America304 West Liberty St. Suite 201Louisville, KY 40202Tel: (502) 583-3783www.ciraonline.org

Intervale Foundation282 Intervale RoadBurlington, Vermont 05401Tel: (802) 660-0440www.intervale.org

National Cooperative Business Association1401 New York Ave. NW Suite 1100Washington, DC 20005Tel: (202) 638-6222www.ncba.org

National Main Street CenterNational Trust for Historic Preservation1785 Massachusetts Ave. NWWashington, DC 20036Tel: (202) 588-6219www.mainsteet.org

New England Booksellers Association1770 Massachusetts Ave. #332Cambridge, MA 02140Tel: (617) 576-3070www.newenglandbooks.org

Sprawl-Busters21 Grinnell St.Greenfield, MA 01301Tel: (413) 772-6289www.sprawl-busters.com

United Food and Commercial Workers Union1775 K Street, N.W.Washington, DC 20006Tel: (202) 223-3111www.ufcw.org

| Resources48

Vermont Agency of Agriculture, Food &Markets116 State StreetMontpelier, VT 05620Tel: (802) 828-3830www.vermontagriculture.com

- Buying Vermont Products Online:www.vermontagriculture.com/buyvermont.htm

- Community-Supported Agriculture Farmsof Vermont:www.vermontagriculture.com/csalist.htm

- Vermont Farmstands and Pick-Your Own:www.vermontagriculture.com/pyown.htm

- Vermont Farmers' Markets:www.vermontagriculture.com/farmmkt.htm

Vermont Alliance of Independent CountryStoresDennis Bathory-Kitsz, Executive DirectorTel: (802) 485-3972www.vaics.org

Vermont Cheese Council116 State StreetMontpelier, Vermont 05620Tel: 1-888-523-7484www.vtcheese.com

Vermont Community Development ProgramDept. of Housing and Community AffairsNational Life Building, Drawer 20Montpelier, VT 05620Tel: (802) 828-3211www.dhca.state.vt.us/VCDP/index.htm

Vermont Community Loan FundP.O. Box 82715 State StreetMontpelier, Vermont 05601Tel: (802) 223-1448www.vclf.org

Vermont Department of EconomicDevelopmentNational Life Building, Drawer 20Montpelier, VT 05620Tel: (802) 828-5236www.thinkvermont.com

Vermont Downtown ProgramVermont Division for Historic PreservationNational Life Building, Drawer 20Montpelier, VT 05620Tel: (802) 828-3211www.dhca.state.vt.us

Vermont Forum on Sprawl110 Main St.Burlington, VT 05401Tel: (802) 864-6310www.vtsprawl.org

Vermont Fresh Network116 State StreetMontpelier, VT 05620Tel: (802) 229-4706www.vermontfresh.net

Vermont Food Venture CenterPO Box 138 Main StreetFairfax, Vermont 05454Tel: (802) 849-2000www.edcnv.org/vfvc.htm

Vermont Grocers' Association33 Lafayette St.Rutland, Vermont 05701Tel: (802) 775-5460www.vtgrocers.org

Vermont League of Cities and Towns89 Main St. Suite 4Montpelier, VT 05602Tel: (802) 229.9111www.vlct.org


Vermont Retail AssociationP.O. Box 688Essex Junction, VT 05453Tel: (802) 879-6999www.vtretailers.com

Vermont Small Business Development CenterP.O. Box 188Randolph Center, VT 05061Toll Free in VT: (800) 464-SBDCTel: (802) 728-9101www.vtsbdc.org

Vermont Smart Growth Collaborativec/o Vermont Forum on Sprawl110 Main St.Burlington, VT 05401Tel: (866) 764-7984www.vtsprawl.org/Initiatives/sgcollaborative/VSGC_main.htm

Vermont Sustainable Jobs Fund58 East State St.Montpelier, VT 05620Tel: (802) 828-5320www.vsjf.org

Vermont Vegetable and Berry Grower'sAssociationUniversity of Vermont Extension157 Old Guilford Rd.Brattleboro VT 05301Tel: (802) 257-7967 ext. 13www.uvm.edu/vtvegandberry

| Resources50


Notes

1 Todd Dankmyer, CommunicationsDirector, National Community PharmacistsAssociation, personal communication, July2001.2 Dan Cullen, "Independents Hold MarketShare for 2001; Market Share by DollarGrows," Bookselling This Week, April 18,2002.3 "2003 Market Measure," Do-It-YourselfRetailing, November 2002.4 Mary Hendrickson, Ph.D., William D.Heffernan, Ph.D.. Philip H. Howard andJudith B. Heffernan. "Consolidation in FoodRetailing and Dairy: Implications forFarmers and Consumers in a Global FoodSystem," National Farmers Union, January8, 2001. 5 Carol Emert, "Staying Alive Amid OfficeSuperstores," San Francisco Chronicle, June20, 1998.6 "Video Stores Seek Class Action in Suitagainst Blockbuster," The Home TownAdvantage Bulletin, Institute for Local Self-Reliance, November 2000.7 "Top 100," Nation's Restaurant News,June 24, 2002.8 Patricia A. Frishkoff and Alicja M.Kostecka, "Business Contributions toCommunity Service," Office of Advocacy,U.S. Small Business Administration,October 1991.9 Mark Fitzgerald, "Wal-Mart's DeadlyImpact On Advertising: Retail Giant ShunsNewspapers, Kills Competitors," Editor &Publisher, May 27, 2002.10 Quoted in Jim Kelty, "Chain Reaction,"Business People Vermont, February 5, 2001.

11 Civic Economics, "Economic ImpactAnalysis, A Case Study: Local Merchantsvs. Chains," December 2002.12 Dr. Kenneth Stone, "Competing with theDiscount Mass Merchandisers," Iowa StateUniversity, 1995; Dr. Kenneth Stone andGeorgeanne M. Artz, "The Impact of 'Big-Box' Building Materials Stores on HostTowns and Surrounding Counties in aMidwestern State," Iowa State University,2001.13 Thomas Muller and Elizabeth Humstone,"What Happened When Wal-Mart Came toTown? A Report on Three IowaCommunities with a Statistical Analysis ofSeven Iowa Counties," National Trust forHistoric Preservation, May 1996.14 These are statewide averages. Living wageestimates vary depending on location andsuch factors as whether an employerprovides health insurance. Vermont JointFiscal Office, "Basic Needs Budgets and theMinimum Wage," January 15, 2003, p. 7.15 Steven Greenhouse, "Suits Say Wal-MartForces Workers to Toil Off the Clock," NewYork Times, June 25, 2002.16 Land Use, Inc. and RKG Associates,"Greenfield, Massachusetts: Fiscal andEconomic Impact Assessment of theProposed Wal-Mart Development," April 2,1993.17 Vermont Environmental Board, Re: St.Albans Group and Wal-Mart Stores, Inc.,Findings of Fact, Conclusions of Law, andOrder (Altered), Application #6F0471-EB,June 27, 1995.18 Town of North Elba Planning Board,"Statement of Findings and Decision:Proposed Wal-Mart Store," January 9, 1996.

| Notes52

19 Tischler & Associates, “Town ofBarnstable: Fiscal Impact Study of Non-Residential Land Use Prototype Summary,”July 2002.20 Kennedy Smith, Executive Director,National Main Street Center.21 Constance Beaumont, Better Models forSuperstores, National Trust for HistoricPreservation, 1997.22 Tom Schueler, The Center for WatershedProtect ion, “The Importance ofImperviousness," Watershed ProtectionTechniques, Fall 1994. Schueler, et al., "TheBenefits of Better Site Design in CommercialDevelopment." Watershed ProtectionTechniques, January 2000.23 Elizabeth Humstone and Thomas Muller,"Impact of Wal-Mart Stores onNorthwestern Vermont," prepared for thePreservation Trust of Vermont, the VermontNatural Resources Council, and WillistonCitizens for Responsible Growth,September 1995.24 Vermont Forum on Sprawl, "CommunityInvestments in Smart Growth: A Decision-Maker's Guide," May 2002.25 Hailey Comprehensive Plan, Section Six:Economic Development. ConstanceBeaumont , Smart S tates , BetterCommunities, Washington: National Trustfor Historic Preservation, 1996, p. 310.26 Steve Lopez, "The Battle of Downtown,"Time Magazine, July 10, 2000.27 Further information on the zoning policiesdescribed in this section can be found in theVermont Forum on Sprawl’s "ExploringSprawl: The Causes and Costs of Sprawl inVermont Communities," available atwww.vtsprawl.org, and Community Rules: ANew England Guide to Smart GrowthStrategies, published in 2002 by the

Conservation Law Foundation and theVermont Forum on Sprawl.28 The estimated $21 million in sales taxlosses includes internet sales that displacedsales previously made at stores ($11.1million) as well as internet sales thatdisplaced other untaxed remote sales such asmail order catalogues ($9.9 million). Nostate-by-state data exists on the amount ofsales tax losses that continue to result fromnon-internet remote sales such as cataloguesand cross-border shopping, but roughnational estimates suggest losses in Vermontmight be around $7 million. “State and LocalSales Tax Revenue Losses from E-Commerce: Updated Estimates,” by DonaldBruce and William F. Fox, prepared for theInstitute for State Studies (Salt Lake City,Utah).29 Petkovich, M. D., & Ching, C. T. K.Some educational and socio-economicimpacts of closing a high school in a smallrural community. Reno, NV: AgriculturalExperiment Station, Max C. FleischmannCollege of Agriculture, University ofNevada, 1977.30 Sell, Randall S.; Leistritz, F. Larry;Thompson, JoAnn M., "Socio-EconomicImpacts of School Consolidation on Hostand Vacated Communities." AgriculturalEconomics Report No. 347, 1996.31 Barbara Kent Lawrence, et. al., Dollarsand Sense: the Cost Effectiveness of SmallSchools, Vermont: The Rural School andCommunity Trust, KnowledgeWorksFoundation, and Concordia, Inc., September2002; Constance Beaumont, Why JohnnyCan't Walk to School, Washington, DC:National Trust for Historic Preservation,2001.


32 Vermont Forum on Sprawl, CommunityInvestments in Smart Growth: A Decision-Makers Guide, May 2002.33 Vermont Statutes 29 V.S.A. § 903.34 See www.newrules.org for examples oflocal and state locally preferable purchasingrules. 35 Matthew L. Wagner, "The role ofbusiness retention in downtownrevitalization," Economic DevelopmentReview, Summer 1996.36 National Cooperative Bank, Top 100Cooperatives, 2001.37 James R. Hagerty, “Tough as Nails: HomeDepot Raises the Ante, Targeting Mom andPop Rivals,” Wall Street Journal, January25, 1999, p. A1.38 National Cooperative Bank, Top 100Cooperatives, 2001.39 Todd Dankmeyer, CommunicationsDirector, National Community PharmacistsAssociation, personal communication,August 2001.40 Heather Green and Robert D.Hof, "Lessons of the CyberSurvivors," Business Week,April 22, 2002.41 Michael Hoynes, "The Current World ofOnline Shopping," Bookselling This Week,February 11, 2002.42 Michael Hoynes, "The Current World ofOnline Shopping," Bookselling This Week,February 11, 2002.

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