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Main Spotlight: Beyond Passing the Plate - The Main Street America Small Deal Initiative

September 27, 2022 | Main Spotlight: Beyond Passing the Plate, The Main Street Small Deal Initiative | By Patrice Frey, Senior Advisor, Main Street America |

During the nine years I've worked at Main Street America, I’ve observed one particularly persistent and seemingly intractable obstacle to revitalization in our downtowns and districts: a lack of capital to support small-scale development, whether it’s a rehab of a corner store, the creation of upper floor housing, or any number of other creative new uses. (For purposes of this project, I define small-scale development as those projects under $5 million in project costs.)

"The banks just aren't interested," I'd hear on site visits to Main Streets, as building owners or Main Street Directors would explain their vision for the renovating a cool building and express frustration at the difficulty of finding conventional capital. Crucial predevelopment funds – which typically take the form of grants – are scarce. Adding to the challenge, the most robust national incentive for historic preservation – Federal Historic Tax Credits – is often an ineffective tool for small deals. Specifically, the transactional costs associated with this incentive are often too high for small projects, and the conventional wisdom is that tax credits usually don’t pencil on projects under $5 million (though there are some exceptions.)

Many terrific, potentially transformative projects simply do not happen because building owners and small-scale developers lack needed resources. Consolidation in the banking industry in recent decades reduced the number of lending institutions through which small-scale developers can secure debt, as larger banks tend to favor larger-scale projects. Small-scale projects that do make it across the finish line are often self-financed by building owners, many of whom solicited loans from friends and family after being shut out by conventional sources.

But self-financing isn’t a scalable solution. Small-scale developers typically have limited personal funds to deploy and have a hard time accessing other sources of private equity. This issue affects building owners and developers of color the hardest as they continue to face systemic barriers in securing financing today. And with more than an estimated $850 billion in real estate capital available nationally Main Street communities deserve a lot better than “passing the plate” to friends and family to fund critical economic development projects.

Main Street America’s Small Deal Initiative

Without a scalable solution, the lack of capital will continue to suppress economic development, marginalize communities of color and rural places (where a lack of capital is particularly pronounced), and perpetuate our culture of waste and environmental destruction by leaving high quality existing buildings vacant or underutilized. It also jeopardizes the future of many of our country’s cool and irreplaceable historic resources – the very assets which help our communities establish a sense of place and powerfully connect us to the past.
Over the next several months, with thanks to the support of our Board of Directors and Interim President & CEO Hannah White, I'm embarking on a project to learn more about the specific barriers to small-scale real estate development on our Main Streets and identify solutions for financing small-scale deals. Ultimately, the goal of Main Street America’s Small Deal Initiative is to accelerate investment in small-scale real estate development projects on Main Street, specifically those under $5 million in project value.

As this work begins, I’d love to hear from you with your thoughts on the topic: Do you know of innovative financing approaches that have succeeded in transforming a building (or buildings) in your town? Do you know of any other folks in your city, state or region that are trying to address this same challenge of a lack of capital for small scale development?

Please send me a direct message at

And stay tuned for more this fall, including a forthcoming survey on the topic and my next blog which will dig deeper into the many reasons that small-scale development matters.

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About the Author

Patrice Frey is Senior Advisor to Main Street America, where she leads an initiative to accelerate investment in small-scale real estate development projects on Main Streets. Patrice previously served as President & CEO of Main Street America between 2013 and 2022, overseeing the creation of MSA as an independent subsidiary of the National Trust for Historic Preservation. Prior to her time at MSA, Patrice served as the Director of Sustainability at the National Trust for Historic Preservation, where she led the National Trust’s efforts to promote the reuse and greening of older and historic buildings.

Before joining the National Trust, Patrice worked for several years in the field of community development and urban research. She is a graduate of the University of Pennsylvania's program in historic preservation, where she received a master's degree in preservation planning and a certificate in real estate design and development through the Penn School of Design and Wharton Business School.