March 9, 2023 | Two Years of ARPA on Main Street | By: Kelly Humrichouser, Director of Government Relations at Main Street America |
In March of 2021, President Biden signed the American Rescue Plan Act (ARPA) into law. This package, aimed to provide immediate relief to communities, businesses, and families in the face of COVID-19 economic and social impacts, was a broad and ambitious step towards recovery. A major piece of the legislation was the State and Local Fiscal Relief Fund (SLFRF), $350 billion divided and dispersed to every state, county, and municipality in the country. As these relief dollars became available to governments, many Main Street programs advocated for the use of these funds to support programmatic activities, business support, and specific community projects to enhance downtowns and neighborhood commercial districts. As we reach the two-year anniversary of these historic funds, we want to celebrate successful projects and local advocacy and share lessons learned in collaborating to leverage federal funds to support commercial districts.
Throughout the pandemic, Main Street programs played a significant role in focusing attention and investment in small businesses and retaining a customer base for the district’s entrepreneurs. Communities with a pre-existing focus on their Main Street districts saw stronger local economic outcomes during the pandemic. Studies of Washington and Iowa’s Main Street programs indicate that, in communities with a Main Street program, consumer spending rebounded at a faster rate than in similar communities without a Main Street program. Beyond direct outreach to entrepreneurs, downtowns and neighborhood districts also became focal points for healthy and safe outdoor activities amid lockdowns and spaces for community dialogue and belonging during turbulent times.
Recovery funds offered local leaders an opportunity to invest in the small businesses and commercial corridors at the heart of vibrant communities, a growing priority for mayors. National League of Cities’ 2022 State of the Cities report highlighted this focus: economic development ranked the second highest priority (behind infrastructure) for mayors in the annual survey, with “downtown development” and “commercial real estate and projects” as the two highest subtopics. Mayors and other local officials are aligned in the desire to invest in these districts.
Main Street programs’ success in helping cities adapt to pandemic challenges, along with mayors’ stated focus on downtown development, make partnerships between Main Streets and local governments a natural priority for the distribution of relief funding. Nationally, 67.8% of funds have been budgeted by local governments, leaving nearly a third of available funding yet to be allocated to uses by recipients. The multifarious categorizations of ARPA-funded projects make a singular assessment of the impact in Main Street districts difficult to track through these big data sources.
Snapshot of the Network
As part of Main Street America’s 2023 Trends Survey, we asked the Main Street network about their use of ARPA State and Local Fiscal Relief funds.
In broad terms, 36 percent of all Main Street programs surveyed were successful in utilizing ARPA funding for projects they advocated for, whether implemented by the city or other partners or core Main Street projects. About one-third reported not having taken advocacy action for these funds. Almost a quarter of participants report unsuccessfully advocating for funds, while 13 percent are awaiting funding announcements from local governments.
Main Street programs advocated for diverse local needs. Funded projects include examples such as renovations to a year-round indoor farmer’s market facility; funding received to support the creation of a retail incubator space; beautification and façade grant programs; and building improvement grants. Whether for funding directly received by the Main Street program or funding for priorities identified by the Main Street program, use of ARPA funds for Main Street are dependent on strong local public-private partnerships.
Crawfordsville Main Street (Crawfordsville, Ind.) is one example of how strong local relationships have led to impactful local uses of ARPA funds. Utilizing ARPA resources provided by Main Street America, Crawfordville Main Street collaborated with city leadership to identify two priority downtown projects for funding eligible under the ARPA criteria for negative impact to businesses and tourism. The city granted $200,000 towards the replacement of the fountain in the downtown Marie Canine Plaza, a focal point of community gathering.
The city also utilized $100,000 to create the Architecture & Engineering Grant program to help downtown property owners conduct professional building conditions assessments. The grant program offers property owners within the historic commercial district funding to cover 60 percent of the cost of a professional conditions assessment, which helps owners understand building rehabilitation priorities. Incentivizing building assessments of commercial district properties will help Crawfordsville retain historic fabric while helping property owners understand the needs and costs for rehabilitation.
In recent Main Street America research, 70 percent of Main Street building owners reported that a lack of built-out space hinders economic development opportunities downtown. Through ARPA funding, Crawfordsville is prioritizing creating vibrant downtown spaces that can support small business growth and community connectivity. Susan Lucas, Program Manager for Crawfordsville Main Street, noted that successful partnership between the Main Street program and the City of Crawfordsville “could be summarized by two enduring Main Street axioms - ‘time-tested’ and ‘community-led.’ Lucas said of her experience: “It takes a considerable investment of resources to cultivate and maintain relational equity at the local level. It requires getting up from the desk and out of the office to engage with community leaders and business owners, listening to them, serving local needs and opportunities. Time-tested local relationships result in durable community-led progress.”
The Importance of Advocacy
From individual community stories like Crawfordsville, to statewide successes in places like North Carolina and Illinois, ARPA funds have made a significant impact on downtown vibrancy, addressing the ongoing need to support improvements to downtown buildings and civic infrastructure. Main Street programs – whether independent nonprofits or part of city government – can play a key role in advocating for downtown priorities and cultivating engagement and buy-in from small businesses, property owners, and other district stakeholders. Through strategic investments, Main Street programs can be partners in the implementation of federal and state programs.
For communities that have yet to allocate ARPA funds, potential new avenues of use are still at play. The FY23 Omnibus spending package, signed in December, included increased utility for ARPA funds for local infrastructure projects including response to natural disasters, transportation, and uses eligible under Community Development Block Grant rules. And earlier this week, Senate Majority Leader Chuck Schumer sent a letter to Treasury, urging that ARPA funds be allowed to be used for capacity building to help communities access other federal programs established through the Bipartisan Infrastructure Law (BIL), Inflation Reduction Act (IRA), and other federal spending packages.
The implementation of ARPA dollars in downtowns and neighborhoods districts highlights the role of Main Street programs as partners to city, county, and state governments to target investments and reach small businesses and property owners directly. As ARPA implementation continues, and as federal programs from BIL and IRA emerge, Main Street leaders must take an active role in relationship building and advocacy to highlight district needs and opportunities. Check out MSA’s Advocacy Toolkit for one-pagers and resources on building your advocacy skill.