the future of MAIN STREET
12 | BLOCK, STREET & BUILDING
PHOTOS BY MAT THEW MARTIN
PHOTO COURTESY LIBRARY OF CONGRESS
W
e are at a confluence. Whether you take the research from reports, blogs or books that declare the power of place to heart, it is undeniable that there are two massive drivers reshaping Arkansas’s downtowns that put small developers right in the driver’s seat. The first great driver is demographics. From millennials to retiring baby boomers, trends show both young and old want to be in downtowns and urban cores. The lure of downtown living for these two demographic groups has been growing over the last decade and a half in cities across the nation, and now its pull is being experienced in Arkansas’s cities. According to the Nielson Company, 62 percent of millennials—those between the ages of 17 and 34—indicate they prefer to live in the type of mixed-use communities found in urban centers, where they can be close to shops, restaurants and offices. “We love living within walking distance of shops and restaurants, and having a short commute,” said Megan Feyerabend, who owns a local photography studio and frame shop with her husband, Matt, in downtown Siloam Springs. Likewise, baby boomer Beverly Rowe in downtown Texarkana touts walkability as the reason she and her husband downsized and moved downtown several years ago. Like so many other baby boomers, the Rowes want to walk to places like the Perot Theater and experience the arts and culture that are found in the heart of the city. Due to its density and activity, areas in or directly adjacent to downtowns hold some of the greatest potential for small developers to capitalize on this growing demographic trend. Jimmy Streett and Shane Butler with Russellville Downtown LLC invested $480,000 in the 110-year-old Deluxe Hotel. This investment resulted in five new second-floor apartments that help meet the growing demand for downtown living space, and attract young millennials to the downtown to provide more feet on the street. This project was awarded Best Historic Rehabilitation Tax Credit project of the year by Main Street Arkansas. In addition, a new Thai food restaurant has opened on the ground floor, adding a new dimension to downtown Russellville’s dining options. The second driver is tax credits and financial incentives. Federal and state historic preservation tax credits encourage reinvestment in older and historic buildings, which are usually located in a central downtown location. “The state tax credit is 25 percent, with limits, of the approved rehabilitation expenses on a historic building, which is or will be an income-producing property, such as commercial, office, rental residential, etc.,” says Tom Marr, rehabilitation tax credit coordinator with the Arkansas Historic Preservation Program. For example, a historic building on the National Register of Historic Places with a project cost of $90,000 could receive a state tax credit of $22,500 with the potential of being sold to a bank at a variable rate such as 0.86 cents on the dollar totaling $19,350 cash back in the current market. With the lowest tax credit cap in the region, the state rehabilitation tax credit is currently only effective for small and medium-sized projects. Last year in Arkansas, the state saw a total of 76 federal and state tax credit projects resulting in more than $38 million invested. Some communities and local Main Street programs have taken matters into their own hands by offering financial incentives to small developers to put in craft breweries, restaurants and housing. All accredited Main Street programs in Arkansas are required to provide a mini-grant facade program. While the