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Welcome to today’s deep dive webinar. This webinar is part of our ongoing series which addresses specific informational and instructional topics on issues facing communities. Past programs include examples of sales & use tax, BID & TIF use. Today’s topic is important and relevant to businesses and communities throughout the state. The value and impact of quality façade improvement projects have on property performance, rental rates and the businesses within them is an important factor in achieving a successful downtown revitalization project. Facades represent one of the most publicly visible elements of a downtown, and improving this aspect of a community, if done correctly, can do much more than boost morale. Today we are pleased to present the findings from our 2014 Façade Improvement Impact Analysis, including a summary of the impacts and trends identified as a result of façade improvement projects, information on several specific projects which represent different types of projects and impacts, and an overview of how these projects were accomplished.

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I am pleased to have with me today three panelists to cover this topic. Our presenters today include Chris Naumann, Amy Greil and Dayna Sarver. Chris is the current executive director of Downtown Kenosha, one of the partners that helped identify and launch this study. He will provide brief remarks on the importance of high quality design in developing a compelling and vital downtown fabric. Amy Greil and Dayna Sarver are both with the University of Wisconsin Extension and together with Joe and myself, are the authors of the 2014 study.

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This study is a product of discussions had between Bill Ryan, a specialist with the UW-Extension Center for Community Economic Development, myself and the previous Exec. Director of the Kenosha Main Street Program, Violet Ricker.

We knew that vacancies in the downtown, and underperforming businesses were of growing concern and we wanted to know what data would help the situation. Violet had been citing an old University WI-Extension study from 1986 entitled ‘Economic Effects of Storefront Improvement: A Report of a 1096 Study of WI Retail Businesses Which Had Made Façade Improvements during the Previous Five Years.’ Robert Dick, Bruce Murray and AyseSomersan were the researchers and authors of the study. Seeing it was so old, I had to hunt down a source of this report, and came upon a design firm from New England that often cites this study and had access to the full report. A special thank you to Kathy Frazier for her assistance in locating the original study so we could refresh the research through the collection of present-day storefront improvement case studies.

So we set out as educators from UW-Extension, Bill Ryan, Dayna Sarver, Amy Greil and also WEDC Main Street program, Joe Lawniczak and Errin Welty, to investigate the present-day impacts of downtown storefront improvements through the collection of 24 case studies from around WI representing a cross section of small/mid/large sized communities.

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Typical storefront improvements include; awnings, brink pointing, exterior doors, exterior lighting,, exterior painting, signs, windows/glazing, woodwork… etc.

Prior to our study, there was inconclusive evidence whether these downtown storefront improvement projects provide an adequate return to property owners, outside investors or public funding entities.

If indeed there are positive returns, what are those returns? Are they economic returns (such as increased sales revenue and rental rates) or are they cultural returns (increased community pride/historic appreciation).

Our research helped us deduce a number of findings that we’ll cover in more detail through this presentation that relate to’ increases in number of first time customers, increases in sales, increased rental revenues, spaces converted to better uses, simultaneous interior redesign, multiple funding sources, increased building value, the catalytic nature of improvements and community pride.

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Market analysis is an important component. Storefront improvements cannot save a business with faulty business plan.

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16 did masonry work, 6 metal repair work, 10 did would repair work, 19 painted, 4 did re-siding., 14 replaced signs, 15 removed past alterations, 16 repaired/replaced windows and doors, 11 removed or replaced awnings and canopies.

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The building on the left was built at the turn of the century. After the original center building was lost to a fire, the owner purchased the vacant lot and built the infill building in 1983. The building on the right was built in 1889 and restored by the owner in 1989. All three buildings are open to each other and house the retail gifts store, Country Treasures. Joyce Pugh has done work on these three buildings in stages since 1983. Wisconsin Main Street Design Specialist Joe Lawniczak drew up the idea of a false upper facade for the middle building to connect it in height and character with the neighboring buildings.

"There was an unbelievable amount of support from the community for the project. Our downtown and new building construction moved along more quickly than planned, and I feel that my improvements might have helped to give impetus to those projects:'- Joyce Pugh

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In this case, the economic benefits included a 10% increase in first time customers and 2% increase in sales. They invested 130,000 into removal of metal façade on the building to the left, tuck-pointing and window replacements also on the building to the left. A new false second story brick façade was added to the center building and the entire front of the two buildings was redone with larger storefront windows and doors. Other improvements included paint, signage and awning removal.

Improvements were funded through a regional business fund and low-interest Main Street loan. Renders were completed by Main Street Design Specialist Joe Lawniczack…

This is a unique project in that it used the false façade replace/integrate a space that was damaged by fire. The false façade served to unify the historic character of the three buildings. Beautifully done.

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Constructed in 1857 by Charles Lewis Fellows, a river boat captain on the Ahnapee River, the building has always served as a hotel. In 1905, Frank Slaby constructed the second wing, which is now the three-story brick structure and entrance of the hotel. Slaby changed the name of the building from Ahnapee House to Hotel Stebbins in honor of his friend, the late Wisconsin State Senator DeWayne Stebbins. Kristine Ruehl purchased the business in July 2005, and had always intended to restore the building to its early twentieth century grandeur.

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This project created an increase in sales as the hotel and restaurant say an increase in first-time customers. They used a bank loan to secure the funding.

This project set out to remove a 1960s façade to reveal the full integrity of the building design, exposing the stone and brick work around the base of the building. Once removed, masonry repairs were made and curbing was added to seal out moisture.

Exposed beams were repaired and unique steel scroll work was sandblasted/repainted. Exterior doors were removed in the entry way so an awning could be installed… new signage was added. All for the bargain price of 45,000.

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Although the building needed repairs, financing wasn't readily available until Menomonee Falls created the Economic Development Master Fund program. This 50/50 matching program was just what Brad Posnanski needed to do the upgrades for his building.

"The finished project was amazing. I had no less than 30+ positive comments. They would say, 'love the great job you did on your building: Others would say that they noticed my business now more than ever before:'- Brad Posnanski

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This project features 20,000 investment that included minor tuck-pointing, soffit replacement, four windows, two doors and new canvas canopy... New sign and some painting. This project is significant as the property owners claims an increase of 30% in residential rents due to the renovation.

A 50/50 match program helped shore up the needed funding.

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Fix Development is a commercial real estate developer committed to community, economic, and environmental stability. CEO Juli Kaufmann has lived and worked in historic Walker's Point since 2005. Working by the Fixer's Manifesto of "If it's broken, fix it!" and "If it's not broken, improve it;' Kaufmann saw the potential in this building and how it could serve the community.

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This is a unique example of rehabbing a former manufacturing building into a restaurant use creating a multiplier effect for the area: It compliments other businesses such as the Water Council, Indulgence Chocolates, and Black Sheep.

This project encompassed nearly a 100,000 investment in new storefront windows, new door, interior atrium, surface painting, new LED lighting and new awning. It was funded through a City of Milwaukee Façade Grant.

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The Smith Building, built in 1879 in the Italianate style, was purchased by the Bemis family in 1995. Bemis manufactures bath supplies and desired to have a downtown presence. The objective of the restoration was to take the building back to its original 1879 character. The project followed the Standards of Historic Preservation. It has become an iconic symbol of historic restoration in Wisconsin and currently serves as Wisconsin Main Street's official logo.

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This historical restoration provided an ideal for a downtown retail space for a local manufacturer.

1995 this project began. The interior floors, stair case, interior walls were rehabbed simultaneously to the exterior work—and beautifully done. Cornice high windows were added at street level, and exterior bring was washed to expose original cream City brick—notice they did not paint the brick! The upper windows were also restored with respect to the Italianate architectural style.

The price tag for this project was upwards of 650,000 for both interior plumbing and electrical work. Exterior work, financed through a bank loan and state/fed historic preservation tax credits.

There are many reasons to love this project but I love it most because it is my hope that local Kenosha manufacturer’s also see the potential in creating a downtown retail location in our historic downtown.

Joel owns North Bay, a favorite stopping place of local and tourists for anything from fishing gear to a cold beverage. The Downtown Green Lake Renewal Project awarded Joel with an anonymous gift for the purpose of improving his building's facade. The work on his building has given Joel positive feedback and inspired others to invest in their properties. Jo Ellen Madden, Green Lake Renewal Project, says good will is getting passed around.

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This project was financed through an anonymous donor that encouraged the property owner to invest in his building… It cost no more than 2,206 dollars to repaint the exterior and hire a local artist to paint a mural on the side of the building. It was financed through the Downtown Green Lake Renewal Project Funds and spurred an 10-20% increase in first-time customers.

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Jeremy and Kelly Belot found a dilapidated tavern near their home and the new Menomonee Valley branch of the Urban Ecology Center. Infusing it with a new vision, the building was converted into an eco-friendly childcare center focused on a healthy, sustainable lifestyle on the main floor, and a residential unit on the second floor. The backyard became a natural play-scape, and the interior received a full renovation.

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This previous tavern got quite a facelift when it was converted to a childcare center, Tiny Green Trees! It is most significant for the extensive list of financing mechanisms employed; Layton Boulevard West neighborhood CD fund, Me2/Focus on Energy, Milwaukee Downtown Development Corp, Local bank loan.

The owners completed a full renovation of property, including extensive landscaping and roof replacement. They resided, installed cedar wood trim, replaced windows and doors and created a custom-made sign.

A vacant, blighted building increased in property value—Tax assessment increased $80,000 after renovation. It also served as a catalyst for the area.

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Sam Meyer sat across the street during an event in downtown Fond du Lac thinking, "If I have to stare at this old building a II day, I'm going to buy it and fix it up.” Built in 1873, the beautiful arched windows had been covered over with a false facade. The Wisconsin Main Street Design Specialist provided architectural renderings for the project. The City of Fond du Lac designated the building a historical structure and the Wisconsin Historical Society granted the project historic tax credits.

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This restoration doubled the building’s market value, funded by the Downtown Fond du Lac Façade Improvement Grant, Bank Loan and historic preservation tax credits—tallying 28,000 of investment dollars.

By removing the false façade, the plaster over the brick was restored and the cornice was recreated. The beautiful arched windows were also restored as well.

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Constructed in 1854 and 1855, the set of buildings were generally regarded as eyesores. The Wisconsin Main Street design specialist provided an artist's rendering of the building's historical character. The building on the right was originally a firehouse. Based on historical photos, the owners restored the two classic fire station archways in 1989. In 1999, owner Dorothy Schueffner expanded into the adjoining structure. Schueffner hasreaped dividends by creating additional seating in the lower level and a private dining area above.

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This reconstruction and expansion into an adjacent building doubled the owner’s revenue! This is a very high quality rehab project that found a way to integrate its historic use into the building use/theme (a fire house).

New siding and windows were installed in conformity with the Greek Revival-style buildings in the area.

The cost for improvements was 200,000 for interior and exterior improvement, financed through a bank loan. The economic benefits of the rehab were 25% increase in first-time customers, whereas unoccupied buildings is now income-producing, while the increased seating area doubled sales.

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Lynn Truckey, owner of Steele Street Floral, worked with Wisconsin Main Street Design Specialist Joe Lawniczak to restore this building to the glory of a Painted Lady. Painted Ladies usually use three or more paint colors on the features of Victorian or Edwardian structures to highlight their architectural elements.

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This is one example where the cultural impacts of the renovation out way any economic impacts. Pedestrian traffic and public image of the community has improved due to this $30,000 renovation.

Nearly all of the original windows had been removed or made smaller in the past, so the renovation sought to bring back the full-size windows and open the building to greater natural light. The door jams were reworked to accommodate a new French main entrance. Detailed painting on architectural features were also completed.

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80% of businesses experienced an increase in first-time customers. Many also reported that adjacent businesses experienced a similar phenomenon, driven by additional foot traffic in the immediate vicinity. 90% of businesses experienced an increase in sales, with an average increase of 20%. Restaurants benefitted the most, followed by personal and professional service businesses. However, not all businesses experienced an increase in sales. Some of the largest gains came from projects where landlords were able to rent out spaces that had previously been vacant for some time. Several property owners also reported increased ability to rent out upper floor residential units in properties after the façade improvements. These findings are consistent with those from the 1988 study. Several buildings were repositioned to support tenants currently supported in the market, which had a positive impact on the property and community. These projects nearly always included interior and exterior improvements.

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Even projects with a small investment experienced positive returns. Total project costs for projects ranged from less than $3,000 to more than $600,000 and included all sizes and types of buildings. Half of the projects studied utilized some form of local incentive grant or loan projects to finance a portion of the improvements. Nearly all projects incorporated multiple financing sources.

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As Amy and Dayna mentioned, more than 50% of the projects included in the case study analysis utilized some form of public financing assistance to complete their project. However, not all façade programs are created equal. Maximizing the benefit and use of a program requires careful planning and development to design and implement a loan or grant program that will be most successful. For instance, a program emphasizing aesthetic improvements to awnings and signage will be of little use if most buildings in the district are in need of roof and masonry repair, which must be completed prior to any cosmetic improvements. One of the best ways to explore the needs in your district is to survey property owners about their desired projects – what would they do with an extra $10,000? What is preventing them from pursing these projects currently? Understanding the needs and limitations in your marketplace can go a long way toward making a program successful. For instance, if your district only has small storefronts and most prospective tenants are looking for restaurant space or large scale spaces (i.e. furniture stores), improving only the façade of a building will have limited impact on the economic function of the downtown. Similarly, if property owners are unable to raise matching funds, or if improvements will trigger additional work to address code issues such as accessibility, these factors will need to be considered when designing a responsive loan/grant program.

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Façade loan and grant funds can take a variety of forms beyond just the traditional aesthetic improvements. The five general types of funds profiled here can be used separately or in combination to address issues found within individual communities.

Traditional funds are perhaps the most common types of programs, funding signage, awnings and other front-facing exterior improvements. Maintenance and renovation loans still focus primarily on the exterior of a building, but may also allow for a portion of funds to address critical structural or functional issues to help preserve or stabilize buildings. As these elements typically are more costly, these funds are often larger, and tend to favor loans over grants, sometimes with the opportunity for forgiveness after a period of time. Underutilized space programs focus on the interior commercial space (typically first floor only) in a building. It allows building owners to renovate a space that may be lagging on the market by addressing critical issues that impact the appeal or function of a space to prospective tenants, making it more competitive in the marketplace. This can include cosmetic upgrades as well as functional enhancements.

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The final two programs are less common, and also focus on internal spaces.

Business focused funds are designed to fill vacant spaces by providing a flexible funding stream for new businesses to a district. By helping offset some of the costs associated with internal improvements and/or funding working capital, tenants are able to devote time and energy to improving the space or may consider a space which otherwise requires more up front work, therefore delaying opening of the business (and limiting revenue during this period).

Upper floor funding is important in areas where upper floors may be vacant or underutilized. Improving cash flow to property owners from upper floor units can help reduce the reliance on lower floors to support a building single handedly and also providing capital that can facilitate improvements to structural or first floor spaces. Additionally, improved upper floor spaces have the added benefit of boosting the size and quality of the immediate customer base, further enhancing downtown’s economy.

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Due to the wide variety of objectives and focus of loan/grant funds, they can be started using funds from a variety of sources. Ultimately, it is important to pick a funding source that matches this intent. Many of these programs may be Wisconsin-specific, though other states have similar programs. Tax Increment Finance (TIF) = flexibility of use, wide variety of strategies provided it is included in the project planBank Partnerships – i.e. matching funds = leverages additional dollars, potential to outsource loan administration, provides enhanced marketingCommunity Development Block Grants (CDBG) = funds projects helping targeted populations (low income), adding jobsLeveraged funds (i.e. pooled funds with comparable partners such as WWBIC, Industry Funds, Economic Development Entities) = additional leverage, potential outsourcing of administration, ability to focus on and market to specific business typesTargeted funds (i.e. proceeds from property sale, capital from closing TIF district)= potential ongoing/repeat source to recapitalize, provides program flexibilityPrevious Loans/Grants = maximize funding mechanism by utilizing future repayments of loans or grants to capitalize/reseed loan/grant fund. Some entities such as USDA have programs designed for this purpose, but many granting entities allow this use.

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We are always looking for topics of interest to our communities. Please submit your ideas or topics for future consideration.

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