Beacon Hill makes progress, but Mass. downtowns missing key supports

Last September I described in these pages how Massachusetts quietly lost its only statewide program to support downtowns and no one noticed.

But like a popular menu item that suddenly disappears, the people demanded its return.

The Legislature restored the modest $600,000 line item for the Massachusetts Downtown Initiative in the fiscal year 2027 budget and Gov. Maura Healey signed it. State leaders are realizing that our local business districts need serious help.

That’s not all. Over the past 10 months the Executive Office of Economic Development (EOED) created a new bond program called MDI Capital to improve public spaces, streetscapes, signage, and public facilities in downtowns and received more than $11 million in applications.

MassDevelopment also launched Transformative Development Initiative districts in six communities supported by full-time TDI fellows for three years.

The Mass Cultural Council reopened applications for new cultural districts after a program redesign.

And EOED, MassDevelopment and the Mass Cultural Council now meet regularly to coordinate and support each other.

Opportunity Sits in Conference Committee

The Legislature now has a meatier dish before it.

Gov. Healey’s Mass Wins Act proposed $25 million to strengthen downtowns and another $25 million for cultural economic development. Both branches of the state legislature included these line items in their versions of the bill.

With a typical bond bill shelf life of five years, the most we can reasonably expect from these new line items should be $5 million each year per program.

This is much more than we’ve had, but still a tiny amount for the hundreds of downtowns, urban squares, town centers, and rural villages across the state.

A Missing Ingredient: Seed Funding

Special places don’t maintain themselves. They need staffing, programming, cleaning, safety, homeless outreach, active storefronts, interesting places to hang out, things to do for youth and families, wayfinding, and features highlighting the community’s culture and history.

That’s a hefty agenda, and it’s not something that the municipal government or small business community can take on alone.

It’s also impossible to achieve with short-term solutions. Communities need to create downtown partnerships that have a representative governance structure and ongoing revenue. In Massachusetts, these can be formed under the state’s business improvement district (BID) law.

Only 10 BIDs exist in Massachusetts currently, but the interest and potential is huge. Lowell, Pittsfield, Holyoke and New Bedford are just four Gateway Cities right now hoping to create downtown district management organizations.

The state remains the missing ingredient. It can take five to to 10 years to grow local revenue streams from assessments, tax increment financing, parking fees, grants and other sources. To get to self-sustainability, the state should provide a partial match with operating funds—the bond funds in the Mass Wins Act cannot be used for this purpose.

How It Should Work

Here’s how it could work: EOED would award one-time startup grants of up to $1 million for urban BIDs, and up to $250,000 for town BIDs; these funds could be banked by the local downtown partnership and spent down over five to seven years.

Spending less than $5 million per year on these grants, Massachusetts would be on a path to create dozens of these durable partnerships.

The benefits would be clear. Each state dollar would leverage roughly seven dollars in local public and private investment during the start-up period, followed by increased taxes in perpetuity.

Research suggests that property values in BIDs run about 15 percent higher than comparable areas. Studies from England indicate that BIDs generate 5 to 10 percent more foot traffic but 10 to 15 percent less crime.

A Bold Reinvention

Local downtowns and Main Streets shape the economic perception and quality of life of every Massachusetts resident, but they haven’t received the same respect as other sectors.

Biotech, climate tech, even housing production enjoy a focused state strategy, high-level staffing and billions of dollars in state support. Downtowns and Main Streets, with their decentralized constituency and lack of lobbyists, have suffered the result.

Fixing it would not be difficult. It needs just three components.

First, provide operating grants for new business improvement districts as detailed above;

Second, create a state-level strategy working across agencies.

And third, establish a $50 million Downtown Vitality Fund that can support all of the state’s fragmented programs and tie them into a coherent, coordinated framework.

Online sales giants have helped decimate Main Street retail, so we believe that redirecting just five percent of the state’s remote retail collections into the Fund would be more than enough.

Beacon Hill has shown this year it cares about Main Street. The next session should build something that lasts.