Annual State of Downtown event talks BID, grants and plans for generating revenue

After the closure or relocation of nearly 40 downtown retailers, restaurants and offices in the aftermath of Tropical Storm Helene, business leaders and government officials met at the annual State of Downtown event to discuss ways to revive the central business district.

“Not only does downtown need to be vibrant and active, it needs to be responsive and resilient,” said Hayden Plemmons, executive director for the Asheville Downtown Association (ADA) during the March 18 gathering at Battery Park Hall.

At the event, the ADA shared results from its annual Downtown Stakeholder Survey, which gathers insights from business owners, residents, property owners and visitors.

This year, Plemmons said, safety concerns were the top-ranked priority among survey respondents. Cleanliness and public health closely followed. Parking rounded out the top three concerns.

Plemmons pointed to the Business Improvement District (BID), approved last year by Asheville City Council, as a key way to address many of the district’s top priorities. BID services, which launch in May, will introduce community stewards downtown. The initiative will also work on projects such as  litter removal, landscaping and other beautification efforts, headed by Christian Martin, chief executive officer of Nextstreet. All BID-related work will be monitored by an independent board, which City Council will vote on at its Tuesday, April 9, meeting.  The BID adds 9 cents per $100 of property valuation for downtown property owners — about $360 more per year for a property assessed at $400,000. The estimated annual budget for the BID could reach $1.25 million.

The introduction of the BID, however, was just one of several topics discussed at the State of Downtown. Here are four additional takeaways.

Successful campaigns despite lower turnout 

Nearly 10 million people visited downtown in the last 12 months, according to Plemmons. This number represents a 10% decrease year-over-year. In the wake of Helene, foot traffic in downtown slowed over the past six months, with 3.9 million visitors downtown, a 23% decrease from the same time last year.

Despite this drop, the city permitted 225 outdoor events downtown. Of those, the ADA permitted 11, attracting 63,000 attendees.

“The downtown association had a local investment through those events of about $325,000 to artists, musicians, food vendors,” Plemmons said.

Plemmons also highlighted the success of the Winter in Downtown campaign. More than 2,300 locals participated in the Shop Small, Win Big program, launched by the ADA in partnership with Bank of America. Customers who spent at least $25 at participating downtown businesses with a winter windows contest poster were entered to win a $500 weekly prize, with $500 also going to the business.

“As we see our downtown community becoming more vibrant, that vibrancy extends through our whole community,” Buncombe County Commission Chair Amanda Edwards said during the event. Edwards noted that downtown benefited from six sold-out Billy Strings performances in February, with concert profits supporting the nonprofit Bounty & Soul. Additionally, the city saw an influx of visitors for the recent Southern Conference Basketball Championship March 6-10.

“Last year, the tournament had an $8 million impact on Buncombe County and the city. This year’s estimates look to be higher,” Edwards said.

Mayor Esther Manheimer also noted that the Stars Servin’ Up Love tennis match at Harrah’s Cherokee Center – Asheville in February raised over $1 million  for recovery.

Ideas for generating revenue 

For business owners who filled out the Downtown Stakeholder Survey, loss of customers and loss of revenue were top of mind.

“Many of our downtown business owners were turned down by their insurance and didn’t qualify for grants or other support, as the impact was purely financial. In fact, 53% of respondents received no financial support,” Plemmons said.

Plemmons noted that the ADA is interested in launching a social district in the South Slope, allowing visitors to consume alcoholic beverages within the designated area. The South Slope, also known as the “Brewing District,” has eight breweries located along Asheland, Biltmore, Southside and Hilliard avenues.

“In our survey, 75% of respondents were in favor of a social district, believing it would boost visitor appeal and increase foot traffic for businesses,” Plemmons said.

A food and beverage tax, added Manheimer, is another funding option under consideration. Revenue from it, she noted, could go toward financing a performing arts center or workforce housing.

“We don’t have one, which is really weird for a tourist town not to,” Manheimer said.

Vacancy rate remains flat

ADA Treasurer Ted Sullivan, an associate broker for Mansfield Commercial Real Estate, reported a 2.2% vacancy rate in downtown retail spaces. Although rent prices are rising, the rate of increase is slowing, projected to grow by just 2%-2.5% annually through 2030.

Sullivan highlighted the opportunity for businesses displaced by the storm to fill vacant spots downtown. According to commercial real estate data, he continued, vacancy rates are projected to remain flat.

“As we see our favorite businesses and shops close up, it feels much heavier than this data suggests,” Sullivan said. “A lot of people have made some really tough decisions. … But there’s reason for optimism and hope.”

He pointed to Atomic Furnishing & Design as an example. After its Swannanoa River Road location was flooded during the storm, the business relocated to an available space on Broadway.

Advocacy work remains top priority 

Advocacy, on the state and federal levels, noted Manheimer, remains a top priority for city officials.

“Every time we meet with elected officials who are in position to make these grants, we talk about this,” Manheimer said.

Manheimer acknowledged that although there are business loan programs, businesses are seeking grant opportunities to stay open. “People here want to work, and they’ll put in the time and the effort and try to keep their people employed. They just need some help to get there,” Manheimer said.

The city has provided over $1.3 million in business stabilization grants, contributing to the over $4.6 million it allocated for business grants, rental assistance, home repair and emergency shelter.

Manheimer also clarified that the city will still receive the $225 million in Community Development Block Grant – Disaster Recovery (CDBG-DR) funding from the U.S. Department of Housing and Urban Development (HUD). Last week the city had to update its plan for the funding after HUD rejected the initial draft for including diversity, equity and inclusion (DEI) criteria.

“There was a little bit of a kerfuffle you might have seen this last week,” Manheimer said. “That money is still coming our way, and we should see the first of it this summer.”