More than face value: façade improvement grants in North Carolina
A paper submitted to the faculty of
The University of North Carolina at Chapel Hill
in partial fulfillment of the requirements for the degree
Master of Public Administration
By Scott Sherrill
Spring 2012
This paper represents work done by a UNC-Chapel Hill Master of Public Administration student. It is
not a formal report of the Institute of Government, nor is it the work of
School of Government faculty.
Executive Summary
Façade improvement grants are a common tool for encouraging investment in downtown areas across
the state of North Carolina. This project examines the use of best practices from the literature and how
those best practices can help to address some of the problems commonly reported by practitioners. The
data for this project were collected via a survey of North Carolina’s Main Street directors and downtown
development professionals.
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Introduction
Large and small communities have employed façade improvement grants to generate investments in
downtown areas. Fundamentally, façade improvement grants are designed to improve the aesthetics of
downtowns and preserve local historic character. They do so by incentivizing property owners to
undertake façade improvements and by tying funds to design criteria or a committee review process.
The literature on façade improvement grants is generally thin, but some sources have identified best
practices for façade improvement grants. This study examines the usage of some of those practices in the
state of North Carolina to answer the research question:
Does the usage of façade improvement grant best practices affect the utilization of façade improvement
grants?
After a brief description of the methodology and characteristics of respondents, this paper will describe
best practices, the extent of the use of those practices and façade improvement grant utilization trends
among communities, impediments to grant utilization, and recommendations.
Methodology
This study included a survey designed to measure programmatic variation and common obstacles to
façade improvement grant utilization. The survey targeted groups connected by an interest in downtown
development including members of the North Carolina Downtown Development Association(NCDDA)
and the North Carolina Main Street Program under the assumption that communities in those groups
already had an interest in downtown development and would be more likely to have a façade
improvement grant program.
Survey questions focused specifically on:
1.
2.
3.
4.
5.
6.
Community matches of owner investment
Additional assistance communities provided to grant recipients;
Program marketing efforts;
Design contingencies associated with façade improvement grants;
Common impediments to grant applicants;
Number of grants; amount spent on grants; and amount budgeted for grants.
The survey questions provided metrics for five best practices and utilization trends for façade
improvement grants.
Communities Using Façade Grants
44.2% of communities receiving the survey responded to the survey had an active façade improvement
grant program in the last ten years. Respondent populations ranged from around 830 to over 400,000. The
median population was 12,900.
Of the 54 communities that responded to the survey, 18 provided enough information to identify spending
and utilization trends, and 5 had one year of data or relatively new programs. This smaller subset of the
respondent population had a median population of 16,190, was predominantly located in Tier 2 counties,
and had a median household income of $35,358, below the North Carolina median of $43,674.
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None of the organizations active in this study had programs prior to 1981. The median start date of 2001
suggests a surge in façade improvement grant programs within the last ten years.
Best Practices
The survey provided insight into five best practices among those identified by the literature. The best
practices analyzed in this report come from the NCDDA’s Façade Improvement Grant Workshop and the
Commercial District Advisor Blog.
1. Require matching funds from private sector that cover 25 to 50% of total project cost. Said
another way, the community should provide a grant for 50 to 75% of the total project cost. The
Commercial District Advisor Blog provides this best practice, noting that “the higher match is
necessary in areas where business owners are struggling and may lack the capital necessary to
meet their match requirements.” For example, on a $4,000 project, the property owner would
provide $1,000 to $2,000 and the community would provide $2,000 to $3,000.
Source: Community Provides 1-1 to 1-3 Match
2. Provide design services as needed. Given that the fundamental goals of many façade
improvement grant programs are to improve the aesthetics of downtown areas and preserve local
historic character, the NCDDA suggests providing design services as needed. The service both
helps to accomplish the program goals and makes it easier for property and business owners to
renovate facades.
Source: Design Assistance
3. Establish grants to ensure good design choices. This best practice also addresses the
fundamental goals of façade improvement and is recommended by the NCDDA, but is
implemented through the application and review process. For the purpose of this research, good
design choices include review processes tied to the Secretary of Interior Standards for
Rehabilitation, Local Design Guidelines, or a committee review.
Source: Secretary of Interior Standards, Local Design Guidelines, Committee Review
4. Communicate one-on-one with businesses and property owners. This best practice comes
from the NCDDA with the intent of determining property owner interest in façade improvement
grants.
Source: Communicate One-on-One
5. Have straightforward applications. This best practice comes from the Commercial District
Advisor Blog. The blog particularly recommends for communities with small grants, with the
idea that the smaller a grant is, the easier it should be to use.
Source: Administrator Reports Applications as Impediment to Use
Best Practice Analysis
The 18 communities that provided data on money and utilization trends show no clear correlation
between best practice usage and utilization trends. Utilization trends reflect the number of grants over
time. The money trend reflects the amount of money spent on façade improvement grants over time or the
amount budgeted if the amount spent is not available. In 61% of instances, the money trend reflects the
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utilization trend. There is a limited relationship between the use of best practices and the utilization of
façade improvement grants: those with a downward utilization trend average 3.33 best practices, and
those with an upward utilization trend average 3.75.
The best practices of matching, Good Design, and Non-deterrent application are used in more than 80%
of communities. More than three quarters of communities provide Design Services. The most
underutilized best practice is one-on-one communication, which is used by only 33.3% of communities.
Table 1: Best Practices and Utilization Trends Among Established Programs
Best Practice
% Older Programs Utilization Trend Up
Overall
--
44.4%
Community Provides 11 to 1-3 Match
Provide Design
Services as Needed
Establish Grants to
Ensure Good Design
Choices
Communicate
1-on- 1
Easy Application
83.3%
53.3%
77.8%
42.9%
83.3%
40.0%
33.3%
50.0%
88.9%
43.8%
N=18
N=18
Five communities have either started or will soon be starting to implement façade improvement grant
programs. The trends roughly approximate the best practice utilization rates of more established
programs: all provide a match within the recommended range and have simple application processes that
do not deter applicants. 60% provide design services or have instruments in place to encourage good
design. Only one community reports using one-on-one communication.
Table 2: Best Practices and Usage Rates Among Less Established Programs
Best Practice
% Less Established Programs
Community Provides 1-1 to 1-3
Match
Provide Design Services as
Needed
Establish Grants to Ensure Good
Design Choices
100%
Communicate
1-on- 1
Easy Application
20%
60%
60%
100%
N=5
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Based on more in depth analysis of trend data from the established programs, the new programs should
expect that façade grant utilization will follow some sort of cyclical pattern, though the periods and
magnitude of the cycle will vary.
Non-utilization Factors
Communities also provided insight into some of the factors that might lead to less utilization. Among the
five most common factors for less utilization, lack of knowledge and small grants are the two areas where
communities have the most capability for improvement. The best practice around one-on-one
communication can help to solve the problem of a lack of knowledge.
Reported problems follow roughly the same patterns across all categories, except that a smaller
percentage of businesses and property owners undertake façade improvements on their own and a smaller
percentage of facades have been redone by communities with new programs. A slightly smaller
percentage of communities with established programs and more complete data report that their grants are
too small.
Table 3: Reasons for Non-utilization
Factor
Est. Programs
(N=18)
Less Established
Programs (N=5)
Total Survey Population
(N=35)
Bad Economy
88.9%
80%
82.9%
Lack of Knowledge
Businesses Undertake
Improvements on Own
55.6%
40%
57.14%
50%
20%
54.3%
Facades Redone Already
50%
0%
40%
Grants Too Small
33.3%
40%
40%
None of the best practices examined in this paper suggest solutions to the small grants issue. The
Commercial District Advisor Blog suggests a couple of best practices, but they are not façade
improvement grants, rather they are revolving loan funds and microloans for signage which businesses
must repay.
One of the best practices the research going into this paper suggests is providing linkage to other funding
sources like historic preservation tax credits. 55.5% of established programs, 40% of less established
programs, and 57.9% (N=38) of survey respondents use this practice, which suggests that more
communities could use this practice to supplement the grant amounts for historic structures.
Recommendations
Communities in North Carolina to a large extent follow the best practices the literature provides. This is
particularly true for having straightforward applications, providing design assistance, establishing
programs that will encourage good design, and providing matching grants within the recommended range.
Nonetheless, this research does indicate two primary recommendations for improvement:
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1. Communicate one-on-one with business and property owners. 33.3 percent is a rather low
percentage of communities using this best practice. Communities can have very well designed
programs, but if business owners and property owners do not know about it, the program is more
likely to be underutilized.
2. Provide linkage to other funding sources like historic preservation tax credits. Given that
many of the commercial structures in downtown areas in North Carolina are historic, connecting
property owners with historic preservation tax credits and similar resources beyond the façade
improvement grants makes sense. This best practice should help communities to overcome the
perception that grants are too small.
Conclusions and Limitations
Although it would be ideal to say conclusively that certain best practices lead to greater utilization than
others, the analysis conducted in this paper cannot go that far. Instead, what this study demonstrates is
that some best practices have become very widespread among North Carolina communities, while others
are underutilized. Similarly, many communities use façade improvement grant best practices but do not
necessarily see greater utilization. This study provides insight into some of the reasons that communities
may experience less utilization, some of which are within program control, and some of which are not.
A more comprehensive look at North Carolina façade improvement grant programs beyond the NCDDA
and North Carolina Main Street programs would be helpful, to see if membership in those groups is more
likely to result in façade improvement grant programs and if there are any practices missed by the survey
population of this research. Further research on microloans for signage and revolving loan funds for
façades would be useful to determine if up-front capital is a limiting factor in façade improvements. A
survey of business owners to confirm the perceptions of façade improvement grant administrators would
also be helpful. Finally, research may examine a couple of aspects this study missed: the total amount
spent on façade improvements by business owners, economic impacts of façade improvements, and the
issue of whether or not more applicants applied for grant funding than communities could provide for
examining program demand. These may prove useful in evaluating the success of façade improvement
grant programs.
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Appendix A: Resources with Façade Improvement Grants
Because of their function in encouraging downtown facelifts and the sometimes small amount of façade
improvement grants themselves, they are frequently accompanied by additional resources. Among 38
survey respondents, the most common forms of assistance were design assistance and linkage to
additional resources like tax credits for historic structures.
N=38
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Appendix B: Marketing
One of the most commonly reported problems among survey respondents was that knowledge of façade
improvement grants was low. Downtown directors and other façade improvement grant administrators
report a wide variety of means of getting in touch with downtown business and property owners: the most
common are website, which is a pulling medium, i.e. individuals have to be looking for the organization
to find the information, followed by town newsletter, social media, newspaper, and word of mouth.
How do you market your facade grant program?
Answer Options
Response Percent
Response
Count
Website
Newspaper
Social Media
Town Newsletter
None
Direct mail
Email
Org Newsletter
Word of mouth
Presentations
Other
80.6%
30.6%
33.3%
36.1%
13.9%
8.3%
8.3%
5.6%
22.2%
5.6%
5.6%
29
11
12
13
5
3
3
2
8
2
2
N=36
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Appendix C: Best Practices, Money, and Utilization Trends
Established Programs
Community
50-75%
Match
Design
Services
Good
Design
1-1
Communication
Application
Deters
$
Trend
#
Trend
A
N
B
Y
1000
N
?
N
N
Down
Down
7500
Y
Y
N
N
Up
Down
C
Y
5000
Y
Y
Y
N
Down
Up
E
Y
1000
Y
Y
N
N
Up
Flat
F
Y
4000
Y
Y
Y
N
Down
Down
I
Y
2000
Y
Y
N
N
Down
Down
J
Y
5000
Y
Y
N
N
Up
Up
K
Y
1000
N
N
N
N
Flat
Up
M
Y
5000
Y
Y
N
N
Down
Down
O
N
5000
Y
Y
Y
Y
Up
Down
Q
Y
15000
Y
Y
Y
N
Up
Up
R
Y
5000
N
Y
N
Y
Up
Up
S
DEPENDS
DEPENDS
Y
Y
N
N
Up
Down
T
Y
1200
Y
Y
N
N
Up
Up
U
Y
2000
N
Y
Y
N
Down
Down
V
Y
1000
Y
N
Y
N
Up
Up
W
Y
2500
Y
Y
N
N
Up
Up
Z
Y
500
Y
Y
N
N
Down
Down
Max
Less Established Programs
Design
Services
Good
Design
1-1
Communication
Application
Deters
1000
Y
Y
N
N
%
Budget
Used
FY12
Y
500
Y
Y
Y
N
100
AC
Y
1000
Y
Y
N
N
40
AD
Y
1000
N
N
N
N
AE
Y
7500
N
N
N
N
100
Unclear
Community
50-75
Match
AA
Y
AB
Max
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Appendix D: Façade Improvement Grant Size and Utilization Trends
Grant
Percent at Utilization
Size
Amount
Trend Up
<$4000
50%
44.4%
$4000$5000
33.3%
50%
>$5000
11.1%
50%
One respondent simply noted that it depends, hence chart adds to 94%
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Appendix E: Survey Instrument
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Appendix F: Bibliography
Bibliography
Basile, Ralph J., J. Thomas Black, Douglas R. Porter, Lyndia Lowy. Downtown Development
Handbook.Washington, D.C.: Urban Land Institute, 1980. Focuses primarily on development from
the private side, but touches on areas, particularly pre-development where the public sector might
be involved, especially in providing a source of funding that can make private development happen.
This source focuses more on development than renovations.
Berk, Emanuel.Downtown Improvement Manual.Chicago: Illinois Department of
Government Affairs, 1976. General guide for downtown development, does spend some attention
on Municipal Financing Tools and Resources. Commonly cited by my other sources.
Jenny, Patricia J., Louise W. Taylor, and Raymond J. Burby, III. Downtown Revitalization
in North Carolina-A Guidebook for Community Action. Chapel Hill: Center for Urban and Regional
Studies, The University of North Carolina at Chapel Hill, 1978. Involved a survey of municipalities
under 25,000 population to determine state of downtown in NC. 17.3% of respondents at that time
used façade improvements for structures in their revitalization program. Case studies and finance
resources also provided.
NCDDA.Façade Improvements 101. Goldsboro: NCDDA, Powerpoint delivered 9/22/11.
Presentation describes Goldsboro façade grant program, state historic tax credits incentive program,
and impacts of façade improvements. Provides a sample outline for a façade grant program. Also
provides a good list of contacts for future research
North Carolina. Legislative Research Commission.Downtown Revitalization: Report to
the 1997 General Assembly of North Carolina. Raleigh: State of North Carolina,1997. A study
commission report on state initiatives to encourage downtown revitalization and determine why
downtown revitalization is important.
Pu-Folkes, Larisa Ortiz.“Five Tips to Designing a Great Façade Program.”The
Commercial Advisor Blog.May 23, 2011
http://commercialdistrictadvisor.blogspot.com/2011/05/five-tips-to-designing-great-facade.html
accessed 10/2/11.
Triangle J Council of Governments.DowntownIdeabook. Research Triangle Park:
Triangle J Council of Governments, 1982.Sets forth a process for downtown revitalization along
with some strategies and frameworks. Local funds are specifically mentioned, One of the more
interesting components of the book is a listing of downtown revitalization activities by town.
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