At my last Civil Rights, Utilities, Economic Development and Arts (CRUEDA) Committee meeting on May 14, I hosted new acting Director Bobby Lee and Michael Wells from the Office of Economic Development (OED) to give an update on the Legacy Business program that I have been working to develop since taking office in 2016. Legacy Businesses are long-standing, independently-owned, small businesses that contribute to the cultural vibrancy and local economy, and give our neighborhoods character and create a bridge to our city’s past.
In 2017 I requested and helped fund a study within the Office of Economic Development to scope out a City program that could help Seattle’s Legacy Businesses survive and thrive. The study showed that Legacy Businesses face similar challenges as most small businesses such as marketing and promotion, however there are unique issues like succession planning and long-term stability in commercial leases that pose specific threats.
In the 2017 and 2018 budget cycles, I sponsored funding requests to bring a Legacy Business program to life, specifically by 1) developing and launching a nomination process, 2) developing a marketing and branding plan, and 3) promoting technical assistance tools that are culturally-relevant and use the assets available in a neighborhood.
The program is transitioning toward the implementation phase, specifically crafting tools and resources, and developing a nomination and designation process. As we move in this direction, I want to ensure that we stay focused on the original goal of preserving and creating sustainability for Legacy Businesses. Drawing from his experience in working for the City of Portland, Acting Director Lee made the apt connection that a simple, no-cost tool the OED can provide is support with succession planning. When matched with strategies like cooperative ownership, operation by a nonprofit, and community-owned crowdfunding, succession planning can create a “pipeline” of ownership for Legacy Businesses.
Aside from the program support, our conversation also revolved around the real financial challenges in supporting Legacy Businesses, specifically to help businesses afford rent costs. The City is limited by State law on providing financial assistance to for-profits, but the City can provide an important role in promoting resources that attract private investors through new market tax credits and establishing relationships with Community Development Financial Institution (CDFI)—these are community-based financial institutions that provide loans to small neighborhood businesses, community organizations, and affordable housing providers that may face barriers in accessing mainstream banks.
I have, together with OED, been working on developing a pilot program to support Legacy Businesses funded by new market tax credits. I am a member of the Seattle Investment Fund Committee and we are working towards investing $800,000 to incentivize the development of affordable commercial tenant improvement space for Legacy Businesses in Targeted Investment Areas, or neighborhoods identified as high displacement risk areas in the City's 2035 Growth and Equity Report Analyzing Impacts on Displacement and Opportunity Related to Seattle’s Growth Strategy; and currently experiencing significant development activity. We have received some exciting applications for the funding and I hope to share news of the recipients soon.
An additional partnership that OED has been developing is with Community Development Financial Institutions (CDFI), like the Rainier Valley Community Development Fund, a CDFI that has served the Rainier Beach area for 20 years.
I’m looking forward to finalizing the nomination strategy for neighborhoods to identify Legacy Businesses and developing the designation, or selection, process. I am encouraged and in alignment with the recommendations of Director Lee and Wells in ensuring that the nomination and designation process involves our Business Improvement Areas, chambers of commerce, and merchant groups, but also smaller businesses that face barriers in being part of the mainstream business community and patrons that need more support in elevating their voice. I’ll keep you updated as OED makes progress on Legacy Businesses!
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