Main Street: Finding a solution to an empty building

Here’s an interesting article about a man in Vandalia, IL who is revitalizing his hometown one business at a time. I love it for two reasons.

1. He’s putting his money where his mouth is. No talk. All action.
2. He’s proof entrepreneurship doesn’t have an age limit. Being too young or too old isn’t an excuse. Instead of investing your retirement in stocks and Wall Street, think about investing in your community and Main Street.

So can this be done in Gillespie and Benld? My best guess is maybe. Because we’re a smaller market, we’ll have to get a little more creative with financing our empty buildings, which by the way we have a surplus of them, but it can be done.

If I was king for a day, here’s what I’d do.

1. Set up a meeting with all of the owners of the empty buildings in town, and propose the following plan.
2. If the building has been vacant for more than a year, the owner must become part of our economic stimulus package to help revitalize main street.  The owner agrees to, once a suitable entrepreneur is found, lease the building to the tenant for $1 per month from anywhere from 12-24 months. The tenant must pay for all of the remodeling fees, as well as agree to purchase or lease the building once the $1/month term is up, on an agreed upon price that was made prior to the $1/month lease. The tenant must also pay for the annual taxes on the building. The tenant must also give the owner of the building complete access to the financial statements for the business, as well as an estimated P&L for the year and financial goals for the business. If at the end of the $1/month lease the tenant reaches her goals, she buys/leases the building at the agreed upon price. If not, the owner can continue the $1/lease or take the building back over. The owner will not have to pay the tenant back for the taxes paid or the remodel improvements.

Here’s why the entrepreneur should love it:

1. It allows the entrepreneur to “test” her model before making a big investment.
2. It minimizes one of the biggest expenses startups have initially and frees up cash flow.  That money can be spent on remodeling (looks do matter), expanding product lines, or marketing.
3. It gives the entrepreneur hard evidence when she applies for a bank loan. Plus, it eliminates the worst part of starting a business: dealing with a bank. Begging for a loan with no proof of concept is tough.  Projected P&L’s are useless.

Here’s why the buildings owners should love it:

1. It will get entrepreneurs in their building. Instead of a building sitting vacant for 1, 2, or even 3 years, the owner will actually have living human beings in it. No cobwebs, frozen water lines, mold, etc. It’s much easier to sell a building if someone has been in it as opposed to just sitting empty for years upon years.
2. If at the very worst the entrepreneur doesn’t meet her financial goals and closes shop after the $1/month lease agreement, the owner has a remodeled business that she hasn’t paid a dime for, and her taxes on the building has been paid for the year.
3. It acts like a matching service between buyers and sellers. Who needs a real estate agent when you have entrepreneurs knocking on your door?  I would guarantee that an owner who agrees to this plan will find a buyer quicker than an owner that just has their building sit there. Plus. it gives the entrepreneur hard evidence for a possible bank loan.
4. On a deeper level, the owner gets the feeling of helping someone out. Don’t underestimate that.

Why the community should love it

1. It helps fill some of the vacant building on main street. The more attractive and lively main street is, the more appealing it is for other businesses thinking about starting up. It creates domino effect.
2. It speeds up the entrepreneurial cycle. By making it easier for entrepreneurs to start, we’ll see a host of new businesses start up. By speeding up the entrepreneurial cycle, we’ll see more successes and more failures, but the successes will be worth it.
3. It will breathe life into main street and infuse it with energy and excitement. Our community will be known for fostering entrepreneurial activity. We’ll be known for our progress and initiative, and attract successful entrepreneurs with similar mindsets.
4. More business means more sales tax for the community. Plus, jobs, jobs, and more jobs.
5. Other businesses on main street will feed off of the excitement, energy, and foot traffic of the new businesses. The more customers we can get on main street, the more success we all have.

Does this plan have its faults? Yes, it’s not perfect. There will be a lot of red tape that will need to be crossed. It’s worth a try though because what we’re currently doing isn’t working.

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