Medford is working to reduce its number of vacant storefronts through the Vacant Storefront District Program, which will award up to $10,000 worth of tax credits to businesses interested in moving into storefronts that have been vacant for 12 months or more. The eligible storefronts are located in six districts, which include Medford Square, Haines Square, Hillside, South Medford, Wellington and West Medford.
The funding will come from a collaboration between the state and local governments. Up to $5,000 will come from the Economic Development Incentive Program, while a match of up to $5,000 will come from the city, using Community Development Block Grant funding.
“To be frank, we don’t have a huge vacant storefront issue,” Medford Economic Development Planner Jessica Martinez clarified when asked about the challenges that led to current vacant storefronts. “To move into a space, to do the upkeep and the maintenance that would require to open a new space, would be in the hundreds of thousands [of dollars] in some cases, so this is just a small incentive for businesses to move into vacant storefronts.”
In addition to providing this incentive for business owners, the city wants to facilitate growth in business districts to appeal to the interests of current and incoming residents.
“We want to bring more vibrancy to our town squares,” Martinez said. “We have a lot of residents that are moving into the city, and they’re looking for things to do, places to shop, places to buy things. And we want to make sure that we’re providing retail opportunities for our residents in these districts.”
Sal Di Stefano, Medford’s director of economic development, explained the social implications of vacant storefronts.
“If you’re going somewhere new that you don’t know, and you’re seeing half the storefronts are vacant or boarded up, or there’s broken glass all over the sidewalks, or disinvestment in downtown, you probably won’t feel like it’s a safe place to go shop and dine and explore,” he said.
Di Stefano added that encouraging investment in these storefronts could avoid a vacancy “snowball effect.”
“Vacancy, unfortunately, can create additional vacancy, and it could be like a snowball effect when storefronts are empty,” he said.
To avoid the economic challenges of vacant storefronts, the city hopes to incentivize the growth of businesses as well as diversify the industries of businesses throughout Medford.
“Right now, we have a lot of restaurants or business shops, like insurance or lawyers, but we’d love to see more retail opportunities, like bookstores or clothing stores,” Martinez said.
The city is also focused on providing more support to business owners from marginalized groups.
“We have a special interest in supporting women-owned businesses, BIPOC-owned businesses, as well as veteran-owned businesses,” Di Stefano said. “They are groups that traditionally have less advantages in accessing capital.”
The Vacant Storefronts Program application is open to any interested entrepreneurs. Martinez explained the application process.
“You have to submit an application to the city so that we can verify that you’re an eligible business,” she said. “Once you are verified with the city, you submit an application to the Economic Assistance Coordinating Council, where they will approve the tax credit.”
She added that the deadlines are on a rolling basis. After approval, the reward will be an end-of-year tax credit.
Cynthia Kinnan, associate professor of economics at Tufts, discussed the drawbacks of using tax credits to encourage business growth as compared to other policy tools.
“There might be a lot of upfront costs of rehabbing that property,” she said. “If we’re thinking especially about a small business owner who might not have deep pockets and [might not] be easily able to access a lot of business credit to finance those upfront investments, then a policy like an upfront grant or an upfront subsidized loan might be somewhat more effective.”
Kinnan also explained the advantages of tax credits over upfront grants and loans.
“Money will only be paid out to the extent that that business really is active and is bringing in revenue in the area,” she said. “I think that could help to reduce cases of some kind of not very serious business being set up simply to claim an upfront grant.”
Di Stefano shared that the Economic Development Program is committed to assisting businesses even after they receive tax credits. The department partners with the Massachusetts Small Business Development Center and the statewide Community One Stop for Growth program, which provides grants to support economic development.
“If a business is moving into the city, we welcome them to reach out to the economic development team, and we could walk them through how to access the resources,” Martinez said.
