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COVID-19 Economic Response and Recovery

Refresh your business attraction sector propositions and collect lead generation insights

While opportunities to attract businesses to your city will be significantly reduced during an economic downturn, there may still be opportunities, either in industries that are seeing a demand surge or are being restructured.

Revisit your sector propositions and update your commercial real estate database (assessed value and taxes, last sale date and amount, availability for sale or rent, total square footage, amenities, zoning classes, historic status, condition, current tenants) for a post-pandemic economy.

Also, maintain relationships with industry leaders, “multipliers” (such as professional services firms, and real estate brokers) and site selectors; and/or get early intelligence from investment attraction platforms, such as ROI Gazelle, Conway Analytics, or FDI Markets with investor signals.

Learn more about Business Retention Strategies

Business Retention Strategies

COVID-19 Economic Response and Recovery

Retool Incentives to Support Small Businesses

Why:

Small businesses are being disproportionately impacted by this crisis and often do not qualify for incentive programs, due to minimum requirements on investment and jobs created. By opening incentive programs to smaller firms, cities can support local businesses through the recession and advance other policy goals (e.g. workforce, equity, living wage, etc.).


Learn more about the Tactical Guide

COVID-19 Economic Response and Recovery

Redesign your Business Attraction, Expansion and Retention Incentives

During an economic downturn, you should consider refocusing the financial incentives that were used to recruit new businesses, such as tax breaks, attractive loan financing and grants, to support retention and expansion of existing businesses.

Examples of US Financial Incentives Include:

  • Industrial development bonds
  • HUD CDBG revolving capital fund
  • EDA loans
  • Revolving capital fund
  • SBA 504 loans
  • Restoration tax abatement
  • Business retention and modernization tax credits (e.g. payroll, sales/use, investment, clean energy)
  • FastStart/on the job/incumbent worker training program

Source: Georgia Institute of Technology, 2010


Learn more about Business Retention Strategies

Business Retention Strategies

COVID-19 Economic Response and Recovery

Support businesses to speak with one voice

Why

The pandemic has highlighted the importance of cooperation between governments, destinations, and business.

To rebuild traveler confidence, destinations must be able to demonstrate visitor safety across the end-to-end journey, which requires all players to adopt a coordinated approach.

Moreover, as the tourism sector comprises mainly micro and small businesses, there is a clear role for governments and DMOs to use their convening power to help local businesses work together and be heard by policy makers.

Do

  • Do gather compelling data on the industry’s importance to the destination, as well as the impact that the pandemic has had on local businesses and workers. For example, prior to the pandemic, New York’s Hudson Valley collected data which found that tourist activity supported multiple sectors of the economy, sustained $38bn total income, reduced the unemployment rate from 12.5 to 4.1%, and saved every household an average of $1,221 in taxes.
  • Do make things easier for stretched public officials — becoming a single point of contact to understand industry wants and needs, a way to communicate to the industry, and a partner to get support to the businesses and workers who need it most.
  • Do accept that different segments of the industry may have different priorities and focus the task force on common goals — but not on the lowest common denominator.

Don’t

  • Don’t try to maintain the task force beyond its useful life, and don’t ask it to solve every challenge facing every segment. Remember that it is a temporary grouping for the purpose of accomplishing a definite objective.

To find out more

COVID-19 Economic Response and Recovery Roadmap

COVID-19 Economic Response and Recovery

Support Incubators and Makerspaces

Why:

Such projects can be catalytic, helping entrepreneurs create businesses and existing businesses to grow, thereby building local wealth. By establishing and preserving affordable spaces for light manufacturing, business incubation, maker/artist studios, and cultural activities, cities can foster quality middle-skill job opportunities for LMI residents.


Learn more about the Tactical Guide

COVID-19 Economic Response and Recovery

Rebuild Traveler Confidence in your Destination

Do

  • Do make safety measures specific, and try to secure broad adoption across a customer’s end-to-end journey.
  • Do engage city officials early in the process to seek their buy-in, help coordinate and extend measures across industry segments, and communicate them to residents and visitors.
  • Do encourage local businesses to raise awareness of local safety measures with residents and visitors, because first travelers can validate destinations’ communications and spread the word to family and friends that they would have the confidence to return. (92% of travelers say that they trust word-of-mouth recommendations from family and friends.12)
  • Do focus communications on relevant social media channels and online forums. Since the pandemic, travelers have placed greater importance on pre-trip planning, and Pinterest has emerged as a popular platform.13 Almost half of all travelers have also increased their time spent browsing social media, and many rely on online travel forums to find information about how destinations are executing on safety.14

Don’t

  • Don’t activate tactical marketing too early. Multiple surveys show that travelers will not visit your destination unless they are confident that they can do so safely. Action 3 contains advice on ways to build their confidence.

Learn more about the Tactical Guide

COVID-19 Economic Response and Recovery

Provide Access to Funds and Resources for Tourism Businesses to Adapt

Why:

Keeping local, small businesses is critical for the recovery of your tourism economy. By helping them develop new online communications and sales channels, create new lines of business, or repurpose and adapt their space, you are helping to create longterm revenue solutions.

Do:

  • Do spend time building the trust and confidence of your member businesses.
  • Do regularly engage with your business owners and provide support based on their differing levels of digital literacy.
  • Do set aside considerable time at the beginning to sort out payments from Shopify to vendors.

Don’t:

  • Don’t assume any knowledge. Create stepby- step guides, and share information on how businesses can take good photographs, buy ads, and market their businesses on social media.

Learn more about the Tactical Guide

COVID-19 Economic Response and Recovery

Provide Technical Assistance to Small Businesses

Why:

Since COVID-19, travelers, particularly younger travelers, have a heightened awareness of environmental sustainability and social and racial equity. As a result, they are more likely to look for evidence that destinations are taking steps to address these issues.


Learn more about the Toolkit

COVID-19 Economic Response and Recovery

Support Mainstreet/Downtown Businesses by Increasing Local Tourism

Benefits:

  • Facilitates additional spending at local businesses during a time when people are not traveling as much

Risks:

  • Spending will just be redistributed within the city, rather than be additional
  • Many city-backed marketing campaigns are poorly targeted, executed or measured

Impact: Medium
Implementation time: Slow
Cost: Low. This primarily is leveraging existing media and advertising resources to promote local neighborhoods.


Learn more about the Tactical Guide

COVID-19 Economic Response and Recovery

Maximize federal funding sources by using new markets tax credits (NMTC), which are available for a wide range of applications

Why:

NMTC investments can fund catalytic development projects in low- and moderate-income communities. By partnering with a CDE to access NMTCs, cities can attract third-party funding that might otherwise have had to come from the general fund.


A CDE can be a Community Development Finance Institution (CDFI), mainstream financial institution, government/quasi-government, nonprofit, or for-profit. A city government can become a CDE.

The CDFI Fund conducts an annual competition (incredibly competitive) for NMTC allocations. Applications are scored against four criteria: community impact, business strategy, capitalization strategy, and management capacity.

CDEs typically engage a consultant to support their allocation. CDEs that are awarded NMTC allocations sign an allocation agreement, before raising private investment to deploy to appropriate projects. Most NMTC allocations go to CFDIs, followed by mainstream financial institutions, and then governments.4

A benefit of becoming a CDE is the access to unrestricted funding, via received interest payments.

4: https://www.taxpolicycenter.org/briefing-book/what-new-markets-tax-credit-and-how-does-it-work

Impact:

The project created 210 new jobs in a distressed neighborhood. It is also expected to create a further 321 jobs over the next 5 years.

The company is working with local workforce development agencies to train and hire underserved, low-income residents to become technicians and professionals at the facility.

Do:

  • Be aware of NMTC application deadlines, which are shared on the Department of the Treasury CDFI Fund website.
  • Identify potential projects which are NMTC-eligible. Help projects to become NMTC-ready, through land use approvals.
  • Talk with other cities that have successfully worked with CDEs to capture NMTC investment in their community.
  • Engage local stakeholders to ensure support for the project.
  • Work with existing experienced CDEs:
  • Applying for a NMTC allocation is a complex process.
  • Most successful applicants are existing CDEs and CDFIs with significant experience.
  • Working with the CDE can ensure that your project makes it into its application, or is allocated excess credits

Don’t:

  • Don’t go into this process alone, or without advice.
  • Don’t partner with only one CDE. Multiple CDEs can invest in the same project.
  • Don’t underestimate the severity of “recapture.” While this risk is low if the transaction is structured properly and compliance is up to date, penalties are harsh (100% of the credits can be recaptured with interest and penalties).

Learn more about the Toolkit