Northampton’s economic future in hands of local banks

Author: Lauren Leigh Rollins

Publication Type: Op-Ed/Guest Column/Letter to the Editor 

Original Publisher: Daily Hampshire Gazette

Link to Publication:

Scores of Northampton residents gathered at the corner of King and Main streets last month to protest the installation of a new sign over the former Silverscape building. The “centerpiece of Northampton” was officially sold to JP Morgan Chase last September after being on the market for nearly two years.

Nearly 1 in 5 storefronts downtown are currently vacant — roughly 18% of those have been empty for over a year. Many reasons for this are complex and difficult to control locally.

But the great white whale hogging the unicorn’s rainbow crosswalk isn’t.

According to 2022 Census data, women make up 58.4% of Northampton’s population, but only 22.2% of its business ownership. Of the Northampton Chamber of Commerce’s 489 registered active members, a mere 10% identify as woman-owned.

These disparities of representation and opportunity are far worse for BIPOC entrepreneurs. Despite making up 17.6% of the population, they’re such a small percentage of business ownership that the number is suppressed for “not meeting publication standards.” By the Chamber’s numbers, only 1.43% of registered businesses identify as BIPOC owned — only one of those is Black-owned (0.2%).

How did we get here? The same way all broken systems do. Top-down gatekeeping and stubborn adherence to a failed status quo.

Despite increasingly excess supply, commercial rents have barely budged since before the pandemic. After four years of vacancy, the former Faces location is renting at roughly the same price as in 2019.

When prices don’t adjust according to free-market principles, it’s because someone’s gaming the system. In our case, it’s the greed and corruption of a very small, monopolistic group of white, male downtown commercial landlords — and the commercial real estate brokers who shill for them.

Their “business strategy” is to keep rents far higher than the market supports and then claim tax “losses” when locals can’t afford to rent them. This is an even more lucrative strategy for historic buildings, as the maintenance costs make losses look even more stark for the IRS’ benefit (whether they’re doing the maintenance or not).

Subject to this racket, leasing the space vacated by Faces — as is — would cost a local start-up nearly $400,000 annually in rent alone. Even a portion of the space would require significant build-out; raising the cost of initial investment exponentially — before decorating, equipping or buying a stitch of inventory. These numbers fail virtually all retail or restaurant models at inception, but especially those of historically excluded and marginalized people.

When leasing is cost-prohibitive, purchasing becomes the only way to bypass the regime. It also creates equity owners can borrow against to keep doors open when they’d otherwise close.

But because most buildings on Main Street have retail at the street level and residential property above, they’re zoned as mixed-use and don’t qualify for residential or commercial loans. Instead, they require a “portfolio” loan. Whereas there are many programs and products that help first-time homebuyers purchase with limited cash down, portfolio loans require a 30% cash down investment.

If Silverscape’s $1.3 million sale price had been eligible for terms similar to a residential loan, a local startup could have purchased the property for as little as $40-60,000 down, as long as their business could afford the monthly payment. The owner could also occupy the residential space to reallocate their housing costs toward the business —and increase their share of risk for the lender’s purposes.

Subject to portfolio lending, that same property’s down payment is $390,000. No local start-up has that amount of cash. Even if it did, it would be irresponsible to tie it up in a down payment considering a new business’s need for liquid capital.

This makes most of Main Street unsuitable for residential purchase, for business purchase, or even for both—to anyone except the same corrupt landlords or outside corporations who don’t require loans at all. It also quietly guarantees Northampton’s economic future will be run into the ground by outsiders or by a minority that doesn’t represent us or our values.

Who has the power to change the system? All local banks that claim a commitment to community investment or diversity, equity and inclusion initiatives. Six-figure annual community grants simply aren’t sufficient to end systemic bias in economic opportunity. But local lenders have a real chance to innovate their portfolio lending practices to invest in real change, share more risk and reap greater reward in the community than Chase Bank ever will.

It takes only the courage of their leadership to innovate a new path forward.

Lauren L. Rollins is the founding president and CEO of the Western Massachusetts Policy Center, a new model of grassroots, community-led, antiracist think tank and vocational policy training school. She is also a principal adviser at Equity Based Dialogue for Inclusion (EBDI), a Black- and Latinx/e-founded diversity, equity and inclusion consultancy in Cambridge. She can be reached at