In a digital age, local mom and pop shops are feeling the pinch of online competition, said City of Montrose’s director of business innovation Chelsea Rosty.
“That’s the primary difficulty, I think, for a small business,” she said recently. “It’s attracting people to come in and present, and not be shopping online.”
This past year, the U.S. Department of Commerce estimated people spent $513.61 billion online in 2018, up 14.2 percent from 2017.
Although online sales have risen over the past year, Rosty said there are ways for a small business to still flourish. It comes down to having owners who are engaged and active within the town, she added.
“A lot of these businesses get out into the community and interact,” she said. “So they leave their storefront and go to events and do things with the community.
“... I think that’s a key component to being a successful business owner in town. It’s very important to be engaged with your communities so they can put a face to the name.”
She indicated two businesses that have done that in Montrose: Chow Down Pet Supplies and Cimarron Coffee Roasters.
Cimarron Coffee Roasters owner Eric Palumbo said when he opened up his shops in both Ridgway and Montrose, he knew the shop had to stand out. He explained “anybody can serve coffee,” so his focus was more on how his coffee would make people feel.
“We want to raise people up with a good cup,” Palumbo said. “So every time somebody walks through the door, we want them to leave feeling better when they came in the door.”
A number of those customers have come from out of town. Those are the same people who are the majority of his online subscribers and frequent coffee buyers, said Palumbo.
It doesn’t hurt that Cimarron Coffee Roasters has received attention from national publications. Recently, Palumbo’s shop was named as an honorable mention for the best coffee shop in Colorado by Food and Wine Magazine.
But not every store, especially downtown ones in Montrose have succeeded in the past few months.
Rosty, who’s the Development and Revitalization Team, or DART, manager, said downtown has been a bit “stagnant.” Stores such as Pollux, which closed its doors within the last few months, have ceased operations. But, at the same time, two other buildings have been sold, she added.
She described downtown’s current situation as “things are happening but it’s a slow burn.”
“We’re pretty confident that once we get all the right things in place, it’s really going to start to come alive,” Rosty said.
One such avenue for downtown’s growth will be through opportunity zones, she said.
The City of Montrose and Montrose County have partnered on a community opportunity zone prospectus project with the help of the Department of Local Affairs. The idea is that the project will work as an outline and will be a tool to market the local opportunity zones to potential investors and developers.
But to differentiate from other communities, DART has floated the idea of a professionally done video, promoting the Western Slope town, said Rosty. The plan is that $14,000 — which comes from DOLA — would go to pay for the video, and to a distribution strategy which would get the video and prospectus to interested investors and developers.
There’s money to be had in opportunity zones. Rosty said she was told by DOLA and various other organizations that there are trillions of dollars of opportunity zone funds that need to be reinvested in the nation.
“We’re really trying to get this in front of those types of people,” Rosty said.
Montrose falls under a secondary market (behind only an urban market). That means the city will probably attract secondhand dollars, Rosty said.
“This is something that we haven’t done before like billionaires or millionaires several times over,” she said. “It’s a different market. That’s why we’re asking for that outside help.”
Three broad areas, or census tracts, in the county were among the 126 tracts in Colorado that, in April 2018, won U.S. Department of Treasury certification as Colorado Opportunity Zones. The zones, in essence, allow investors to reinvest taxable income on capital gains into an opportunity fund.
The opportunity zones program was established under the federal tax reform legislation of 2017. It allows for temporary deferral of capital gains in the gross income for capital gains that are reinvested into opportunity funds, according to the state of Colorado.
The legislation also established a step-up in basis for capital gains reinvested into an opportunity fund. This basis increases by 10 percent if the investment is held for at least five years, and by an additional 5 percent if held for at least seven years, according to a fact sheet prepared by Economic Innovation Group, which supported the federal legislation.
In certain situations, an investment held for at least 10 years may be eligible for a permanent exclusion from taxable capital gains income.
An investor also could get a 15-percent reduction on capital gains tax and any equity that has been gained from the opportunity zone, Rosty said.
Additionally, Montrose will more funds through DART after moving up to become a designed community, Rosty said. Since DART is designated as a community under the Main Street program within DOLA, the Development and Revitalization Team receives a fixed amount of mini-grants a year, she explained.
By moving up a tier, DART has access to $5,000 in mini-grant funds. That money can then go into a downtown improvement project, said Rosty.
She added the DART board will use those funds to reinstall the Hartman clock in Centennial Plaza.
The clock was given to the city back in 2004 when the Hartman Brothers who celebrated their 100th year as a downtown store by donating the clock.
Rosty said the city and DART board believe these projects and more will help get downtown going.
“We are highly focused on getting the downtown where it needs to be,” Rosty said. “Then, we can roll out these tactics to the rest of the City of Montrose.”
Andrew Kiser is the Montrose Daily Press’ sports/business writer. Follow him on Twitter @andrew_kpress.