“It captured a lot what downtown could be,” Quintero noted.

The energy has continued with the city issuing 39 new business licenses to downtown entrepreneurs in 2009. While there isn’t any other data with which to compare this, it’s still a sign of that there’s faith in downtown’s complete revival. Want more evidence? Sweet Temptations bakery opened. A coffee shop is in the works. Also, two businesses — Rascals and Joey-O’s Barber Shop — have moved from North Merced to downtown. All this in what, statistically at least, amounts to a depression in Merced County. Visitors, even national journalists, have taken note of downtown’s electricity, even if some locals don’t see it.

“We’re believing what the statistics tell us,” Quintero said. “The numbers paint a picture, but it’s up to Mercedians to tell the story.”

To be sure, business downtown isn’t easy. Some shops are working harder than ever to attract customers and others are banding together, knowing they’re stronger united.
The groundwork for this unlikely recession-era renaissance comes after years of work by the city’s Redevelopment Association and with the support of venerable businesses that have weathered past recessions. Most importantly, there’s has been an injection of new blood from people who are primed to lead downtown to becoming the thriving core of Merced. But change is never easy.

Downtown businesses are pushing to organize and re-form a nonprofit downtown business association that will give them direct control of the budget to market Main Street and the ability to sponsor events that lure people to their shops. The backdrop for this effort is the past failure of the association and the brutal economic climate that’s made it difficult for even the strongest of nonprofits to survive.

The coming year could prove pivotal. The success of new businesses could encourage more people to take a risk and fill one of the many voids. Any failures could make people decide to play it safe.

Invest, rebuild, repeat

As a way to combat urban decay in city centers, California allowed cities and counties to form redevelopment agencies, which reinvest property tax money in areas that would otherwise fall behind. In 1974, Merced’s Redevelopment Agency designated downtown as an area in need of help.

The agency has proved to be the biggest player in the rebirth of downtown, pumping millions of dollars into the city’s core. Many of the prominent buildings downtown have been made possible through the agency because it can offer low-interest loans to finance construction and also partner with developers. The Merced Lofts, the Mainplace Theater, County Bank’s former headquarters, the Mondo Building, Bob Hart Square and McNamara Plaza were all refurbished or built with the help of the Redevelopment Agency.

The agency’s budget grows when downtown’s property values rise because the added tax revenue must be spent in the same area. The budget will take a hit with the sale of County Bank’s former headquarters to Merced County because governments don’t have to pay property tax on their buildings. Quintero estimates the city will lose between $50,000 and $70,000 each year.

The agency has another major project in the works: a high-density housing complex at 18th and I streets. Given the success for the lofts and the theater apartments, the city has taken note that there are people who’d like to live and shop downtown.

So far, the agency has bought six dilapidated homes, which will be torn down in the coming months, said Quintero, who is talking to local developers and ones across the state to see if they’re interested in partnering on the project and potentially others. The project is still several years away.

Other activity will be immediately seen. Road crews soon will be repaving 16th and 18th streets from approximately G Street to R Street. The police’s security cameras, still being tested, will soon go online. The city also plans to tout its free wireless Internet access downtown once it’s more reliable. Public art, paintings of downtown landmarks and of people, will be hung in the display cases next to the Mainplace Theater. The agency has also partnered with Valley Values to offer downtown businesses subsidized advertising slots.

While all this sounds impressive, to some, including Cigar Monkey owner Mike Siegel, it’s not enough. He’s seen city planners and their regulations stymie entrepreneurs. This is the time when the process should be streamlined, he said. Also, Siegel feels like the city doesn’t do enough to support and promote downtown events.

“It seems like at times the city is at odds with us,” he explained. “We’re the locals, not the chains. Not that we expect priority, but there should be more loyalty for the folks who live here.”

Siegel is among the people who want to establish a downtown business association that has oversight of the downtown fund, a budget made up by business license taxes charged to each downtown outfit. Siegel said he believes the city doesn’t want to let go of the fund because it’s a source of revenue.

The last association was mired in debt, the city pulled funding and membership dwindled.

The Downtown Steering Committee meets monthly to oversee how the city’s following the plans laid out in the 2007 Downtown Strategy, which lasts until 2012. The committee also suggests how money in the downtown fund should be spent. At the December steering committee meeting, Quintero promised an open meeting to downtown business owners in the first quarter of 2010 to begin discussions of forming a new merchant association. No date has been set.

Quintero said the city’s beginning to look at transitioning the Downtown Steering Committee to include more downtown business owners who rely on street traffic. He remained fuzzy on the details or any sort of timeline, except that it’s something that would be carefully evaluated and up for consideration next year.

“It needs to be successful,” Quintero said. “To just say, ‘Give me this money so I can spend it,’ that just isn’t going to work.”

Some of the most vocal business owners contribute the least amount to the fund, which typically promotes the downtown core, Quintero said. The tax is based on gross receipts, so major players, such as Save Mart and Grocery Outlet, put in close to $1,000, whereas smaller shops may only kick in $60 to $100, he explained.

He noted that if the city relied solely on the fund — about $60,000 — to run all of 2009’s downtown events, it would have been bleeding red ink. Government leaders tapped major sponsors to defray the costs.

Standing in the middle is Davidson, who uses her role on the Downtown Steering Committee to keep the city aware of her colleagues’ wishes. She’s the retail community’s main voice among a couple lawyers, a mortgage broker and a public accountant. She recalls the days when all the business owners knew each other because the downtown association would hold picnics. Now, most businesses only know their direct neighbors and a certain spirit has been lost.

“(Re-forming the association) is one thing we absolutely need to move forward with,” she said. “You’ll give the people more confidence and they’ll have a closer relationship with the city.”

Through all these growing pains, Davidson remains confident in a bright future for downtown, especially with UC Merced enrolling more students every year and the continued enthusiasm shared by the next generation of downtown businesses owners.

“This town is going to be moving and shaking. It’s inevitable,” she said. “It’s just how long. Five years? Ten years? Fifteen years? Who knows?”