Categories: Economy

Saving Main Street: College Towns Deal With Economic Devastation

Downtowns everywhere from Maine to California are dealing with varying degrees of economic and existential pain as a result of the pandemic, but nowhere is the pain as acute as in college towns. Cities like Ann Arbor, Michigan; Ithaca, New York and Davis, California have had to deal with a two-headed economic monster: a pandemic that has hurt the hometown population and a student population that has left town, sometimes with no set return date.

“Their economic activity has tended to insulate college towns from the swings of the business cycle,” says a report in The Hill. “But the pandemic has turned this dynamic upside down. Almost overnight, colleges closed their doors, sent their students home, suspended construction projects, and cancelled sporting events, graduations, and reunions — at enormous cost not only to the colleges themselves but to their home communities. Canceling commencement cost South Bend, Ind., home of Notre Dame, about $17 million in lost revenue.”

Amherst, Massachusetts is one of those towns. It’s home to a huge state school — the University of Massachusetts — and borders several other notable institutions including Smith College in Northampton and Mt. Holyoke College in Hadley. And it’s not just the college kids who have left the restaurants and shops wanting. There are summer camps that have been canceled, local music festivals and even the Eastern States Exhibition, a regional fair that usually fills local hotels. Amherst Area Chamber of Commerce Executive Director Claudia Pazmany says her job has been trying to generate as much goodwill and private grants for local businesses as she can. On the day PYMNTS spoke to her, she was in her car making the rounds to deliver $100,000 in grant money to various local businesses, a result of her own fundraising.

“I’m delivering checks from the second round of grants and we’ve raised $320,000 already in total,” she said, “all from private citizens and private foundations. We went after it. I was a fundraiser before all this. We got an amazing committee together and we just put out the word and it just took off. Some of that money was put toward purchasing PPE so we’re really proud. Today I’m super emotional because delivering these checks, people I guess are filled with a little bit more hope that they can pay off that one vendor or make that one payment.”

The situation is so widespread that Amherst is scheduled to vote on a proposal to increase annual water and sewer fees by an average of $100 per household, a result of a precipitous drop in water use as students have abandoned the town.

Pazmany is trying to see the silver lining in the pandemic, which is dependent at least in part of the return of students to UMass Amherst, which is scheduled for late August. Massachusetts has been one of the more responsible states in adhering to CDC guidelines and lockdown mandates, although Amherst closed relatively early — March 8. She sees local retailers and restaurants working on their eCommerce capabilities. The chamber director sees surrounding towns more willing to collaborate on relief efforts. And she sees local governments become more willing to loosen some of the restrictions that make it expensive for businesses to expand and make repairs.

“I really hope that based on the trust that we’ve built that we can move forward,” she says. “I mentioned Northampton, you know we have a river that divides us and it physically divides us and it mentally divides people. And so my true hope is that these partnerships outlive the pandemic. And that maybe we can look at our borders a little differently. And maybe we can think of our businesses a little differently. I came on board here looking at new partners from day one. And hopefully we can all move together and get things done.”

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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