Oregon Public Broadcasting

You've heard of the phrase: 'Success breeds success.' Well the opposite is just as true: 'Failure begets more failure.'

Kristian Foden-Vencil / OPB

Just one or two vacant shops along a street can give the whole area a depressed feeling. And  it’s hard to entice shoppers to a bleak streetscape.

Now, as Kristian Foden-Vencil reports, an Oregon city has come up with a fix.

On the corner of Northwest Miller and 3rd in downtown Gresham, developers have built a nice new apartment complex. On the ground floor, there's a row of empty storefronts.

It gives the area a bit of an abandoned feel. So Gresham City Council has voted to give any new business owners a 'fee holiday' if they're willing to move into a vacant storefront.

Kristian Foden-Vencil / OPB

Phillips is moving her business into one of three vacant storefronts here. And she's happy to give the grand tour.

Debbie Phillips: "We have our kitchen back here and pretty much the whole shop will be a kitchen, with a counter. And we'll have fresh baked cupcakes everyday. We're going to bake fresh, everyday."

The grand opening is scheduled for July 1st, but she's not sure yet if she's going to make it.

Debbie Phillips: "I just started baking for friends and one of my friends owns a restaurant, he said, Oh, I think I could sell these on the dessert tray. So, I started selling to him. I got my mother's kitchen licensed, because we have pets. And I just started baking out of there and I took my cupcakes around to different coffee shops and places and pretty soon they started selling there. Then people started calling. I joined the chamber of commerce and that's it. It just took off."

Phillips has spent about $15,000 to build out the shop. But she saved $5,000 under Gresham's 'fee holiday.'

Debbie Phillips: "They have a lot of different fees that were I think were hindering people.  Once they found out $100 here and $100 there. So the waiving of that was a good deal. You know, that was a good incentive. But I had planned on doing it anyway."

Next to Bella Cupcakes is Lillian's Market. It's also moving in and the owners are saving about $22,000 in fees. There are also a couple of restaurants, a radio station and a ice cream shop that are taking advantage of the deal.

Gresham City's small business coordinator, Kristin Chiles, says the 'fee holiday' is proving to be a success.

Kristian Foden-Vencil / OPB

The idea has been well-recieved so far. And it makes Gresham a more attractive place for a small business to setup shop.

But some people are worried coaxing a business to move from a garage to a storefront too soon, might stretch its resources too thin.

Eric Schmidt, the city's community development director, says city officials are wary of the problem.

Eric Schmidt: "It certainly is optional. I think small businesses have to evaluate when they do make that leap. It is on our mind, certainly we want no business to fail. We want them always to succeed. And the city looks at this, not only to get them in the door, but also how do we maintain that partnership and help them grow that business within the community."

Back at the apartment complex outside Bella Cupcakes, the building's owner Dwight Unti inspects work at Lillian's Market. He says finding tenants was difficult until the city started its 'fee holiday.'

Dwight Unti: "It's not the only factor but it is a very very ciritical factor."

Other cities have tried similar ideas. The City of Portland allowed artists to move into storefronts for a short while during Christmas.

But it's costly -- Gresham staff estimate it has cost the city $42,000 dollars in just a couple of months.

Consequently, the clock is ticking on the whole experiment. The 'fee holiday' sunsets March 31st next year.