Hampton Beach Master Plan: Economic and Tourism Recommendations
This section begins with a summary of the proposed vision for economic revitalization in the Hampton Beach area. The vision section restates many of the points made in both the Economic Conditions sections to provide a basis for the suggested economic strategy. The remainder of this section outlines specific short, medium, and long-term steps that will help Hampton Beach achieve its vision for future economic vitality.
Recap of Present Situation
The economy of Hampton Beach is primarily based on tourism despite gains in office and industrial employment in other sections of Rockingham County. Employment in the Town of Hampton is heavily concentrated in seasonal, low-wage retail and service jobs, with Service jobs largely comprised of hotel and restaurant employment. The labor pool for many of these seasonal jobs is extremely limited, and business owners in Hampton Beach have found it necessary to hire international students to fill summer season positions in recent years.
During the non-peak tourism months, the economic identity of Hampton Beach changes completely. Many of the summer cottages in the beach area become low-rent "permanent" homes for people working in southern New Hampshire and the Merrimack Valley of Massachusetts with few of Hampton’s residents actually working in the Town. Many of these off-season residents work in jobs with odd hours; and therefore; are not even in Hampton Beach during business hours to support the retail businesses that stay open throughout the year. The truly permanent population of Hampton Beach—mainly retirees—does not represent the target market for the beach area’s retail businesses, even though these people could potentially spend their retail dollars in Hampton Beach. Clearly, the year-round population of Hampton Beach is not inclined to support the existing retail businesses in the area.
From an economic standpoint, Hampton Beach has the least desirable type of tourism, as the typical visitor does not spend much money but contributes negatively to traffic and environmental problems. Visitors to the Seacoast are more likely to be day-trippers and spend less money than do visitors to any other region. One positive sign is that those who do stay overnight on the Seacoast actually stay longer on average than do visitors to any other region in the state.
On a national scale, the statistics of Hampton Beach’s population are far more comparable with those of middle-class beach towns like Old Orchard Beach, ME, Ocean City, MD, or Asbury Park, NJ than with upscale communities like Kennebunkport, ME, Rehoboth Beach, DE, or Point Pleasant Beach, NJ. Key areas in which Hampton Beach differ from these upscale towns are its younger population, lower average household income, high proportion of renter-occupied housing units, and low median home value.
Economic Vision for Hampton Beach
Based on the above review of the economic situation in the Hampton Beach area and feedback from the findings of the Economic Needs Assessment, ERA has formulated an economic vision for Hampton Beach. Part of this vision was based on the fiscal impacts of establishing different types of year-round residential populations (see Appendix III).
This vision offers a snapshot of Hampton Beach at some point in the future, following the implementation of the Master Plan. The points below outline the elements of the suggested economic vision for Hampton Beach:
- Hampton Beach is an economically diverse, year-round community, with a stable base of residents and businesses.
- Tourism to Hampton Beach is a vital element of its economy, with tourists of all income levels and interests staying at many hotels, inns, and cottages in the area.
- In addition to its summertime appeal as a recreational destination, vacationers also find the natural beauty and beach town atmosphere of Hampton Beach attractive in the spring and the fall.
- A large number of retirees from Boston, Manchester and other larger cities in New England call Hampton Beach home and provide a significant market for retail and service businesses in the beach area.
- Hampton Beach is a haven for small businesses as it offers ample opportunities for entrepreneurs to start and expand businesses in an attractive waterfront setting.
- Hampton Beach’s growing business community attracts new, permanent residents to the Town of Hampton, who come to take new jobs with good wages.
- Residents and visitors alike enjoy strolling along the pleasant beachfront and shopping in the stores in the commercial district of Hampton Beach.
To make the above vision a reality, a number of major interventions must occur. Hampton Beach in the year 2001 is dramatically different than the above statement. The following subsection contains short, medium, and long-term economic strategies aimed at helping Hampton Beach realize the vision for its future economy.
Economic Strategies for Hampton Beach
Particular economic strategies for the Hampton Beach area will need to be implemented in various phases over time. For planning purposes, proposed action steps can be divided into three different time frames: short-term (1-2 years), mid-term (3-9 years), and long-term (10-50 years).
Economic strategies fall into one of three categories: economic incentive and economic development programs, marketing programs and special events, and physical improvements. The three following sub-sections outline suggested short, medium, and long-term economic strategies, as well as a matrix of these strategies, divided into the three time periods and three categories, is included at the end. The recommended economic strategies follow.
Short-term Strategies (0 - 2 years)
Strategy 1. Establish a Business Improvement District.
Historic downtown areas around the country have found themselves at a competitive disadvantage over the past several decades with shopping malls and retail "power centers." A major contributor to the inability of downtown areas to compete is that malls and shopping centers are owned and managed by one entity that can very effectively control the visual environment on and around the property. In contrast, in a downtown area, each parcel is owned by a different entity with different levels of commitment to maintaining an attractive and safe environment.
Business leaders in many historic commercial districts around the country have reacted to the decline of downtown by adapting the "central management" model that has proven so effective in shopping malls by creating Business Improvement Districts (BIDs) or other commercial district management organizations. A BID functions by raising money from all property owners in a special assessment district with a district tax; this tax money is then pooled to fund efforts like landscaping improvements, marketing services, public safety, street and sidewalk cleaning, and transit services. Taxes can be assessed in many ways, including a percentage of property value, a charge per square foot of commercial space, or a charge per linear foot of street frontage.
Hampton Beach is fortunate to already have a BID-like organization in place—namely its Village Precinct, which could be substantially changed to become a BID organization. The Precinct, which was established in 1907 to provide fire protection to the beach area, is funded through a property tax assessment to all properties, residential and commercial, located in its district. Over time, the Precinct has taken on several of the roles of a BID including advertising and marketing, and special event programming. The Precinct is, in fact, planning to cease its fire protection activities in the immediate future and turn that role back over to the Town of Hampton, and in doing this will free up additional resources to expand its activities.
The only disadvantage of the Precinct’s current structure is that BIDs are usually structured as non-profit organizations that are able to receive foundation grants and state and federal money for façade rehabilitation, pedestrian improvements and other capital investments. The Precinct, as a public taxing jurisdiction, is not eligible to tap into such resources. It is, however, able to raise money through public means, and it could feasibly have the Town float a revenue bond to pay for new parking construction and the acquisition of shuttle buses, and then take responsibility for managing the parking facilities.
Another issue that needs to be rectified is the limited operational period of the visitor center at the Seashell Stage. It operates from April through October due to its location in a seasonal structure. There are plans to improve the facility so that the visitor center can remain open year-round, but these plans hinge upon decisions made at the state level. In order to help create a better environment for visitors, a temporary year-round location should be obtained, either through funds from the Town, Precinct, Chamber, a newly established management entity. If the state park does opens a permanent facility, the visitor center could move back into the park.
As such, a BID organization should be established to manage core area of Hampton. The Hampton Beach Village Precinct is a possible candidate for the job only if its present organizational structure is substantially changed to take on the legal and financial obligations of a BID.
Strategy 2. Establish a network of economic development resources.
The primary obstacle to economic change in many communities is a lack of available capital or technical knowledge to undertake real estate redevelopment or to start new businesses. Without capital, potential investors and entrepreneurs are unable to qualify for necessary financing from lenders to initiate economic activities. Without technical knowledge, those with capital may be unwilling to take on investment risk.
In recent years, governments and private enterprise have teamed up on countless occasions to provide potential investors with the capital and technical skill they need to forge ahead with their projects. The State of New Hampshire offers a number of economic development services aimed at closing the capital and skill gaps, including its Community Development Finance Authority, its Community Development Block Grants Program (CDGB), and its Small Business Development Center.
In addition to these public sources, a nationwide network of Community Development Venture Capital (CDVC) funds have popped up in the past 15 years. CDVCs are geographically-targeted, non-profit organizations that provide capital and technical assistance to community-based entrepreneurs lacking the necessary equity and/or expertise to start or expand a business. At least two CDVCs could potentially serve Hampton Beach: the Seacoast Business Alliance Corporation in North Hampton, and the New Hampshire Community Loan Fund in Concord. The former provides funding and technical assistance programs for businesses on the Seacoast, and the latter provides capital for the development of low to moderate-income housing all over the state.
In the short term, the Town of Hampton should create a resource manual of economic development assistance programs and provide a contact person, either with the town government or with the Rockingham Economic Development Corporation (REDC). These locally based sources can put potential investors and entrepreneurs in touch with people who can provide them with the capital and technical knowledge that may be preventing them from reinvesting in Hampton Beach. REDC can also offer funding through its regional loan fund that targets CDBG dollars to help bridge the capital gap for specific economic development initiatives in the region.
Strategy 3. Create incentives for reinvestment in existing lodging properties.
Many of the hotels, inns, and rental cottages in Hampton Beach have deteriorated in recent years. As long as lodging properties continue to generate steady income each year, operators and property owners have little incentive to renovate their properties. As the condition of properties worsens, the overall visual environment becomes blighted and the public’s perception of the area becomes more negative. Although towns in New Hampshire cannot offer property tax abatements, other options are available. One option would be for the local redevelopment authority to borrow low-interest State of New Hampshire Business Finance Assistance (BFA) Corporation loans for redevelopment and pass these loans along to investors. Improving the condition of the stock of lodging accommodations in Hampton Beach will set the stage for drawing more overnight visitation and, in turn, increase the per capita spending of visitors.
First impression of a lodging business for visitors that arrive from the southern gateway
Strategy 4. Create more activities in Hampton Beach during the shoulder and off-peak tourist seasons.
As with many other beach communities, Hampton Beach suffers from being too crowded in the summer and not crowded enough in the winter. Since the beach area’s main attraction is the ocean and the beach itself, its popularity is at its peak during July and August when people seek these attractions to swim, sunbathe, and enjoy other beach activities. Since these months coincide with the summer school break, families flock to Hampton Beach en masse, creating huge crowds. Visitation and tourism drops significantly once children go back to school and the weather starts to get colder.
In order to extend the tourist season, Hampton Beach needs to create more activities and excitement in the "shoulder" months of April, May, September, and October when the weather is still nice enough for other outdoor activities and performances. There are opportunities for the winter months as well. The Town already holds a "Penguin Plunge" in the winter. Other communities have winter events that attract thousands of people by using themes that revolve around holidays, food, and outdoor activities.
This can be accomplished in the short-term by establishing ongoing programs like a farmer’s market or by having a seasonal, weekend-long festival such as a regatta or a hot-air balloon race. Programs like these could continue to be organized by the Hampton Beach Village Precinct, Hampton Chamber of Commerce, or a business improvement district. Once such programs are in place, the gaps can be filled in with effective marketing programs.
Furthermore, most events at the Beach are held between May and October. There are only a couple advertised events during the winter or spring seasons. The New Hampshire Special Olympics sponsors the Penguin Plunge, a mid-winter event that has attracted several thousand people over the past two years. Other communities in New England have sponsored successful winter events such as Hot Chocolate Follies in Fall River, Massachusetts. Possible off-season events could include "First Night," "Winter Festival," or a spring kite-flying contest.
Strategy 5. Create incentive programs for construction of new and varied types of housing.
Housing construction in the Town of Hampton has not kept pace with construction in neighboring communities on the Seacoast. A likely reason for the lack of construction is that the value of land is correlated with its proximity to the ocean, and high land prices are common deterrents to housing development. Since housing prices in Hampton Beach are simply not as high as in nearby beach areas like Rye, the development economics for new housing simply do not work for developers. For this reason, the Town of Hampton should create incentive programs to encourage the construction of new housing. This can be accomplished in a variety of ways, including land cost write-downs for developers, low-interest construction loans, federal rehabilitation tax credits (for reconstruction), and density bonuses for low to moderate-income housing set asides.
The availability of low to moderate-income housing is becoming more important as home values rise on the Seacoast. In fact the New Hampshire Housing Finance Authority reports that the "affordable" housing payment for a moderate income family (80% of median income) was only 62 percent of the payment required to purchase a home at Rockingham County’s median housing price in 2000, the lowest ratio since 1990.
Beyond the issue of new housing is the issue of housing diversity. A hallmark of a vibrant community is its ability to support a range of housing styles and prices. Since much of the existing population of Hampton Beach is low to moderate-income, it is important to not foster "gentrification," where current residents become priced out of the market. Developers can be enticed to build at higher densities in appropriate areas if their projects include units set aside for low to moderate-income residents. Age diversity is also a factor since many buyers of retirement homes will prefer a luxury condominium to a similarly-priced house and often do not want to take on the hassle or expense of home maintenance.
Growth of condominiums has characterized the housing market of Hampton Beach
Strategy 6. Provide access to capital and technical assistance for professional businesses.
Hampton Beach is conveniently located on the Atlantic Ocean, within easy driving distance from airports and employment centers in Boston, Manchester, Portsmouth, and Portland. As such, it is a potentially desirable location for "lone eagles" that can work independently from their homes or "urban refugees" who want to maintain their businesses, but are seeking a more relaxed environment than in a larger city. A major component of access to any capital or technical assistance programs should be aimed at such migrating businesses. The State of New Hampshire and the REDC are constantly developing these contacts and can provide leads for businesses that may find Hampton Beach attractive.
Another way to assist prospective businesses would be for the Town and/or a redevelopment authority to acquire an older commercial building and refit it as a business incubator facility. This sort of facility may hold appeal for small, growing technology firms that may be unable to afford conventional office space in the Route 128 corridor around Boston, and would be willing to move a bit further away to get affordable space in an attractive location.
Mid-term Strategies (3-9 years)
Strategy 1. Acquire sites for housing and solicit development partners.
Once the Town of Hampton has begun the process of overhauling the character of the housing stock in Hampton Beach, interest should build among developers to build new units in the beach area. As developers show interest in Hampton Beach, it will become crucial to maintain control over the type, density, and character of new housing so that it fits in with the future vision of the beach area.
In the interest of encouraging development while remaining faithful to the Hampton Beach Area Master Plan, the Town can be proactive by acquiring priority sites and issuing Requests for Proposals (RFPs) to developers. The Town may choose to manage such a process either directly through its government or by creating a redevelopment authority with municipal powers such as eminent domain and the ability to issue bonds. Through this process the Town can encourage a development that is "developer ready" by assembling parcels, updating site infrastructure, and obtaining the proper zoning itself, thus removing potentially costly and time-consuming barriers to private developers. If developer interest is lacking, the RFP process can be aided by offering incentives to developers such as land write-downs, ground leases below market value for the first few years of operation, or low-interest construction loans. Land write-down is an incentive program that reduces the cost of acquiring land to a potential developer. Land cost is often the primary barrier to making the economics of a project work, and many towns and redevelopment agencies choose to acquire land and sell it below market value to overcome this barrier and stimulate development.
Strategy 2. Diversify retail offerings in the beach area.
Most businesses in Hampton Beach either operate only in the summer months or have significantly lower sales in the non-summer months. The key reason for this falloff is that retail businesses in Hampton Beach tend to be aimed at the tourist market. While increasing the length of the tourist season would certainly help retail businesses remain competitive, a more viable strategy would be to attract retail businesses that serve the year-round resident population.
Since New Hampshire does not have a local sales tax, the "leakage" of retail dollars to the next town does not have the obvious fiscal effects on a town that it does in other states. Retaining retail dollars does, however, have three positive impacts on a place. The first is that greater retail sales equal higher property values, thus increasing the tax base. The second is that retail businesses tend to act synergistically in that ancillary businesses such as dry cleaners, video stores, and bakeries tend to cluster around anchors like grocery or drug stores. For this reason, if Hampton Beach had a full-service grocery store, other retail businesses would find it more attractive. This feeds into the third benefit of retail— developing a critical mass of retail goods and services creates a sense of place and contributes to the image of a place. Potential locations for these uses would need to have adequate access and visibility, such as along Ashworth Avenue.
For all of these reasons, Hampton Beach needs to attract more year-round retail businesses aimed at its resident population by using various incentives. This task logically falls to the Business Improvement District, which can leverage its resources to market space and/or vacant land in Hampton Beach to either local or national retail tenants. The Village Precinct can put together an attractive brochure containing information on the location, market demographics, and natural environment of Hampton Beach and use it as a marketing tool. Local commercial real estate brokers should be included in the development of marketing materials, as they are likely to be the source of tenant leads. The Town or Village Precinct can offer potential retailers a certain amount of money per square foot to help install furniture, fixtures, and other items to renovate retail space.
Strategy 3. Acquire sites for new lodging development
One way to help change the type of visitor that comes to Hampton Beach is to diversify and improve lodging options. The development of one or more new full-service hotels would not only draw a more affluent tourist, it would also provide opportunities for residents to hold events like weddings and banquets in a special environment right on Hampton Beach. As with the residential development initiative, the most efficient way to accomplish this would be to assemble and prepare a site (or sites) for hotel development and issue an RFP to prospective developers with either the town or a redevelopment authority managing the process. Again, some economic incentives may be warranted.
Strategy 4. Create new transit options.
Building on the parking shuttle program, a more comprehensive circulator bus system should be introduced in Hampton Beach. This bus can be modeled on the municipal bus system in Ocean City, Maryland, where a $1.00 charge buys an unlimited daily pass. If beach goers want to take a break from sunbathing to visit restaurants or shops, the trolley system would allow them to travel around Hampton Beach without moving their cars, or it would allow them to return to their cars more easily with their beach equipment. In addition to buses, the network of trails being developed will allow pedestrians, in-line skaters, and cyclists to circulate without driving. Some areas may have to have separate uses such as in-line skaters and pedestrians along the boulevard.
Long-term Strategies (10 - 50 years)
Strategy 1. Keep tabs on existing businesses.
The double-edged sword of business development is that businesses that move to a new location today could grow unsatisfied with the location over time and may re-locate again. While long-term improvements to Hampton Beach will undoubtedly create an increasingly attractive business environment, other considerations may eventually cause businesses to rethink whether or not they want to be located in the beach area. For this reason, the Town must coordinate with the Village Precinct, the Seacoast Business Alliance Corporation, and other economic development organizations to track the growth and the changing preferences of businesses. By conducting an annual or semi-annual survey of businesses in Hampton Beach and maintaining active dialogues with businesses, the Town can keep accurate statistics on its business activity and can continue to serve its business community effectively.
Strategy 2. Tie into regional transportation networks.
Traffic along the Interstate 95 corridor continues to increase, making the experience of driving up and down the Seacoast more difficult with each passing year. Additionally, growth in the Interstate 93 corridor from Boston to Manchester and the completion of Route 101 is adding to east-west traffic in southern New Hampshire.
As automobile traffic worsens, other modes of transportation are becoming more and more important. Later in 2001, the Boston and Maine Railroad is set to reopen as part of Amtrak’s network, providing rail service from Boston to Portland with a stop near Hampton in Exeter. While this train will initially only run four trips per day, it is likely to spur more rail development in Northern New England over the next several decades. Tourism to Hampton Beach could be helped substantially by running an express bus service from the Exeter station to Hampton Beach to offer a car-free alternative for travelers coming from Boston or Portland. Over the next 50 years as more train lines are reopened, perhaps someday Hampton could again have a train depot of its own.
Strategy 3. Identify new housing markets.
Demographers have a saying: "You cannot expect people to change; you can, however, expect them to die." As a result, retirement housing will only continue to be successful in the long-term if the supply of retirees continues to grow. Unfortunately, for communities banking on retirement as an economic engine, the baby boomer population that is retiring right now is far larger than the Generation X population that will be retiring in 30 to 40 years.
The long-term implication of this generational shift is that retirement housing in Hampton Beach will be a very important part of its population in the short to Mid-term; other populations, however, must be attracted in the long-term to ensure the continued vitality of the area. This relates to the issue of stability—if children grow up in the same house in Hampton Beach and do not move around each year, they are more likely to return as adults and raise their own families there. As the available populations change over time, the ability to attract successive generations as residents is very important in maintaining a stable residential base.
The following matrix page summarizes proposed economic strategies for Hampton Beach. Strategies are divided by time frame (short, medium, long-term) and by type of initiative (economic incentive and economic development programs, marketing programs and special events, and physical improvements). This matrix is intended for use as a discussion tool during the review of the Master Plan.
Economic Incentive and Economic Development Programs
Marketing Programs and Special Events