New grant aims to keep longtime businesses in downtown Chapel Hill


By Adam Powell

CHAPEL HILL — The Town of Chapel Hill opened up an application process for a series of grants aimed at helping downtown businesses stay there.

The grants are paid for via $100,000 of American Rescue Plan Act money allocated to the town’s economic development department back in 2021.

Chapel Hill Economic Development Manager Katie Bowden said the new program is a business retention plan intended to support existing downtown businesses facing a potential relocation in the coming months. The grant program is limited to existing small businesses located within the Downtown Municipal Services District that have an imminent need to relocate due to redevelopment pressure. The program would help reduce the costs of moving their business to a new downtown location. 

“The primary purpose of this grant program is to retain existing businesses impacted by the continued redevelopment occurring on Franklin and Rosemary Streets, not to recruit and attract new businesses to downtown Chapel Hill,” she explained.

Bowden said iconic storefronts on Franklin and Rosemary streets are crucial to “maintaining an economically strong downtown and they create an ecosystem that encourages walkability and attracts visitors.”

“Post-pandemic, downtown Chapel Hill has experienced unprecedented levels of private investment, and we’ve heard from several local businesses facing relocation as a result,” Bowden said.

Bowden said the town recognizes the need to maintain a vibrant downtown is important for new businesses looking to open in the town.

“In terms of the town’s business attraction goals, Chapel Hill continues to address the long-term transformative work that will generate and retain startups, as well as attract businesses, workers and tourism.”

In October 2020, the economic development department began a planning process that culminated in the ReVive Chapel Hill Recovery & Resiliency Plan. One of the plan’s recommendations was to create grant programs that will strengthen businesses during redevelopment projects.

With this series of grants, Chapel Hill is looking to incentivize those small local businesses that have stayed loyal to downtown Chapel Hill to stay put for the long haul.

“The economic development team and community partners involved in developing the program recognize the importance of retaining local businesses that chose to make Chapel Hill their home,” she continued. “Staff looked to grant programs administered in other communities across the country to mitigate the impact of development on independent businesses.” 

The town has partnered with The Partnership for a Greater Chapel Hill-Carrboro to administer the funds. Award amounts will be based on the strength of the grant application, a scoring system established by a grant review committee and sharing by the applicants.

“Award amounts will be based on demonstrated need, in increments of $20,000, with funds dispersed as primarily as reimbursements,” Bowden explained. “Funds may be used for revenue-generating space improvements, moving/relocation costs, lease payments, or down payment assistance.”

Bowden noted, while the initial pool is $100,000, the staff hopes the first application cycle will be a pilot that informs future programs if the town can find other funding sources.

This latest grant program is one of three the town has funded through ARPA money, and recently awarded $180,000 in ReVive Recovery Grants for a wide range of local small businesses. The awards from that program were smaller, between $1,000 and $5,000 to support entrepreneurial ideas, startups and small businesses as they recover from the pandemic.

The ReVive Recovery Grant Program assisted 66 micro-enterprises and entrepreneurs, of which 70% of recipients were women-owned businesses, 44% were BIPOC-owned businesses and 16% were non-native English speakers. In addition, the town awarded $60,000 as an opportunity grant in 2022 and 2023 for the new Garden Spot, adjacent to The Lantern Restaurant on Franklin Street.

“This grant has helped to transform Basnight Alley into a pop-up event space to host food entrepreneurs testing new concepts and looking for new markets,” Bowden said.

The grant to transform Basnight Alley was developed with partners including the Chapel Hill Downtown Partnership, Durham Tech’s Small Business Center and the Chamber of Commerce. 

“An advisory group, which includes community leaders and business owners, will bring both industry knowledge and life experience to share with the participants,” Bowden said. “The market aims to bring additional foot traffic downtown, while supporting women and BIPOC-owned businesses.”

The relocation grant application is available online and will remain open until August 30. The grant subcommittee is expected to review the applications and select recipients in fall 2023. Questions about the program guidelines or application can be sent via email to

Corrections: A previous version of this story stated planning for the new grant began three years ago. The plan developed in 2020 guided all of the town’s federally-funded recovery work. Additionally, a previous version of this story stated local organizations contributed to the new relocation grant rather than the grant for The Garden Spot. TLR regrets the errors.

Clarification: The 66 micr0-enterprise recipients were part of the ReVive Recovery Grant program.

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