Van Wert Case Study
Should we accept the decline of our small towns as inevitable or is there a strategy that offers the potential for revival?
The Problem in Van Wert
In 2019, a group of business and civic leaders in Van Wert, Ohio, decided to take action to address their community’s steady and drastic decline. What was once a beautiful downtown had been gutted by a highway bypass, and the presence of giant retailers and wholesalers outside the downtown streets. These, and many other factors, had gradually turned thousands of vibrant towns across America, including Van Wert, into ghostly memories of bygone days.
Van Wert’s core contained 116 buildings, 100 of which were not occupied by government and institutional tenants. But only 3 of them were fully utilized. Eighty buildings were in such disrepair that they were in danger of collapsing. Indeed, one structurally unsound building collapsed into the City’s street at 3 AM. Deplorable conditions existed in many of the buildings; they were filled with trash or littered with the dead animals.
Eric Doden realized that the traditional approach of redeveloping one building at a time within such a town would have negligible impact. And it would not be profitable. Building owners in Van Wert had long faced a similar problem: where could they obtain the $2.5M needed to restore a building that was only projected to be worth $1M after they completed the renovation?
Pago USA’s Solution
Small towns needed big thinking; they needed scale. Eric Doden sought a partnership with Steve Smith of The Model Group. He also recruited Eric Shields, an Indianapolis based consultant on economic development. Needing a name for this new company, Doden discovered that pago was the Latin word for village. Pago USA was the ideal name for a company that would be focused on a new strategy for the restoration of the American village.
The newly formed team behind Pago USA quickly realized that you cannot fix what you do not own. Despite best efforts, most of the owners of buildings in small towns lack the capital, access to bank loans, and expertise to do it on their own. Federal and state tax credits are most assuredly out of their reach. To radically alter a downtown, one entity must own as much of its buildings as possible. The key to Pago USA’s plan for Van Wert was local ownership, not out of town investors or developers.
On May 3, 2019, a handful of influential leaders in Van Wert agreed to place $3M in a fund to purchase buildings through the Van Wert County Foundation. The initial $3M focused on must-have buildings, purchased at an average price of $75,000. Moving quickly, the Foundation, with Pago USA’s assistance, acquired 44 properties by December 2020.
Today, the Foundation owns 53 buildings. The initial effort led to a $46M investment to restore 20 properties, as of August 2024. The stage is set to restore a majority of downtown Van Wert in under 10 years, including all of its historically significant assets.
The Partners Who Made is Possible
- Andy Czajkowski, the president of Statewide Ford Lincoln, and chair of both the Van Wert County Foundation and the Business Development Corporation
- Tom Turnwald, president of National Door and Trim, brought others to hear Eric’s message and plan for the city.
- Chuck Koch, sat on various boards and raised plenty of money for local charities. Chuck is an attorney who has handled many projects of the Van Wert County Foundation, including its downtown efforts. In 2021 he would become chair of the Foundation.
- Scott Niswonger is a local boy who made good. He has donated millions to the community, most of it in the Niswonger Center for the Performing Arts.
- Seth Baker, the CEO of the Van Wert County Foundation, was enormously valuable and forthcoming with information and suggestions. The Foundation was also responsible for firing the starting pistol and making the initial investment in the downtown restoration.
- Gary Clay, Bill Purmont, and Mark White were also at the initial May 3, 2019, lunch where they gave generously their time and insights
The Impact Achieved
The Van Wert County Foundation spearheaded the revitalization of downtown. Now, it has the ability to execute a long term vision, even a century into the future. The Foundation has the capacity to, and a natural interest in, preserving and maintaining its downtown.
There has been a revival of commercial activity on the main streets of downtown Van Wert. Entrepreneurs of boutique shops and restaurants, new and old, were eager to get behind the vision for downtown. The process of curating more retail and supporting new entrepreneurs continues.
The residents of Van Wert have a renewed sense of pride in their community. Business owners are optimistic about the future of their space and are ready to work alongside the Foundation.
Lessons Learned Throughout the Process
From a purely financial perspective, the Van Wert project does not check all the boxes. Whether due to economic distress or low rental income, the appraised market value of the final downtown “product” is projected to be $40M. But the cost of restoring 54 buildings is closer to $100M. Although the value will eventually grow beyond $40M, the greatest value is that provided to the people of Van Wert and the surrounding communities. And with Pago USA’s model, the incremental value created stays in the community in perpetuity because the owner is the community, not a developer. Van Wert saved itself and has become an attractive and beautiful place for both new and existing residents. Restoring blighted and broken buildings has given residents hope and improved their quality of life.
The Van Wert project shows that a community can work to overcome the effects of decades of decline. That outside forces can be overcome with vision and strategy. The allure of small-town life is deeply rooted in our history, and rehabilitating our downtowns and bringing new life to Main Street is a significant step toward human flourishing.
When a rural Ohio town can quickly fight its way out of sixty years of population stagnation and downtown decay, we should take note. It should inspire all of us who live in a small town, or came from a small town, to roll up our sleeves and get to work. What will you do and what will your community look like?
