No vacancy: Niwot fills nearly all available commercial space

Two years after the first COVID-19 pandemic lockdowns sent a shock through the local economy, Niwot isn't just back in business, it's booming. Over the past 12 months, shoppers, diners, and retailers have been flocking to Cottonwood Square and 2nd Avenue, driving sales tax revenues to all-time highs while driving the commercial vacancy rate to an all-time low. Part of this growth is due to an economy that is on the rebound from a slowdown in 2020, plus the easing of many pandemic restrictions. But much of it is also due to a long list of tangible and intangible amenities that have made Niwot resilient in the face of major shifts in daily living, according to real estate developer and local resident Cotton Burden.

"The pandemic has taught us how to work from the best of places, and Niwot is certainly one of those places," he wrote in an email interview. "Businesses have moved here from Boulder and Longmont for that reason. We have certainly seen a move towards downsizing in our Niwot and other Boulder County properties."

The town may be small, Burden argued, but it is highly accessible and offers the same essentials as its larger neighbors-fast and reliable internet, groceries, banking, and several drinking and dining options. Commercial rents also tend to be lower in Niwot than elsewhere in Boulder County, making it all the more attractive to businesses seeking a "smaller footprint."

Indeed, since the summer of 2021, at least nine businesses have made Niwot their new home: Farow Restaurant, Wandering Jellyfish Bookshop, The Little Shop, Niwot Gig, Blessings Day Spa, Una Vida, Chill, Rackd Fitness, and Fritz Family Brewers. As of Feb. 28, there was just a single commercial space available for lease in Niwot, putting its vacancy rate well below the Boulder County average.

Filling Niwot's empty storefronts has been the longtime goal of the town's economic development director Catherine McHale, who echoed Burden's comments about prospective businesses seeking smaller spaces (and smaller rents) since the pandemic. She further noted that many of these owners are seeking something else they can't get in Boulder or Longmont.

"Since even before the pandemic, we've been working hard to communicate Niwot's character and charm to visitors, residents and businesses," she wrote in an email. "This was the aim of the 'Small Town Big Heart' campaign... . Especially with everything that's happened, this has been a consistent message of what Niwot means to its community, and I think that this has attracted businesses who are looking for something more than a faceless Main Street. These businesses want to participate in our community."

A similar set of dynamics kept Niwot's existing stores and restaurants afloat during the pandemic, McHale continued, as residents heeded the call to shop "small and local". The town was also a refuge for visitors eschewing crowds at larger stores, or hoping to spread out and shop at one of the many new pop-up events. As a result, revenues to the Niwot Local Improvement District grew at a time when many local municipalities were seeing shortfalls. Between 2019 and 2021, annual district collections increased 28.8%, from $209,465 to $269,287.

"All of our local businesses have stepped up to support each other, and to keep the message going out to consumers that there is lots to see and do in Niwot," McHale said. "We have been able to bring back some of our larger events, as well as new events which were created to allow for more outside activity, and are now just part of the fun vibrancy of town, which is very attractive for shoppers."

That trend has only accelerated with the influx of new stores and restaurants. Almost half of the LID's 2021 ($132,154) revenues were earned in the last five months of the year, including a monthly record of $29,164 in September. Nor are there signs of slowing so far in 2022, as the pandemic recedes even further. In the short term, that's great news for Niwotians, as more commercial activity equals more revenue for the LID, which equals more money for public events and town infrastructure. In the long term, however, that picture is more complicated.

Aside from the coming mixed-use project at 210 Franklin St., new commercial development is at a virtual standstill in downtown Niwot, thanks mostly to lingering questions from the 2018-19 building moratorium imposed by Boulder County. The town's small size also works against it here, as there are few places for a new commercial district to emerge. Burden warned that could lead to high business turnover and higher rents in the coming years, negating one of Niwot's strongest competitive advantages.

"I think that Niwot's charm has been discovered and that it is here to stay," he said. "Unfortunately, there is virtually no opportunity to improve upon Niwot's lack of critical mass [of businesses], so the economics of the town are dependent on attracting strong business operators to the space that is available. If the charm continues, the limited supply of space will force rental rates to climb, eventually bringing Boulder and Longmont back into the conversation of where best to locate a business."

McHale has similar reservations about Niwot's lack of commercial development, but pointed to the business community's recent response to the pandemic as a reason for more optimism.

"I am excited about the potential we have here because every one of these downtown businesses helps the others symbiotically," she said. "In an ideal world, for a sustainable downtown, it would be great to see appropriate and viable development in some areas... This will be an important issue for the community to address in the next couple of years if we are to keep Niwot's commercial district vibrant, and for it to support its residents."