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Archive for February, 2010

Cities Must Own Their Development Process – Part 2

Written by
Rickey Hayes
Retail Attractions, LLC

To be successful in the development world, a city must have integrity, character, and be true to the promises it makes. Reputation goes a long way, and it also goes both ways. A community with a good reputation that is known for being true to the promises it makes and being pro-development has a head start in the recruitment of national retail. A city with a bad reputation in the development world has a tough time convincing anybody to invest. A city that changes directions in the middle of a deal or promises incentives and then reneges may laugh it off, but a developer won’t think it’s funny. In fact, it may cost that developer thousands of dollars in engineering and design costs.

In this economy, when retailers are really examining sites and new market entry, communities that understand the retail development process are miles ahead. Cities that can position themselves to partner with the private sector to alleviate problems and provide incentives for investment are ready to reap the additional revenues that new retail growth brings to cities.

Most cities that are striving to recruit retail investment into their communities make several common errors. Most assume that they are ready to market themselves just as they are and that retailers are going to come anyway in time. Nothing could be further from the truth. Cities can and should market themselves with every available tool and technology.

Another fundamental mistake is the notion that a city can have no positive influence on a potential retailer’s site selection. Communities can and should work to influence the retailers decision to invest by providing the right data and having that data organized and easily understandable. But before sending the same old city propaganda to a potential retailer, it would be wise to take a good long look at the foundational development philosophy that currently exists in the governmental bureaucracy of a community’s development department. Perhaps the most important thing that a city can do is to make absolutely sure that the regulatory arm of the organization is “development friendly”. If a city is touting their market strengths, traffic counts, and disposable income to developers and retail site selectors, they need to make sure a pro-development atmosphere exists in the local governmental infrastructure; otherwise no matter how much marketing they do, an internal foe is sabotaging their efforts. Like I have said before: All it takes is one rogue building inspector to kill a retail deal potentially worth millions.

Rickey Hayes is the principal of Retail Attractions, LLC, a firm dedicated to helping cities and developers successfully find retail sites, close deals and improve the quality of life for our client cities.

Cities Must Own Their Development Process – Part 1

Written by
Rickey Hayes
Retail Attractions, LLC

I grew up in a community surrounded by crops and fields that depended on an agricultural economy. Anyone can plant a seed and rely on circumstance and Mother Nature to produce a harvest, but prudent farmers leave as little to chance as possible. If you want a sure harvest, the wise thing to do is build a greenhouse and create the optimal environment for growth and development.

In the retail world, wise cities are working to create that same “greenhouse environment” for their retail marketplace. As with farming, controlling as much of the process as possible will increase the odds of success. Ensuring the development process is as uncomplicated and trouble-free as possible is potentially worth millions of dollars to cities seeking retail investment. I am sure there are exceptions to this statement, but in almost every circumstance I have experienced in dozens of communities, it is my conviction that a city needs to be in control of its own economic development and retail recruiting efforts. Chambers of Commerce and other economic development organizations can help, but it is the city government that must control the process.

One key reason why the city must control the development process is because the city (or public trust empowered and managed by the municipality) controls public infrastructure including transportation, water, storm water, and sanitary sewer systems. Public infrastructure has a direct impact on development costs and timing, and ultimately the success or potential failure of a development deal may hinge on the public infrastructure. A proactive city looking to grow will maintain an infrastructure that can support growth and have a long-term plan for their future infrastructure.

Part of controlling the development process is anticipating problems and eliminating them before they become an issue. In this very competitive time, cities need to have as many of the potential development problems taken care of in advance as possible. Communities need to do everything in their power to make the development process as painless and efficient as possible. A rogue building inspector or fire marshal can impair development or delay it enough to actually kill a retail deal.

The typical development process including zoning, platting, and site plan review can move painfully slow in good economic times. The old adage “time is money” is true. Delays, unexpected fees, and arbitrary or changing requirements or standards can kill a potential deal just as quickly as financing issues or site problems. Government at all levels has the reputation for being slow and difficult, and communities need to examine their development processes and make absolutely sure any and every foreseeable problem is identified and remedied before the action begins. No reputable development group is going to try and get by codes, life safety issues, or development standards. But when a city is bureaucratic and unwilling to partner with a retailer or a development group to solve an issue or a think of a solution to the inevitable problems that arise in the complex world of retail development, even the easy deals can break down and progress slow to a crawl or stops completely.

Rickey Hayes is the principal of Retail Attractions, LLC, a firm dedicated to helping cities and developers successfully find retail sites, close deals and improve the quality of life for our client cities.

Owasso OK – A Test Case For Retail Success

Written by
Rickey Hayes
Retail Attractions, LLC

If you look at cities around the country who have experience a boom of retail growth in recent years you’ll find many of the same characteristics. All of the cities, especially suburban communities in densely populated urban growth cities, share shockingly similar traits.

  • Strategic plan for growth – The community had a growth mentality. Cities need to see growth as positive. We are certainly not talking about sprawl here but managed well planned growth. Transportation, water, sewer and technology infrastructure has to grow as well.
  • Surging residential growth – Owasso was averaging one 500 new single family residential dwelling a year. In the same time frame over a thousand upscale apartment units were also constructed. This growth has slowed somewhat, but still continues. In 2009 the City of Owasso had about 241 new single family starts.
  • Young, well educated, upwardly, mobile population – Owasso’s demographic profile revealed a higher than normal percentage of college educated, young families with stable employment and home ownership. This trend still continues.
  • High disposable income – Owasso’s average family household income was well above normal income levels and well above the threshold that national retailers tend to use for baseline comparisons.
  • Strategic location – Owasso’s location and state and national highway’s traffic flow patterns funneled traffic from a larger regional area into the urban center of Tulsa. This one criterion is always evident in “keyhole” or “portal” suburban communities and where you find the traffic flow.
  • Timing – Owasso’s growth meshed with the cyclic nature of retail development. When massive retail development came to Owasso, almost every national retailer was in the middle of a very aggressive growth mode. Retail growth and new market expansions ebbs and flows with the economy and many other variable factors.
  • Development philosophy – Owasso’s city administration built a foundational philosophy of customer service into every city department and backed it up. We saw developers and retailers as our customers and not only as customers, but as the engine that powered our local economy. There was a “can do” attitude at every level of the organization (administration, planning, public works:.everybody at every level was proactive and involved).
  • Impactful marketing material – There are two kinds of material:good kind/bad kind. The good kind is effective. The bad kind is not effective. You should let professionals do this:basic rule of thumb-concise, factual, and verifiable.
  • Use of technology – Website and GIS data and the use of other cutting edge technology. It is not enough to have the technology available but to use it in strategic ways.
  • Incentives – Almost every square foot of 4.2 million square feet of national retail that came to Owasso had an incentive attached to it. If your community is not ready to partner with the private sector to incentivize retail growth, you’re already fighting an uphill battle.
  • After care – Very important to build and maintain relationships with local retail management. Often the national retailers need assistance on marketing their goods and services, especially if they are just entering the market.
Rickey Hayes is the principal of Retail Attractions, LLC, a firm dedicated to helping cities and developers successfully find retail sites, close deals and improve the quality of life for our client cities.