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Archive for March, 2012

What’s in Store for 2012? (Part 3 of 3)

“NEW DEVELOPMENT PARADIGMS AND TRENDS”

Written by
Rickey Hayes
Retail Attractions, LLC

In our last two blog posts we discussed how local politics play a big part in retail and economic development for cities, especially when communities have to compete for every advantage in these days of growing expenses and declining revenues. As we mentioned before, the model for retail development in cities has changed radically. Much stricter guidelines and more scrutiny at each level of the process is resulting in far less growth and causing cities that need and desire to grow their retail base to think in new ways.

Gambling on the future is always a risky thing, but it has always been a part of the risk of development. Betting on the cycle is fun and profitable if you get it right, and a killer if you get it wrong. The good news is that there are some encouraging signs in the retail arena. Bookstores, and electronics retailers are suffering, but retailers like T.J. Maxx, Marshalls, Petco, and almost all the “dollar” stores are seeing strong growth. In some parts of the country, retailers are still struggling and the evidence indicates that consumers are still sensitive to pricing and that people for the most part are shopping for bargains and the greatest value for their money.

We are seeing some grocery growth across the region, and, because of the economy’s effect on the housing industry, many grocery chains are still very cautious and are taking advantage, as are lots of other retailers and restaurants, looking at 2nd generation space, infill, and redevelopment opportunities. In some markets, not in all, department store closings have created caverns in malls and in power and strip centers that have led to redevelopment challenges for owners. In certain areas, de-malling will benefit both owners and consumers as new retail growth creates new challenges to find exciting and more efficient shopping experiences for communities and consumers.

Across the board, there are many challenges to retail growth. Without healthy and sustained job growth, retail may survive but certainly new growth will be needed to cause it to thrive. Retail Attractions has always preached that new retail growth in cities gives them a boost in recruiting new job opportunities. Retailers are all concerned about internet sales opportunities, both in relation to their own increased sales, and negatively as to how those online sales pinch their traditional real estate models. New efforts to make the collection of sales taxes for city governments easier on internet sales may be good for cities, but they are increasingly becoming more tangled in the political winds at the federal level.

Last but not least, cities should not be shocked when retailers in many genres begin to downsize their boxes to become as efficient as possible. This is already happening in many of our client cities. Cities should assist retailers with all available means to help them improve their efficiency and over-all sales per square foot. Justice (a clothing outlet targeting girls aged 7-14), for example, plans to open 55 stores in the US, but also plans to remodel over 40 locations. Old Navy has already remodeled numerous stores to downsize and re-fit into smaller spaces.

Retail Attractions has relationships with retail and restaurant tenants and would love to help your community market itself to retail growth. Cities need to learn the valuable lesson of doing what they do best, which hopefully is building new infrastructure for growth, providing government services to their citizens, and creating proactive policies for growth and sustainability. Let a professional do the work of marketing your community to the national retailers. It’s more efficient, and more productive.

Contact us today to make a seemingly overwhelming task more manageable.

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.

What’s in Store for 2012? (Part 2 of 3)

“COMPETITION-IT AIN’T AS EASY AS IT LOOKS”

Written by
Rickey Hayes
Retail Attractions, LLC

As we said in the last blog post, local politics play a big part in retail and economic development for cities. Over the past several years federal politics, crazy as they are, have spawned a trickle-down effect that has flowed from the federal politics into state, regional, and local governments. Communities that were able to govern in relative unity a few years back are now experiencing bitter partisanship and radical thinking. When cities are competing to attract sales tax producing retail development to their city limits, they cannot afford to have dissension in their local politics. It’s hard enough to foster growth when everyone is working in a unified and efficient manner. With competition more fierce than ever, retailers and restaurants that are looking for new sites are definitely looking for the “low-hanging” fruit. They want markets that are the easiest, simplest, and produce the biggest bang for their investment dollars.

Between 2003 and 2006, big box retail stores were doing 100-200 new deals a year, and the junior anchors were equally as aggressive. Big box anchored power centers and retail developments were being built all over the place. Financing was simple, banks were cooperative and throwing money at retail deals. Brokers were making tons of money. Times were great. Not today. In these tough, lean economic times, many of the big boxes are not even considering new sites, and the ones that are will just do one or two a year. In the past, all it took for a communities to have an excellent chance for new retail deals was showing residential growth in their markets. Today it takes a special circumstance to get the attention of the retail and restaurant site selectors. In this highly competitive market, cities are competing for their very existence, and suburban communities circling a core urban area are competing amongst themselves for retail goods and services for their growing residential areas.

Where a retailer might have been willing to work with difficult local politics in the past, in this market unstable or volatile local politics can have a negative effect on retail deals and slow or even stop development. Cities need to consider the impact of their reputation on the watching world. Folks in the retail business talk to each other. Developers discuss markets over coffee. Retailers discuss how a smoothly a deal went over lunch. It is imperative for cities need to get their ducks in a row and share their retail potential with the development world. They need to be vocal about partnering with the private sector with incentives, development agreements and partnerships. They need to streamline the regulatory environment and perhaps even get into the real estate business to control the use of prime development areas. In addition, local bodies need ensure their community has a reputation for being politically unified with pro-business attitude. A reputation like that will go a long way in these competitive times.

It goes without saying, but I’m going to say it anyway… Communities need to hire an independent, experienced, well-respected third party consulting firm to market them to the retail world. Hiring a consultant shows the development world your community is serious about growth and is taking the first steps to making it happen. Retail Attractions is proud to represent communities across the county in their development efforts. When your community is ready to take the next step give us a call at 918-376-6707. We are ready when you are.

Contact us today to make a seemingly overwhelming task more manageable.

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.

What’s in Store for 2012? (Part 1 of 3)

“LOCAL POLITICS”

Written by
Rickey Hayes
Retail Attractions, LLC

This year has been an amazing year for Retail Attractions. We have seen positive impact in all of our client cities. As 2011 comes to a close and I reminisce over the last year’s scope of work, I am both excited and concerned about what is ahead for communities, large and small, across the country. On one hand, I am excited about the potential that is waiting for communities that really have a grasp on what it takes to market themselves and get noticed by investors while 43,000 other cities across the country are trying to capture the same attention. Good times are in store for many cities in 2012. Increased revenues through sales tax, new residential and retail development, and improved quality of life are all possible. City governments must be willing to take a look at reality and see what is missing, or see what is actually taking place, and be prepared to take an honest and realistic look at what is going to have to happen to change their current circumstances. If a city is willing to do that, they are going to be pleasantly surprised when they see that change is possible. One thing is for sure, if you keep doing what you’ve always done, you’re going to keep getting what you always got.

On the other hand, I see some really tough times coming for lots of communities as well. In recent months, many communities across the country have fallen victim to ultra conservative ideology that has trickled down to the local administrations because of political activism spawned at higher levels of government. In any political realm, it is inevitable that differences of opinion are going to rise. That is the beautiful thing about democracy. It works well when the diversity in local political ideologies have at the core of their belief systems the overall good of the community. If the goal is to improve the overall quality of life in a local setting, and everybody is working together for the common good, then differing opinions on how to reach the goals make life fun and exciting. However, if the goal is not to fix what is wrong and build consensus but to stir up more unrest, more dissension, then this ideology can get in the way of progress and may cause communities to turn away from opportunities that they might not get again. Our total scope of work in our client cities is improving the quality of life, improving revenues, and improving the way cities do business in terms of retail development. Every community has a story to tell. It only takes three things to improve the quality of life in any city: VISION, UNIFIED EFFORT, and FUNDING. In most cases, funding change is relatively easy. But creating vision is tougher. And getting people to gather around a dream or a vision and work hard to get it done is tougher still. But it can and should be done.

As overwhelming as this list seems, it is all necessary to make your community the most attractive destination possible to retailers looking to expand. Competition is fierce. If you don’t want to be left out, you need to do the same. Retail Attractions can help you put your best foot forward. We provide a wide range of services to help you turn your vision into your reality.

Contact us today to make a seemingly overwhelming task more manageable.

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.