By Rickey Hayes, Retail Attractions, LLC
Recently a client city that our company had worked in for two years decided to not renew our contract and go with another “competitor”. Now I know what you are thinking. I bet you are thinking something along the lines of well competition is good and maybe the other firm can do something for the community that your firm wasn’t able to do. And you might be right. But before you really start celebrating your “rightness” you probably need to know the rest of the story.
I use this blog as a platform to educate cities, elected officials, and other folks and organizations on economic development, retail development, quality of life issues, and other subjects that they may need “educating” on. The reader may ask “What qualifies you to educate others?” All educators need two things: training and experience. And if I had to choose as to what makes an educator most effective, I would say experience trumps training every time. I have had years of training, and having worked directly or indirectly in over 300 cities in 35 states, and having been part of, at some level, the facilitation and completion of, millions of square feet of retail, residential (both single and multi-family), medical, office, and other mixed uses of commercial real estate, I have some “experience”.
So back to my story. I am guilty of doing some dumb things myself, so don’t think I am really bashing the group of city officials that I am telling you about. I am not. And I will leave the city anonymous:.to protect the guilty. When I began working for this city, I did so as a favor to the city manager, who was new to the job in that community. This city manager had just left another city, where because of a poorly done retail project, multiple lawsuits, possible criminal acts, and lots of public money was spent helping to clean up a really big mess. I might say that we were not working in the city when this terrible series of events went down. I watched it from the sidelines, and was really interested because the city manager, who is my friend, warned the elected officials time after time that the retail deal was not being executed in a lawful and intelligent manner. The result, instead of working to fix what was out of order and instead of correcting what was wrong, the elected officials fired the city manager. So out of a job, the city manager (who, by the way, has considerable training and experience) was quickly hired by another city. As soon as the manager got his feet on the ground, he reached out to me to see if our company could help his new community. He advised me that this new city had never worked with a company like ours, had no budget for contracted consulting services, but he felt like he could muster both a little money and some support to hire us. We agreed to try and help, and because I had lots of respect for the city manager, I agreed to a much lower fee than I would normally apply to a consulting contract. (that was dumb on my part J). I worked hard for the community, made considerable trips to the community for multiple meetings with staff, elected officials, and developers and real estate professionals, and marketed the city to national retailers, restaurants, and developers. Without going into a lot of details, we received positive feedback on the market from multiple retailers and restaurants, but because the market was “green”, and local land owners were not really interested in selling, private sector investment was slow.
Several predictable things occurred during the process. Most of these things were addressed in face to face meetings with city staff and elected officials, but unfortunately some people do not want to be confused with facts, they are motivated by their “aggressiveness” and impatience. Small markets should be extraordinarily patient, because retail development, even in markets where tenants are climbing over one another to get sites, the development process is s-l-o-w. This particular city made the mistake of believing their market was “special”. Unfortunately, their market was just like every other small market, one in tens of thousands or small markets that are competing for these retail deals. They also made the mistake of believing that creating tax increment financing districts, and being vocal about willing to incentivize retail deals, made them stick out among the tens of thousands of other markets in the race, many of whom had better “data” than they had. Fact is that cities all over the country are beginning to offer incentives and create enticing development opportunities to lure retail and restaurant deals.
What I am saying is that elected officials, city administrators, and people who care about growth in cities, especially small ones, need to realize they have to be on the edge of reason and willing to do things that have never been done before, to set their communities apart. We represent dozens of small markets, the ones who have new retail on the ground and the ones who have retail or restaurant deals working are the ones who have stayed the course for the long haul, the ones who have been patient, and the ones who have gotten serious about getting in to the real estate business. Retail 101:whoever controls the real estate controls the future! Believe that. If your community is small, you need a professional and qualified firm to help you. And let me close this session of venting, by saying, if you are a small community you need more than data, because in most small markets, your data may not be helping, it may be harming your efforts. So by all means don’t be seduced by one of my slick talking “competitors” into paying big bucks for data. Bringing retail to small markets may be the toughest job on the planet, but it can be done. It requires proving your market has potential, defining the target retailers and restaurants that best fill your community’s need, and then doing what it takes to get the deal done. That’s what we do.
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.