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Economic Development Takes Time and Patience

Written by
Rickey Hayes
Retail Attractions, LLC

Consumers drive our economy. So what happens when the average consumer feels uncertain about their financial future and decides to hold off buying that new refrigerator or pair of blue jeans? The economy slows down. And when the economy slows down the process of economic development slows down. It is the age old concept of supply and demand. It is hard for retailers to justify building new stores when the shoppers are spending less.

Economic development is a process that has always required time and patience. Consider the retail boom in Owasso, Oklahoma that occurred in 2003-2005. It is naïve to think that it only took two years for the 4.2 million square feet of retail to arrive. The real secret was the residential growth than began 15 years earlier. Owasso was building over 500 new homes per year, and the demographics for the residents were ideal for retailers, a young population with considerable disposable income. Even with all the stars aligned, it took Owasso 6 years from vision to implementation. The storefronts that opened in 2005 were planned in 2000 and inked in 2002 and 2003. It took years for the national retailers to finally open and begin producing revenue for the community. The moral of the story: economic development takes up to six years even in the ideal environment.

Communities pursuing retail development must understand that the process is slow and tedious. Retail development is a process. Our first step is to identify and verify a trade area that accurately depicts the demographics of the consumer base. From there we work with our clients to determine retailers that compliment the opportunity gap for the trade area. At this point, many firms will hand over a report and call the project complete, but this is where our firm gets down to the real work. Using our network of retail contacts, we begin selling your community to the retail world.

We normally contract on an annual basis, but our clients know that a year typically doesn’t produce tangible results. The first year we focus on educating retailers about our clients, making sure retailers know where our clients are located and key demographics for the surrounding trade area. Once we identify retailers who are interested in our client communities, we begin to discuss what it will take to make a deal happen. The time involved depends on the level of interest and the aggressiveness of the retailer’s growth plan.

The bottom line is that economic development takes patience and time, and there are no short cuts. To locate national retailers in your community you must first let them know that you exist and then let them know what you are willing to do to make the deal. Retail Attractions has extensive experience in these negotiations. Contact us to see how we can help your community in their pursuit of economic development.

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 Cities Can Learn from the 2010 ICSC RECON Conference

Written by
Rickey Hayes
Retail Attractions, LLC

The International Council of Shopping Centers just wrapped up the 2010 RECON Spring Retail Conference in Las Vegas, Nevada. This year’s gathering is the ninth ICSC Spring Conference that I have attended and although the crowds were down from past years, this year’s annual event marked several milestones. The instability of the national economy and the banking industry crisis, among other key factors, brought retail development to a standstill for much of the United States. While the local and regional economies in Oklahoma, Texas, and Arkansas remained mostly stable, retail development has drastically changed directions.

Despite a smaller numbers of attendees, this year’s ICSC conference had some bright spots. Some national “big-box” retailers announced new development plans for 30-40 units. Although this is not near the numbers of new sites that were being developed a few years back, it may indicate that at least the worst may be over and some confidence in the overall retail marketplace may be returning. If anchor tenants begin to do new store and site development it seems logical some junior anchors, some larger restaurant chains, and some quick service restaurants will follow.

In the past, speculative development occurred and large tracts of real estate were tied up by investors. Lending institutions were liberal with loans and less restrictive. Developers sought anchors and hoped the momentum would follow. These days, all retail deals will be tenant driven and financing will be scrutinized at several levels. There is more and more competition between communities for the very limited number of new deals in the marketplace. But there are many reasons to believe that retail deals can still happen in new and existing retail markets, even in smaller cities and in some areas that have not seen any retail growth at all.
To land new retail in your community, you need to be providing the right information. The following strategies should be employed immediately:

  • Provide incentives – set your city apart from the competition
  • Clearly define and verify your trade area
  • Be able to identify and describe the consumers within your trade area
  • Provide current demographics and psychographics to specific retailers you are targeting
  • Realize the retail potential within your community
  • Analyze leakage and target retailers who fill the missing niches in your area
  • Develop a plan to utilize public-private partnerships
  • Review and streamline your city’s development guidelines to help expedite retail deals
  • Provide the actual sites (get in the real estate business)

Retail Attractions, LLC provides our client cities valuable data, insight, and proven strategy to harness their retail potential. Contact us to find out how we can help bring retail development to your community.

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.

Is Your City Ready for Retail Development?

Written by
Rickey Hayes
Retail Attractions, LLC

If you are a city manager or mayor of a community in Oklahoma, the bulk of your energy at work consists of trying to wrangle a budget that is fed by sales tax. This is definitely a full-time job. Until a more stable and predictable revenue source comes along, cities are forced to wrestle with sales tax revenues that ebb and flow, creating stressful situations for cities that are trying hard to stay ahead of growth, or simply trying to keep the bills paid.

In today’s competitive world, cities that are not maximizing every potential growth opportunity are falling further and further behind. In the real world, there are only two kinds of cities, growing cities and decaying cities. If you are lucky enough to be in a growing community, then you at least have the opportunity to capture the growth revenue and use it wisely. But if your city is NOT in a growth mode, the outlook for the future may seem pretty bleak indeed.

Since most, if not all, your general fund revenue comes from sales tax, the most prudent thing to do is to make every effort to maximize your community’s base of retail outlets. In order to accurately evaluate your city’s retail growth potential, several key factors must be quantified:

  • A community’s retail base market must be identified and validated. Many rural or small population based communities underestimate their retail potential by not understanding traffic flows and market draw. Retail leakage needs to be identified and retailers that can plug the hole need to be recruited. The most cost effective way to do this is to hire a professional. Information about city demographics, leakage, and retail potential is marketed better and more efficiently through independent, third party sources like Retail Attractions, LLC.
  • Communities must understand that retailers do not just show up and start building. Retail and restaurant outlets need to be attracted to your community by well planned marketing efforts and current, verifiable, and accurate data. Retail Attractions knows what retailers and developers need to see, hear, and feel about a community before they are motivated to invest capital and time to investigate potential opportunities.
  • A city should evaluate its development process to see how difficult it is to actually develop commercial real estate in your municipality. Lots of communities boast of being retail friendly, but in reality the bureaucratic development process is very difficult and time consuming. In this economy, when retailers and restaurants have the ability to be very selective on new market development it is extremely important to have all the kinks worked out of the development system. A city is very wise to count the cost of promising and not being able to deliver on their promise. Being able to deliver on a promise in a timely manner is very important when potentially millions of dollars are at stake.

Hiring a firm like Retail Attractions, LLC can expedite the evaluation process and provide a community with an unbiased analysis of both the potential retail market, including leakage reports and accurate up to date demographic data, as well as a review of the local development procedures to ensure a seamless and time efficient development process for developers. Retail Attractions, LLC has a proven track record of success in our client cities. Retail development is a slow and tedious process in great economic times. Now, more than ever a community must take every opportunity to stay ahead of the competition and be ready to capitalize and make the most of every opportunity.

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 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.

The Importance of City Website Design for Economic Development

Written by
Rickey Hayes (Retail Attractions, LLC) and
Rob Nichols (Torxweb Design, LLC)

If you’re reading this, chances are your city is looking to grow by increasing sales tax revenue through economic development. One way to grow your tax base is by recruiting retail development. One of the key components of successful recruitment is your city’s website. Most companies will start their retail site selection research on the internet, and each project will have its own set of unique parameters. It is not enough that your city meets these requirements. For your city to be selected as a possible location, you have to sell your city. Get the information out there and let the potential investors know what you have to offer. Your city’s website will more than likely be your first chance to make a good impression on the potential developer or investor. If your website is out of date or lacking in information critical to investors, your website presents an unorganized city that is not prepared to support growth. Progressive cities are recognizing the need to aggressively market themselves and create economic greenhouses in preparation for growth.

One of the most critical pieces of information for a city’s website is current demographics for your city and trade area. If your city has a unique trade area or unique demographics, site selectors need to be made aware of this information. Take this opportunity to showcase what your city has to offer. If incentives are available to potential developers, your website should provide information on these incentives especially if they are unique to your community. With so many cities competing for the same development projects, your city has to be aggressive in marketing its potential.

The organization and presentation of your city’s information is another key element in making your city attractive to potential developers. Information should be easy to find, up-to-date and thorough. Your website should convey that your city is ready and willing to work with developers on any issue that may arise. Each department should have their own page with direct contact information, and pertinent documents such as permits and standards should be clearly posted. This is your chance to show potential investors that your city is organized and ready to help make their development project a success.

Lastly, let’s discuss the most commonly overlooked element in municipal web design, search engine optimization (SEO). A website that has been optimized for search engine accessibility has content that is highly searchable and easily indexed. Having an optimized website is important when an investor is searching for information on potential sites. Optimizing your cities website will ensure investors find your official city website and the most relevant information when searching for details about your city.

Retail Attractions has teamed up with Torxweb Design (www.torxweb.com) to create a content management website solution with municipalities in mind. The CMS provides the tools a city needs to maintain an active, up-to-date website and also provides search engine optimization as one of the top priorities. When a potential developer searches for information about your city, it is critical that your city’s website dominates the search engine results for these types of queries and clearly presents key information about your city. To find out more about having a website designed for your city, contact Retail Attractions or Torxweb Design.

To find out more about having a website designed for your city, contact Retail Attractions or Torxweb Design.

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.
Rob Nichols is the principal of Torxweb Design, LLC, a web site design firm specializing in content management based website design and development.

Retail and the “Quality of Life” Factor

Written by
Rickey Hayes
Retail Attractions, LLC

What makes a city great? The “cool” factor, an affordable cost of living, good schools and low crime rate are just some of the qualities that come to mind. An infrastructure that can support growth and well planned residential subdivisions are also crucial if a community truly desires to be “world class”. Quality retail development is another ingredient that is absolutely essential for a city to be considered at the top of the list.

Of course, people with different lifestyles will look for different criteria. For example, single professionals look for quality employment and may rank a short commute time near the top of their list while families with young children will undoubtedly consider education a priority. Good jobs are essential to a community’s economy. Suburban cities may depend on near-by urban area for jobs, but in smaller, more remote towns, and even in larger micropolitan areas, communities must be able to provide employment opportunities. Job availability is always a priority for a growing community, but there is a growing trend seen in these modern times. Younger people are now looking at location before they decide on where they will work. They are seeking a quality of life first, job second. In the past, the place of employment was the driver, now the location and its attributes may influence the growth more than the availability of jobs. Many employees can work from their homes, so this phenomenon may increase more in the years to come.

One thing at the heart of all growing communities is a strong and vibrant retail base. Having all the essential retail services available in the city is critical for a city that wants to grow. Communities should recruit suitable retail and market themselves to attract retail investment. In states like Oklahoma, where general fund revenue comes from sales tax, cities that are not actively growing their retail base are in the process of decay whether they realize it or not.

Insightful, proactive planning helps enrich the experiences of residents, helps businesses in the area and helps cities make the transition into the next phase of growth. Cities are changing, and government officials must be sensitive to changing trends and demographics. The next generation of younger urban residents is much more demanding in their expectations of what “quality of life” means.

The retail sector is always connected to quality of life. Cities can influence growth and investment. Cities can and should market themselves to maximize retail growth and the corresponding sales tax revenue that retail brings to the table.

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.
 

Is there a benefit to ICSC membership?

Written by
Rickey Hayes
Retail Attractions, LLC

Cities and towns across America, and really, globally, compete for a limited number of retail store openings each year. The past two years’ economic challenges mean the number of new retail store openings, refurbishments or expansions is significantly smaller and therefore more hotly contested than ever. More and more communities are waking up to retail growth as an economic development strategy and are trying to attract new businesses.

Not only can retail growth add jobs and improve the quality of life in a community, but sales tax revenue from retail sales also drives the economic engine of just about every community in the country. Attracting retail isn’t as easy as it often seems…. Cities must stay on top of market trends, technological tools, development rules and regulations, and still find time to effectively market themselves to the right people.

One of the best tools we’ve found to help cities who want to grow their retail sector is membership in the International Council of Shopping Centers (ICSC). Each year more and more communities are taking advantage of the great networking possibilities that exist at the ICSC events held regularly around the country, especially the annual spring convention in Las Vegas. Although the economy has recently affected the attendance at the national and regional events, ICSC events are still one of the most effective ways a community can broadcast its retail needs and market its strengths. ICSC research provides crucial data on market trends, both globally and at the local level. Being able to think and plan ahead and react in a timely way helps a governmental entity stay on top of sometimes unpredictable market trends. For that reason alone, cities should encourage key staff members to become ICSC members.

Attendees at the events, whether local, regional or national, are always from a broad spectrum of the retail world. Real estate professionals, brokers, lawyers, consultants, site selectors, developers, architects, engineers, and others all share their wares with retailers and communities who are represented at the events. The ICSC organization also does a great job of providing cutting edge data relevant to the needs of the retail community and governmental entities involved in the various disciplines of retail development.

Retail Attractions, LLC represents our client cities at ICSC events three times a year, and our partner cities benefit from our ICSC involvement. Over the last several years, I can tie hundreds of thousands of square feet of retail development directly back to a meeting at an ICSC event.
 

Now is the Time for Cities to Plan Their Retail Future

Written by
Rickey Hayes
Retail Attractions, LLC

Even casual observers of the news media can’t help but notice the coverage on the retail industry over the last few months. Scores of national retailers have announced bankruptcy in 2008 and 2009. Retailers who were growing aggressively only a few months ago have stopped looking for new sites and are re-evaluating growth plans for the 2010-2011 development cycles. Unfortunately, the consensus among industry leaders is that it is not over yet. However, many in the retail and development communities understand the cyclic nature of their industry, and are quietly planning growth strategies for the future.

So what does this mean for a city trying to recruit retail in order to boost over-all quality of life and generate much needed sales tax revenue?

It means growing cities must understand the basics of retail development and how to pro-actively position themselves at the top of the list for when future retail growth opportunities present themselves. One of the first things a community can do is to analyze and verify their true Trade Area; once the consumers in that trade area are identified, specific sets of information must be communicated to the retail world. In the past, a “concentric ring” approach was used to determine the strength of a retail market. For many cities, a one, three, or five mile radius does not even begin to accurately describe their retail market and potential draw. Cities should be aggressive in defining and marketing their retail potential to site selectors, retailers/restaurants, and brokers.

Even in the current economy, many retailers and restaurants are still expanding, and working to fill their real estate pipeline for 2010, 2011 and 2012. But they are also paying special attention to their real estate decisions. National retailers are prioritizing their investments and picking markets where the best return is available. Fewer deals mean more competition and cities must be their own advocates to the retail marketplace.

To land new retail in your community, you need to be providing the right information. Things to include in your marketing strategies are:
• Clearly define and verify your trade area using third-party data
• Be able to identify and describe the consumers within your trade area
• Provide the most current demographics and psychographics to specific retailers you are targeting
• Realize the retail potential within your community
• Analyze leakage and then target retailers who could fill the missing niches

Retail Attractions, LLC provides its client cities with valuable data and strategies to harness their full retail potential. Communities that are aggressive in marketing themselves to the retail world will be strategically set when the economy begins to strengthen.

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.