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.
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.
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.
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.
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.
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.
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
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.
Retail Attractions, LLC
One of the first tasks a city must master to gain a competitive advantage is applying technology appropriately. In long-term efforts to reach out to new businesses, retailers and potential residents, efficiently using state of the art technology allows cities to reach more people with the right message more quickly. The Internet has fundamentally changed the way place marketing is done. Web site optimization, social media, and email have changed former business models completely, and those communities not adopting a more modern, business-like approach and using technology to market themselves will lose opportunity in a highly competitive arena.
In today’s world, people shop, learn, communicate, and are entertained while seated in front of a computer or web-enabled Smartphone. A community that wishes to be in the middle of progress must be on the cutting edge of technology. I am not just saying cities should use technology for the sake of showing how many widgets can be placed on the homepage, but instead carefully apply available technology to set the city apart. If the city’s location is unique, for instance, don’t tell about it on the web site: show it via video clips on YouTube or another video sharing site. Do the people really shine? Let them via a forum, resident blog, or by featuring user content somehow.
A city has to think ahead of growth because if they react instead of being proactive, they are continually behind the curve and always trying to catch up with other, more competitive communities. When a retailer, developer, or potential new industry begins research for investment opportunities in new communities and markets, that search begins on the Internet. If your city has a poorly designed web site or does not provide accurate, easy to find data, your community may be overlooked or even eliminated from the search. With easy-to-use website solution and innovative site construction, first impressions can become lasting business relationships.
by RICKEY HAYES and MANDY VAVRINAK
More and more cities and communities are realizing that growing their retail base wisely is an integral part of any balanced and long-term economic development strategy. Not every city can support extensive retail; overbuilding in some categories and areas has contributed to today’s economic woes in the retail sector. However, many areas are still significantly underretailed and opportunities exist for both savvy cities and smart retailers.
Since fewer retailers are moving in this challenging environment, competition for those new projects and locations is fierce. How can a city help get its name on the expansion list? Here are some tips we’ve found to be effective as we help cities recruit new businesses:
- Believe in and utilize public/private partnerships. Cities can assemble land, provide needed public infrastructure and ensue the development process is as pain-free and efficient as possible. Now is the time for innovate approaches to incentives and improving internal processes.
- Know your city/sites well, from a development perspective. What would make them attractive (or not) to a particular retailer? Does the site fit the retailer’s criteria?
- Get your demographic house in order. Using the numbers from the last census is NOT providing current, actionable information for the site selection process. Numbers generated via internal studies (not independently verifiable) are also not helpful. Use a reputable source for solid demographics based on a reasonable trade area.
- Understand the development process from the development side. Knowing how to work with site selectors, brokers, developers, leasing agents and retailers is crucial to ensure a smooth process and positive outcome.
- Craft a marketing position and use it. If your city logo/motto reflects 150 years of history but not where you’re headed, or what new residents or businesses can expect in the future, you’ve missed an opportunity to shine. If your city web site looks like an internal project, you’ve missed another one. Cities selling themselves need the same tools as other companies with products to sell… good logo, solid identity, good product information, great marketing vehicles to share it all.
- Own your own economic development efforts. Chambers of Commerce, industrial development authorities, and other quasi-governmental bodies cannot “pull the trigger” on projects, yet the decision-making process and the ability to get things done in a consistent manner is an integral part of economic growth and development.
It’s not easy to get noticed by national retailers and other site selectors, but using these tips will help your community put its best foot forward and increase the chances you’ll get a shot at new business expansions or developments.