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