Economic Development Takes Time and Patience

Posted by Rickey Hayes on June 22, 2010 in Blog | No Comments

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.

What Cities Can Learn from the 2010 ICSC RECON Conference

Posted by Rickey Hayes on June 15, 2010 in Blog | No Comments

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.