How Long Does Retail Development Take?

Posted by Retail Attractions Blog on May 24, 2016 in Blog | No Comments

Successful retail deals require an abundant supply of patience. Even under optimal conditions, it can still take a long time for all the pieces to fall into place. Closing a retail deal that works for all parties often requires months of planning and negotiation, and it can take years for a community to realize their full retail development vision.

Months of Planning

Planning for retail development is a vital step, and it’s one that takes time. While trying to speed things up is tempting, you really don’t want to cut corners in the stage where you and the retailers work out a mutually beneficial partnership.

Take Enid, Oklahoma as an example. This is one of the towns where Retail Attractions is currently working. Talking about the retail deals going on in Enid, Rickey says, “We’re about to go to the International Council of Shopping Centers Convention in May … and we will be talking, out there, about 2017 retail deals. That’s the thing, the retailers that you’re seeing come … were deals that we’ve been working on for 24 to 36 months prior to you actually seeing them coming to town.”

The more complex a deal is, the longer it will take to work out. If you’re working with a consultant like Retail Attractions, we can be working on the deals for months before you have to sign contracts with the retailers. Without a consultant, your community will have to work all this out on your own.

Years in Development

Even with optimal conditions, it can still take several years after a deal is signed for the retail development to become a reality. When Rickey was working in Owasso, Oklahoma shortly after 2002, new retail was flooding the city and everything was perfect for retail growth. Even so, it took ten years to fully retail the market.

Rickey says, “One of the most frustrating parts of my work is the job of educating city councilors about how long it takes. When you see a new retail deal under construction somewhere, you can know without a doubt that, even with an accelerated effort and timeline, some poor soul has been working hard to make that deal a reality for at least a couple of years in most cases.”

Deadlines and expectations for project development need to remain realistic. Working with a qualified company like Retail Attractions helps move things along as smoothly as possible, but it’s still not going to happen overnight.

Speeding Things Up

While you don’t have much control over how quickly your retail partners are able to move forward with development, you can at least make sure nothing on your end slows the process down. You’re already on our blog, and that’s a great place to get started. Here, you can learn about ways to market your community, get information about retail development incentives, and find other information you need to know about holding up the public side of a retail development partnership.

Retail Attractions can also help you work through the planning process and development stage of retail growth in your city. We’ll be there to consult with you every step of the way. With our experience and contacts in the retail development industry, we already have a head-start in moving your community through a successful retail development project. Contact us today to talk with Rickey about your community project or get more details about how we can help you.

Create A Shared Vision Before Entering Partnerships

Posted by Retail Attractions Blog on May 12, 2016 in Blog | No Comments

Vision is the starting point for all successful projects. When you’re developing a vision that will carry your community into a public/private partnership to support retail development and economic growth, it’s essential that the vision is shared. Investors don’t want to partner with a community that can’t agree on their goals.

If your community can’t generate a cohesive vision before heading into public/private partnerships, then there’s a good chance your retail development goals are doomed to failure. Recognizing this gives you an opportunity to impress potential partners by creating a shared vision from the very beginning of your city’s plans for growth and expansion.

Include Everyone

Ideally, your vision will involve everyone who has a stake in the positive outcome of this potential partnership. This includes residents, property owners, homeowners associations, media outlets, colleges, hospitals, churches, and other stakeholders.

Make sure you don’t leave out people and groups that are initially opposed to the community’s proposed vision. Building consensus and addressing concerns is a key step in the process of vision-building if that vision is to be shared by the entire community.

Use Media

Get the media on your side early in the vision-building process. An alliance with local media outlets makes it easier to get your message out and cultivate transparency during the planning stages. Media will continue to play a key role in publicizing the vision and keeping it fresh in people’s minds after your community has decided on a final version of your vision plan.

Future Planning

City visions often include long-term plans that can span several local political administrations. This means that establishing a collective vision and creating community buy-in for the project is essential for sustaining the vision long-term.

As your community develops a shared vision, remember to keep the practical side of things in mind. A vision by itself isn’t enough – you also need a plan for implementing your vision. This is where you can really start focusing on what your community hopes to get out of a public/private partnership and what you can offer your investors.

Provide Clarity

Use public hearings, news releases, visioning exercises and other tools to keep stakeholder and area residents in the loop about the vision you’re developing. Make sure you specify the scale of projects included in the vision and let people know exactly what’s going to happen. A shared vision will start to collapse if people feel blindsided or misinformed.

Retail Attractions can assist with generating an honest assessment of your city’s strengths and weaknesses. We know what investors are looking for and can help you with demographic analysis and strategic planning you’ll need to create an implementable vision before entering into a partnership to foster economic development.

Does E-commerce Leave Space For Retail Expansion?

Posted by Retail Attractions Blog on April 21, 2016 in Blog | No Comments

It was only a few years ago that people like software guru and investor Marc Andreessen were announcing the impending end of retail brick-and-mortar stores. Now in 2016, we’re starting to see these predictions were mistaken. Retail stores are not dying. Yet even though retail stores are still around, there’s a concern that the rising popularity of e-commerce will negatively affect retail expansion in physical locations. As a community looking to attract new retail development, or an investor looking for a location to build next, how worried should you be about e-commerce?

Percent of Sales Online

While e-commerce will affect physical retail stores, it is not going to do away with them. The percentage of retail sales that happens online is climbing, but not as quickly as you might think. In 2006, online stores accounted for about 3% of sales. In 2015, the adjusted figure was 7.5% according to recent figures released by the U.S. Census Bureau. That still means well over 90% of sales are taking place in physical stores.

Really, webstores are replacing paper catalogs more than they are physical stores. People like the convenience of online shopping, but it can’t replace the experience of shopping in a physical store where they can try on clothing and see the quality of items in-person. Physical stores also offer the instant gratification of taking home your purchase immediately and you don’t have to pay for shipping.

Retail Expansion Continues

Further proof that retail is not dying can be found in the expansion plans of major retailers. According to a March report from CBRE, only 1% of surveyed retailers said they did not plan to open any new stores in 2016. More than half plan to open 11 or more new stores this year.

The expansion efforts are pretty evenly balanced between urban shops and shopping malls. 76% of executives described urban locations as key to their expansion plans, and 72% indicated they plan to expand into shopping malls. Both types of retail locations are still seen as valid and lucrative regardless of e-commerce’s popularity.

A Few Concerns

The CBRE report reveals that some of retail investors’ key concerns regarding retail expansion don’t relate to e-commerce at all. Rising real estate costs around the world are a major concern for 56% of survey responders, 42% express concern about the economy, and 37% are worried about the quality of retail spaces available. These responses call attention to the vital role communities must play in attracting new retail. There are investors looking for a location to build, but they need a situation that’s both economically feasible and offers quality retail space.

Whether you’re a community wanting to attract new retail development or a retail investor searching for the best location for your new project, Retail Attractions is here to help. We understand the needs of both investors and communities and are dedicated to helping you make the most of your partnership. Contact us today for more details.

Understanding Key Players in Public/Private Partnerships

Posted by Retail Attractions Blog on March 14, 2016 in Blog | No Comments

Public/private partnerships develop much more smoothly if all parties are committed to working with each other. A solid partnership starts with an understanding of the background, goals, motives, and needs of each partner. Without this, you can’t build trust and there’s a good chance the deal will fall-through in planning stages.

The Public Partner

As the public partner, city government is responsible for assessing the project’s public purpose, incentivizing the project, and getting needed approval. The government typically acquires land, prepares the project site, builds infrastructure, and supplies public facilities needed for the new project. It’s the public partner’s job gets the project approved on a state and federal level as well as locally with zoning commissions, city officials, etc.

Government also brings incentives to the bargaining table. They can write down costs, expedite permit processing, waive fees, and offer tax abatement. In a partnership, the government needs to recognize the need for flexibility and compromise. Government should also understand that their private partner needs a positive bottom line and work to help them achieve that goal.

The Private Partner

As the private partner, for-profit interests are responsible for project design, construction and operation, and a large part of the marketing. The private partner also provides part of the funding and is in charge of development. They’re expected to be the experts in developing the site and turning it to a profit.

Private partners should understand that government often moves slowly and is not always profit driven. Since the government deals with broader constituencies and operates with long-term goals, it’s helpful if private partners are able to assist with marketing the project to the community and encourage local support.

Local Interests

Nonprofits in the local area often play a key role in public/private partnerships. Neighborhood organizations, churches, foundations, and community development corporations have access to funding sources that are unavailable to the public and private sector interests. If they’re interested in community development projects, they often contribute to the financial package.

For the project to succeed all stakeholders, including private citizens, must feel that their concerns are heard and that they’re able to influence the project. Keeping in touch with stakeholders lets both public and private partners know what the community is looking for in a development project and alerts the partners to any objections the project is raising. Though not all objections can be addressed, maintaining transparency and accepting input creates an atmosphere of trust and acceptance for the project.

A Consultant’s Role

Trying to juggle so many different interests can be overwhelming without professional help to facilitate the negotiations. At Retail Attractions, we have extensive experience working with both public and private interests to negotiate the best possible partnerships for all parties involved. We’ll help you develop a working relationship with your partners and draw-up a mutually-advantageous partnership agreement. Contact us today for more information.

Understanding Retail Development Incentives

Posted by Retail Attractions Blog on February 3, 2016 in Blog | 3 Comments

We often mention the importance of offering incentives to retail developers who are looking at your city. As of 2012, 89% of all retail growth in a local setting has some type of incentive. If you’re trying to attract new retail development to your city, you have to understand what type of incentives developers are looking for and what your city can do to market itself.

Incentive Examples

Tax exemptions or abatements, waiver of fees, sales tax rebates, tax credits, grants and loan guarantees are the most common incentives offered to new developers. They’re a good way to attract interest from developers, and likely to result in a win-win situation for both city and developer. Here are a few real-life examples:

•  To construct a supermarket in an under-served part of Washington DC, developers received sales tax exemption for construction materials and equipment, and personal and property taxes were exempted for ten years.
• A suburban city encouraging downtown retail development waived all building and permit fees up to 2 percent of construction cost.
• A location near a metro city offered retailers investing $5 million or more, with annual sales of $30 million or more, 50 percent of city sales taxes for five years and rebate of all development fees.
• A suburban city investing in facade upgrades downtown provided grants to cover 75 percent of costs up to $4,000.

Other Incentives

When you’re thinking about incentives, don’t forget that ease of development can be just as attractive as saving money. To make your city a better location for new development, take steps to provide the needed infrastructure even before you start marketing your city. Make sure the roads, signage, sewage and water systems are ready to handle new retail growth. Assemble land that you can present for development. The goal is to make the development process as pain-free as possible for retailers.

Create A Plan

When you’re deciding what initiatives your city should offer, you have to take into account both the retailers’ needs and your own. You’ll need to define who’s eligible for the incentives and how much you’ll offer, establish performance standards and monitoring policies, and perform cost/benefit and rate of return analysis. You’ll also decide whether you’re going to offer across-the-board incentives, or negotiate them deal-by-deal.

If this sounds overwhelming, Retail Attractions can help. We have extensive experience working with cities and retailers. We know what you need to offer to attract attention from good developers, and how to protect your city’s interests as well. Contact us today to request more information or to schedule a consultation.

Building Interest in Retail Development – Closing The Deal (Part 2)

Posted by Retail Attractions Blog on November 10, 2015 in Blog | No Comments

You know your city demographics, you’ve shown there’s a demand in your community for what retailers can offer, and you’ve started building relationships with investors and business leaders. Now that retailers are interested in developing your city (see Part One), it’s time to focus on closing the deal.

Build on Relationships

Preexisting relations and familiarity with involved parties is very helpful during the negotiation process. If you and your community don’t have those connections yet, don’t worry. Retail Attractions’ founder Rickey Hayes has a strong network of contacts, and when you hire our company he’ll introduce your city officials to investors, builders and business leaders, and also  help with negotiations.

Since investors already have a relationships with Retail Attractions, negotiations will start out with an established level of trust that helps speed up the negotiation process. Not only that, but your community’s relationship with Retail Attractions will also help smooth over or prevent challenges and misunderstandings during the construction and regulation process.

Effective Negotiations

All too often, communities that are inexperienced dealing with investors and developers start off on the wrong foot when negotiating. If you offer too little at first, it can put-off investors and make them take their business somewhere else. But if you offer too much, it hurts your community. You need to find a middle ground that gets everyone talking, which can be hard if you’ve never worked with major developers before.

One of the advantages of hiring Retail Attractions is that your community gains access to a development professional who will advise on negotiations. We know how to get negotiations off to an effective start, and what type of incentives to negotiate for. This helps ensure you don’t scare-off potential investors with demands they think are unreasonable, or hurt your community by signing too much away.

Demonstrate Knowledge

Like you, retailers want their relationship with your city to go smoothly and be profitable for both parties. You can help convince them that their development project in your city will finish on time and within budget by demonstrating experience and knowledge working with building codes, EPA regulations, and other factors that contribute to a development project’s cost in time and money.

Once again, Retail Attractions offers services that are key in showing your community understands retail developers’ needs. We know what factors retailers are looking at, and we’ll provide you with Demographic Data and Market Analysis that you can share with interested companies, as well as advise your community on factors that will affect development planning. Our goal is fostering good relationships that will benefit your community now, and in the long-term as you continue to work with future investors.

Building Interest in Retail Development (Part 1)

Posted by Rickey Hayes on October 28, 2015 in Blog | 2 Comments

Retailers want to invest in locations where there’s demand for what they supply. To attract large retailers to your city, you have to build interest in retail development by letting them know your city has what they’re looking for. Retail Attractions is uniquely qualified to help with this task. We have years of experience assessing what you have to offer, and we know exactly how to market your community to the retail world.

Know Your Demographics

Before you can invite large retailers to build in your city, you must be able to offer them good reasons to invest in your community. Retailers want to see demographics for your city presented in a reliable, professional format so they can decide whether or not your city is worth their investment. They don’t want to lose money on a project any more than you do.

Retail Attractions offers Demographic Data and Market Analysis services to help you supply this demand. We know what retailers are looking for, and we’ll help you present your city demographics in a way that lets retailers know you’re serious about working with them. Retailers will appreciate that you were able to supply reliable demographics compiled by a third party, and it will make them more likely to consider investing in your city.

Show There’s Demand

Sometimes office and housing growth in developing towns or up-and-coming suburbs moves faster than retailers can develop the area. This isn’t just a challenge that affects small cities – larger areas like McKinney and Frisco, Texas, can also struggle with retail development lagging behind population growth. For quickly developing urban areas, you want to attract retail investors as soon as possible, and that’s where Retail Attractions can help.

To attract larger retailers to your city, they need to know there’s demand for their services. Retail Attractions can assist with compiling Opportunity Gap Analysis to show retailers that your city is a good location for their next development. If you can show that the market isn’t oversaturated, retailers are more likely to invest in your city.

Build Relationships

Good business is built on good relationships. If your city doesn’t already have contacts with retail developers, it can be hard to “get your foot in the door” on your own. Preexisting relationships with developers, and with the retail businesses they’ll bring in, is critical for starting the recruitment process.

Here’s another area where Retail Attractions can help. Founder Rickey Hayes already has a strong network of contacts, and he’ll introduce your city officials to investors, builders and business leaders. This helps with attracting retailers to your city now, and also makes it easier for your community to market itself in the future.

Retail Attractions Advises on Muskogee Urban Renewal

Posted by Retail Attractions on October 10, 2015 in Blog | No Comments

Retail Attractions Advises on Muskogee Urban Renewal

Time, chance, and retail development wait for no man. When Armstrong Development Properties Inc. wanted to delay development of a retail property in Muskogee, Oklahoma, it was time for city planners in the local community to shift their focus. Land tracts along West Shawnee Bypass are prime real estate, and there’s plenty of interest in developing this location.

With the help of Retail Attractions, the city of Muskogee plans on bringing in large-tract developers who can then bring in big-box retailers. Tracts chosen for urban renewal will include housing, office space, and retail attractions.

“There’s a ton of interest and some internal discussions about how to proceed putting that into the hands of those who wish to develop it,” says Retail Attractions’ founder Rickey Hayes. He continues, “The Armstrong deal is off. The entity wanted to delay, and we can’t hold good dirt because somebody wants to delay – we’ve got people wanting it.”

Retail Attractions is an economic development consulting firm. They advise communities on retail development projects with the goal of increasing city revenue and improving the quality of life within the community. By applying reliable data to real needs in the community, Retail Attractions provides useful information that benefits both cities and companies looking to invest in retail development.

Once presented for final approval in October, the city of Muskogee will proceed with a master plan to develop areas between Chicago and 11th streets on the east and west and Shawnee Bypass and Talladega Street on the north and south. This plan, assembled by the Planning Design Group from Tulsa, includes multi-family and single-family housing, office and warehouse space, and retail centers. It is designed around a 20-acre focal point which will include restaurants, water features and one of the two shopping centers planned for this project.

Retail investment and development companies that do strike a deal with the city of Muskogee will also benefit from Retail Attractions’ experienced assistance. By fostering effective communication, Hayes’ company helps retailers translate their expectations into information that city planners can work with easily.

In his testimonial about working with the Retail Attractions team, Jim Tapp of Tapp Development describes Ricky Hayes as “an interface.” Tapp says,”The greatest strength Ricky has for our company is a communicator. He’s a go-between for us to communicate with these cities.”

For further information about this project, and other available properties, contact Rickey Hayes at Retail Attractions.

How To Retail Small Markets

Posted by Rickey Hayes on September 24, 2015 in Blog | No Comments

How To Retail Small Markets

Written by Rickey Hayes, Retail Attractions, LLC

Our company has had the opportunity and good fortune to have been able to work in over 330 cities in 35 states since we started in 2007. We have worked in large, urban markets from New York City to Los Angeles as well as medium markets from Mandan, North Dakota to the lovely City of McAllen, Texas on the Rio Grand River. While a lot of this work has been in the role of a consultant directly contracted to a local municipality, much of it has also been work for a developer, a franchise owner, or a retailer or restaurant asking us to do a specific scope of work in a local market. While working in large and medium size markets, there is an expectation of actually being able to see new private sector investment materializing and actual brick and mortar coming out of the ground. Consumer groups are readily identifiable, disposable income is easy to see, and retail tenants are aggressive to find a home. It’s fun work. The much harder job is to recruit retail interest and private sector investment in smaller markets. And the facts are that there are a bunch more smaller communities that are under-retailed, and that getting that job done takes a lot more work and patience. It can still be done, but it takes longer, and requires certain crucial steps be accomplished through the process. I want to address the issues that small market cities face, and how to overcome some of those obstacles.

Before we start, let me say a couple of things. No matter what size market you find yourself in, having at least a basic understanding of how retail growth works, and the common ingredients in any retail deal is crucial. Secondly, the smaller the market, the more creative the community needs to become. Both of these foundational truths will be covered in more detail as we proceed.

Common Considerations For Retail Growth in Any Market:

· Market Data: Having correct and up to date information on your city: your trade area, your people (including those who live in your community, and those that come to buy goods and services), your real estate, and information on your regulatory climate and your willingness to partner with the private sector is essential. [* know that data is just numbers unless you have a story, and it (the data) may be harmful, especially if your market is small.]

· Population Growth in the Market: There is no surer way to attract private sector investment in your community than new residential growth, or the evidence that your city needs and can accommodate new residential development.

· Other pertinent info to share, like disposable income and traffic counts, and destination points where large volumes of potential consumers come into the market are all critical for small markets to broadcast.

In order to bring new retail and restaurant development and for that matter any new private sector investment into a small (or smaller) market, the key thing to understand is that from the perspective of the retail or restaurant tenant, whether they are corporate or franchise driven, they probably will have multiple other opportunities in stronger markets than yours. That is the reason that smaller markets, and those administrative and elected officials that want to increase their revenues have to be willing to do something different, to consider some other angle, offer some other reason to get the folks who make the retail decisions to pay attention to your specific situation.

I have had the pleasure of seeing some success stories in smaller markets and that is probably the most fulfilling part of our work. Many times the smaller the market the greater the impact from the development of new retail. In small markets, the more innovative the city is the better. At a minimum, I would suggest that if your city is a small market, city leaders should at the very least look at some way to identify, option, and control the real estate dynamic, especially sites that could, in any way, be considered commercial. Whoever controls the real estate controls the future development of your community. Two other things will help as well, first get professional marketing pieces done on all the commercial sites, and then, if possible, city administration should develop a “one stop shop” mentality in terms of entitlements, annexation, platting, site plan review, etc. to save developers as much time as possible.

I have experienced retail development in many different settings. It’s really fun when a city has all the right stuff going for it. This happened in Owasso, Ok shortly after 2002, and we experienced a tsunami of retail. It came in huge waves. But it still took more than a decade to get it all done. And I mean everything was right in Owasso: residential growth was off the charts, retailers were wildly aggressive, banks would loan money for a retail deal at the drop of a hat, and the city had big household incomes and stellar demographics. Still took ten years to get the market retailed. So small market communities should definitely be extremely patient, and let a qualified company like Retail Attractions market them to the private sector. It will save you time and a lot of money and effort. But know going in that it will take a long time. One of the most frustrating parts of my work is the job of educating city councilors about how long it takes. When you see a new retail deal under construction somewhere, you can know without a doubt that, even with an accelerated effort and timeline, some poor soul has been working hard to make that deal a reality for at least a couple of years in most cases.

It is also worth mentioning that the smaller the market the more hesitant the retailers and developers are in meeting with you. This is not really about anything other than the fact that most of the retail and restaurant tenants that are growing have already identified “growth markets” and they have to be educated to all the extenuating circumstances, and the “rest of the story” that makes your small market viable. This is what the real basis of Retail Attractions scope of work entails. Bringing the real story of your market to the retail world is what we do every day. We are known and respected by those who develop and the tenants they build for. And the good news is our relationships have grown every month we’ve been in business.

Call us. We can help. Office (918) 376-6707 or cell (918) 629-6066

Rickey Hayes is the principal of Retail Attractions, LLC, a firm dedicated to helping cities and developers successfully find and develop retail sites, close deals, transform communities, and improve the quality of life for our client cities.

FIGURING OUT WHAT CITIES REALLY NEED

Posted by Rickey Hayes on June 11, 2015 in Blog | No Comments

Rickey Hayes, Retail Attractions, LLC

Retail development professionals really prefer not to talk to cities, chambers of commerce, and local economic development staffers. At least that is what they have confided to us. The reason? Because about 99% of the time, cities are not basing their comments about the local retail potential and environment on reality. There are four groups of people that you have to watch: politicians, news media, some preachers, and economic development professionals. I’m just kidding:(not really). Each of those groups listed has a reputation for exaggeration, or telling the story with a little bit of twisted motive. That is the main reason why communities need to contract an independent, qualified, and unbiased firm to interface with the retail and development world.

So how do communities really come to grips with reality? Firstly, they have to see where they really are. They also have to know they are in competition with every other community. There is such a thing as a “regional” collaboration (and a time and place for that does exist) but in reality, there is no “regionalism”, it’s every city for itself. Secondly, an understanding of this ancient principle, “there has to be sowing before reaping”. Before a house is built, a foundation must be laid. Before a vineyard can produce fruit, lots of hard work has to happen. And last but certainly not least, there needs to be some sort of working unity or consensus of everyone involved. This is really hard to accomplish in lots of locales. There are egos, preferences, political agendas, and greed working in every community. Sometimes it’s visible (and everybody in the community sees it) and sometimes it is very sinister and hidden.

Let’s get down and dirty. A needful first step for any community that needs real economic “development” is to determine exactly what they need. The “need” can be summarized by one of the following programs: relief, rehabilitation, or actual development. Some cities need “relief”. They are going down for the third time, and need immediate assistance from outside city hall. Other communities need “rehabilitation”. That is they need to take a look at their vision, their program, or their people, figure out what has to change in order to bring new growth and positive change. Lastly, some cities need “actual development”. Development can happen when the reality of the market can be evaluated, what is missing is identified, and the real estate part can be transacted. All these parts have to be in place before real development can occur. Now please understand that this development process I have spoken of is in itself, tedious, and grindingly slow. That is reality. The principle works this way: The process of real economic development will not start itself (it must be initiated), the process is the process (let it work), the process will produce the fruit (in the fullness of time).

Call us. We can help.

Rickey Hayes is the principal of Retail Attractions, LLC, a firm dedicated to helping cities and developers successfully find and develop retail sites, close deals, transform communities, and improve the quality of life for our client cities.