Is Retail Growth Really Economic Development?

Posted by Rickey Hayes on March 16, 2011 in Blog | No Comments

Written by
Rickey Hayes
Retail Attractions, LLC

Last week I received an invitation to the Heartland Economic Development Course held in Kansas City next month. The course touts itself as the “highest ranked multi-state economic development course in the United States”. This course, like most of the regional ED courses held in different areas around the country, is accredited by the International Economic Development Council (IEDC). This course is a basic part of an economic development practitioner’s training program and is in fact required for the IEDC certification process. I attended the same course in San Antonio, Texas in 2001, and I can tell you the course is saturated with good, solid training and should be a part of every ED professional’s course of study. There is absolutely nothing wrong with the course. However, if you look at the course offerings highlighted on the marketing brochure you will find not one reference to or mention of retail recruitment. It’s all about the “smokestack” and industrial and manufacturing job creation. I would argue that there is more to economic development than this. There is a bigger picture.

Bottom line is this:when we were in school we knew we weren’t going to use half of the stuff we were being taught. And we were right. Education gives you a foundation, but economic development technique is not learned in a classroom. It is learned in the field. Successful economic development at its foundation is about improving the quality of life in a community. Real economic development is about relationships with the right people at the right time at the right location. Correct me if I’m wrong here, but I can point to some job creation successes that ultimately reduced the overall quality of life in a community. Is that successful economic development? Not in my book. I know this is sensitive stuff, but sometimes when we try to be sensitive and politically correct we lose sight of our goal. What is our goal? To face reality and move forward in a positive direction.

So what is reality? The fact is that when well planned national retail comes to a community, the quality of life in that city goes up. The adage “rooftops generate retail” is only part of the story. Just as residential growth can bring retail growth, retail growth can generate residential growth. When corporate America decides to relocate jobs from one geographic area to another, I can assure you that the retail goods and services offered and the overall quality of life in the prospective cities are at the top of the list of things considered when those decisions are made.

The following story is not fantasy:it is reality. I saw it with my own eyes in living color. From 2002-2007 the City of Owasso, Oklahoma experienced tremendous growth in both commercial and residential investment. Census data states Owasso grew 55% in population from 2000-10, and the city’s sales tax base and general fund revenue nearly tripled during that time. The sales tax revenue continues on an upward trend even in a “recession” economy. New commercial construction totaled more than 4.2 million square feet with over a quarter of a billion dollars in total value. The Owasso Independent School District built over $100 million in new facilities, and because of the increased property values, all this was done without raising taxes one penny. And a sleepy little bedroom community became what other cities have termed a “city on a hill”, a true regional shopping mecca. What is the driving force, the “reason”, for the continued growth and revenue? Retail. Well planned, incentivized retail.

Is that real economic development? I think so.

Our company teaches communities how to define their retail market and sales potential and then market themselves to the national retailers and restaurants. Our client cities that stick with us through the slow grinding process of retail development reap new retail, new revenue, and a new and improved quality of life for their citizens.

Is that real economic development? I think so.

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.

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