We are often approached by communities asking how they can attract more retail to their business districts. That may be the wrong question. The retail sector is experiencing a massive transformation as people are spending less, the internet is taking an increasing slice, shopping habits change, and chains continue to close stores at record levels. The best locations will continue to thrive, but all others need to be thinking about a more comprehensive approach to creating healthy business districts, in which attraction is only part of the picture.
Our white paper provides a comprehensive look at how retail is changing and what it might mean for your community, district, or center.
Kingman County is one of two counties making up the Wichita MSA in southern Kansas. This largely rural county has been losing population for decades, though that trend may be reversing as people move from the City of Wichita to rural home sites and smaller communities with a more affordable cost of living. The county’s economic development organization is seeking opportunities to retain businesses and attract new ones to the community both for the economic opportunities they provide, and to offer shopping and services to residents.
Place Dynamics was brought in to conduct the market and financial feasibility analysis for three potential uses:
A conference facility capable of hosting events with a minimum of 100 attendees
A new hotel, possibly in conjunction with the conference facility
Retail and dining businesses
The retail trade area for the county and its principal city is really no larger than the county itself. While few single-category uses are immediately viable (aside from a truck stop and restaurants), there is an opportunity for businesses to combine product lines to capture unmet demand.
The City of Kingman can support a new hotel, fueled in part by a 20 percent increase in traffic on Highway 50 over the past decade. A 40-room midscale property was recommended. The financial analysis demonstrated the project’s likely profitability and ability to secure financing based on typical commercial lending criteria.
Few similar rural counties, or communities the size of Kingman have convention centers of the size and character the economic development organization has envisioned. We examined the small handful of comparable facilities and assessed likely competition for the proposed center. The recommended facility will have a combination of dedicated rooms, flexible space, and amenities to enable it to host diverse functions such as business meetings, conferences and some trade shows, and banquets or receptions. A proposed location in the historic downtown, outdoor reception space, allowing outside food, and lower rental fees will help the facility to compete for bookings.
In addition to the location and facility design, the study recommended a management structure, services to be provided, and marketing strategies.
None of the comparable spaces are financially self-sufficient, and the analysis predicted that this facility would similarly need continued financial support. That might not be the case, however, if it were to be developed with grants and donations to defray the estimated $1 million development cost.
Several vendors provide “market reports” that offer estimates of the retail potential in areas defined by the user. How good is that data? Not long ago, we published a white paper addressing that question. In a nutshell, the answer is that they are often wildly inaccurate.
We are not alone in stating this. An analysis by the Institute for a Competitive Inner City found the same. In their efforts to verify the source data they found egregious errors that call into question the validity of the results.
Our white paper, Algorithms, Assumptions and Ignorance: Just How Reliable are the Numbers in Your Market Analysis?, describes the problems in these reports in detail.
The City of Marshfield, Wisconsin adopted the downtown plan prepared by Place Dynamics with the assistance of Short, Elliott and Hendrickson. This teaming led to an action-oriented strategy based on sound market research and a realization of opportunities for the downtown district. We could talk about it, but how about instead we offer the words of one Council member:
I have been given the privilege of seeing the entire plan and having the entire presentation both on the Plan Commission and through the Economic Development Board. We’ve looked at this quite closely. There are a number of features in this plan that I am very enthusiastic about and I am supporting wholeheartedly. One of them is that for the first time in dealing with our downtown, you guys have identified that there a lot of different downtowns and there are different treatments that have to be done to each of those areas, as opposed to just one big area, and saying that ‘this is downtown and you need to do all of these things in it’.
The other thing I like about it is that you have been very, very practical in the redevelopment area, phasing it in and showing us what we can do in three years, five years, ten, and maybe even for twenty years. That is something that is doable – the old story of how do you eat an elephant? One bite at a time. And that is what we are going to have to do here.
The other thing that is very good, that I think it is important for the Council to know, that we have struggled with as a Council, is who are the players and who does what? This plan spells out very clearly not only who the players are, but what the tasks of each player are in each strategy and each goal. This is probably the most well-defined work program I have ever seen for downtown. It is something we can sink our teeth into and budget to it, which we have already done, actually. In the Capital Improvements Plan we have already set aside some funds for the start of the 2nd Street corridor. We can do this. We can implement this. This is not a plan written by twenty and read by three. This is a plan that will be implemented and I am very pleased about that.
The last thing is that we have always argued that to make downtown and Main Street thrive we needed a critical mass of people to support the retail end of it, to support the entertainment end of it, and that sort of thing. This plan shows us how to get to that critical mass through place-making as well as utilization of existing space, and for residential. I am more enthused about this plan than any plan that I have seen in the past twenty years.
The economic development community is increasingly looking at startups as an opportunity for growth, which we think is great. We have also seen an increase in the number of organizations considering business incubation as a strategy to promote entrepreneurship. This may be less great. Incubation can be a highly effective strategy, but one that requires a great deal of sustained commitment, financial support, and technical capacity. Too many incubators are created without these assets in place and are doomed to failure.
We have prepared a two-part white paper examining business incubation. Part One: What We Know (Is Incubation a Winning Strategy – Part 1) examines data on the practice of incubation and shares the insight we have gleaned from interviews with dozens of incubator operators in the U.S. and Canada. It offers an objective assessment of the impact of incubation on startup success. Part Two: Factors in Success (Is Incubation a Winning Strategy – Part 2) shares some of our observations and thoughts on the practices that can help to determine whether an incubator may be successful. It concludes with a brief mention of some of the emerging collaborative models that may serve more clients and be better matched to the capacity of typical economic development organizations.
Place Dynamics assisted Henry, rural Rock Island, and Mercer Counties in planning to develop and promote tourism within the HRRIM region. This was a multi-faceted project involving inventories, assessment, planning, and marketing.
We began the project by documenting and evaluating existing tourism atttractions on five unique criteria, resulting in a ranking and helping to identify future development needs. At the same time, we examined visitor demographics and patterns not only within the HRRIM region, but also among competitors. Attractions were grouped to create itineraries designed to boost visitation and encourage visitors to extend the length of their stays. A development program addressed both general needs or opportunities, and those specific to individual attractions. A marketing plan discussed messaging, target markets, and opportunities for promotion.
To help demonstrate the importance of tourism to the economy, we compiled an economic impact analysis of tourism on the economy of each of the three counties. The area’s tourism is responsible for generating over $55 million in economic activity, nearly 1,000 jobs, and nearly $1 million in annual tax revenue.
The City of Santa Fe was looking for a more convenient way to monitor economic conditions and the impact of its economic development activities. Like many communities, they found it challenging and time consuming to identify available measures, collect the data, and keep it current. We worked with the City to create a comprehensive dashboard tracking general conditions, employment and earnings, business activity, spending and tourism, real estate, and personal well-being.
In total, fifty-two measures are tracked. All of the data is compiled in an Excel spreadsheet. Each table includes a hyperlink to the source to make updating an easy task. The spreadsheet includes a reporting function. Users may select the year and quarter for which they want to generate a report. All calculations are performed and all tables sand charts are automatically generated with the appropriate monthly, quarterly, or annual data. In most cases, ten years of data is reported. Local measures (city or MSA) are contrasted with state and national statistics.
Janesville is a city of about 64,000 people located in south central Wisconsin. The City retained Place Dynamics and SAA Design Group to advise it on prospects for redeveloping several brownfield sites along the Rock River where it passes through downtown. Our role was to assess the market opportunity and advise the team on effective redevelopment strategies.
The analysis demonstrated a strong and immediate demand for market rate and higher-end rentals along with owner occupied condominiums. These uses could be successfully developed along the river, where the river itself, along with existing paths and parks would be a significant amenity. Additional riverfront improvements recommended by SAA Design Group would further enhance the area’s potential. To help establish the market for redevelopment, the City will need to be an active player in helping to assemble, remediate, and market properties, as well as provide support for elements of proposed projects such as enclosed parking, which is a necessary amenity.
The market for retail, office, and dining uses in the downtown is presently limited, in part due to a lack of any retail concentration in the district, and in part due to a very large inventory of available space elsewhere in the city. The most likely prospects in the short term will include eating and drinking places, home decor and hobby-related retail, and boutique office users who may be tied to the nearby courthouse.
Place Dynamics has just released The Creative Spark, an assessment of the potential for a coworking space, or network of spaces in Southeastern Wisconsin. The study envisions using a coworking platform to promote entrepreneurship and help to grow small businesses in the region, with a focus on design and creative professional services.
Layton Boulevard West Neighbors is a nonprofit organization working to preserve the vitality of the Silver City, Burnham Park, and Lincoln Park neighborhoods on Milwaukee’s far west side. These were historically working class areas that developed along streetcar lines from the 1870’s through the early 1900’s, offering housing along with shopping and services for workers in the adjacent Menomonee Valley. As the largely Eastern European households that once dominated the neighborhoods move out, many Hispanic households are moving in. Home ownership in the area remains high, with moderate incomes. These are “moving up” neighborhoods for recent immigrants and first generation citizens who want to own a home.
Our analysis focused on five primary corridors.
Pierce Street borders the Menomonee Valley, which has been the historic heart of Milwaukee’s manufacturing district. This area is attracting several new green industries and small craft manufacturers that are attracted to the central location and availability of smaller spaces than found in the Valley.
National Avenue is the most important commercial corridor. Its higher traffic volume, proximity to Miller Park, and existing businesses are a foundation on which to build a destination business district focused on multi-ethnic dining and shopping.
Greenfield Avenue will largely serve neighborhood shopping and service needs.
Burnham Street does not have the traffic necessary to sustain the amount of commercial space available. We recommended development around nodes, with the most important of these being around a popular Mexican grocery.
Lincoln Avenue can serve these neighborhoods along with adjacent suburban areas. The street’s proximity to a large hospital complex presents opportunities to serve workers and patients, particularly for businesses in health care or dining establishments.
In addition to the market analysis, we recommended specific strategies for the organization to pursue in its efforts to revitalize these corridors.