By Charles Parker, Project Director, The Retail Coach
It’s easy for city leaders to get lost among the chaos of retail and commercial real estate. New store openings, major brand bankruptcies, mall redevelopments, and retail brands buying one another up can make them wonder — is there anything a city can do to join the conversation and get the ribbon cutting?
The answer is a resounding “yes!” Public officials have an important role to play in where restaurants, retailers and developers choose to locate. Every project must receive council or commission approval, so the municipality is already involved. The most successful cities are those that proactively recruit retail projects and insert themselves into the conversations early in the process, rather than waiting for new development to come to them.
Incentives are the first things that come to mind when government recruits business. But the country is littered with vacant retail centers that were once incentivized. Incentives alone do not make successful retail developments, and they also don’t always come as a lump sum or a tax abatement. City leaders can offer incentives to locate in the form of waived local fees or an expedited review process. These may not add up to much as a dollar amount, but a streamlined process that aligns with expectations is valuable. Is your city easy to work with? Are zoning, design standards and codes clear to follow? Can a developer contact somebody quickly for answers to questions? These are ways a city develops a reputation as a market where brands want to find more projects.
Site selection has become extremely data-driven. Retailers and restaurants analyze sites, trade areas, store performance, and every other variable imaginable so they understand the key ingredients of a good project. They know the value of every parking space, the daily traffic count, and the spending pattern difference between “soccer moms” and “empty nesters.”
Successful retail development sites are chosen using data points like population density, household incomes, educational attainment and more. The need for quick and accurate data on markets is where city leaders can get more involved. Site selectors typically cover a wide range of states in their territory and rely on resources like CoStar, ESRI, and other platforms largely dependent on national, census-based databases. While these resources make it easy to analyze a market from anywhere, there are drawbacks such as delays in getting current data and an inability to get granular data.
Cities’ planning and economic development departments are an incredible resource for site selectors. If nothing else, make sure the city website has easy to find information on the trade-area demographics, new housing data and projections, and any other major investment happening in the community — this is where city officials can have the biggest impact!
Retail recruitment is ultimately a relationships business. Building personal connections with real estate managers, brokers, and developers who ultimately make the decision where the next grocery store or coffee shop locates is critical. Attending industry trade shows and conferences allows for invaluable face time with retailers, and lets a city leader pitch the opportunities of their market. Site selectors want to understand local property owners and which off-market properties may be available. City leaders are the conduit for this valuable information and many deals are made without a “for sale” sign.
Many stars must align for a commercial real estate deal to work and city leaders absolutely have a role to play. Providing the information, environment and support for retail site selectors directly impact how communities recruit new shopping, dining and entertainment experiences.