Redeveloping Retail Centers Richard Caplan
	Session:Redeveloping Retail Centers (March 11, 10:15 am)

Good morning. My name is Richard Caplan. My experience of 12 years in local government in California and Colorado and 17 years as an economic development consultant to more than 100 cities has given me a unique and good understanding of why some cities, downtowns and older commercial corridors are able to successfully revitalize themselves while others stagnate. This morning, I want to cover several areas: Share with you the key elements that increase your city’s chance for success Discuss the economic profiles of three comparably sized communities but what makes each unique as a basis for understanding how they can succeed in redeveloping their retail . And Offer a checklist that you should consider when embarking on revitalization in your community. Part 1. Three Components of Successful Revitalization There are three critical components to achieving retail revitalization. Each one of the three must be committed to the redevelopment plan or you needn’t bother spending your energy and resources. The three components are: Technical/Professional staff Private: Stakeholders/Business/Developer/Property/Tenants and Elected officials. Without any of these, your revitalization efforts cannot succeed. Part 2. Checklist for Revitalization When embarking on retail revitalization, it is essential to start with an understanding of the market that the retail center, downtown or commercial corridor serves. The market study assists in predicting what retail uses are needed and therefore will more likely be successful in the future. You must study the unique characteristics of your community to better tailor or target the uses that serves your city’s specifics needs. Twenty years ago no one could have predicted the variety of target market segments that exist among the retail industry today. Not only have the Wal-Mart’s and Targets of the country changed shopping habits, but niche markets for every product imaginable have also emerged. Stores that sell only items to organize your living spaces, to selling only athletic shoes, ties to shops catering to extreme sports. Understanding the market potential is important because before you decide how your community visualizes the future, you must understand where the area fits into the current market and what kind of retail role your community serves. And let’s not forget the Internet, which has forever changed certain shopping habits whether it is for books or travel agencies. Part 3. Why Is a Retail Market Study Needed Therefore, let me summarize some of the key reasons why a market study is important to your revitalization effort. Provide an understanding and quantify sales injections and leakages Enable an understand and target markets Provides you and your community with realistic expectations You can use the study as a basis to predetermine amount of land required Your local economic development staff and others can use as a recruitment tool It increases your ability to say "no" to uses that are inconsistent with your vision Living in a university community, I have found myself debating with some professors at the University of Kansas whose perspective is that "Lawrence is just right today. Any new growth that "we allow" should be just to support the existing population or only the amount needed generated by new residential development." My response is that "The community, or any community, cannot insulate itself from retail trends in America. Surely McDonalds, Wal-Mart and Starbucks have taught us that. Rather, a city’s land use plan can guide these retail forces into the neighborhoods, downtowns or corridors through various public incentives or disincentives. By recognizing and understanding these market forces, a community has a better chance to direct those changes and revitalization efforts. First, let me describe as the major components necessary to achieve revitalization. All of these components need not be present, but the more they are absent, the more difficult the revitalization. Understand the market conditions, realistically assess the potential opportunities Have clear goals and objectives – who are the prime beneficiaries of the plan? Depending on the state and local sales tax structure, many cities recruit car dealers for the financial impact to a city’s budget. The most common statement I hear from Mayors is "we need a first class restaurant or a hotel with plenty of meeting space". There are plenty of reasons, Mr. Or Madam Mayor why these services are not present in your downtown. As a consultant, I get paid to tell them the truth. Publicize your plan – it never hurts to build support and serves to attract partners Know what tools are available – financial tools such as tax increment financing; planning tools such set back or potential parking variances, bonus density etc. Assemble all of the team members – There are many players in revitalization that demands more coordination and time then new development. But keep in mind that the elected officials and property owners must be on board prior to taking action. Publicize your plan. It never hurts to build anticipation and support for your objectives. It also serves to alert potential investors, developers or other partners. Organize your implementation strategy before revitalization begins. Part 4. Three Community Profiles Let me give you some examples and then we’ll apply them to three communities. Let me briefly describe three distinct communities, each with different strengths, weaknesses, resources, staff and tools. Clear Lake, Iowa is a community with a major summer recreation attraction located on an interstate highway. Its largest downtown business and employer, a bakery occupying two square blocks, recently closed and the community understood they faced a unique opportunity. Chillicothe, Missouri’s role as a minor trade center and county seat no longer sustained the historic downtown since a major metropolitan area, only an hour away, and a highway bypass weakened the traditional downtown commercial role. Gladstone, Missouri’s North Oak Commercial Corridor is a first ring suburb of Kansas City whose commercial activity has been diminished by big box stores or mall locating further out on larger, undeveloped ground. Initially, our firm conducted a market study to understand three important factors: What market is each of these areas serving today? Most retail areas or downtowns serve up to four segments of the market: Neighborhood; community; regional and increasingly tourism (which can be evenings such as for a dinner or a cultural attraction up to one or more over night stays. What is the potential for each i.e. is there sales leakage and if so how much? – This will be determined based on a variety of geographic, demographic, transportation and economic factors. Are there a common perception that things could be better and a willingness to make change? – This is the most difficult to quantify, but may be the most important. I can suggest to you with a high degree of certainly that the success of a revitalization plan is going to be determined by the level of commitment by the willingness of the existing players and stakeholders to implement change. Part 5. Gladstone Poised for Success Let’s take a closer look at one of the three cities, Gladstone. Let me briefly walk you through the retail analysis that was performed for the City of Gladstone. Gladstone retail market slides……….. Thank you very much. Richard Caplan Author and Copyright Information Copyright 2001 by Author RICHARD CAPLAN & ASSOCIATES (785) 841-7166 Richcaplan@aol.com