How cities, developers can best work together on new retail projects
With macroeconomic factors leaving new construction at a virtual standstill, partnerships between local governments and retail real estate developers have never been more important.
That’s what experts noted at the recent ICSC New York City show during a panel titled “Winning the Deal — How Cities Are Attracting Top Retailers.” City officials and partners discussed how developers and municipalities can work together to bring new development plans to life, providing fresh retail amenities for residents that currently may be lacking.
“We found that Newark residents spend about $6 billion per year, and $2 billion of that is in other communities,” said Emily Manz, chief business development officer and director of marketing at development agency Invest Newark. “We understand that there's demand that's yet to be captured by retailers. In our outreach to businesses and in our meetings with business owners, using data that we've had for the last year, we can quantify how many people leave the city for certain services.”
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When meeting with developers, “dialogue and data” are key for making deals. Thomas Broeker, economic development director for the city of La Vergne, Tenn., said that city officials can showcase metrics such as population growth and housing development statistics to prove that their municipalities are prime locations for retail expansion.
“La Vergne is right up against Nashville, and we are in the fastest growing county in Tennessee,” said Broeker. “When meeting with a developer, he asked if there were enough ‘rooftops’ to support a new project. I sat down and started showing him our numbers that we have pulled for housing permits that have been approved. As a result, that area, which has roughly 12,100 new homes going up, now has a 100-acre mixed-use development that's being built with over 200,000 square feet of retail space.”
The approach for attracting new business should be collaborative as well, partnering with neighboring cities to build relationships.
“Cities from across the state join us in our retail recruitment initiatives,” said Brad Long, deputy city administrator of the city of Madisonville, Ky. “When you're talking to developers, or when you're talking to maybe a franchisee, it may make more sense for a retailer to enter into three communities within a certain mile radius. It’s the mindset that when one succeeds, we all succeed. We are seeing retail growth in the state of Kentucky at a pace that we haven't ever seen before.”
Similarly, city officials can work with state partners to showcase the best incentives available to capture and retain new development.
“We keep very close relationships with the New Jersey Economic Development Authority and the other big players in New Jersey that have different grant programs and incentive programs,” said Manz. “When we meet with a business owner, we know we all want to be aligned. Making sure that it's not your first time working with any of these state partners when you're talking to a business is important because that alignment gives the business owners a lot of security and comfort.”
