Tuesday, August 2, 2011

The game of downtown retail

I did a very, very bad thing. I sent an email many months ago to Alison Oshel, who is the wonderful Director of Community Redevelopment at the Greater OKC Chamber and did not read that she got back with me until just now. This is an especially egregious accident on my part, considering that I wrote a pretty negative appraisal of the job she is doing. She responded, basically informing me of what she does, as if she needs to. I then apologized and asked her if I could ask a few questions, which I'd put up as an "interview" on here. It probably looks like I ignored her and disrespected her, but sometimes you lose track of emails, and I feel very bad about this.

But here is the interview, and you can compare/contrast this with a rather negative post that I wrote back in 2009.

Q: How does the Chamber, or you specifically, go about recruiting retail for OKC?
A: We provide market research and site analysis. The research is assembled into marketing materials that are disseminated to our area brokers and developers for use in their recruitment efforts. We provide site analysis as needed and we update our market research continually. I have attached some samples of the marketing materials we compiled this year.

Q: What are some specific examples of this process at work?
A: We target retailers not yet in our market and meet with them. We have met with Whole Foods, COSTCO, REI, California Pizza Kitchen, Urban Outfitters, Anthropologie, Paper Source, Free People and at least a dozen others and most have indicated an initial interest in our market after we were able to demonstrate to them that OKC is a large market with high disposable income. Several of these prospects have been here for multiple site visits and at least two have requested site analyses for locations that they have zeroed in on. I believe we will see 1 or 2 of those listed above in our market within 18-24 months. We have NOT met with Nordstrom’s because they notoriously expect a giant public incentive (I heard in one case $40 million!) to come to any new market.

Q: What kind of efforts are made at conventions and on the road to meet with retailers?
A: We lease space at the International Council of Shopping Centers (ICSC) convention and build a booth with meeting rooms and a reception area. We offer our meeting rooms and brochure racks to any OKC broker or developer to use during the convention. This is the largest outlay of cash from our retail program but, in the good years, more than 55,000 retailers and developers attend this convention so it is a must for anyone trying to promote retail. Because space at the show is expensive, some of our area brokers/developers are extremely appreciative of having the ability to host their meetings in our space. This is not a trade show—it is a place to have meetings and to make deals. Both Jane Jenkins and Jim Cowan were our guests at this convention this past April.

Q: Every area of the metro, except downtown, was recently in store for a lifestyle center (most of these are now stalled)--how does downtown compete, and what is the plan for making downtown stand on its own as a feasible retail market?
A: We target national retail developers who have downtown development experience. We have met with a number of these firms to talk with them about and invite them to consider developing in Core to Shore. There are opportunities which exist in Core to Shore for concentrated retail which do not exist anywhere else in downtown. We have hosted site visits for a number of national developers. I am hosting a group from Atlanta today and tomorrow, in fact.

It’s not, by any stretch, an easy game and the fruits of our efforts which began in 2007 are just now starting to yield results. Whole Foods, and other retailers like them, already had their 2010 store openings announced when we first met with them in 2007—so if we don’t get a Whole Foods in 2010, it shouldn’t surprise anyone. But if we do get a Whole Foods in 2010, I believe the Chamber’s retail program can claim some credit. The Chamber lays the groundwork with our marketing materials and research to help “make the sale” but we must have good retail shopping centers to offer retail prospects so our development and brokerage community is tasked with “closing the deal”. So, I guess I’m saying it takes a village and, thankfully, we do all seem to be working in concert.

Lastly, retail is the hardest type of real estate development to get financed right now so as much as you may not like hearing it, the national economy has slowed or stopped much of the progress that was being made. A number of the developments that you mentioned are back to the drawing board, changing their mix of retail, housing, office and hotel space in order to get their projects financed. I am hopeful that the strong will survive and we will see some quality developments when the cloud lifts.

/end response

I think that is very interesting, and extremely true, that you can have the best retail development task force in the world, and if you don't have any decent developments for retailers to lease space in, you won't get the retailers. I think since this email, some of those retail development goals HAVE been met with success. We now have Whole Foods, Anthropologie, and an outlet mall--major kudos to Ms. Oshel.

I think the answer to this dilemma is obvious. We need more space, and if downtown had desirable retail space, Oshel, Jane Jenkins, and others, would work hard to get it filled with great tenants. But all of these very-capable professionals can't make banks loosen financing, and can't make developers come up with resources to put into a project featuring downtown retail. And it won't happen until there is a large, desirable, contiguous development for retail to go in--one storefront here and there won't do it, these prestigious retailers like to locate together.

OKC Business newspaper agrees, as the subtitle on an article from yesterday reads: "Despite interest from national high-end retailers, until a suitable lifestyle center is built, they won’t come"

1 comment:

Anonymous said...

What is the deal with the mayor and Chamber pushing Core to Shore instead of other viable areas downtown to develop. I am so tired of hearing about Core to Shore. This project is basically will be dead when the Convention Center/Wall to development is built