City targets retail growth opportunities

In an effort to attract new retail stores and restaurants and help strengthen the viability of current local businesses, the Gatesville City Council approved a contract with The Retail Coach, a national consulting, marketing and recruitment company to help identify opportunities to boost the area's economy.

The Texas-based firm will help the city identify developers and retailers with a goal of recruiting them to locate in the area within 12 to 24 months. The contract will cost the city $35,000, with $1,000 of those expenses being refundable.

"It's important to look at potential development opportunities," said City Manager Scott Albert. "The cost will be $10,000 this fiscal year and $25,000 next fiscal year."

Aaron Farmer, president of The Retail Coach, gave a presentation to the council which included the firm's success stories in other areas.

"We help communities identify their retail opportunities and we actually go out and recruit retail businesses to your community, which includes stores, restaurants, entertainment and hospitality. We also help coach communities on long-term success.

"I have been with The Retail Coach for 16 years. We work all over the United States, but Texas is our home base. About 70% of our projects are in Texas, and Texas is what we know best. We have a 90% client repeat rate," Farmer said.

The company has helped attract retail to communities like Harker Heights, McKinney, Brownwood, San Saba, and Bastrop.

"With retail it's very important to be aggressive and to understand the Texas market," Farmer said. "We have helped attract several retail businesses to communities and those are big wins for the communities.

"There is an eight-step process, and the first phase is understanding the market and where customers are coming from. You have to have a healthy mix of local, regional and national retail. We want to bolster each of those. We also work with the local businesses that are already here," he added.

What happens in Waco, Temple and Lampasas also impacts Gatesville, Farmer said.

"We study cell phone data to better understand the market," he said. "If you have a cell phone and go to H-E-B or Wal-Mart, we know you are there. We are able to identify where customers are coming from and how long they stay in your community. Using cell phone data is incredibly powerful (in understanding the retail market)."

In addition to identifying retail needs and opportunities, Farmer said The Retail Coach can also help predict "what demand will look like in five years. You are showing growth and demand is going up."

He pointed to areas around Wal-Mart that are vacant, as well as sites along Highway 84/Main Street where new businesses could potentially locate.

"Gatesville is underserved," Farmer said. "There's opportunity in this area. If we can provide the sites to these retailers, it speeds up the recruitment process. We identify retailers that should be there that aren't there, and we show them they can't afford not to be in Gatesville.

"It's important to have all the economic development information in the right place, quick and easy to access. We do the recruitment, phone calls, emails and text messages and we go to trade shows, and we keep track of all of our efforts. One of the most important things in retail is trade shows. We represent you at the trade shows and work with the retailers there."

Farmer, who lives in Dripping Springs, in the Austin area, said he is familiar with Gatesville.

"I know your community well - I have family not far from there," he said. "I think there's opportunity whether it's on Highway 36 by Wal-Mart, or redeveloping areas along Highway 84 and Main Street."

Both Councilwoman Barbara Burrow and Mayor Pro Tem Meredith Rainer expressed concerns about protecting local businesses already established in Gatesville and also the community's smalltown atmosphere.

"When you say you plan to work with the current businesses we have in town, what does that look like?" Rainer asked.

"We have a town hall meeting and share all the information and how to use it from a marketing standpoint," Farmer said. "I can run reports on individual businesses using cell phone analysis."

Rainer noted that "some of the sites near Wal-Mart people have looked into. We have infrastructure issues - waterline issues."

"I'm somewhat up to speed on the infrastructure issues," Farmer said. "If we can convince a developer to do a large project (addressing the infrastructure needs) makes sense, cost-wise."

Councilman Greg Casey asked about incentives for businesses that would locate in Gatesville and pay for infrastructure upgrades and asked about The Retail Coach's role in that discussion.

"We'll probably do that ourselves," City Manager Albert said.

"We actually have the ability to run an incentive analysis," Farmer said. "We can see what a project will bring in as far as sales tax and can project it for five years."

Burrow emphasized the importance of protecting the businesses that are already in Gatesville.

"With new businesses introduced, that is going to exacerbate the movement away from small businesses," she said. "It was the same thing with Wal-Mart when they came in. It sucked the life out of our local businesses. How do we limit that collateral damage?"

Farmer said Burrow presented a great question, and added, "What Wal-Mart has done has expanded your trade area. We look at how to bring that to other businesses. We just want to add to your retail mix and keep people from leaving your community as often. We call that retail leakage."

Rainer said she was "proud of our small businesses. I don't want to lose that small town feel. If you bring in Target, it's going to feel like Waco and not like Gatesville."

"I can tell you 100% that Target is not coming to Gatesville," Farmer said. With regard to protecting small businesses, Farmer said "we had the same concern in Dripping Springs. The reality is we have $400 million in retail leakage on a regular basis. It's important to find that healthy mix. We want to work with your local businesses and help them expand their business."

Councilman Claude Williams said he had a different perspective than Burrow and Rainer, stating that sometimes businesses did not offer the best value for customers because of a lack of competition, leading many people to leave Gatesville to visit other communities to dine and shop.

"I feel the opposite," Williams said. "Prices can get so high when you are paying $15 for six pieces of chicken that I'd rather go out of town to a restaurant (for better value)."

Councilman Joe Patterson noted that San Saba, a small agricultural community with a population of about 2,600 people, was among The Retail Coach's clients, and asked for details on how efforts helped that community.

"Do you have anything to share about successes or struggles in attracting businesses to a place like San Saba?" he asked. "Some worry about too much change. I look at some of those retailers and think they may not have much interest in Gatesville" (because it is a smaller community).

"San Saba is close to my heart - it's a great small town," Farmer said. "I take my kids to the park there. We were successful in attracting some fast-food establishments to San Saba. We also helped the local grocery store. They had expired items on the shelves and people were leaving to shop in places like Brownwood. We worked with the store to have them carry items that people would actually buy and keep them from leaving town so often.

"There are a number of success stories for them but mostly at a local and regional level. They don't have as much ability to attract national retailers like Gatesville does."

Councilman John Westbrook noted that Harker Heights "is the money side of Killeen, Brownwood has a university and is a major crossroads, and Marble Falls is close to Austin - I'm having a hard time seeing where Gatesville fits in" (to attracting new retail).

"That's why you need us," Farmer said. "Your trade area is growing and is five times Gatesville's population. You are pulling people from other areas to stop and eat. You've got a hospital that is a pretty large draw, a pretty decent-sized school district. Wal-Mart and H-E-B are there, and that shows your ability to draw for a larger retail area."

Rainer said one issue Gatesville has with its Census data is that the prison population is included for the community.

"I've known that, and we've got demographers that will come in from day one and be able to identify strengths and needs," Farmer said. "We also look at your daytime population. Prison staff are coming in from outside the city limits. We will work with demographers to identify that true population."

Albert said The Retail Coach will work with local businesses too, adding "that's worth the money in itself."

He added that "even if we retain only 5 to 10 percent of that $400 million (in retail leakage), that's a significant amount of money. You can see the deterioration of buildings and infrastructure. We've got to start bringing in additional money."

Rainer said her concern was the impact on local businesses.

"That is the nature of a capitalistic society," Patterson said. "People are going to vote with their dollars."

Mayor Gary Chumley said he lived in Hamilton for two years and had to shop in Gatesville. He said when people come here to shop, it's important to provide them with variety and places of interest.

"You draw traffic in from people coming to shop and they see more business, they'll start spending a little more time here," he said. "That equals money.

"This is not the total answer but it's one more tool in our toolbox to be able to pay for this infrastructure."

"Our goal is to bring in a couple additional businesses and restaurants and to help existing businesses grow and expand," Farner said.

"The only competition I hear about is people going out of town to shop and eat at restaurants," Williams said. "Why can't we keep more of that money here? I think it also brings jobs."

Farner said The Retail Coach looks at "80 different sectors to be able to tell the story to attract retail."

Rainer asked about a timeline for bringing in new businesses.

"It's quickest to get retailers and restaurants into existing space," Farmer said. "We'll know within a few months. If we can get them the site and the information they need, you'll see some things happen pretty quickly.

"There are some areas of downtown that need some redevelopment, and we'd be able to strategize."