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Retail Traffic

Municipalities Market Main-Street America

When it comes to retail initiatives, municipalities are proving they're just as aggressive and creative as their private peers. From tax incentives that encourage public-private partnerships to promoting unique demographics, municipalities' public officials are doing what they do best - building the excitement of retail potential while courting the private sector.

Putting its money where its mouth is Shirtsleeve winters, a thriving downtown and energetic leadership are what economic development officials with the city of Shreveport say are responsible for the city's booming retail economy.

With restaurants opening at a rate of one every 10 days, Shreveport is the fastest-growing tourist destination in the state of Louisiana. A flourishing gaming industry puts the city ninth in revenue among the country's top 33 gaming markets, while a recent downtown revitalization effort, including the construction of an $85 million convention center, is also luring some 6 million to 8 million tourists annually.

"The growth is phenomenal," says Mayor Keith Hightower. "The city has put its money where its mouth is and the private sector has responded."

Located within one mile of downtown, four gaming operators are the bedrock of the city's retail progress. A fifth is on the way. But, with its casinos drawing visitors to the area, city officials decided to revitalize their expired downtown three years ago with the creation of a $25 million entertainment district. The project's focal point is the historic Red River, a scenic and navigable waterway that flows through the heart of the city and is heralded as the Gateway to Texas.

"We took familiarity trips," explains Arlena Acree, Shreveport's director of economic development, about the city's efforts to gain insight into other municipal riverfront developments. "We visited Charleston,S.C., Savannah, Ga., Indianapolis and Cincinnati. It was better to learn from other cities than reinvent the wheel."

With ideas brimming but no one to implement them, Acree traveled to Memphis, Tenn., to ask famous Beale Street developer John Elkington to visit Shreveport and make suggestions. Not only did Elkington oblige, he became an investor in the Red River Entertainment District.

After completing a study of the city, Elkington identified the downtown area as the most bankable for retail growth. Abandoned in the late 1970s with the decline of the oil and gas exploration industries, historic buildings are currently being leased to a tenant mix of 30% retailers and 70% restaurants and nightclubs. Commitments from Dick's Last Resort, Pat O'Brien and Sambucca are currently under negotiation.

Acree estimates projected downtown retail sales to reach $55 million annually.

Hollywood Casinos plans to open its doors in October. In addition to its gaming facility, the complex will also boast a Fairbanks Steak House, Hollywood Diner and Hollywood Epic Buffet. A 170,000 sq. ft. themed pavilion promoting Hollywood memorabilia is also part of the project. Nearby, a 405-room hotel overlooking the river will give visitors the opportunity to stay downtown overnight.

Last year, the city also embarked on a river stabilization project to protect the riverbanks from erosion. Two floating docks accented with large rose-like architectural pieces also are being built to celebrate the city's claim to fame as the American Rose Center. A retail area with small kiosks is also in the works.

"This is a celebration of our river," Acree says. "We already have a lot of walkers on the riverfront, so why not enhance it while at the same time promoting retail and entertainment?"

Tax-free spurs shopping sprees Always on the cutting edge of shopper sagacity, New York City (NYC) officials announced in March the end of the sales tax on clothing and footwear costing less than $110.

Coupled with a $16 million investment from Federated Merchandising Group to expand its NYC headquarters, the city is preparing to win the hearts of shoppers and retailers in the new millennium.

The permanent elimination of the 8.25% levy is expected to save shoppers hundreds of dollars each year, add approximately 13,200 jobs to the local economy and boost the city's revenues by $910 million, according to Mayor Rudolph W. Giuliani.

Before implementing the unprecedented tax reform measure, city officials tested the waters during a three-year period. NYC shoppers were treated to seven sales tax-free weeks, which met with remarkable success. To the delight of retailers, citywide sales during one of the test trials increased by as much as 77%.

"The sales tax elimination will also do much to recover the $700 million per year NYC merchants lose to New Jersey," the mayor says. "Working families with lower incomes that typically spend a large portion of their income - as much as 12% - on clothing and footwear will especially benefit."

City officials estimate the tax relief will result in 19,600 additional jobs and $1.4 billion in annual economic activity.

Michael G. Carey, president of the New York City Economic Development Corp. (EDC), said the repeal also will go far to bolster the apparel and retail footwear industries in the city. EDC is the city's primary vehicle for economic development services.

"The city's 4,300 firms currently employ more than 74,000 workers and boast record sales of more than $8.2 billion annually," Carey says. "This sales tax elimination will add more than 8,100 retail and 5,100 related jobs to the city's employment rolls."

Headquartered in Cincinnati and New York, an organization known as FDC is the nation's largest operator of department stores. With annual sales of $18.2 billion, FDC currently operates more than 400 department stores in 33 states under the names of Bloomingdale's, The Bon Marche, Burdines, Goldsmith's, Lazarus, Macy's, Rich's and Stern's. FDC also operates Fingerhut, Bloomingdale's By Mail and Macy's By Mail.

FDC's expansion will result in the consolidation and expansion of its headquarters at 11 Penn Plaza. In return for FDC's commitment to retain more than 700 employees in NYC, as well as add more than 230 during the next 15 years, the city's industrial development agency approved approximately $1.7 million net present value in sales tax exemptions and $640,000 in energy cost reductions for the company.

Rocking on the river The Biggest Little City in America, also known as Reno, Nev., is taking retail growth to new heights with its savvy approach to redevelopment.

With Reno long known for its gaming industry, city officials have embarked on a massive revitalization project encompassing every facet of the city.

Along the banks of the Truckee River, the city's three-year development effort has focused on building retail establishments, restaurants, cultural entertainment and lower-rent studios for starving artists. With 300 days of sunshine each year and a mild climate, the city's not hard-pressed to find willing tenants and investors.

Meanwhile, a massive masterplan to revitalize the city's downtown entertainment district promises to add diversity and adventure for the 6 million visitors who trek to Reno annually.

"At some point in our city's development, we turned our backs on the river, which should never have happened," says Dorene Sotto, the city's economic development manager. "We want to see redevelopment complement the river with walkways, restaurants and specialty retailers."

As she continues, "Across the city, we're also looking at underutilized blocks of downtown land and adding retail to an area of the city that's predominantly perceived as being just for the gaming enthusiasts."

On the river's south bank in the abandoned Riverside Casino, city leaders are refurbishing the nationally recognized historic building with funding from historic and low-income tax credits and private investors. Projected for completion in September, the five-story, $7 million renovation project will consist of 37 lofts that will be rented to local artists. A restaurant, small book store and exhibit hall will inhabit the first floor, with the remaining space used as live/work studios.

Art Space in Minneapolis is directing the project and will pair up with the Sierra Arts Foundation, a local non-profit agency that will administer the lower-rent housing project and qualify candidates. Rental costs of the 800 sq. ft. to 1,200 sq. ft. lofts will range from $300 to $600 per month.

Across the street, the city is rehabilitating its historic post office, relocating its postal workers downtown and turning the facility into office space for art and cultural users, as well as promoting entertainment venues and eateries. To be themed in a French-villa design, a jazz club is planned for the facility, as well as office space for the local philharmonic and ballet agencies.

"We anticipate taking the first floor and turning it into an entertainment venue that opens up to the river and restaurants," Sotto explains.

Across the river sits the Old Mate's Casino, which was also on the National Register of Historic Buildings. Unfortunately, Sotto reports, the city was not as successful at securing historic tax credits for its rehabilitation purposes due to the huge cost associated with renovation.

"The building will be demolished," Sotto says. "We've got several pending proposals from five different developers and we're not quite sure what will evolve. However, we're certain it will be something that complements the river in the form of a hotel, restaurants, retail or entertainment."

Three blocks north in the downtown entertainment district, the city has hired Cordish Co. of Baltimore to redesign underutilized areas of land and create a masterplan for a special events facility. Scheduled for completion this summer, the plan will incorporate an entertainment and retail component that will add variety to the typical fare associated with the gaming industry.

"We don't have a lot of retail downtown," Sotto says. "We've set aside $50 million for this special events center and we want to add to and diversify the experiences of our visitors."

Creating its own curve Garrett Newland, director of economic development, admits the city of Chandler, Ariz., historically has been behind the retail curve compared to some of its urban peers, but not anymore. Capitalizing on its strong demographics and high-tech base, the city is creating its own curve and, in the process, attracting a wealth of retail and entertainment venues.

"Since we're located at the far end of the metro Phoenix valley, we've been a little bit behind in terms of retail growth," says Newland. "But Chandler is the second fastest-growing city in the country and there's a lot of demand for services. It's been a very high priority for the mayor and the city council to go out and attract retail."

Indeed, Chandler's demographics are the envy of most municipalities. The recent announcement of Intel's $2 billion investment into the local economy to manufacture the latest in semi-conductors is indicative of a youthful, quality work force.

"It's driven our age down and our income up," Newland admits. "The average household income in Chandler is $50,000, which is second only to Scottsdale. We're committed to attracting quality retail because of our demographics."

Westcor Shopping Centers is one of many retail plums putting down roots in Chandler with the five-anchor, 150-tenant Chandler Fashion Center, scheduled to open in October 2001. An adjoining 100,000 sq. ft. movie theater will be linked to the shops by an outdoor village area complete with restaurants and other retail establishments. Two additional power centers located on opposite corners of Interstate 10 promise to be additional consumer draws for retailers.

In the community's western region, the 1 million sq. ft. Chandler Pavilions will combine popular retail establishments, such as Home Depot, Sam's Club, Toys 'R' Us, Borders Books and Lowe's, with the excitement and entertainment of Polar Ice's skating facility.

"There's a lot of demand for general ice skating for the public, as well as by local hockey leagues and figure skaters in the metro Phoenix area," Newland explains. The rink will be NHL-sanctioned since the Phoenix Coyotes are a popular sports staple in the local athletics line-up.

The Pavilions will also feature Casa Paloma, a high-end specialty center themed in a historic Spanish design that will cater to higher-end tenants not yet found in the Chandler valley. With a major grand opening set for early summer, the 150,000 sq. ft. retail center will house tenants such as A.J.'s Fine Foods, The GAP, Banana Republic, Ann Taylor, Sally Huff and a gallery for Thomas Kincaid artworks.

A major renovation project is also slated for Chandler's downtown. Modeled after some of the original designs of Frank Lloyd Wright, who conceived the first masterplanned community plan in Arizona, the Chandler City Center revitalization effort will consist of 100,000 sq. ft. of major office space, as well as several new restaurants and retailers within walking distance of one another.

"As downtowns tend to do, ours died during the last 30 years because we made the mistake of building an interstate that ultimately divided the city," Newland says. "We're trying to bring attention and activity to our downtown and make it its own special destination. We're not interested in competing with the malls. Instead, we're focusing on smaller retailers and office users."

Newland attributes the success of Chandler's retail growth to the city's commitment to assist large developments with infrastructure while offering developers an expedited design-review process. Developers willing to make infrastructure investments are reimbursed up to 50% of the project cost through sales tax refunds.

"With the valley experiencing so much growth, the special design-review process has reduced review procedures by half - from 20 days to 10, " Newland says. "It proved to be a huge success on the Pavilions project and it's helped us to attract tenants we probably wouldn't have gotten."

Chandler's overtures to developers, and those of other like-minded cities, will help keep it where it wants to be - in the forefront of retail excitement for years to come.

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