Columbia Seeks Input From Property Owners in the American Bottom

Anticipating an upturn in the economy, the City of Columbia has begun laying the groundwork for marketing local opportunities for investment.  While the City has provided information to potential investors and used trade shows and other marketing venues to promote Columbia and Monroe County for many years, this year the City will broaden its tactics.

One of these tactics is enhancing the City's website.  Studies show that websites are the point of first contact for attracting most investors and suggest that marketing efforts should focus on this venue, at least initially, to attract new businesses and new development.  The City of Columbia recently updated its website and is continuing to make improvements designed to facilitate inquiries from potential new investors.

Over the next few months, the City will be making changes to its website to make information about areas of Columbia easier to find and inquiries more fruitful.  The City's website will deliver information about each planning district defined in the 20/20 Master Plan, adopted in 2005, and will offer general information about each district along with links to specific properties for sale or for lease.  Using information from the 2005 plan for a base, City officials will begin fostering community discussions in each district, seeking input from property owners and others to help define the current and future character of that district.  Ultimately, these efforts will culminate in a revision of the master plan document.

The first discussion will be held Monday evening, February 27th, beginning at 7:00 p.m., as part of the bimonthly City Council committee meetings.  Invitations will be going out next week to property owners in the I-255 Development District (Columbia's portion of the American Bottom) to seek their participation in an informal discussion about development goals for that area. 

'Team Columbia' Promotes Community With Midwest Retailers, Developers

Three Columbia boosters spent the latter part of last week working to tell the community's story and attract new retail and new development into the city.

The venue was the Chicago Deal Making event, a trade show that assembled more than 2,000 developers, retailers, real estate brokers and city officials for the express purpose of making connections and facilitating new deals.  The annual event is sponsored by the International Council of Shopping Centers, the global trade association of the shopping center industry.

The City of Columbia had a booth at the event this year, staffed by Paul Ellis, Director of Community & Economic Development.  He was supported by Craig Hiser, owner of CMJP Properties (a brokerage based in Columbia), and David Wittenauer, vice president for NAI DESCO (a regional brokerage with an office in Columbia).  While the two brokers have business interests expanding beyond the city limits, all three worked together as "Team Columbia" to identify and, subsequent to the show, follow up with potential new development.

Columbia was only one of several Illinois cities exhibiting at the show, which drew participants from across the Midwest.  From Southwest Illinois, the City of Mascoutah and Village of New Baden also sent representatives who worked the show.

Guarded Optimism Accompanies February Retail Sales

In February, chain store sales across the nation stopped declining as fast as they have been for the past several months, according to the International Council of Shopping Centers (ICSC). Too soon to call it a trend, but retail experts are viewing the figures with guarded optimism.

Warm weather conducive to spring merchandise sales, lower gas prices and leaner inventories helped many chains recover some from the economic doldrums of recent months. Wal-Mart led with a year-on-year comparable-store sales rise for the month of 4.5 percent--the big box retailer's best performance since last June, when sales rose 5.8 percent (February represents its fifth consecutive month of traffic increases). Department store and specialty apparel chains fared the worst, down 9.8 percent and 7.9 percent, respectively. Luxury department stores were hit particularly badly, with sales down 19.2 percent.

ICSC expects March sales nationwide to be flat to one percent off from a year ago. ICSC is the global trade association for the shopping center industry, representing 70,000 members in the U.S., Canada and more than 80 other countries.

While recovery may be beginning, it is spreading faster in areas considered essential by most consumers. Fast food, discounted apparel, haircuts and cable television are four items people won’t cut, according to a survey of about 4,000 consumers by the National Retail Federation (NRF). Among items respondents consider expendable are luxury handbags, specialty apparel and high-end cosmetics, and they say they can dispense with fine dining as well, according to the survey. Some 80 percent of respondents said they refuse to give up Internet service, 64 percent said they would hang onto cell phone service, and 61 percent would cling to cable/satellite television--come what may. Ninety-two percent said they will give up luxury handbags for now, and 91 percent said the same about specialty apparel and cosmetics.

NRF is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services.

Are Incentives Failing to Spur Growth?

An interim report from an ongoing study by research staff at the East-West Gateway Council of Governments has concluded that commitment of more than $2.5 billion in public money over the last 15 years for local development incentives has not resulted in real economic growth, and that focusing on expanding retail sales is a losing economic strategy for the region. The interim report was presented to the organization's Board of Directors last week.

In addition to those findings, the interim report suggests that the provisions for uniform reporting of revenues, expenditures and outcomes for all types of incentives are “remarkably weak,” and that there is no mechanism to require a private project sponsor to deliver economic outcomes, or to allow taxpayers to recoup the value of local tax incentives if those outcomes do not happen.

While the report is well-researched, it is still interim and East-West Gateway staff are seeking further input from cities and developers who actually deploy the incentives. The report makes little distinction between wide differences in how incentives are disbursed and reported in Illinois as compared to Missouri, for instance--a failing that should be corrected in any final document. It should also be noted that use of incentives in Columbia--such as Tax Increment Financing for redevelopment of the Admiral Trost Redevelopment Area--have been made and reported in a manner that the report, even in this interim stage, would support.

Established in 1965 to provide a forum for cooperative planning and problem-solving, the East-West Gateway's programs are continuously evolving in response to a changing region. Gateway’s 21-member policy and decision-making board is comprised of chief elected officials in Franklin, Jefferson, St. Charles and St. Louis Counties and the City of St. Louis in Missouri and Madison, Monroe and St. Clair Counties in Illinois, six regional citizens and the chair of Metro. Columbia Mayor Kevin Hutchinson currently serves as a director.

Shopping Centers Launch Campaign to Boost Bricks-and-Mortar

Shoppers who buy from stores rather than over the Internet are, in effect, putting money into their own pockets--that's the message the International Council of Shopping Centers (ICSC) hopes to get out through a new campaign to encourage consumers to patronize brick-and-mortar retailers. It's a message that can only help to reinforce local efforts to encourage consumers to "Think Monroe County First!" and spend dollars locally.

The campaign, titled “Give Your Community a Lift … Shop Locally for Your Gifts!” aims to remind shoppers that local retailers provide local jobs and support community-based civic and charitable organizations. “Many consumers shop online and avoid paying sales tax, and while this may appear to consumers as a way of saving a few dollars, in the end it may cost them more if local tax revenue is eroded and municipalities are forced to cut back on services,” says Michael Kercheval, ICSC’s President & CEO.

ICSC is encouraging malls to display posters and window and door clings, available from ICSC, to support this campaign. A one-minute public service announcement promoting the campaign will air this month on CNBC, CNN, Headline News, Fox News, MSNBC, The Weather Channel, Bloomberg and National First Business, as well as during ABC’s GMA Weekend, NBC’s Today Show Weekend and the Oprah Winfrey Show.

“Sales tax revenue is important to local communities, because it’s our life’s blood,” states Douglas H. Palmer, mayor of Trenton, New Jersey, in the television spot. “We need those kinds of moneys to provide the services, whether it’s police, fire, public works and all the other services that cities have to provide.”

Founded in 1957, ICSC is the global trade association of the shopping center industry. Its 75,000 members in the U.S., Canada and more than 80 other countries include shopping center owners, developers, managers, marketing specialists, investors, lenders, retailers and other professionals as well as academics and public officials.

Shipping Jobs Overseas--A Declining Trend?

Opponents of "big box"retail cite the shipping of manufacturing jobs overseas as one reason to fight the growth of such enterprises. The recent issue of Fortune suggests that a decline in this trend may be in the works.

The magazine's September issue reports that the "cost of shipping outsourced goods from China to U.S. customers has doubled in just two years thanks to high oil prices, and labor costs in China are rising sharply." These factors are leading to "talk of a reverse migration of manufacturing from China to the U.S., [which] has been buzzing across union halls and factory floors, corporate boardrooms and Wall Street."

Fortune profiles Wisconsin-based Regal Ware Inc., a 500-employee maker of high-end cookware which discovered that manufacturing abroad has another drawback--"it isn't nearly as efficient as they had hoped." As part of a recent review of its manufacturing processes, Regal Ware managers decided they could solve inventory woes and serve customers better by abandoning a large portion of their ten-year expansion into China." After Regal Ware moved its production back to the U.S., CEO Jeffrey Reigle claims that the company experienced a more flexible supply chain and heightened efficiency.

Though Fortune opines that "plenty of manufacturers will continue looking for ever cheaper places to produce," Regal Ware's experience "suggests that companies need to think beyond simply chasing the lowest cost supplier."

Developer Appeals Columbia Crossing Decision

As expected, developer G.J. Grewe last Thursday filed an appeal challenging dismissal of his suit against the City of Columbia over the stalled Columbia Crossing project.


Grewe's appeal will be heard in the United States Court of Appeals for the Seventh Circuit, which has jurisdiction over such cases. To overturn the earlier decision, Grewe must show the trial court made a legal error that affected the decision in the case. The court of appeals makes its decision based on the record of the case established by the trial court; it does not receive additional evidence or hear witnesses.

The City of Columbia has already spent $200,000 defending against Grewe's lawsuit and has another $350,000 budgeted for this current fiscal year.

Wal-Mart About to Debut 'Small Box' Stores

According to a report just released by the International Conference of Shopping Centers, Wal-Mart will roll out a convenience store concept called Marketside with a ten-store launch in Arizona this fall. The 15,000-square-foot units (about one-tenth the size of regular Wal-Mart stores) will compete with Tesco’s newly launched Fresh & Easy concept. Wal-Mart projects that Marketside will blossom with approximately $10 billion in annual sales from up to 1,500 stores nationwide. Since this store size is smaller than Harres Furniture (23,000 SF) here in Columbia, this new move by the retail giant may have a sizable impact upon a pending local ordinance seeking to restrict “big box” development.

Wal-Mart is most likely responding to the growing backlash against "big box" retailing by aggressively moving to outflank its critics. Not that the controversy is hurting sales--Wal-Mart saw profits rise 17 percent in its fiscal second quarter, which ended July 31st. Net sales rose 10 percent to $101.6 billion, from $92 billion a year ago, and its same-store sales in the U.S. grew 4.5 percent (excluding fuel sales) year on year. These glowing numbers encouraged the company to raise its full-year earnings forecast, but at the same time, it cautioned that sales would be slower in the third quarter—somewhere between 1 and 2 percent—as the money from the tax rebates that helped drive sales in the second quarter gets used up.

Judge Dismisses Developer's Suit Against City

A federal judge today tossed out a Missouri developer’s lawsuit against the City of Columbia stemming from a dispute involving the proposed Columbia Crossing project near the Jefferson Barracks Bridge.

G.J. Grewe Inc. was seeking millions from Columbia, alleging that it had failed to live up to a three-year-old development contract, but U.S. District Judge Phil Gilbert dismissed the suit, writing "there is no express or implied authority" allowing the City to enter into the agreement in the first place.

The ruling represents a victory for the City--in effect, granting the motion for summary judgment that Columbia requested. While Grewe may very well appeal this decision, necessitating additional costs to defend the lawsuit, the ruling presents an opportunity for Columbia to begin moving on beyond a situation which has shadowed local economics for many months.

"I am hopeful that this will be a turning-point and that the Council can come together to proactively work toward the betterment of our City," Mayor Kevin Hutchinson stated upon hearing the decision. "I have been very vocal and consistent in expressing my belief that Columbia needs a healthy balance of residential and commercial development to sustain our current service levels," he reflected.

"I am eager to work with the rest of our Council and with our community to develop innovative new ways that we can sustain City services by increasing our currently flat and/or declining revenues without unduly burdening our residents."