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by Lisa Hill, Vice President, Buxton
During times of economic uncertainty such as we are experiencing now, it is extremely difficult to keep momentum and move development projects along to completion. To achieve success today redevelopment agencies are reenergizing the tried and true tactics that worked during good economic times and applying them, but with even more vigor.
The traditional efforts for retail development—assembly of sites, infrastructure improvements, regulation reform, matching retailers to the customer base in the trade area, understanding the needs of retailers and developers and, of course, aggressive marketing—still apply but they need extraordinary efforts.
Help from the Agency
The redevelopment agency in San Juan Capistrano has funded a study that analyzed the current local economic market. What resulted was an understanding of what retail will work in the designated redevelopment areas and help developers recruit retail that can weather any economic climate. “Our projects continue to move forward even in these tough economic times,” said Douglas Dumhart, economic development manager for the city of San Juan Capistrano. “We’re working with landlords and property owners find the right tenants for their developments, so the next time we experience this sort of economic change, there might not be those vacancies.”
For example, when the Regency Theatres expressed interest in bringing an old movie theater in the Franciscan Plaza back to life, the owner, Lyndon Golin, knew he would need help from the city’s redevelopment agency to make the vision a reality. “Operating theaters in South Orange County, I had always been fond of the community of San Juan Capistrano and the theater in the Franciscan Plaza,” said Lyndon Golin, owner of Regency Theatres. “When the opportunity arose to bring back the theater and movies to the community, I pursued the challenge knowing that banks were not lending on projects like this.”
“The business model was achieved by the decision to not build just another movie theater, but a Movie Palace with an upstairs VIP auditorium modeled after Rick’s Cafe Americain from the movie “Casablanca,” that will not only be available for community activities, but will serve as a destination. It also features stadium-style seating, digital sound, and upscale snacks and food service,” explained Golin. To assist the development, the Agency provided a $450,000 loan to the Regency Theatres to assist with the Theater’s renovation. “We felt like this was the perfect instance for using our redevelopment funds to get a project up on its feet,” said Dumhart.
Advising Cities and Counties
While the credit markets are tight and cities and counties across California might be discouraged, local public officials must remember to move forward with their retail strategy. Urban Futures, a financial and redevelopment consultant for numerous California redevelopment agencies, has been advising its clients to keep their eye on the ball and don’t freeze. “We’re of the opinion that projects can move along and come to fruition as long as the agency can keep the momentum going,” said William R. Kelly, managing partner of Urban Futures, Inc. “When the credit markets come back around and retailers begin that aggressive growth, agencies don’t want to be behind the curve. Continue to market your community at ICSC events and sell yourselves to the retailers that you have identified for your market.”
The city of Azusa and its redevelopment agency has done just this. By staying the course and aggressively pursuing Target, they have successfully recruited the big box retailer to their city. The pad sites around future Target site are currently being primed for additional retail. As soon as Target sets its wheels in motion, the developers will work to finish out the surrounding land for new retail.
Extraordinary Efforts
Development is never easy and a good case may be made that it is more difficult today, but redevelopment agencies are achieving success by getting back to the basics. Make sure your city or county has a clear picture of what retailers will be supported by your community base. This doesn’t always line up with what local public officials want to locate in the city, but a realistic approach is necessary. After a list of retailers has been agreed upon, make sure when selling the community to retailers, there is a site to promote, or the agency is currently working to assemble a site. After the groundwork has been laid, work to reach out to those key contacts at retailers. Keep your city top-of-mind with the targeted retailers.
Successfully recruiting even one retail concept or restaurant can serve as a catalyst for additional wins. Remembering the basics of retail redevelopment is important in these times, and redevelopment agencies are achieving success by using traditional tools and techniques.
View the September 2009 Community Matters Newsletter
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