In Palm Coast’s Expensive Hunt for New Retailers, a Few Leads, But Only Low Wages
FlaglerLive | April 26, 2016
Last July Palm Coast signed a $135,000, three-year contract with a Texas-based marketing company to help the city recruit new retailers, fill empty storefront or build new ones, and spur the local economy. Tuesday morning, the company gave its first progress report to the Palm Coast City Council.
The firm Palm Coast retained is called the Buxton Company, whose Matt Tate, a senior account executive, presented an update alongside Palm Coast’s Beau Falgout, the city’s point man on economic development.
There was a great deal of the economic jargon that invariably accompanies presentations heavy on marketing data and optimistic speculation but still short on results. But in the end, it was a glass half-full, half-empty sort of thing: there was not a single success to speak of, but there are possibilities with at least two retailers: Save a Lot and the Cato Corporation, the women’s fashions retailer, though it’s not certain that the companies’ interests in Palm Coast is directly related to the city’s recruitment efforts. “Lots of times we don’t really know how they found us,” City Manager Jim Landon said. “It’s a combination of things.”
There are a few other distant possibilities with Longhorn Steakhouse, Buffalo Wild Wings, and BJ’s, but those are on a horizon measured in years, not months, if then.
And in every case, the retailers offer mostly low-wage jobs that would be below living wage measures, and the businesses would generate revenue for themselves that, for the most part, would be sucked out of the local economy and transferred to retailers’ headquarters and shareholders. That’s on the assumption that any of the prospects do open a store locally. Council members, however, have not been concerned about the low wages. Their focus is exclusively on filling storefront, and on getting on big retailers’ radar in order to convince them to open locally. (By way of comparison, Island Walk, the renovated shopping center that used to be Palm Harbor, has filled the majority of its storefronts without government help.)
“Everybody says OK, it’s been six months, well, what have you done for us,” Landon said. “These retailers have a one-year plan, and if we weren’t on the radar and we get on the radar, they’re not all of a sudden going top announce Palm Coast is our next store, because they’re building three or four that they already had in the pipeline. So the key to it is to become that fifth or sixth. And when someone has five to seven [stores] they’re going to build this year, and you don’t make five or seven but hopefully you were in their top 70, well then, next year you try it again, because they’re going to have another five to seven next year.”
“But Mr. Landon that’s the kind of data that we need because we are investing tax money into promoting Buxton, and so from time to time it’s reasonable that, OK, this is what we’ve done for you lately,” council member Bill McGuire said. That, Landon said, was the reason for today’s presentation.
Tate described the laborious process Buxton goes through to determine which retailers might be the best fit for Palm Coast. Buxton looks at “thousands of retailers,” he said, to match them with the city’s customer base, winnowing down the numbers based on the type of customers available. For example, according to Buxton’s analysis, almost a fifth of Palm Coast’s households are termed “L41” (that jargon again), what it refers to as “older empty-nesting couples and singles enjoying relaxed lives in small towns,” the sort of people who have disposable incomes, who go on cruises, buy hybrid cars and read science and technology magazines. But a tenth of households are “Q64’s,” or “town elders,” essentially older people on fixed incomes. Buxton crunches those and other findings to come up with a list of companies that would be good targets for recruitment.
Optimism but no solid data to show that the $135,000 investment is what led to a few glimmers.
Mayor Jon Netts asked how Buxton knows what the retailers themselves are looking for. That’s a combination of data accrued from the retailers—at least those that cooperate with Buxton, and there are a few—and extrapolation of that data to make assumptions about other retailers. Tate described Buxton’s experience with a frozen yogurt company that offers kosher yogurt. “Wherever they’ve located near a Jewish synagogue, they would have a boost in their sales,” Tate said, “so those types of things would be worked into performance type metrics.”
Next comes the “pursuit package,” a fancy term that boils down to Buxton sending information about Palm Coast to a targeted retailer as an introduction to Falgout’s follow-up calls and emails. Buxton itself doesn’t recruit so much as it prepares some groundwork for Falgout to do the work.
When asked how different the Buxton era is from the time when Falgout was working on his own, he explained: “I would say my time was used inefficiently, whereas obviously Buxton it’s kind of like getting qualified leads.” Those leads can come from developers, from Buxton, from real estate brokers. It’s Falgout’s job to connect the dots and “build those relationships.” Some retailers have shown interest in the Kohl’s area, but are not happy with its lack of visibility. They could be made happier, the city found, if the lots can be reconfigured, but that’s a long-term project that involves the owner and others.
When it came down to more tangible retailers Buxton and the city targeted, the list started with about 20, though several of those had to be excised: Aldi, the grocer, was one of them, but Aldi was already interested—on its own—in opening a location at the corner of State Road 100 and Belle Terre Parkway. Sports Authority was one of them, but it’s in bankruptcy. Dick’s, another sporting goods store, was one of them, but its not interested in Palm Coast. Others included Chili’s, McCalister’s, Big Lots, Rue 21, Marshalls, Carter’s and Applebee’s, which are still being targeted.
The single best prospect turned out to be Save-A-Lot, a low-cost grocer. “They’re searching for the right and sustainable location,” Tate said, referring to his discussions with the company’s development manager for the southeast, “he said that he believes that Palm Coast could sustain two Save-A-Lot locations. For now, he said, “it’s really just trying to find the right spot. He mentioned he’d move into the Kohl’s parking lot in a heartbeat.”
“So of these potential retailers, where would we be if not for Buxton?” council member Steven Nobile asked.
“I don’t know that the door would be open or conversations would be going on,” Falgout said. “Would they be looking at us? Yeah, some of these larger corporations either hire Buxton or other groups out there, so they may be looking at you. I believe just being in this process for now six months is that’s really a relationship business and do you make it higher up on the list—do you ever know? Maybe not.”