August 9, 2018 10:42:10 AM
The city of Columbus is looking at potentially hiring a firm for retail recruitment and development for the upcoming fiscal year, which begins Oct. 1.
A representative with NaviRetail, a firm based in Memphis, Tennessee, is expected to pitch its services at an upcoming city council meeting. While the city hasn't signed a contract with NaviRetail, it does include $30,000 in its FY 2019 budget for retail recruitment services.
NaviRetail would reportedly charge the city $37,000 annually, and since it's a professional service, state law does not require the city to pursue formal bids or other proposals.
Ward 3 Councilman Charlie Box told The Dispatch the city has experienced a dip in retail revenue in recent years. In fact, a recent Columbus-Lowndes Chamber of Commerce study conducted by national market research company Brick + Mortar showed more than $1.1 billion in retail potential was leaking from Columbus to other areas.
With a dedicated retail recruiter, Box said he believes the city can recapture those sales, and in turn, more sales tax revenue.
"Maybe we're plagued but I just don't think so," Box said. "(NaviRetail) is working with a bunch of other cities right now and they're having progress with it. We need to try something. ... People are leaving (the city), that right there tells us enough. If people are leaving here to shop in other areas, we need to provide the stuff here."
Likewise, Ward 6 Councilman Bill Gavin thinks the city needs to seriously invest in retail development soon.
"We've got to try something and look for different sources and go out and get another player on the team," Gavin said.
If the city contracts with NaviRetail, or any other retail firm, it would eliminate the need for the Golden Triangle LINK to assist with retail, according to city officials, and instead just focus on industrial recruitment and development.
If something doesn't change soon, Gavin said, Columbus will continue losing ground to neighboring cities with which it should be competing.
"We're already behind Tupelo and Tuscaloosa, now we are trying to keep base with Starkville," he said. "If we don't watch it, Starkville is going to outgrow us. And my job is to make the city grow. Because we are losing population. That's not a myth."
NaviRetail's track record
Chief Executive Officer Casey Kidd started NaviRetail three years ago. In that time, the company has contracted with cities -- mostly in Mississippi, Alabama and Tennessee -- to better focus their retail strategies, Kidd said.
"This is a very data-driven business. We look at what the consumer is looking to buy and what they cannot buy within the city limits," Kidd said. "What we are trying to do to help these cities is capture those retail builders."
In one city in Tennessee, which he wouldn't name but said it was similar to Columbus in both size and demographics, Kidd said he helped its restaurant sector capture $7 million in just one year that people had been spending eating elsewhere.
Kidd also mentioned his ties to the area and already generally knowing what the city's needs are.
"I am from North Mississippi, so I already know a lot of people are driving to Tupelo for these simple things," Kidd said. "They are driving to Tupelo to shop and spend those same dollars on retail that could be in Columbus."
Effects on the LINK
Columbus has set aside $100,000 annually for the last 10 years to pay the LINK for industrial and retail development.
But some councilmen, including Box, believe The LINK hasn't done enough on the retail side.
"We need to have someone working a little harder," Box said. "I don't see any work at all (by the LINK) towards retail development. They promote really well but we need recruitment.
"I think (LINK CEO) Joe (Max Higgins) does a fantastic job with economic development but we need industry in the city too," he added. "We've got buildings everywhere that could be used. I'm not real happy with what they're doing in the city."
Ward 5 Councilman Stephen Jones agreed a retail-centered firm could be more effective in that area than the LINK.
"The LINK has focused on anything other than retail," Jones said. "They have done a good job with industrial work, but retail-wise, we need a change."
In 2014, the city discussed the possibility of hiring Retail Strategies to take on retail development. But the rift that idea caused between the city and the LINK caused the city to back off.
At a Monday budget work session, though, when the potential to hire NaviRetail entered discussions, Box moved to cut the city's contribution to the LINK in half -- to $50,000 -- if it wasn't going to provide retail development services.
That motion died without a second, meaning the city will continue to pay the LINK $100,000 annually just for industrial services.
Higgins told The Dispatch that this time around, he would not have a problem with the city hiring a new retail consultant, so long as the LINK can wash its hands clean of the duty. Four years ago, he said, he feared his organization still would have to assist in retail development alongside the other firm.
"If the city wants to hire somebody to do that work, I am OK with that," he said. "And as far as them cutting out money, if they say we are not bringing them $100,000 in value, I would understand that as well. What we said last time was we don't want to get brought in (to the retail consulting). If they're going to hire someone for that, it needs to be a turnkey."
Higgins has said retail development is driven by demographics, and if the city does not match the criteria that the developer is looking for, there is nothing to be done to convince developers otherwise.
Kidd acknowledged the validity of Higgins' position but said that there are ways to recruit retail in spite of it.
"At the end of the day, the demographics do matter, but it's not the make or break," Kidd said. "I don't like it when people get in their minds 'because we don't have this population, we can't have this in our city.' I don't think that's how it really works."
In 2016, Starkville hired Retail Strategies to handle their retail development, taking away the responsibility from the LINK without cutting LINK funding.
Starkville Mayor Lynn Spruill speaks highly of the decision for the city.
"I think Retail Strategies is better suited because I think Joe Max and the LINK -- their wheelhouse is obviously industry and we are very pleased with that. I am not sure necessarily that we have gotten absolute return from Retail Strategies, but they are coming in September to give us an update.
"Do I think it was probably the right move?" she added. "Yes I do. Do I know if we've gotten some measurable results? I am not sure yet."
Higgins also told The Dispatch the LINK does not do any work with Retail Strategies in Starkville, and he would expect the relationship with NaviRetail to be the same in Columbus.
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