Retail Development: A New Focus for Economic Development

When I first entered the economic development field back in the mid-1970s, attracting retailers wasn't a low priority for communities - it was completely off their radar. In those days, every effort was made to attract manufacturers and other basic industries that would import new dollars to the community and in exchange export goods and services. It was presumed that by growing the "base" economy, retail would come along on its own - without any inducements - to fulfill the needs of the local population. Besides, the retail dollars merely circulated over and over within a community rather than generating net new wealth to the area.

Interestingly, California is where retail development first started to gain respect as a component of economic development. The passage of Proposition 13 in 1978 limited the growth of property taxes, so jurisdictions seeking to grow their revenues turned instead to the retail sales tax, increasing their take by attracting new retailers.

This trend has now expanded to the point that many communities are as eager to attract certain retailers as they are to bring in other business developments.
This impact of retail development has not been lost here in Hamilton County, where the retail sales tax is the county's largest generator of tax revenues. As such, HCDC has created a two-pronged retail development strategy that consists of retaining or attracting unique regional retailers as well as maintaining and revitalizing community business districts for smaller businesses.

Community or neighborhood business districts come in two varieties:

- A convenience business district that serves the surrounding local population's need for common goods and services such as groceries, dry cleaning, hair care and jewelry. These districts have been challenged by the growth of national convenience retailers that entice customers to shop beyond the local community. In addition, without a stable surrounding residential area of willing and able shoppers, such convenience districts tend to die.

- A unique-attraction business district draws shoppers from a wide area with a cluster of related specialty shops or services. Antiques stores commonly form such districts, for instance, and wedding products and services draw brides from across the country to Reading's Bridal District.

Both types of community business districts are strengthened by the existence of unique local restaurants. While the national chains tend to populate the malls and lifestyle centers, local eateries add a flavor and charm that's in keeping with the local district.

Of course, the smaller retailers do not have the impact on county sales tax revenues that the large regional mall or lifestyle centers do. However, they provide valuable tax revenue and resident services within their communities, contributing to the quality of life within the 49 cities, towns and townships that make up Hamilton County.