RDA Happenings August 2012
Posted on August 1, 2012 – By Emporia RDA
On July 1, 1995, the Regional Development Association of East Central Kansas (RDA) was incorporated. Just completing its 19th year and in less than one year will be entering its third decade.
There is absolutely no question that the RDA has been successful in its primary goal of working with existing and new basic employment sector businesses in adding higher than average wage jobs, and adding to the property tax base.
In fact the RDA is the only industrial and economic development organization in the Emporia area that had the results of their efforts reaffirmed by the Emporia voters three times: 1995, 2000 and 2010.
The most recent project, Hill’s Pet Nutrition, created 112 full-time jobs with an annual total payroll in excess of $5,000,000 which provides a regular economic impact every payroll period. In the future when the performance-based property tax abatement expires (which does not cost the community any cash) adds to the tax base and lowers and stabilizes the property taxes.
VEKTEK continues to add personnel in 2012. Even though the announcement of the project and construction occurred in 2011, the true economic impact of higher than average salaried employees are hired.
With expansions of existing new basic employers, there is a lag time from project announcement, construction and searching, hiring and training of employees.
Over my past tenure here at the RDA there have been at least two times that “large” retail developers have contacted our office or the community about retail development.
From 2005 to 2006 there were 4 to 5 different developers interested in developing the Lyon County Fairgrounds. The projects were Walgreens, Home Depot and/or Lowes. During that process it was determined by the community that the Fairgrounds is and will be at its current location. The Fair Board/Lyon County has developed and continued to proceed with a development plan.
More importantly, during the 2005-2006 time period, the City of Emporia did not have in place performance-based incentives for large retail development. The RDA was tasked with assisting the City of Emporia in the development of the Tax Increment Financing (TIF), Transportation Development District (TDD) and the Community Improvement District (CID).
Today those incentives are in place and the RDA assists the City of Emporia in performing the independent and objective “due diligence” of the large retail project feasibility. With the RDA’s role of conducting the due diligences for industrial expansions it makes perfect sense to analyze retail projects.
The Emporia Plaza project, which was proposed to be located northeast of the intersection at 24th Avenue and Industrial Road was the first project the RDA performed the due diligence. It was a protracted process, which took from August 2008 to February 2009 to complete. With the Emporia Plaza project, the Planned Unit Development (PUD), Tax Increment Financing (TIF) and Transportation Development District (TDD) had been approved by the Emporia City Commissioners. The community just waited for the anchor tenant to make their commitment to the developer.
The anchor tenant, Lowes, growth strategy and Emporia demographics changed. The end result was in early February 2012, the PUD expired, and thus the TIF and TDD expired as well; end of the project.
Last year, in preparing for coordinating our annual list to the International Council of Shopping Centers (ICSC) RECON EXPO, I contacted Target about the possibility of locating a store in Emporia. The real estate broker who represents the Target Corporation in Kansas contacted our office. We had a wonderful conversation. The bottom line is that Target would certainly like to better serve their Emporia customers, but two things have to happen. First, Target needs to develop a business model smaller store concept or secondly, Emporia’s market population which is all of Lyon County and parts of all the surrounding counties adjacent to Lyon needs to grow. If one or both occurs, then Emporia may be considered.
Recently, I spoke with one of the developers owners of the land at 18th Avenue and Industrial Road area, commonly referred to as Eaglecrest Development. Twenty years ago, the only businesses at the interchange were Wal-Mart and McDonalds. No question, that area has been built out and become a significant stopping point for travelers and a retail nexus for the region.
These developers at their own expense began proactively contacting the various restaurants, motels and retail operations. These developers soon learned that these national and regional commercial enterprises developed their own demographic criteria for every community. If a community does not meet the minimum criteria for population and income levels, they move on.
When a community meets their criteria, they generally have designated real estate professionals who represent a territory. So the best strategy for these developers was to have “pad ready” sites, which means proper zoning, utilities to the property and the property priced competitively. In this case with Eaglecrest, all but a few have developed.
Next I visited with the Flint Hills Mall and the West Emporia Plaza, the strip mall on the east side of Industrial Road between 12th & 15th Avenue. Both fund their entire market operation; they are proactive/reactive to new tenants in their space.
So I asked these developers point blank, do you think any publicly funded organization should proactively recruit retail? The response being, if it is new construction, the primary contact is the zoning and building codes department. These groups should be responsive, timely and with a degree of flexibility. But, they indicated that resources could be spent better.
Other large developments, like Emporia Plaza type projects need to have an available site that are competitively priced with incentive programs such as TIF, TDD, Community Improvement District (CID), Neighborhood Revitalization and Historic Districts.
Their reply was growing the employment base or creating jobs is more meaningful than recruiting retail. The RDA needs to get back to the core mission to create higher skilled, better paying full-time jobs. Retail will follow a growing community.