A sparse crowd showed up in the courtroom Dec. 6 to hear results of the state of the local retail environment. The detailed survey was conducted and funded by the Winrock International Foundation in conjunction with the Mayor’s Task Force on Economic Development, with seven speakers including Mayor Butch Berry and Task Force Chair Sandy Martin.
Berry introduced Matt Twyford, regional manager of the Community Development division of the Northwest Arkansas Economic Development Commission, who explained that AEDC wants to create economic opportunities in communities by attracting higher paying jobs by expanding and diversifying the local economic base. Integral in the process would be local leadership that exhibits accountability, integrity and fiscal responsibility.
He described programs available to communities and the process for applying for assistance, including receiving community block grants and other grants for technology and rural development. Twyford encouraged leadership to keep the community engaged in the process by clearly understanding what the community actually wants.
When selecting a community for assistance, AEDC considers factors such as availability of skilled labor, proximity to a major highway, quality of life and construction costs. Also taken into account are crime rate, reputation of schools, healthcare, and availability and cost of housing. Cultural and recreational opportunities also matter because the goal is to bring new businesses to towns that need them.
Twyford emphasized that it’s important for a community to nurture existing businesses because new jobs are often created by businesses already serving the community. Also important is creating an environment that supports entrepreneurs, but the first objective would be to improve the quality of the workforce.
Berry followed by stating one of his missions was to diversify the economy by reducing the ratio of tourism-based jobs versus non-tourism-based jobs. He has been attempting to add to the tax base, but Eureka Springs has been losing residents because of limited housing and job opportunities. To reverse the trend, he wants to make the town more attractive to entrepreneurs by creating citywide wireless and broadband access, and encouraging affordable housing projects. He pointed out that regardless of local efforts, “There’s a lot we don’t know, and that is why we reached out to Winrock.”
Martin commented that the Task Force has sought to increase collaboration throughout the county with a mission “to diversify and grow the economy, tax base and population of Eureka Springs, to simplify and streamline procedures and access to services and information; to build public trust through open, ethical, collaborative and transparent city leadership.”
To accomplish the goal, the Task Force created the “Doing Business in Eureka Springs Tool Kit and Research Guide” which is available on the Task Force website at www.EurekaSpringsInc.org.
Martin noted new businesses have relocated to the area and others are considering a move. She and others continue to make presentations at the state and international level to attract businesses which fit with Eureka Springs such as environment and green initiatives, arts and culinary, healthcare, education, a technical center and businesses involved in technology and digital production including movies.
The next step, she said, would be to “put feet on the street” in reaching out to pitch Eureka Springs. She stated the Task Force had identified six “focus teams” for planning and information gathering, but invited input from everyone to help them achieve the goal. “We have a lot to sell,” she said.
Michelle Perez is a Program Associate of Winrock who manages projects as part of creating regional investments and strategic partnerships “to empower the disadvantaged, increase economic opportunity and sustain natural resources across the globe.” She said Winrock has 200 projects in 49 countries, but her focus is to work with small communities in Arkansas, Oklahoma and Louisiana.
Perez’s part of the project is to focus on capacity assistance to help local leaders create environments conducive to developing businesses by performing retail analysis and making business practices more efficient.
Mark Goodman, president of Goodman and Associates, was hired by Winrock to work with Perez on analyzing data from surveys and other sources. He showed a map indicating the Eureka Springs trade area, or the area in which one might expect residents to come to Eureka Springs for everyday items. If they do not, then why not? He pointed out rural towns must be very efficient in marketing strategy to avoid retail leakage, or losing customers to other towns.
Goodman’s data demonstrated that 81 percent of respondents preferred restaurants in Eureka Springs to anywhere else. Rogers was second with ten percent and no other city topped three percent. Local convenience stores, florists, and gift and novelty stores also performed well. Just over half those responding shopped for groceries locally while almost one in five preferred Berryville and one in eight went to Holiday Island.
Only 35 percent said they shopped for building materials and garden supplies locally, with Rogers close behind at 29 percent and Fayetteville third at 16 percent. Goodman pointed out these data indicate retail leakage because 65 percent of respondents chose to go elsewhere. Also for auto parts, only one in four shop locally, with Berryville close behind with 22 percent. Fayetteville and Rogers drew 12 percent, and six percent preferred Wichita.
Rogers was overwhelmingly first for clothing purchases with 37 percent. Eureka Springs and Fayetteville tied for second with 19 percent, while Berryville and online purchases tied for fourth with seven percent.
Eureka Springs fell farther behind in the next four categories. For general merchandise, Berryville, Rogers, Fayetteville and Bentonville all draw more shoppers than Eureka Springs, which was chosen by only nine percent, which was more than only Harrison, Kansas City and Pittsburgh, Kan.
Berryville and Rogers far and away were preferred for furniture and home furnishings, and again Rogers led the way in electronics and appliances with 37 percent. Eureka Springs tied for fourth with only six percent, barely ahead of Lowell. In the categories shown, the worst performance for local businesses was in sporting goods in which Eureka Springs retained only three percent of local shoppers. Close behind at two percent were Amazon, Conway, Pittsburgh and other online sales.
Goodman’s follow-up question was, “Why do people shop somewhere else?” His immediate answer was, “Early closing hours can kill a community.” He claimed research shows 70 percent of retail sales occur after 5 p.m. He pointed out tourism accounts for much of the restaurant business, and also emphasized it mattered what merchants have to say about the town. A negative shop clerk can sour the whole experience for visitors.
He encouraged locals to have regular workshops with representatives of the Small Business Association who can advise merchants and business owners how to improve their marketability and learn what it takes to stay current in today’s retail environment.
Michael Gerfen, Workforce Specialist for the Arkansas Economic Development Institute, took on the task of plotting a path forward given the data Goodman and Perez had prepared. He said the goal is to identify the best use of workforce development funds. He gave as an example it would not be wise in an environment flush with cosmetologists to use workforce development funds to train more cosmetologists. He said all partners in the economic environment – including local governments, schools, employers and community organizations – should be involved in identifying what skills are lacking for the jobs available.
Gerfen said his job was to analyze data from multiple sources to identify which jobs are available and unfilled. First on his top ten chart was heavy equipment/tractor-trailer truck drivers. Data indicated there might be 352 openings annually for these jobs in the general area. The category of general and operations managers had the highest growth rate and the second highest number of annual openings. First-line supervisors of office and administrative workers had the third highest growth rate and an average hourly wage of $22.11.
Gerfen added health services continues to grow and offers 743 regional openings annually which attract applicants from out of state.
He said it is important for communities and regions to work together to make sure the workforce is trained for available jobs and to educate schools and workforce centers which jobs deserve focus. He added our region might need to develop new certificate programs or training centers to prepare the next wave of employees.
Last on the agenda was Cliff McKinney of Quattlebaum, Grooms and Tull, a Little Rock law firm. McKinney pointed out retail development is vital to economic development. New businesses such as information technology and office-centered jobs tend to locate in areas with a good quality of life that includes retail shopping opportunities.
McKinney said successful retail also spawns other business opportunities, and factors in the success would include appealing to the right demographics, being in a visible location and being easily accessible to customers. He said the right retail mix is important, and local governments must be flexible in maintaining traditional aesthetics while encouraging development. In addition, local governments should be easy to work with.
His presentation discussed creative ways in which cities and developers can manage the high cost of retail development, which he considered an investment. Just as colleges must offer scholarships to compete for good students, cities must offer incentives to attract good developers.