Retail Recruitment Downtown Dallas Program
The Downtown Retail Core Area (also referred to as the Main Street District Core Area) is a focus area within the City Center TIF District Boundaries. 2
The Downtown Retail Core Area is an expansion of the Madison Retail Plan 3
Retail Recruitment Initiative –Retail Opportunities • In 2001, Madison Retail indicated that without a retail recruitment program the district would primarily attract restaurants and bars. • Madison further indicated that this type of one- dimensional retail district would not be sustainable over time. • Madison’s insights have proven to be accurate. • Rehabilitating abandoned downtown core buildings so that they are attractive to potential tenants and are ready to be leased continues to be a challenge. • The City Center TIF District funds support the activity of building conversions. 4
Main Street …. Today
Main Street …. tomorrow!
Selling the Vision
Vacancy Info Packets Marketing Materials Slide show
Property Owner Involvement Property Questionnaires Marketing Posters on space available throughout the Main St District Tenant Rep – Recruitment Partnership Marketing Agreements
Consumer Perceptions Campaign Poster Program Parking Garage Advertising Print Media The new Downtown Dallas – change your perceptions
Perceptions Campaign - Anchor Creative
Perceptions Campaign - Anchor Creative
Perceptions Campaign - Anchor Creative
Parking Perceptions $1.00 an hour for weekdays $2.00 for evenings and weekends Retail Parking Programs
Valet Parking Program
At the beginning of the campaign Stakeholders identified the retailers they felt were worth saving. The four block area was filled with souvenir shops, wig store, check cashing locations, fast food and liquor stores.
Strategy for Recruitment • Create one-stop shop for information • Conduct monthly broker briefings on what is happening in the district or host broker receptions for their organizations (i.e. ICSC) • Create a staff position for retail recruitment and servicing the inquiries • Visit targeted boutique business throughout the Metroplex who might need a better location or are being forced out by national retailers
Six months into the campaign 7,500 Square Feet of new uses
One Year into Campaign 69,000 Square Feet of new uses
RETAIL INCENTIVES Once this test is met, financial incentives can be made available to icon anchor tenants chosen based on the following objective criteria: 1. A “but for” test (where tenants would likely not come downtown but for the incentive) 2. Whether the tenant is an independent destination 3. The size of the retail anchor that attracts other high volume retailers that will not require an incentive 4. A uniqueness factor, giving more incentive the more unique the retailer is within the region. 5. Whether the tenant is vertically integrated (it sells goods under its own label) 6. Incentives are available only to apparel, home furnishing and specialty store retailers. No incentives will be made available to retailers in well- functioning markets such as food and beverage, night clubs, hotels, banks, and service retail outlets (i.e. phone stores etc.). 7. The higher the projected sales per square foot, the greater the incentive. 8. Additional incentives are available over the base incentives if a tenant occupies a second level. Greater incentives are available to tenants that build expressive retail storefronts.
RETAIL INCENTIVES • Goals: – To stimulate the creation of a high performance retail district in Downtown – To create between 200 and 500 new retail jobs in the downtown and to maximize the percent of these jobs held by Dallas residents – To generate between $4 million and $8 million in new general fund revenues from retail sales. These amounts would almost double after the incentive period ends.
Retail Recruitment Initiative - Background On October 22, 2003, the City Council approved the City of Dallas Main Street District Initiative Grant Program to stimulate business and commercial activity within the downtown retail core area. $2.25M for grants and marketing were approved
Retail Recruitment Initiative – Use of Funds • Tenant Improvement (TI) Allowances: – Improvements to the retail space – TI for public area only (gross square footage less office and storage space) – One-time only grant to be reimbursed with proof of expenditures. – Only permanent fixtures (beyond “white box”) • Examples: lighting, wall covering/painting, flooring, window platforms, stairwells, mechanical systems, bathroom improvements
Retail Recruitment Initiative – Use of Funds • Rent Subsidy: Up to two years – Rent subsidies will terminate if agreements are not maintained and recapture provisions will be required in the case that the lease is broken in years three through five. – Profit sharing will be required in all instances after a certain revenue is obtained (profit sharing will be negotiated on a case-by-case basis).
Retail Recruitment Initiative – Eligible Businesses • Retail or service businesses - there must be a public benefit to the neighborhood such as the provision of goods and services currently not available or new jobs. • For profit, sales tax paying businesses • New complementary retailers within the Main Street District Initiative Program Area • The applicant may own the real estate in which the business is located. Alternatively, the applicant must have a fully executed lease, term not less than five years. • No restaurants or bars – the purpose of this Initiative is to make the Area a more well-rounded neighborhood.
Six months after introducing the incentive program * * * * * Received Incentives
“Celebrating our Success” Consumer: Email Blasts to Targeted Audiences Business or Media Alert:
18 months after introducing the incentive program * 27 businesses - 120,000 sq ft - only 7 got incentives * * * * * * * Received Incentives
Lessons Learned
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