The city of Rome bailed out of an arrangement with retail recruitment consultants NextSite 360 last week, with City Manager Sammy Rich explaining that the $15,000 fee could better be reinvested in some other aspect of economic development.
What did the city get for its two-year, $30,000 investment? A nice demographic data package was the tangible result. It also got immeasurable exposure from the consultants who pitched Rome and Floyd County to retail developers at trade shows and behind corporate board room doors all over the country.
With the situation that has led Rome and Floyd County leaders to want to change the way the community goes about recruiting major industry, the question that has gone unanswered is why hasn’t the community been able to close the deal to bring additional jobs or retail opportunities to the community.
Getting an answer to that question is difficult because corporate America does not often want to tell you, specifically, what goes into their decision-making processes.
The answers are not as easy as Rome doesn’t lie on a major interstate highway or the obvious notion that internet sales have been hammering brick-and-mortar store shelves for the last two decades.
Commercial real estate agent Debra McDaniel, with Toles, Temple & Wright, stressed that the I-75 factor is unquestionably the biggest reason that Calhoun, Adairsville and Cartersville have enjoyed a spurt of successful recruitment efforts over the last several years.
Toni Rhinehart in the city of Rome finance office said that monthly sales tax distributions from the Georgia Department of Revenue do not break out any of the data to show the percentage of online sales taxes collected versus the brick-and-mortar sales.
Clearly however, those are at least a part of the answer. Ken Wright, director of business and industry services at the Rome Floyd Chamber, said some retailers are like their industrial counterparts and want to be close to an interstate.
“There’s just nothing we can do about that,” Wright said.
Another part of the answer is that Rome’s population base, called “critical mass” by one leader in the economic development sphere, has been minimal in recent years. The 2017 Census population estimate for Floyd County was 97,457, up just 1.1 percent from the official 2010 count of 96,317. The population growth was 5.7 percent from 2000 to 2010.
Wright Ledbetter, the chief operating officer at R.H. Ledbetter Properties, a premier retail developer that has been based in Rome for decades, said there is a complex network of real estate developers, investors and retailers that work around the nation to identify markets where they want to be.
“Rome has been under-retailed for some time, that’s no secret,” Ledbetter said.
Rome is considered a secondary market, and as the retail scene is evolving, retailers who are looking to bring a brick-and-mortar presence to a secondary market are really focused on the demographics of population growth, household income and location scarcity.
“Rome has challenging population growth, decent household income, but certainly not like you would see in a primary market, and Rome is challenged by location scarcity,” Ledbetter said.
The NextSite 360 demographic data does point out that Rome has historically been in the heart of a regional trade area which boasts a population demographic of 239,677 residents. The trade area, as defined in the NextSite report, extends just north of Trion, east to Adairsville, but not Cartersville, south to include both Cedartown and Rockmart, and west to include Centre, Alabama.
Wright recently said that Rome needs to recruit industry with wages that would actually attract people to Rome for a new job. The big problem should that occur involves housing. Rome Director of Community Development Bekki Fox said that Rome has a good bit of housing, both for purchase and rental at the high end and the low end of the pricing scale, but suffers from inventory issues related to the middle-income market.
If one had visited Mount Berry Mall on Black Friday, a parking lot survey would have provided some evidence that Rome is still, to some degree, a regional draw as cars bearing tags from Cherokee County, Alabama, to Walker County were sprinkled through the sprawling parking lot.
The whole argument about the parking issue in downtown Rome is the result of prime storefront parking spaces that are frequently full during peak periods of the day, evidence something is going right.
The marketing report prepared by NextSite also indicates that the average age across the regional trade area is 38.8 and average household income exceeds $54,900.
Heather Seckman, the director of economic development at the Rome Floyd Chamber, said her office is working hard to increase the per capita income of Rome and Floyd County residents.
“That’s what most retailers look at,” Seckman said. “There have to be a certain number of people in certain age groups, depending on the retailer.”
The NextSite 360 report also highlights leakage from the area, that is shopping by Rome area residents, tracked through a variety of methods, that is going outside the regional trade area. More than $89 million is lost to full-service restaurants, another $33 million lost to supermarkets and grocery stores, $22 million to furniture stores, $18 million in the automotive sector, $9 million in women’s clothing, $7 million in household appliances, and $6 million to hobby, toy and game stores.
City Commissioner Craig McDaniel, a commercial real estate agent with Toles, Temple & Wright, said the information is certainly interesting, but that retailers he’s brought to Rome have their own data.
“So much of retail is about commercial real estate. They’ve got to have the right piece of property. You’ve got to have the traffic count and you look at other people that have been there and how successful they were,” he said.
A number of prime properties are on the market in Rome, most noticeably the old Kmart property at Turner McCall Boulevard and Hicks Drive. It’s got just about the highest traffic count in Rome and the former tenant was successful locally, however the local Kmart fell prey to changing market trends, as did the Sears store in Mount Berry Mall.
Ledbetter said his company is excited about the opportunities the old Kmart site offers.
“The good news is that we are seeing strong interest from exciting new retail and service businesses who are not in this market. The bad news is the costs of redevelopment don’t justify proceeding with the project because of the limited market-rental rates that we are seeing from our potential retail partners,” Ledbetter said. “We are exploring what options we have to try to make this project work. We truly hope we can be involved in the redevelopment of that site.”
The Mount Berry Mall owners want to tear down a large section at the north end of the mall to artificially increase the percentage of space that is occupied in the mall, thereby enabling the ownership group to retain lease rates that are tied to occupancy rates. Hull Property Group also hopes that by increasing the occupancy level they can attract new tenants, either to the mall itself or to outparcels that will be created at the north end of the mall.
Commissioner Bill Collins, chairman of the city Redevelopment Committee, said he longs for someone to replace the old IGA grocery on Division Street which closed earlier this year. The NextSite study indicates there is room for additional grocery-store development.
Debra McDaniel also pointed out that workforce issues remains a big part of the problem.
“But in talking with other people in other counties, they are having the same (workforce) problem that we are,” Debra said. “We could start in West Rome and before we got to Broad Street we could find 10 jobs. When the market is like that, the employee calls the shots.”
Clearly, the issues are complicated and there is no single, magic-bullet solution. City and county leaders are taking steps they hope will steer the community in the right direction, but the kind of growth most want to see is not going to happen quickly.