ECC Director Responds to Rumors and Suggestions
The following was published on the Ellis County Coalition for Economic Development’s Facebook page. It has been reprinted here with permission of Aaron White, ECC Executive Director and author of the below post.
“First, let me say that we are seeing some exciting possibilities right now. We have had several national retailers reach out to us, and we have also started discussions with others. This can be a lengthy process, sometimes lasting a year or more. With the dollar figures involved in a large project, no one is willing to move too quickly.
“I would like to take this time to clear the air regarding some retailers. Hays has not turned away retailers, in particular Target. Retailers have a set of requirements for a community to be an eligible site. The last discussion with Target was in 2008. Target said they are focusing on sites with 85,000 within 4 miles of a location. The only community with that density in the whole state is Kansas City. These requirements can change, as the economy shifts.
“Hays is willing to work with potential projects. We are doing so with one right now. Unfortunately, Hays does not have deep pockets to direct towards retail recruitment. National chains riding a wave of popularity, such as American Eagle, will often require a building free of charge. Large mall developers and large communities may be able to give away millions in real estate and infrastructure, but small communities like Hays cannot. We will continue to identify and work with prospects that are suited for our region. We have several things going for us as a community: one of the highest retail pull factors in the state (and yes, companies do pay attention to those figures), substantial growth in retail sales since 2008, and a trade area population of over 75,000. As we continue to show retailers our strengths, we can expect some good success stories in the future.
“Another area I wanted to address is restaurants in Hays. A lot of comments have been made about the expansion of fast food instead of nice sit-down restaurants. A lot of that problem can be attributed to the franchise process and requirements. Most of the national chain restaurants are not corporate stores, but franchises. Let’s look at Buffalo Wild Wings as an example: a new owner is required to open a minimum of 2 stores. Based on current land and construction costs, building a 4,000 square foot BWW (this is the minimum size allowed) will run about $1 million per store. On the finance side, BWW requires a new owner to have $750,000 in liquid assets per store, and $1.5 million in net worth per store. New owners cannot borrow more than 80% of the project cost. So what we have is an owner that must have $3 million in net worth, $1.5 million in liquid assets, and $300,000 of that must be cash.
“There are chains that have even more restricted requirements. This is why it is a challenge to bring certain chains here: finding a buyer who has the experience and finances to build the restaurant is tough. We continue to identify investors who already have the franchise and are interested in this area. It is a long process, but we are seeing some interest.
“Patience and persistence is the key for this community. As the economy recovers from the last few years, companies will be in a growth mode again. We will also continue to work with locals who are interested in starting a business. I encourage everyone to explore our boutique shops, particularly in the downtown area. You may be surprised at what you find.”