Developers: Landing new stores not easy

Many factors go into site selection process for new Springfield businesses.

Many Springfielders often wonder why the area cannot attract Starbucks, Gabriel Brothers or Barnes & Noble, for example.

The Springfield News-Sun talked with developers who have worked on two major retail corridors in Springfield — East Main Street and North Bechtle Avenue — to find out the advantages and disadvantages of developing retail sites in Springfield.

Developers and local economic officials said site selectors consider a number of factors, including demographics, expendable income, location and overall market forces.

“People look at the demographic fit or ‘profile,’ and sometimes we don’t fit that mold,” said Horton Hobbs, Greater Springfield Chamber of Commerce vice president of economic development. “On the surface, we don’t have the right incomes.”

For example, when marketing Springfield Commons in the 1900 block of Bechtle Avenue, Tolson Enterprises uses census data to give estimates for population and incomes in a 3-, 5- and 10-mile radius.

Three miles from the retail complex, more than 44,000 people and more than 17,500 households are found, according to data provided by the Toledo-based developer. The average income is $44,675; the median $33,927.

Within 10 miles, there are more than 125,600 people and nearly 49,500 households — with an average income of $49,241. The median income is $40,263.

Pete Noonan, founding partner of Midland Properties, said size is a definite issue with retailers, as Springfield may not have the population to support more than one store, if at all. Midland is one of the largest commercial real estate companies and recently brought Tim Hortons to East Main.

“A (Tim) Hortons sees Springfield as maybe a three-store town … or back when I was talking to Kroger people, they were interested in having stores out north, south, east and west, portions of town that covered the market,” Noonan said. “But there are other folks I don’t think you would see with multiple stores, like an Olive Garden.”

Tolson president Steve Speranza said some retailers are “looking for more of a higher-end income and education, so they shoot for Beavercreek and Springboro. It’s that lifestyle tenant like Eddie Bauer … they’re only doing one store in Dayton.”

It took 18 months to get the East Main site zoned and approved for Tim Hortons and 10 years to even find the right site for them on the east side, Noonan said.

“Some people have the opinion that we have some significant flexibility in where we might be able to locate a tenant,” Noonan said. “That just isn’t the case. The retail user is a pretty sophisticated guy who knows where his clients are and where he wants to be relative to them. He’s looking for a location that fits that bill.”

Tolson Enterprise has done well on Bechtle, Speranza said. The developer owns the sites by Walmart that have Buffalo Wild Wings, Panera, Batteries Plus and more. The company is doing a 12,000 square foot addition to the complex to provide room for more retailers.

But Speranza said for every three or four retailers Tolson signs, they’ve talked to about 400. He gave three reasons as to why retailers won’t settle in Springfield: the company says its not ready to do a store, demographics, or a franchise cannot find anyone to purchase a location.

“We’re coming out of a really difficult period where entrepreneur-type people, they couldn’t get money, they couldn’t get loans,” Speranza said. “We’re coming out of that now. For four years nobody could get money … Once the economy comes back, people are pent up and looking for those things.”

For some businesses, Springfield’s income range is exactly what they need to target. Clara Osterhage opened her first Great Clips franchise on Bechtle Avenue 18 years ago without being familiar with Springfield.

“We are a discount hair cutter with a price point of $13 for adult and $10 for a child or senior cut, so we fit nicely in all demographics,” Osterhage said, although she was quick to point out that she did not see Springfield only by its numbers.

“In Springfield that was another part of the business decision,” she said. “If you’re going to be offering service, you can’t be charging more than the market will bear. If you charge $40 a haircut, you won’t have success.”

Osterhage now has 29 Miami Valley Great Clips locations, two of which are in Springfield, plus one in Urbana. Her Springfield stores are her best sellers, she said.

Speranza said that, overall, Springfield has a logistical advantage for retailers.

“The beautiful thing about Springfield is it’s part of the Dayton market, but its clearly its own separate market,” Speranza said.

Developers will look at Dayton with a plan to do several stores, and Springfield is often in that list.

Speranza, Noonan and Hobbs also said Springfield’s groups of business serve as an attraction.

“We can support a ton of restaurants, and they’re all clustered together,” Hobbs said.

The traffic generated by other businesses is key, developers say. Tolson purposely located near a Walmart to gather traffic, while Midland gathers traffic data for interested buyers. Some of Midland’s retail ads mention East Main Street sees 20,000-plus cars a day.

For example, Tim Hortons needed a site that not only was large enough, Noonan said, they needed it to be on the side of the street with traffic going into Springfield, people who want to grab breakfast on the way to work.

Great Clips’ Osterhage said she purposely opens in places anchored by other businesses.

“I can’t be someplace where there aren’t a lot of cars. A lot of your smaller businesses would tell you the same thing,” Osterhage said. “Having the traffic is very, very important. A lot of us look to be close to Walmart and Kroger.”

But Hobbs says developers at the chamber and city try to focus on other industries besides retail because a lot of those retail factors cannot be controlled.

“If someone is looking at the community, often times it’s very market driven, so sometimes they pick before we even have a chance,” Hobbs said. “If you focus only on one industry, like retail, you’re missing out on bigger opportunities.”

Hobbs said the chamber is focused on finding what drives spending incomes up: industry clusters that can provide jobs for people.

“The goal there is to grow businesses that have a ripple effect on the economy,” Hobbs said, adding that the Buy Springfield campaign is the broader marketing opportunity for retailers.

“We have had some successes, and we have to visualize where we want to be, and we have to have a strategy so we know what is growing jobs,” Hobbs said.

Developers remain hopeful that the economy will turn around enough to make Springfield more attractive.

“In Springfield, we just don’t have the kind of booming economy or population that you see in a Columbus or some places like that, where stuff is just popping up like dandelions in the spring, and I wish it was,” Noonan said. “We’re working hard to get to the point where were doing more of that type of work. I’m cautiously optimistic we have things going on in Springfield that’s going to make us a more attractive place.”

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