Clark County officials say that growing retail will be key for economic development in the county this year. BILL LACKEY/STAFF

Retail still key to local sales tax revenue in Clark County

Officials in Clark County say that retail development will continue to be a key focus for them this year because a large part of the county’s revenue comes from sales tax.

Several large retail stores have left the area over the past few years, including Dick’s Sporting Goods, Macy’s and Sears. However, there has been a recent bump in sales tax revenue for the county as officials say it shows signs of growth in the local retail sector.

The county’s operating budget, which was approved earlier this year, estimates that about $25.7 million will come from retail sales taxes. That projection is a slight increase from the $25.6 million collected last year.

The slight bump in sales tax projected this year points to an upward trend in retail sales in the county, said Melanie Flax Wilt, the Clark County Commission President.

Flax Wilt said though there isn’t one single reason as why the increase is taking place, there has been a number of small businesses that have opened in the county in recent years. There is also a diverse selection of retail in areas such as South Fountain Avenue in Springfield or North Chillicothe Street in South Charleston.

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That mix of retail can include boutiques, other forms of retail as well as dine-in restaurants, coffee shops and bakeries. In some cases, small business owners have converted old buildings that had been vacant for a number of years, the News-Sun reported.

South Charleston has seen several small businesses open over the past year or so. Several small retailers as well as new restaurants have emerged in downtown Springfield. Areas such as New Carlisle and Enon have seen an increase in economic activity as those downtowns have attracted local entrepreneurs, said Ethan Harris, the director of the Clark County Community and Economic Development department.

However, attracting additional retailers in the area can still be a challenge, especially when it comes to larger chains that have unique sets of requirements. Consumer trends have also changed over the past decade with the rise of online shopping.

Flax Wilt said consumers are not only interested in convenience but are also looking for a unique shopping experience.

However, a big challenge in attracting national retail chains can be the fact that the county has continued to see a decline in population.

Clark County’s population peaked in 1971 with about 160,000 residents, according to Census data. By 2010, the population stood at about 138,300 people. The county’s population dipped about 2.7 percent from 2010 to 2018, according estimates for the latter year that put the population at 134,585.

However, population estimates by the U.S. Census Bureau have indicated that the number of residents in the county is starting to stabilize. The News-Sun previously reported that population dropped by more than 1,000 residents between 2015 and 2016, but only fell by 64 residents in 2017.

In an effort to attract more larger chains to the area as well as assist small retail operations, the county entered into a partnership last year with a company called Retail Strategies as its primary retail consultant.

Alex Dietz, the economic development coordinator for the county, said Retail Strategies has access to a number of different data banks that the county can use in its efforts to attract more business.

That can include identifying areas with high car traffic or using data that pinpoints where cellphones are spending their days and nights. That data can be used to show areas where there is a higher potential for customers.

“Brick and mortar retail is getting harder every year. Amazon is just increasing their market share ever year, end over end,” Dietz said “It’s really positioning ourselves to be competitive for that retailer as a community so they know that they come in and make money. That is the bottom line, companies are not going to come here if they can’t be profitable.”

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“One of the big things is adapting to and not trying to overcome online retailers,” he added.

Dietz said that data is important as a lot of national retailers have specific demands when choosing areas to open a store. He said the goal is to show those stores that the county can support them with a customer base despite the county losing population.

Some of those requirements are nonnegotiable such as how many cars pass through a certain area during the hours a potential store would be open.

Some custom built buildings in the county can be hard to attract buyers, especially from other national retailers. An example is the former IHOP location on North Bechtle Avenue. In other areas of the county, some vacant properties were not originally built for retail. However, some small business owners are adapting those spaces to meet their needs, especially in places like New Carlisle, Dietz said.

Certain areas in the county have a heavy presence of national retail stores such as portions of Bechtle as well as parts of East Main Street and South Limestone Street in Springfield, county officials told the News-Sun.

Harris said that Dietz’s role was created last year in order to assist businesses that are either already in the county or looking to set up shop there.

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County officials say its an important role as sales tax in the county makes up roughly 60% of its total general fund revenue. This year’s general fund is estimated to be $49.4 million and Clark County approved an overall budget of $195.3 million in January.

With recent gains in the amount of sales tax collected, the county is starting to see a recovery following a hit in that figure staring in 2017 as counties could no longer could impose sales tax on Medicare and Medicaid activities.

Prior to 2017, Clark County collected about $3 million in Medicaid Health Insuring Corp. sales taxes annually, according to state data.

Dietz said recent changes to online sales tax collection is expected increase sales tax revenue for this year. However, he said it is too early to tell what the exact impact it will have.

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