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Chain Reaction/Part 2 of 2

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National retailers keep rooftops on radar

By Chris Sardelli

Brandon Newton can’t help but shake his head when he drives past Lancaster’s now-abandoned Kmart building.

It’s been almost a year since the major retailer shuttered its store along North Main Street, and weeds have now supplanted cars as the most common sight within the store’s parking lot. 

Newton, 19, remembers a time years ago when both Kmart and the long-gone Winn-Dixie, which anchored the thriving center, were huge draws for the county’s shoppers. 

“People shopped there all the time,” Newton said. “I wish someone would do something to put something back in that block. I feel bad for Arby’s, stuck there next to it, which can only get its own traffic. It’s gotten sad to see. That parking lot with Kmart and Winn-Dixie used to be packed full of people. It was hard to get a parking space.”

The Lancaster native worries that the loss of Kmart has created a deficit in the local economy. 

“My family used their pharmacy all the time and we were sad to see it go because you never want just one option for a store. It’s always good to have competition,” he said. “There’s not as big of an incentive to charge lower prices if you’re the only game in town.”

Newton has a couple favorites he’d like to see move into the empty shopping center. 

“A Target would be nice for us to have something to compete with the one big-box store we have left,” he said. “If we had to get another grocery store, I’d want a Publix to come to Lancaster, so it could do well like the one in Indian Land.”

Despite wishful thinking from residents like Newton, there are many other factors that come into play before a major retailer decides to move into a new area. 

So what are some of the challenges Lancaster County is facing in attracting these retailers and what can be done to make the area more attractive?

Dean Faile, president of the Lancaster County Chamber of Commerce, said it all begins with a county’s gross sales. Two years ago, the county was still ranked 22nd out of 46 counties in the state, he said. 

“We are right in the middle, and places like Target and Best Buy will look at the total numbers,” Faile said. “Gross sales are up, but on the flip side, we have low per-capita income. So there’s a focus on how to get everyone gainfully employed. Unless we do that, it will be a slow process to get retail.” 

Equally important is the local population’s amount of disposable income, that money left over after residents pay their bills, as well as the number of homes within a certain radius. In developer lingo, they call these “rooftops.” 

“The reality is any opportunity for getting retail like Target or Old Navy is more primed to move into the Indian Land area because of the number of rooftops they draw from surrounding areas such as Union County or York County. It’s that number they (retailers) are looking for,” he said. “We can chase retail all day long, but we’re spinning our wheels because if the per-capita income or number of rooftops is not what they are looking for, it’s not going to happen.”

Other important factors considered by retailers include consumer demographics, traffic patterns and potential drive times for customers. 

“Retailers want roads to be free flowing and are attracted to busy roads with service roads on the side. (They also ask) how far away could someone live and still get to the store in 30 minutes,” he said. “The drive-time distance has become more of a relevant barometer than just sticking a pin in the map.” 

Faile said he would welcome the addition of more large “anchor” retailers here. 

“If you look at Lowe’s and Walmart, when they relocate, your smaller retailers follow in the shadow of those chains,” he said. 

He calls the phenomena the “shadow effect,” which has already been seen at Indian Land’s Harris Teeter and Publix stores. Faile said many of the small business owners next to Publix have even cited the grocery store as their main reason for moving there, he said. 

“They knew it would be a high traffic area and people would see them,” Faile said. 

On Faile’s wish list for major national retailers are Target and Best Buy.  

“You tend to get a bigger bang when they move in,” he said. “If we can get a Target, we won’t just build for Target, it will create an entire shopping district.”

With a slight uptick in the economy, Faile expects retail will soon follow. 

“I think we’ll see retail growth in the Indian Land area over the next five years, and over the same amount of time retail growth will be low or modest in the Lancaster proper area, which won’t pick up until the employment rate picks up and when more manufacturing facilities continue to come online and expand here,” Faile said. “I think with the growth in Indian Land and in nearby Union County and along S.C. 160 (Fort Mill Highway), that area is starting to look more and more like a sweet spot for retail.”

Up on the rooftops

Looking at the county from a developer’s perspective, Skip Tuttle concurs that major chains only move in when certain criteria are met. 

“It’s real simple in the retail arena. There are two things they are looking for, rooftops and traffic counts,” Tuttle said. “With the slowdown in the home building industry in the last four years, that has slowed to some degree the level of retail development. However, we’re seeing good signs of improvement in that regard in the last six months.”

As owner of the Tuttle Company, which is involved with retail and industrial or office-type developments, Tuttle has specific insight into the process. His company served as project developer for the City of Light property in Indian Land, as well as land development for Indian Land’s Edgewater project. 

“Lancaster County, in particular Indian Land, is on the radar screen as far as retail is concerned. When Lowe’s and Walmart went out there, the first thing that happens in retail are the smaller shops come, such as haircut places, sandwich shops and doctor’s offices. The next step are big box retailers or what is called “junior box” retailers and those don’t come until there is a critical mass of population,” he said. 

He predicts a large wave of big box retail will descend on the northern portion of the county within two to three years because of the quickly growing population base.

“There are 80,000 people within a five-mile radius of (S.C.) 160 and (U.S.) 521, enough to support more retail,” he said. “They are also looking for indications of continued growth and there are plenty of indications that Indian Land is continuing to grow. With that comfort level they will be more willing to invest.” 

Based on his experience, and his forecasts of national trends, Tuttle said retailers will begin pouring over the county line once conditions meet a favorable mix. 

“The general concept is you have to have rooftops before retailers come. They’ll come when demand is there and that has happened and that’s why Publix moved in, they followed the rooftops; Walmart followed the rooftops. And if the rooftops continue to increase you’ll see additional retailers move in,” he said. 

County workforce a priority

Though his organization is solely tasked with bringing office and industrial companies to the county, Lancaster County Economic Development Corp. President Keith Tunnell said he is asked daily why there aren’t more national retail options here. 

Tunnell admits there is no magic equation to attract retailers, instead believing it will take a domino effect of smaller actions to get national retailers’ attention. Among those dominos which must fall are increased amenities, a retail development plan and a trained workforce. 

“If you want to have a vibrant, strong economy, then a vibrant and strong retail sector is important,” Tunnell said. “Earlier this year the LCEDC lost a project due to the lack of a business-class hotel and the number of restaurants and retail opportunities located in or near the city of Lancaster. There are many factors in play when a company considers Lancaster.”

Hampering efforts to attract retailers and big industries alike, he said, are those low per-capita incomes coupled with high property tax rates, Tunnell said. 

“I feel strongly that with the right downtown and retail development plan, Lancaster County could be an ideal location for retail commercial business to prosper. Being so close to Charlotte and with many of our cultural, historic and natural resources that could be developed and with a beautiful historic downtown, I think Lancaster is a hidden gem,” he said. 

He cites the “downtown reinvention” he’s seen in other counties which occurred through the strategic use of innovative items, such as New Market tax credits, micro-loans and tax breaks for small business owners. 

But for Tunnell, it all boils down to one common denominator – having a trained workforce. 

“We need to continue to bring in more companies that are paying good wages. There needs to be a major emphasis on training our local workers for these new jobs and the existing jobs we have here today,” he said. “If people aren’t working, then the payroll isn’t feeding the local economy and the commercial retail and housing sectors suffer.”

Despite these variables, Tunnell said retailers are expressing interest in the county.  

“As we speak, we have five major retail commercial projects that are considering Lancaster County, all in Indian Land,” he said. “These projects involve two major retail-commercial developments, a retail business that would be a service company, a major hotel and a major restaurant.”

With such high demand from residents and with renewed efforts by local leaders to train the workforce and attract new businesses, it no longer sounds like a question of “if” but “when” some of these national retailers will make Lancaster County their home.

So one day don’t be surprised to see Newton holding a Target bag full of items he bought downtown, instead of from a store one county over. 

 

Contact reporter Chris Sardelli at (803) 416-8416