Rosemount Port Authority debates value of low performing Retail Strategies
Rosemount Port Authority debated the value of continuing to pay for the annual membership of Retail Strategies — a firm that assists cities in the pursuit of retail opportunities — at its June 18 meeting.
The firm communicates to companies that may wish to locate or develop a new business or industry about the benefits of Rosemount. The firm deals with national franchise chains and serves as a connection between the community and property owners.
Rosemount Mayor Bill Droste said the firm bridges gaps as far as certain types of restaurants and businesses looking for a certain demographic.
Value of Retail Strategies
Retail Strategies recently sent out a packet to Rosemount City Council and city staff.
"There is not a lot of substantive information related to Rosemount, so we are expecting on the next month a more detailed review of Rosemount and their visit," said Kim Lindquist, community development director for the city of Rosemount.
Rosemount Port Authority chair Jeff Weisensel expressed his concern and disappointment if the packet was geared for Rosemount. He said he sent an email to a representative with Retail Strategies sharing he was looking for more communication about responses to business contacts.
Weisensel said the city is interested in bringing a craft brewery or a barbecue restaurant to Rosemount.
"They contacted us to say it was going to be a little late and I was expecting a little more," Lindquist said.
"At one time we looked at Retail Strategies versus a position (city job) and they obviously have some different goals and we can talk about that but we need to make sure to pay attention to the deadline," Lindquist said at the Port Authority meeting.
The third year of the Retail Strategies contract would cost $40,000.
"I am not sure we are getting our bang for our buck here," City Council member Heidi Freske said.
Chicken and egg economic development
Rosemount City Administrator Logan Martin said he is not aware if there is a specific metric to measure the performance of Retail Strategies.
"It is kind of a chicken and egg economic development thing, and so Jersey Mikes and Noodles were contacted by Retail Strategies but did the broker already know those guys?" Martin said.
Retail Strategies could have played a role to land the two fast food restaurant deals, but probably not a substantial role, Martin said.
"It is contacts and introductions that we haven't done and part of that will change with the hiring of the new person and that person does not walk in with the same contacts that Retail Strategies has," Martin said.
"The metric was if they (Retail Strategies) brought in one (new business), then that would generate the property tax they would bring in for a period of time and that would offset the fees, so it was like a zero sum game and if they (Retail Strategies) were able to bring in $50,000 in tax revenue and then it would have been fine," Weisensel said.
During the last conversation the city conducted with Retail Strategies, the city stressed gratitude on filling the spaces, but Lindquist said she communicated how the city is really focused on new construction or building that will bring new retail to the city.
"I might suggest we treat this like a poor performing employee and that we are not exactly thrilled with their performance," said City Council member Paul Essler. "For that $40,000, we can send them a message that between now and December we do need to have access and what are the KPIs (key performance indicators), so we know if they are being successful or not."
Essler said he is not in favor of supporting Retail Strategies in December.
"I do think we owe it to them to set up the expectation and let them know we are considering whether to renew or not," Essler added.
Weisensel said the city needs to proceed with caution because this type of networking and business recruitment takes time to build relationships.
Droste said during the council's goal session, there was discussion about what service they are giving to residents and the council decided to wait six months to talk about the progress.
"Now we are halfway through the year and if we don't have a project on line, then we are going to have nothing built next year besides our city community center and downtown, we are sort of driving it," Droste said.
If the city is not working with someone in the next three months, then there will not be anything new on the table except housing, Droste said.
Essler said before the city hires a new economic development coordinator, the city staff needs to work to define the KPI to measure progress.
"There are going to be efforts and there are going to be results, and what we are saying is the results may take time but we need to know what we expect those results to be," Essler said. "I would ask staff what you do think are the right metrics and then we can communicate that out in front with candidates."
Martin said Rosemount Port Authority's budget will be finalized in December and if the group decides, the payment of Retail Strategies can be pulled out.