The Hays City Commission on Thursday gave consensus to open a search for an outside firm to possibly assist the city with efforts to recruit additional retail businesses. The Request for Qualifications also would include a market analysis to help identify current trends and future potential.
Commissioners have had several discussions about the need to expand retail offerings, especially as sales tax receipts have been flat or declining the past few years. The city since 2004 has relied on sales taxes to fund its general operations budget.
“We have done some things. We are trying to be pro-development. We’ve put some things in place, and I do think we’ll see some additional requests for incentives in the near future,” said Jacob Wood, assistant city manager. “With declining or stagnating tax, we’re always looking for methods and ways we can continue to increase that retail base.”
Wood noted the city has adopted an updated development code and economic development policy, and has approved two Community Improvement District tax incentives for a new hotel on North Vine and 73,000 square feet of not-yet-developed retail shopping space in the same area.
City sales tax receipts peaked in 2015 at more than $7.4 million, then dropped to less than $7.2 million the following year. This year’s sales are on pace to be similar — or even less — than the 2016 number, Wood said.
The retail gap analysis would look at factors such as retail leakage and surplus, development in similar cities, consumer behaviors and future opportunities. Commissioners have expressed concern about the possibility of losing customers to other western Kansas communities that have attracted businesses not available in Hays.
An important part of the proposal is the fact a consulting firm potentially could be hired by the city to help bring new businesses to town. The firm would provide the city with a strategic recruitment plan, provide a list of prospective retailers and represent the city to national retail chains and conferences.
It is not yet clear how much the service could cost, but Wood estimated a possible annual range of $30,000 to $60,000. Proposals from interested consultants would be due Jan. 12.
The commission in July voted to cut funding for the Ellis County Coalition for Economic Development by approximately $44,000, with several elected officials expressing dissatisfaction with the group’s outcomes.
Wood said he is not aware of any other cities in Kansas that have directly hired an outside retail recruitment firm in this manner.
Commissioners were unanimous in a desire to request proposals, noting the city wouldn’t be out anything from taking that step. Commissioner Sandy Jacobs said there will need to be “a lot of discussion” before the city moves forward with a potential consultant.
Jacobs noted she remembers the coalition conducting a similar retail study several years ago.
“It came back, and it went on a shelf and nothing was ever done with that and nothing was moved forward,” Jacobs said, noting she is glad the proposal also calls for a potential recruiting firm. “I think all of us here are anxious to see something that will move quickly.”
Mayor Shaun Musil also said he hopes the city would get some new information if it chooses to conduct another retail study.
“There’s nothing hurt throwing this out there,” he said. “My fear is, if we would hire somebody, we’re going to get the exact same thing about oil prices and unemployment — the same thing we’ve got the last five years. I think we could spend a lot of money to get the same answer.”