Archive for Wednesday, July 7, 2010

Report: Local retail lags behind university cities

July 7, 2010


Retail numbers

Here’s a look at the per capita retail sales for Lawrence and eight other university cities that are close to other major metro shopping areas:

Davis, Calif.: $23,569

St. Cloud, Minn.: $17,207

Athens, Ga.: $16,697

Chapel Hill, N.C.: $16,433

College Station, Texas: $16,022

Fort Collins, Colo.: $15,164

Norman, Okla.: $14,683

Lawrence: $12,917

Lincoln, Neb.: $11,751

A new report Tuesday showed how far behind Lawrence’s retail economy is compared with several other major university cities.

Lawrence ranked next to last in a city-compiled report that compared Lawrence with eight other university cities that also are close to major metro shopping areas.

The study found that Lawrence had taxable sales of $12,917 per person in 2009. That was second lowest of all cities studied, and was about 15 percent below the group average of $15,053.

The city’s Retail Task Force asked for the study after expressing concerns about how well Lawrence’s retail sector could perform given its proximity to both Kansas City and Topeka shopping districts.

The report found, though, that broader issues in the Lawrence economy may be playing a bigger role than its geography. The report looked at the gross domestic product of seven comparable college communities and found Lawrence had the lowest GDP both in terms of total dollars and on a per capita basis.

Per capita GDP, which measures the total output of a local economy, was $26,662 per person in 2008. That was about 20 percent below the group average of $33,527 per person.

“I don’t think we should be making excuses for what the numbers say,” said County Commissioner Mike Gaughan, who is a member of the task force. “We need to figure out how people can not only spend money here, but earn money here.”

The task force, which is meeting through the end of the year, did hear that there is potential to increase Lawrence’s retail spending by adding small boutique-style hotels downtown.

“I think that would really add to the retail of downtown,” Judy Billings, director of the convention and visitors bureau, told the task force. “People in Kansas City then might see Lawrence as a quick overnight getaway.”


LogicMan 7 years, 11 months ago

“We need to figure out how people can not only spend money here,"

Doesn't take a rocket scientist to figger this out ...

Have more stores that people want to shop at!

For example:

Super Wal-Mart in north and east Lawrence Aldis there too Lowes Super Target in northwest Lawrence Red Lobster, Golden Corral, Wendy's, etc., probably south Sam's Club and Costco, west or south Grainger, east 23rd or south Harbor Freight Tools, next to SportsClips Putt-Putt

Survey people to determine what they drive out of town and order by mail/internet for, that they can't buy here.

William McCauley 7 years, 11 months ago

Just go and try to open one or more of those in this town and you will quickly find out how unbusiness friendly city hall is towards new start up business.

average 7 years, 11 months ago

The town is unfriendly? Really.

Tractor Supply on East 23rd? Approved in a month. Dollar General being built in North Lawrence. Approved in a month.

Our 'business unfriendliness' hasn't really stopped the dozen or so strip malls built in the last decade, at least as far as I can tell it.

The 'progressives' held power on the city council for about four years out of the last 50, and those are getting to be quite a while back.

parrothead8 7 years, 11 months ago

Brilliant. Your solution to bring in money from out of town is to put in businesses that take all their profits out of town?

rorik23 7 years, 11 months ago

While these business may be based out of town, patronage at these locations would generate significant sales tax revenue locally. This would fund municipal improvements, like street repairs.

jmadison 7 years, 11 months ago

Raise taxes, its the answer our govenmental entities advance as a solution to all our problems.

think_about_it 7 years, 11 months ago

If they would just raise sales taxes to 20% all would be OK. Sales taxes at nearly 9% obviously hasn't generated enough revenue.

inatux 7 years, 11 months ago

I'm with the above. Why doesn't Lawrence have a good mini-golf range?

whats_going_on 7 years, 11 months ago

We used to! I believe it was where DougCo Bank is on 31st. I had many-a-birthday parties there. I miss the roller skating rink too. :(

John Hamm 7 years, 11 months ago

. “We need to figure out how people can not only spend money here, but earn money here.” Oh here's the comment of the decade! How many businesses has Lawrence/Douglas County decided not to "pursue" because they weren't "high-tech" enough? If it ain't white-collar, high-tech "we don't want it here." Now that philosophy has finally come full circle to bite them in the ankles and elsewhere.

imastinker 7 years, 11 months ago

High paying jobs come from manufacturing and industry, which Lawrence has very little of. Lots of people look down at manufacturing because they might be blue collar jobs, but a machinist might make $50k/year and a really good one ought to make twice that. Skilled trades pay very well, and white collar jobs are needed at those kinds of facilities as well. Most of those pay in excess of 50k/year and many twice that or plenty more.

You can't have a healthy community with all the jobs in retail and the good paying ones working out of town. Then it's easy to shop somewhere else for the people who are making the money.

Lindsey Buscher 7 years, 11 months ago

This comment was removed by the site staff for violation of the usage agreement.

KU_cynic 7 years, 11 months ago

The story says it all, just not in the proper order. Income per capita in Lawrence is lower than the so-called peers. It is therefore not surprising that per capita retail spending is also lower. Including outlier Davis, CA in the peer group average doesn't make any sense, by the way.

The missing piece? Housing costs. How do Lawrence housing costs and rents compare to these peers? I'd wager that Lawrence housing costs -- especially when expressed as a ratio to per capita income -- are not materially lower than these other cities.

Lower income + relatively high housing costs = lower retail spending. It's a pretty simple equation.

jafs 7 years, 11 months ago

Yes, but why aren't costs commensurate with income?

KU_cynic 7 years, 11 months ago

High cost of doing business in Lawrence, natural geographic boundaries west, north and south that drive up land costs, and a resulting mismatch between size/prices of new homes and middle class incomes (teachers, policemen, etc.).

I expect that with the high inventory of new housing stock -- both homes and apartments -- rents and home prices will be depressed for a long while, even if incomes rise.

average 7 years, 11 months ago

I've got the current BLS stats up as a database. It lists 392 metro areas (excluding Puerto Rico)

There are 41 job categories where Lawrence is among the lowest-paid 10% of metro areas in the US. They include both 'labor' jobs like truck driving, bill collecting, packagers, assemblers, etc. But, they also include a lot of higher-end degree-required categories, too. Networking manager/analyst (lowest in the nation). Systems admins. Mechanical engineers. Librarians. Pharmacists. Speech/Language pathologists. Office/admin support. And all three categories (elementary, middle, and high) of K-12 teachers.

This is in a town in the top 10 (not even top 10%, the top 10) in the nation for both Bachelor's degrees and Advanced college degrees. If nothing else, that suggests that we probably have a lot more debt than towns where 10% or so of the population has a Bachelor's degree.

Our retail lags. Duh.

geekyhost 7 years, 11 months ago

I'd be more than happy to work in Lawrence, and believe me, I did try, but commuting gives me twice as much money. Actually, I earn nearly three times as much as I ever did in Lawrence, but I'm giving some wiggle room for inflation.

Building more retail isn't going to magically make me have more time in town to spend that money, but working in town would potentially give me about 20 hours more per week of time I could be spending at local small businesses and save me transportation costs I could be returning to the community. I'm sure I'm not alone in this situation.

oliveoyl 7 years, 11 months ago

Puggy and guys took the words right out of my mouth!

BigPrune 7 years, 11 months ago

City restrictions and adherence to an outdated guideline Horizon 2020 that was outdated the day it rolled off the presses is the reason why Lawrence retail lags behind all the other university cities. If and when Lawrence ever allows new areas to develop new retail will the sales taxes increase. Look at the 1990's - all the growth of retail increased the tax base tremendously bringing total sales over $1 Billion dollars per year, starting in 1998. Compare that to 2000-2010 - no significant increases at all and also at the time Lawrence became protectionist towards retail. The root of the problem is the City took the advice of no-growth people, some who are on the retail task force, and essentially killed the sales tax coffers.

No study necessary, these are the facts, free of charge.

Bud Stagg 7 years, 11 months ago

We don't have high paying white collar jobs because too many old hippies/old rednecks don't want to give them incentives to build their business here. These businesses are smart, they will go where they can place and run their business the most efficient way.

The people in this town need to realize that giving up some business taxes wouldn't hurt us. If we gave a company $1 tax break, they could employ people who would generate $2 in sales tax revenue. Those employees would also buy homes that would generate property taxes. They have children in our schools that would bring in more money to the district from the feds. and so on and so on...

BigPrune 7 years, 11 months ago other words, there is no place to build new retail anymore.

LadyJ 7 years, 11 months ago

How about this scenario. Years ago housing and wages were lower in Lawrence. Workers in Johnson county see the houses are cheaper in Lawrence and buy houses here and commute. Realtors and sellers see this tread and start raising the prices of the houses. Now in order for local residents to make enough to live here, they also must commute to work because the wages stayed the same while housing went up.

LogicMan 7 years, 11 months ago

Just dropped $500 on an out of town shopping trip this morning -- stores and stuff that's not here, mostly. Not a dime paid to Lawrence in taxes, instead to the surrounding competition.

Lindsey Buscher 7 years, 11 months ago

Developers can pretty much build whatever they want, not necessarily whenever we want because fortunately democracy is strong in Lawrence as we have a great diversity of grass roots groups. WE are soooo business unfriendly too, nevermind the walmart did get built and it goes along with all of the other new retail at 6th and Wak that will catilize other space in town leaving big box vacancies and blight.

But you are wrong if you think that the answer is more chains. People are not going to take trips greater than 100 miles just to visit chains and people within 30 miles can find any chain they need in Topuka or KC. In order to increase revenue, you have to play to your strengths, ie, downtown. More development downtown, and sure, I suppose you could sprinkle in a few of those chains throughout, just no more big box retail.

And Lawrence has a very sad "white-collar" and high-tech industry. Our largest employer outside the university is a frikin telemarketing firm. Oh yeah, and there is that university thing, here we have a natural resource for talented human capital, why not recruit more jobs that appeal to college grads. Why not give them an opportunity to make more money in Lawrence and then spend it here?

Nope, Lawrence suffers from brain-drain. You know that high school dropouts make more money in this town that people with a high school degree or associates degree (2 years of college)? But I digress, you interweb bloggers have it all figured out, let's make sure there are plenty of walmart, lowe's, and red lobster jobs to go around for college grads. That's the ticket!

Lindsey Buscher 7 years, 11 months ago

Yes, BigTool, there is no place for new retail and new retail is the answer to all of our problems!!!

Exactly what don't you get about supply and demand? Supply does not create demand; supply naturally follows from demand. Take the nearly 1,000,000 sq ft of new retail being built at 6th and Wak, nevermind the existing vacancies on the south side of 6th, you are saying that all this new retail and even more new retail on top of that will increase spending and the "retail tax base"...

WHERE is this new spending coming from? The existing residents only have an finite amount to spend; the only way to benefit from new retail is for people to travel outside of the city/county to shop, but no one is going to travel greater than 30 or 100 miles to visit Lowe's, CVS, Taco Bell, or Smash Burger. Period.

BigPrune 7 years, 11 months ago

Puggy, ignorance is bliss. The south side of 6th Street has vacancies because your so-called "progressive" commission allowed KDOT to close off the entrances to the retail on the south side - remember? I do. I watched Boog say in so many words, "I'm tired of fighting this, let KDOT have their way." Closed businesses almost immediately. Thanks progressives.

Lawrence is losing sales tax dollars from its residents who are going out of town, because Lawrence doesn't have the businesses that the citizens want.

There is no place to build retail in this town anymore unless it is on a huge tract of land owned by out of towners that don't know what they are doing. Try to buy a little piece for a business. It ain't gonna happen.

BigPrune 7 years, 11 months ago

....that could also apply to locals as well as out of towners (that don't know what they are doing) with their big tracts of land. Remember: apartments are different than retail

Mark Kostner 7 years, 11 months ago

Lawrence is a cool place with a lot to offer. Lawrence needs to develop its niche, which is to make itself an entertainment and event driven destination. Have festivals each weekend during the summer such as film, art, various types of music. I just saw where there's a science fiction conference going on. That's a good one, I'd have gone had I been around. Fairs and festivals would be good, block off Mass and draw people from 100 miles around. Have so many good restaurants that when you walk down the street it's endless aromas. Having hotels to stay at downtown is a must including more bed and breakfasts in those wonderful old homes near downtown. I never visit Kansas City without a trip to Lawrence so the city needs to keep building what it's got. A couple of years ago there was a proposal to build a shopping area in North Lawrence at the bridge. A neo downtown type center there would be good also. What you want is uniqueness, not being Anytown, USA.

IndusRiver 7 years, 11 months ago

Lower income + relatively high housing costs = lower retail spending. It's a pretty simple equation.

Hits the nail pretty squarely on the head. I said a long time ago that KU and the LDCHA in the same small town is not sustainable. No jobs on the one hand. Part-time jobs on the other.

IndusRiver 7 years, 11 months ago

Use the Smoking Ban model:

Let's ban shopping and then fine everybody who shops.

workinghard 7 years, 11 months ago

It doesn't matter what kind of stores are here if you don't have the money. By the time the utilities and other services, taxes, gasoline, and medical bills go up, and no raise the last few years, nothing is left to spend.

cozy 7 years, 11 months ago

I drive to shop at chains.

I drive to go to Gordmans (hell of a lot better than TJ Maxx's weird smell, lack of departments and long thrift-store-like racks), Victoria's Secret maybe a couple/few times a year (kind of surprising we don't have one here for all the sorostitutes), Costco (love that place), and I'll go to Fazoli's, Golden Corral ( I'm 124 lbs, so I can pig out if I want), Waffle House or somewhere else we don't have here but should, to eat before I come back here.

George Lippencott 7 years, 11 months ago

Why do we have higher housing costs?? Who bid up the price?? You know many people use the tax assessment to set prices. If we consistently overstate home values we will run up the price. Over valuation earns a lot of property tax. We like property taxes because they allow us to build many many amenities and the direct impact is on a minority. Unfortunately they do work their way into the rental market. Thirty thousand KU students also drive the latter. Just maybe we are reaping what we have sewn?

Oh, by the by, how do we know that the owners of our local businesses return more to the local economy than big box stores do? The latter has a payroll here and pays taxes here. Can we really enhance our economy as suggested by investing only in local color?

Richard Heckler 7 years, 11 months ago

Flooded retail markets are unfriendly to existing and new business. It makes no sense to locate in Lawrence. Anytime new business comes in and puts existing business out that equals no gain, zero new economic growth and further contributes to economic displacement.

The local chamber and behind the scenes powers that be have been shooting Lawrence in the foot for their own personal gains.

And city hall looks to the real estate/development community for direction in growth. These people are NOT urban planners,are NOT good with managing the Lawrence economy and have wayyyyyyyyy too many conflicts of interest = wreckanomics.

Lawrence growth should be dictated from City hall, backed by market impact studies and an annual Cost of Community Services study. Lawrence,Kansas should be led by in house urban planners and good business managers. Transparency would be good for business.

Our Chamber of Commerce is nothing more than the real estate/developer/builder community and members of their legal counsel = wreckanomics.

Lowes comes in Home Depot goes out = zero gain. Lawrence taxpayers shelled out $2.5 million to bring Home Depot in. There are STILL vacant retail spots in that center = retail center STILL not paying back the taxpayers.

Lawrence CANNOT support the KCMO/JOCO,Topeka and Legends shopping concept. Legends may well be supported by those special back door sales taxes.

George Lippencott 7 years, 11 months ago

Where did you get the $2.5 mil from me for the Home Depot? Maybe I can go down there and claims some of it.

You would think that business would be to a major degree self-limiting. I cannot imagine any big box store investing their money in a market they knew to be saturated. I can imagine small specialty stores making an investment as they generally lack THE ABILITY TO assess the market accurately. Just how do you propose to make the decisions on who comes and who goes if market forces are not the basis for those decisions????

George Lippencott 7 years, 11 months ago


So in your world the government owns everything and decides what any of us can do based on studies conducted by some presumable disinterested but super knowledgeable party. I guess that includes the notion that we must shop at the government approved stores with whatever the government decides we get to spend on what they determine is right for us to buy. Why would I want to give you that much power? I guess you really do not see any of us as capable of making decisions so that the leadership must be established by those who know better. Sounds like the dictatorship of the proletariat. Do you have many fellow travelers? Would you be the decider? I note your reach is now including the KCMO to include JOCO and Topeka.

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