By Samantha Bryant

Friday, 09 December 2011

Analysis reveals shoppers spend $518 million outside of city, plus stores, restaurants Hutto lacks

HUTTO — A retail analysis of Hutto released Oct. 28 reveals an approximate gap of $518 million in 2010 between the estimated demand, or potential sales, in Hutto and what residents are actually spending. The gap means Hutto residents are traveling elsewhere to shop and eat, and the city is losing millions in potential sales tax revenue.

The City of Hutto and the Hutto Economic Development Corp. commissioned the retail trade area assessment from Joey Grisham, an independent retail consultant, to determine where Hutto residents go to shop and which retail stores and restaurants the city should recruit so residents do not have to leave the city to meet their shopping needs.

“You leak out quite a bit of dollars to your neighbors,” Grisham said at the November Hutto EDC Power Breakfast. “So you want to bring that back around and have some of your neighbors leak some of their dollars to you.”

Hutto EDC Executive Director Scott Martinez said recovering those dollars is important for the growth of the city. An increase in retail sales means the city collects more sales tax, which can in turn be spent on infrastructure and street projects to spur on more growth.

“[The purpose] is to capture some of the retail sales that we’re losing, primarily to Round Rock, and now Pflugerville with the Stone Hill Town Center, just because we don’t have the retail opportunities here,” Martinez said.

More commercial buildings could also expand the tax base and lessen the burden on residential taxpayers.

Hutto EDC

The Hutto EDC is a Type A corporation funded by a half-cent sales tax. The corporation assists in the creation or retention of primarily manufacturing and industrial development.

“We’re able to partner with the city on water and wastewater lines for economic development projects; we’re able to fund things like the higher education center that will get under way this spring,” Martinez said. “So having that retail revenue stream is important. And the more we can capture from our Hutto residents is obviously something we’re interested in doing.”

Martinez said Hutto has had a lot of residential growth in recent years, but does not yet have a strong daytime job base, an important element for retail and restaurant growth.

Hutto will soon see more daytime shoppers when projects such as the East Williamson County Higher Education Center and the YMCA are up and running, both of which are scheduled to be completed in 2013.

“We’re going to see a big bump in our daytime population when the higher ed center opens,” Martinez said. “So I think some new retail development is inevitable.”

Marketing Hutto to retailers

While every city will lose some dollars to surrounding communities, Grisham said Hutto can recapture some of those sales by bringing in more stores and restaurants.

The study provides city officials with the most recent demographic data on Hutto for recruiting purposes. Grisham said many retail franchises have outdated population numbers for Hutto.

“A lot of these retailers like these demographic companies, but, for instance, some of these companies for Hutto had a projection that in 2010, your population would be 2,750 people,” he said.

Martinez said even though the 2010 census brought the population count up to 14,698, the data does not reflect the annexation of the Lakeside Estates subdivision in late 2010 or the more than 100 building permits issued in 2011.

The updated numbers within the study also helps city staff market Hutto to potential retailers. Assistant City Manager David Mitchell and Hutto EDC Marketing Director Seanna Roysden used the information in the retail study when they attended the Texas International Shopping Center Conference on Nov. 2–4 in San Antonio.

“In order to effectively speak to these retailers, you need to have this data in place,” Roysden said.

She said they were able to make some contacts at the conference, which they will follow up on in the coming months.

The retail study will also aid the EDC in ongoing talks with developers already in Hutto, such as NewQuest Properties and Endeavor Real Estate Group, about encouraging possible businesses to locate to their Hutto properties.

Grisham said a grocery store and soft goods store, such as an apparel store, are matches for the Hutto community. The study lists Kohl’s Department Stores as a potential match for Hutto, based on proximity to similar stores and income levels in Hutto.

Stores in Hutto could potentially draw shoppers from eastern Round Rock and Pflugerville who might have shopping options further west but do not want to fight the traffic congestion to get there.

Once Hutto has an anchor store, such as a Kohl’s or grocery store, Grisham said more retail development will naturally come.

“[Retail stores] love to be next to each other because they feed off each other,” he said.

Grisham said retail businesses generally follow a “clustering effect” and group together. Smaller, ancillary retail stores will locate next to larger stores. Better shopping options can also affect quality of life, one determining factor in where people decide to live.

“There are some people that make a decision on where to locate based on proximity to retail,” Grisham said.

Sally Velasquez, owner of Blue Jay Garden at 201 N. FM 1660, said she hopes the retail study will guide the city on how to promote Hutto, both to residents and surrounding cities, and bring in more businesses.

“We are faced with tough economic times, and for us to allow dollars to leave our community is something we need to bring attention to, to avoid that,” she said.

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