Controlling the market mix

Economic Summit focuses on community character, regional prosperity

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Steamboat Springs and Routt County can take control of the future makeup of their commercial districts, if their leaders want to.

That was the message delivered by one of the presenters at Economic Summit 2003 last week.

"We don't have an overall community market mix strategy," Orton said. "But we could and indeed we should."

Orton, who divides his time between Steamboat Springs and his home state of Vermont, owns the Vermont Country Store, a business comprised of two shops in small rural towns and a substantial mail order/Internet presence.

Promoting the right mix

Orton said other communities have already begun to do what shopping center developers do routinely: put together groups of retail and restaurants that work well together.

Private developers don't allow a random mix of stores to happen in their shopping centers, Orton said.

"Do you think Intrawest (developer of Copper Mountain and Whistler Blackcomb ski villages) simply lets market forces determine the mix of its base area communities?" Orton asked. "Not on your life it doesn't. Yet that's what we as a business community are doing."

Other cities are creating economic development entities to promote the market mix that they deem best able to sustain steady, long-term economic vitality, Orton said. In Neenah, Wis., not far from Green Bay, the Future Neenah Development Corp. has followed that path while reviving the city's downtown, he said.

Orton related the story of a friend who went to Breckenridge to shop, only to be disappointed: the number of real estate offices in its historic shopping district diluted the shopping opportunities. Communities can take control over the mix of storefronts on their main streets, he contends.

"Until now, we as a community have operated under the assumption that to control commercial demands is messing with the free enterprise system," Orton said. "I submit that to not manage commercial demands will dilute our unique place and lead us to a commercial mix that not only looks like everywhere else -- Generica -- but is not sustainable ... A market mix strategy is not interfering with capitalism. It's practicing capitalism to its highest level, to its greatest potential, just like private businesses do."

In Steamboat Springs, the

Economic Development Council could be the right entity to function like an "industrial development corporation," Orton suggested. It could help local entrepreneurs grow their businesses and help property owners fill vacant spaces with strategically identified businesses. It would require an independent entity with staff and funding, Orton said.

Big box vs. indie store

A business development entity in Austin, Texas, called "Livable City" has studied the impacts of local merchants versus chain retailers on the local economy, Orton told his audience. It contrasted the impacts of a new Borders bookstore to that of an independent book seller and music shop.

The study found that for every $100 dollars spent in each store, the local shops put $45 back into the local community compared to $13 for the chain store, Orton said.

However, he believes the impact goes beyond pure dollars and cents.

The managers at national chain stores are middle managers, not entrepreneurs, and although they might be good people, they aren't able to engage the community in the same way that independent business owners are, Orton said.

Orton also believes that the positive economic impact of national chains is often misstated. He refers to a phenomenon he calls "displacement economics."

"I've heard Gart Brothers might put up a huge sporting goods store here," Orton said. "Oh boy, more goodies, more toys, right? More competition, lower prices, right? More sales tax for the city, right? Not so clear when you consider displacement economics."

The arrival of huge national sporting goods chain could create a situation that mirrors what Steamboat has seen in the lodging industry, Orton said. With the addition of hundreds of new hotel rooms and condominiums, the Steamboat lodging pie has been cut into ever smaller pieces.

"How big is the sporting goods pie here anyway?" Orton asked his audience. "Where will all that extra business come from if Gart comes to town? Think it might come from our beloved Ski Haus?"

'Economic gardening'

Economic Summit 2003 organizers Scott Ford and Noreen Moore spoke about the concept of "Economic Gardening," a term coined by summit presenter Chris Gibbons of Littleton. Gibbons' approach to economic development is to emphasize nurturing existing local businesses and entrepreneurs, rather than attempting to entice new businesses to relocate to his city.

Economic gardening is predicated on educating potential entrepreneurs and providing access to capital. Beyond that, advocates of economic gardening suggest communities identify businesses with high growth potential and provide them with access to information that will help them find new markets outside the local economy.

If Steamboat went forward with a plan to positively influence the mix of enterprises in its commercial districts, Orton advocates fostering a strong sense of place in the kinds of businesses that are encouraged.

"When visitors come to town, we should stamp hard into their vacation-shopping pysche the vision and experience of Steamboat Springs shopping," Orton said.

-- To reach Tom Ross call 871-4205

or e-mail tross@steamboatpilot.com

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