What happens in the courthouse...

Unless explicitly noted otherwise, this blog represents my own opinions, not those of any organization (like the Kittitas County Democratic Party) that I might be involved with.

Feel free to join the conversation: welcome aboard!

Saturday, December 4, 2010

Maybe now we can be happy about what we have

I have to admit that I jumped to unfair conclusions when I saw Thursday's Daily Record story, "Stop the Leak" and its followup story on Saturday.

My initial reaction was that the articles would be about an attempt to resurrect the failed plan for "regional retail" at the west interchange, but instead the articles contained fairly straightforward information and reasonable outlooks from almost everyone who was quoted. Even as it was being proposed it was obvious to many of us that the project would go nowhere, and it looks like most of those interviewed have finally realized this, too. It's unfortunate so much money, time, and goodwill were wasted in getting to this point, but it is still nice to see a little realism.

The articles did give me an excuse to do a little research on retail leakage studies, which are a fairly common tool in economic development (click here for a Google search on retail leakage). These studies appear to be undertaken for a few different reasons by a variety of different entities. Some reasons for analyzing retail leakage include:
  • Developing strategies for increasing sales tax revenue. In our case, very high levels of fuel sales to passing motorists partly help offset low levels of local new car sales.
  • Understanding how well the local shopping needs of residents are being met. For example, residents of the town of Kittitas must go elsewhere to buy just about everything except basic needs like groceries and hardware.
  • Uncovering non-obvious business opportunities.
  • Gathering information to use in making the case to prospective retailers to move to a location.
  • Building support for large retail developments. The obvious example here would be the failed development at the West Interchange in Ellensburg.
It is important to note that leakage doesn't necessarily translate to opportunity. One study I found (from Wayne County, Indiana) put it this way:
Retail leakage means that residents are spending more for products than local businesses capture. Retail sales leakage suggests that there is unmet demand in the trade area and that the community can support additional store space for that type of business.

However, retail leakage does not necessarily translate into opportunity. For example, there could be a strong competitor in a neighboring community that dominates the market for that type of product or store.

I also found the handy table shown above. This came from a leakage study done by Ohio State University for Medina, OH (important: data in the table are for Medina, not Ellensburg). Clicking on it makes it a little more readable, or you can see the original study.

Notice the grouping of the different shopping types, and notice that we actually have many of the various shopping types. Kittitas County probably has one or two examples of almost every type of shopping on the list, and Ellensburg, where I live, has all except a very few (I can't think of any dedicated "hobby toy & game shops," for example, and even Medina doesn't have any mobile home dealers).

As I read and write and think about retail leakage, I also think of the attitude some people have about shopping in Ellensburg -- in some cases it's downright hostile. I'm not saying you can find everything you might want in Ellensburg, but some people have it stuck in their heads that Ellensburg doesn't have anything they want, and a few, including at least one particularly obnoxious commenter on the Daily Record's website, seem to take pride in shopping elsewhere.

It occurs to me that these people may have been led to believe Ellensburg's shopping sucks by the way previous leakage studies have been spun by those who stood to make money from development at the west interchange. The Daily Record seems to be working to undo this damage (I refer to their "buy local" campaign, not the leakage articles), and I hope the Chamber of Commerce will, too.