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Retail ideas aired
Incentives may be the key
Monday, February 18, 2013
By DEBBIE HALL - Bulletin Staff Writer
Debra Buchanan’s proposal to create an office to recruit retailers to the area did not mention offering incentives to attract businesses. But several area people who work with new companies say they should be part of the discussion.
Incentives traditionally are awarded based on job creation and/or capital investment. Often they are money, such as those given by the Governor’s Opportunity Fund, but they can be tax breaks, such as those given to businesses locating in Enterprise Zones.
“I think our incentives here are what we have to offer,” Horsepasture District Supervisor Buchanan said of local tax rates, the Martinsville-Henry County Economic Development Corp.’s willingness to work with small businesses and the focus on small businesses through the EDC’s Small, Minority & Entrepreneurial Division.
In January, Buchanan presented her proposal to recruit retail businesses to members of the Henry County Board of Supervisors. The board later included retail as a goal in its economic growth priority.
On Friday, she said she feels that “the best case scenario is the EDC working within their own infrastructure to allot some time for retail.”
As it stands now, if a retailer interested in locating in this area contacts the EDC, the agency works with the company or refers them to a commercial developer who can assist them, Buchanan said.
“But, we don’t make the calls. I would prefer for us to make some calls as opposed to waiting for someone to call us,” she said.
And although Buchanan’s proposal did not include monetary incentives, some local developers already are doing that, and others would like to see funds available for businesses.
One of those people is Dick Ephgrave, director of the Longwood Small Business Development Center in Martinsville, which assists new and proposed businesses. He said that while he is not “sure that a separate office is needed just to recruit retail, I am strongly in favor of recruiting retail because I do think retail/small businesses are the secret to our economic comeback.”
He said that is because all small businesses/retailers “that survive continue to grow, add more jobs, generate more revenue, et cetera, et cetera. I do think we should concentrate on bringing more in.”
To that end, Ephgrave proposed “trying to assist small business startups, provide them help with business plans and that type of assistance, and what I would like to see is financial assistance.”
Virtually every business he works with needs funding, he said.
“Very rarely do they ever have enough money to start” a business, Ephgrave said. He added that it is especially difficult for small businesses, especially in retail, to get bank loans.
Incentives are offered to industries locating in the area, Ephgrave said, “but not small businesses. Now whether or not we need a separate office to do that, the jury is out on that. I’ll wait for the powers that be that are going to have to fund that decision” to make it.
“What I think we need is some sort of program that is funded by either EDC,” the Harvest Foundation or possibly the Virginia Tobacco Indemnification and Community Revitalization Commission, he said. Those entities may be willing to “set up a fund that we could administer to assist these small businesses,” he added.
Ephgrave said his office works with retailers as does the EDC and the West Piedmont Business Development Center, which is a business incubator, “so I think there are resources in place, but there’s no financing.”
He also believes that Henry County-Martinsville would appeal to retailers that “are small, homegrown ones,” like Rising Sun Bakery and 2nd Time Around Consignments, the “specialty niche type retailers that rely primarily on customer service,” Ephgrave said. “Those are the things that we can do better than the chains can, and you can put together a successful strip mall if you have a bunch of small retailers.”
Mervyn King, who renovates buildings in uptown Martinsville which house entities ranging from offices to retailers, said he thinks incentives should be decided on a case-by-case basis.
“I think the right person” should receive some incentives, “but I see so many people come with ideas that are just not going to work,” King said. Even if incentives are given, the company or individual needs to make investments in the business as well.
For instance, King said if he thinks a business will benefit the community, he may lower its rent payments, providing the business owner makes improvements or renovates the space they are leasing.
That “gives them an obligation to work harder. So many people come in with the idea that they are going to make a profit the first year and it rarely, if ever, happens that way,” he said. The main thing is “you have to be very careful and selective about who you choose to assist” financially.
King’s wife, Virginia King, added that the couple focuses on recruiting “unique stores” when looking for retail businesses that will fit in the community.
“That seems to be what the emphasis has been on the downtown areas,” she said. “We can’t compete with Walmart, but we can have the unique stores that can bring people here, and that’s what we’ve been looking at” when developing areas uptown.