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Wednesday, 07 June 2017 14:11

What’s in the cards? Retail travails, prevails

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On a rainy June Monday in Maggie Valley, wispy mists lick lush mountaintops that tower behind nearly every business in town, including the Cabbage Rose gift shop on Soco Road. 

“We had a great weekend,” said Scott Nielsen, who’s owned the place for 30 years.  

Despite the weather and the workday, Nielsen’s shop appears bustling, but he insists it’s not. 

“Business has been good, but 15 years ago we had 15 coworkers,” he said, as a small knot of older women perused purses that line his walls. “Now we have three.”

Closely related to tourism, Haywood County’s retail sector has risen and fallen with the times and the trends but remains an important economic sector that disbursed more than $75 million in wages in 2016.

Perplexingly, wage growth in this sector since 2000 has been negative against inflation and may be helping to fuel Haywood County’s affordable housing crisis; that average weekly wage of $355.15 in 2000 should be worth at least $514 today just to keep pace with inflation. At that wage, an affordable home would cost $53,456.

Instead, the 2016 average weekly wage for retail sector employees was $484, and the median home price was $157,200, making retail an economic development gamble that has in the past turned lemons into lemonade, but won’t bear fruit forever. 

 

Money for nothing

The true economic impact of a new or expanded Walmart on a community has been a hotly debated topic since the mid-1960s, but most all studies and reports seem to indicate a number of positives. 

First and foremost, when a new Walmart comes to town — as it did in Waynesville in 2008 — a city or county retains jobs and revenues that might otherwise have gone to another community.

Sure, it can mean dire straits for smaller businesses, but it doesn’t have to and it isn’t always.   

“We keep changing our product line to evolve with the customers. We can’t complain,” Nielsen said. 

Nielsen’s Cabbage Rose was here long before the internet and long before the Walmart, which nationwide employs about 1 percent of all workers and collects more revenue in a year than the states of California, New York and Texas combined; Walmart’s 2015 corporate revenue could easily run the state of North Carolina for 10 years, or the town of Waynesville for 15,261 years. 

GRAPH: Retail sector in Haywood County

On a single-store scale, a Walmart Supercenter like the one in Waynesville typically employs more than 300 associates and probably grosses about $1 million a week moving everything from microwave ovens to refrigerators to color TVs.  

Given that sales taxes account for 18 percent of Haywood County’s proposed 2017-18 budget, the importance of the Walmart and the other major retail establishments located just off South Main Street cannot be understated, especially over an extended period of time. 

But if it wasn’t for the Haywood Economic Development Council and the Haywood Advancement Foundation, that nexus of economic activity might still be just a rusting, overgrown post-industrial visage of blight and pollution. 

 

Bricks for free

In the early 1940s, the Dayton Rubber Company established a substantial facility in what was then the Town of Hazelwood that became a mainstay of the postwar economic boom until like the boom itself, it eventually petered out just before the turn of the 21st century. At the time of its closing the factory employed more than 500 in making rubber hoses for automobiles.

“They closed, I think it was around 1997,” said Mark Clasby, executive director of the Haywood Economic Development Council.

The sprawling brownfield languished for years, though several attempts at reutilization had been made by the time Clasby began his economic development duties in 2003, when the property was in bankruptcy, owed back taxes and was still awaiting the Dayco-funded remediation of a spill that had tainted some soil. 

“Under a government, buying and selling property can be a challenge, “said Clasby, who also serves as the director of the Haywood Advancement Foundation, a 501(c)3. “The county gave a $650,000 grant to the foundation, and the town of Waynesville gave a $650,000 grant to the foundation.”

With that $1.3 million, the foundation bought the property, entered into discussions with developers, brokered a $750,000 cleanup timeline with Dayco and arranged for the demolition of existing buildings on the site. 

Shortly thereafter, the foundation sold the property to Walmart developers for $2.1 million, and repaid both the county’s and the town’s grants, although Clasby said the foundation wasn’t obligated to do so. 

“We felt that would be the right thing to do,” he said. “It was really a good deal.”

The foundation had “quite a bit” of cash into the deal, according to Clasby, but after expenses still walked with a tidy profit, which it then used on other economic development incentives — in essence, playing with house money. 

Businesses like Nielsen’s show that communities benefit from the coexistence of major retailers with small-town mom-and-pop shops — or, in at least one case, small-town mom-and-daughter shops.  

“My daughter and I run this place together,” said Sheree Rose, owner of the Turquoise Elephant, a new contemporary women’s clothing store on the outskirts of Waynesville that opened last December. “We saw a need.”

Neither Rose nor her daughter has a background in retail, but said they’ve done well so far. 

“We’ve survived the winter. When we opened, we had four racks. Every month, we’ve built up. We’re learning and trying to survive at the moment, but I would love to get a little larger,” she said. 

Rose attributes her strong start to the community, which she thinks is healthy, economically.  

“The locals have been awesome, and the tourists will just be icing on the cake,” she said. “But we opened for the locals because of the need.”

Justice Rogers, owner of Not So Old Toys and Collectibles, opened his shop in Canton last September. 

“I like the small-town feeling,” Rogers said. 

Originally from New Jersey, Rogers could have established his business nearly anywhere, but like Rose chose a small Haywood County town because of the community. 

 “Before I opened, I went to a lot of places and explored. In the bigger cities there were no relationships – it was just all about the money,” Rogers said. “Of course, you’ve got to have money to keep the doors open, but I’m about relationships too. It makes you part of the community.”

Rogers said that his Main Street neighbors in Canton’s retail core have been just as supportive to him as he’s been to them. 

“My neighbor next door makes custom furniture,” he said. “Sometimes he needs some help putting a table in his truck, so he comes over and we laugh it up, and then he goes and makes his delivery. And his daughter comes over and hangs out with my mom, who is like her grandmother’s age. I like that sense of community.”

Tiny Clyde is home to a small retail community, albeit one that like Nielsen has had to evolve with the times and adapt to local competitors. 

“Business is good,” said Tim Glance, owner of The Old Grouch’s Military Surplus on Main Street in Clyde — just across the street from the Big Gun. “We had a slow winter, mostly because it wasn’t cold. Nobody buys wool socks and thermal underwear when it’s 50 the day before Christmas.”

Glance says business has increased steadily over the 27 years he’s been operating, but he probably would have had a much tougher time had he not begun conducting business online — making him and his business a small but important “exporter” of Haywood County goods. 

“Surplus stores are a bit of a dying breed,” he said. “We’ve moved into doing a lot of online stuff, which lets us reach out to a broader audience online.” 

Glance estimated about half of his business comes from online sales. 

“It goes all over the country, and there are some international sales,” he said. 

The business environment in which The Old Grouch operates appears to suit Glance just fine. 

“The town of Clyde is very hands-off, which I like,” he said. “They don’t bother us about much of anything. Same with the county.”

Business in the Town of Waynesville is a lot more hands-on, especially within the downtown retail core.

Much like the county’s Tourism Development Authority markets the county as a destination by collecting a room occupancy tax, the Downtown Waynesville Association markets the Town of Waynesville as a destination by collecting an ad valorem property tax within a Municipal Service District. 

One need only step into the crisp fall air on some sunny Sunday morning and saunter through a busy festival to experience the impact all those tourists have on the overwhelmingly retail-oriented establishments that line both sides of Main Street; unlike the TDA, the DWA has managed to spend a substantial amount of money over decades on aesthetic improvements to its product — a quaint mountain shopping district where you can get a $3 beer or a $3,000 coffee table. 

The DWA, like the TDA, has its detractors; an attempted defection from the MSD by a property owner who claimed to derive no direct benefit from its activities was quashed by Waynesville Aldermen last fall, and a proposed increase in the TDA’s room occupancy tax was yet again quelled by a single state legislator over the near-unanimous objections of every elected official in the county.

In each case, the conflict centered on the debate over individualism-versus-collectivism in government; in the latter, Rep. Michele Presnell, R-Burnsville, said she thought business owners forced to collect the room occupancy tax should be allowed to raise or lower their rates as they saw fit, and spend whatever monies therein acquired of their own accord.

The problem with that is it’s nearly impossible to imagine $1.3 million of those dollars coming together simultaneously, from multiple private individuals, all united in a single common goal to create the profound and prolonged economic impact of something like a coordinated marketing campaign, a regional livestock market, a shovel-ready industrial park, or a brownfield redevelopment.

It’s also nearly impossible to argue with the numbers. 

“April is usually a slow retail month, even with the Easter holidays and a few warm days,” said Buffy Phillips, executive director of the DWA. “But retail is definitely up over last year in downtown Waynesville.”

 Indeed, municipalities currently in the thick of budget season are both reporting and projecting increased sales tax revenues on the order of 5 percent.

Since 2000, the tally of retail establishments in Haywood County is down more than 20 percent, to just 214, according to the N.C. Department of Commerce. But in an encouraging sign, over that same same period the number of employees in the sector increased about 3 percent to almost 3,000. 

There remain, however, a few vacancies on Main Street, but they won’t be there long; existing businesses often jockey for position when new spaces become available, but several new businesses have sprung up, and a few more are on their way. 

Phillips said she thinks that by the time summer truly begins, there won’t be any empty storefronts at all.

“We had several business owners that chose to retire this past year,” Phillips said. “All of those locations but one has been filled.”

Among them the John Graham store, a nearly five-decade tenant and testament to the changing business environment Nielsen mentioned. 

“It has changed,” he said, lamenting the most recent evolution of his customer base. 

“The Millennials now, they’re minimalists,” he laughed. “They don’t want anything.”

But as to what’s in the cards for Haywood County’s growing retail sector, this industry veteran says he still sees a bright future. 

“The more businesses we have, the more people will come. I’m not one of these people that say ‘Oh, I don’t want you taking a piece of my pie,’” Nielsen said. “The more the merrier — as long as we help each other.”