What Businesses are Working in Wisconsin’s Downtowns?

Businesses operating in Wisconsin’s Downtown’s ( ) By: JD Milburn, Downtown Development Specialist Ever wonder what businesses work in Wisconsin’s downtowns which ones close the most, which ones create the most jobs? This presentation provides an analysis of 8 years of data from those on the front lines. Wisconsin Main Street Executive Directors! Wisconsin Main Street presents 8 years of economic operating data to refine your local efforts.

Wisconsin Main Street Community Demographics Population Populations run from 764 to 102,000 when considering the community or one (1) mile radius of the two (2) metro designated neighborhoods. The average population is 7,400 and the median population is 10,000 for the designated areas. Budgets: The average budget of the designated areas were $138,922 with the median being $100,965. Gross budgets ranged from $400,000 to $30,000. The program requires organizations to employ a full- time executive director when the population base is 5,000 or greater, and allows for part-time director when the population is below 5,000.

Wisconsin Main Street Community Demographics (Cont) Legal status 81.82% hold Internal Revenue Service (IRS) tax exempt status of 501 (C )(3) “Charitable Organization “, 3.03% 501 (C )(4) “Civic League”, 9.09% 501 (C )(6) “Business League” and 6.06% two (2) local Government Agency “Business Improvement District” (BID) Status. 62% Have a BID

Closings As we all know business closing can have many negative economic and social affects on an area. Some of those may be: Lost area sales Lost area necessity goods Lost area necessity services Lost bank and investor capital Lost payroll spending impact Lost real estate value Lost taxes Perhaps higher crime rates? So lets look at the types of businesses that are closing, and estimate some economic impacts

Closings Business types that closed the most in Wisconsin Downtowns 1.81 appliance and home electronics 2.70 eating places 3.42 apparel 4.39 Gift stores 5.33 drinking places Closing Business type by job impact eating places drinking places apparel Gift stores other retail

Closings so what? Appliance stores Average sales$1,988,000 Average payroll$217,885 Average real estate size4,000 Real estate taxes$6,160 What has the area lost per store

Closings so what? What have we lost as a state Appliance stores Sales$161,028,000 Payroll$17,648,654 Real estate vacancy324,000 Real estate taxes$498,960

Closings so what? Job impact Eating Places Lost Jobs458 Average payroll$10,539 Economic loss$4,826,987

Business types sold Sales can indicate many things. Some of those may be: An enhanced economic area, in which owners sellout and invest funds into new ventures. An area in which transition is happening as business owners reach retirement age. An area experiencing economic stress, in which selling the business is the only way out of a potential liquidation A type of business that is becoming a casualty of a category killer or Big Box competition So lets look some of the types of businesses that are selling and think about our own local situations.

Business Types Sold Business types that sold the most in Wisconsin Downtowns 1.14 eating places 2. 7 other retail 3. 5 drinking places Sold business type by job impact eating places drinking places laundries & cleaners

Sold businesses so what? Local area economic influence Eating places Average sales$702,875 Average payroll200,238 Average real estate size4,900 Real estate taxes$7,987

Sold businesses so what? State economic influence Eating places Sales$9,840,250 Payroll$2,803,326 Real estate vacancy68,600 Real estate taxes$105,644

Sold businesses so what? State Job impact Eating Places Lost Jobs52 Average payroll$10,539 Economic loss$548,042

Expansions Expansion into the area can indicate many things. Some of those may be: An enhanced economic area, in which owners expand product offerings An enhanced area, in which owners purchase additional real estate An enhanced area, in which owners pursue additional markets, or acquire additional businesses. In most cases expansion is a sign of local economic health So lets look some of the types of businesses that are expanding and evaluate our own local situations.

Business Expansion Types Business types that expanded the most in Wisconsin Downtowns eating places professional services gift stores Expanded business type by job impact banks/credit unions eating places miscellaneous personal services

Expanding businesses so what? Local area economic influence Eating places Average sales$702,875 Average payroll200,238 Average real estate size4,900 Real estate taxes$7,987

Expanding businesses so what? State economic influence Eating places Sales$18,274,750 Payroll$5,206,177 Real estate vacancy127,400 Real estate taxes$196,196

Expanding businesses so what? Job impact Banks/Credit Unions Expanded jobs103 Average payroll$41,635 Expansion gain$4,288,422

Reductions Reductions in the area can indicate many things. Some of those may be: A product that has experienced obsolescence and so the survival strategy is to reduce the employees and or real estate footprint Reductions also happen when a firm is dying a slow death Reductions are warning signs to help the owner using retention strategies So lets look some of the types of businesses that are reducing and evaluate our own local situations.

Business Reduction Types Business types that reduced the most in Wisconsin Downtowns 1. 4 eating places 2. 4 miscellaneous professional services 3. 2 apparel Reduced job numbers by business type manufacturing banks/credit unions 3. 9 eating places

Business reduction so what? Eating places Average sales$702,875 Average payroll200,238 Average real estate size4,900 Real estate taxes$7,987 Local area economic influence

Business reduction so what? Eating places Sales$2,811,500 Payroll$800,950 Real estate vacancy19,600 Real estate taxes$30,184 State economic influence

Business reduction so what? Job impact Manufacturing Reduction jobs50 Average payroll$44,814 Reduction loss$2,240,720

Relocations Relocations from the area can indicate many things. Some of those may be: When a firm has experienced growth so large that a large single purpose headquarters has to be built. This can be experienced both ways and some firms have relocated their headquarters into downtowns Relocations happen when an area experiences business cycles similar to the maturity of its business mix. Relocations happen when cost structures change So lets look some of the types of businesses that are relocating and evaluate our own local situations.

Business Relocation Types Business types that reduced the most in Wisconsin Downtowns miscellaneous professional services other retail miscellaneous personal services Reduced job numbers by business type Insurance agents miscellaneous professional services eating places

Business relocations so what? Misc. Professional services Average sales$1,138,524 Average payroll44,479 Average real estate size2,250 Real estate taxes$5,670 Local area economic influence

Business relocations so what? Misc. Professional services Sales$59,203,253 Payroll$2,312,902 Real estate117,000 Real estate taxes$294,840 State economic influence

Business relocations so what? Insurance agents/brokers Relocated jobs426 Average payroll$46,829 Relocation gain$19,949,279 Job impact

Business starts Business starts in an area can indicate many things. Some of those may be: Healthy attractive business environment Business friendly area, community, politics Capital sources. Good real estate value compared to business revenues Coexisting business in the area, that encourage their friends to open a supporting business. So lets look some of the types of businesses that are starting and evaluate our own local situations.

Business starts Types Business types that reduced the most in Wisconsin Downtowns eating places other retail miscellaneous personal services Reduced job numbers by business type 1.1,112 eating places other retail miscellaneous professional services

Business starts so what? Eating places Average sales$702,875 Average payroll200,238 Average real estate size4,900 Real estate taxes$7,987 Local area economic influence

Business starts so what? Eating places Sales$65,367,375 Payroll$18,622,094 Real estate vacancy455,700 Real estate taxes$701,778 State economic influence

Business starts so what? Eating Places Gained Jobs1,112 Average payroll$10,539 Economic gain$11,719,672 Job impact

Strategies/Take away? Eating places have high start up rates, high job impacts, but experience larger amounts of closings. Each community should have an active restaurant development, retention strategy! Financial institutions have high job impacts and are purchasing real estate in downtowns. Actively working with this sector as a development strategy is an effective strategy. Light small component manufacturing should be a strategy. Look for large manufacturing plants, and try to locate small value added suppliers in certain areas of downtowns. Professional and personal services. This area has large employment and income impacts. Look at your mix and try to fill in the upper areas of properties with these types of businesses. A balanced and market sustainability driven effort is the key to a downtown area.

Data sources? Wisconsin Main Street reporting database. InfoUSA Dollars and Cents of Shopping Centers SCORE 2008 (ICSC & ULI) US 2007 Economic Census