Shawn Massey, CCIM, SCLS

What does “LOCAL” really mean?

What does “LOCAL” really mean?

Jan 16, 2012

I will add my disclaimer right from the beginning that I love unique individual restaurants and my wife appreciates shopping at “one of kind” boutiques.  It is our family goal to try at least one new restaurant a week.  We like to consider ourselves “Foodies” and I try to justify it as research for my work rather than I simply like to try new food establishments.   These restaurants can be a national or regional chain, although the majority of the establishments tend to be developed by area entrepreneurs.  Since the birth of my son last June we average probably just two new restaurants a month, although we tend to still eat out often but choose kid friendly  haunts like Cheffies, Casablanca, Swanky’s  and Three Angels Diner etc.

I make my living helping retail entrepreneurs, franchisees, national restaurants and retailers find the best home for their business in the Mid-South.  Last year I had the opportunity to work with a national branded franchise Quick Service Restaurant sometimes known in the industry as a “QSR” concept.  This franchise is owned by local Mid-South (Memphis MSA based) entrepreneurs and located in the heart of the 38104 zip code.   After opening I posted the opening on my Facebook page as I try to do with all my clients or any new retailer/restaurant investing in Memphis or in the Mid-South.  I was blasted by a few people telling everyone (on my page) to avoid the restaurant as it is national chain and to shop local.  I held back my comments beyond explaining that it is a franchise, the majority of the ownership group is from Memphis, and they provide jobs to 25 local people in an economy at that time when unemployment in the city was 11%.  In addition, they took a blighted vacant building and invested hundreds of thousands of dollars to renovate the building using a Memphis area contractor and increased the property value and tax revenues to the city.  This restaurant group simply chose to purchase a successful national branded franchise that would help ensure a better chance of success.  I will save the benefits of franchising to a later blog.  It just got me thinking what does LOCAL really mean?

The city of Memphis just signed a wonderful deal with Electrolux (a Swedish company) that will provide 2,000-3,000 well paying jobs to my community.  Could the deal have been better, probably not as many communities were vying for manufacturing companies to locate in their area and would do what is necessary to land a project such as $ 200+ million facility not including the additional suppliers that will choose to locate nearby?  What I heard all this past few weeks is that Mayor Wharton did not protect the cities contractors and to ensure adequate local and minority/woman owned business participation.  The general contractor who received the final overall contract was W.G. Yates & Sons Construction which is headquartered in Philadelphia, Mississippi.  I (a Memphian for 31 years) had the wonderful opportunity to go to work for this company when it opened its doors over 15 years ago in Memphis!  Yes the company may be based in Philadelphia, Mississippi which I still consider part of the Mid-South (we have touted regionalism for many years at our Memphis chamber), but for those 15 years they have employed a full staff of many local employees including office staff and construction workers who are happy to call Memphis home.  In addition, they have made a great effort to hire Memphis area based sub-contractors over these years.  This is the only way a general contractor can be competitive locally.  This company made a firm commitment to our city in the 1990’s and has maintained the commitment well into their second decade and I’m sure they will be here for their 25th anniversary and beyond.  Memphis has many quality contractors who are based here, but to constantly say that this one company is not local is just simply wrong.   I know a lot of the controversy with the Electrolux project circles around the minority and women owned business sub-contractor participation levels.  I am firm believer that when possible the city, county and state on municipal projects or where public funds are used directly or indirectly should encourage and even mandate when it can either city, county and state local small business participation.    How we define local small business should be reviewed not only to include minority and women owned business that qualify as a small business, but expanded for all small businesses.  Mayors Luttrell and Wharton did a great job as leaders of the county and city to bring Electrolux to Memphis!  We were the envy of most of the country in 2011 on this front.

I am excited that a great global company like Raymond James has stepped up to purchase Morgan Keegan last week.  Honestly, I was hoping that the local area group could arrange the necessary financing to pull it off as I have known a few of these extremely talented and brilliant individuals for many years.   I was worried that if the wrong buyer took over the company it would mean a huge loss to the city and the benevolence that came with having Morgan Keegan division headquartered in Memphis.  Remember for many years Regions Bank based out of Birmingham has owned this company.  Yes I do think initially we may lose a few jobs due to the merger, but I still am hopeful that Raymond James, a national financial powerhouse, will embrace our city and community.  If Morgan Keegan, a division of Raymond James Company, stays here should we not utilize their services because they are based out of Florida?  The question is rhetorical and we should not only use their services but welcome Raymond James who has had a presence in Memphis already for many years with open arms and show them why not only continue to operate the existing business in Memphis, but eventually expand here as they see our great city that is evolving.

We have so many great national, regional and local companies (including restaurants and retailers) that do business in Memphis and the Mid-South that instead of giving them a hard time doing business here we should all be appreciative that they are choosing to invest in Memphis!   We could not support the continued economic development of our city based on solely on businesses that are originally based or have been developed in Memphis.  In addition, the presence of national and regional businesses in our community will not only improve our economic development situation but provide choices and jobs to all our residents in our community.

So what does LOCAL really mean?  In my opinion it is those national, regional and local businesses (including retail stores and restaurants) that chose to employ local people, rent/own buildings in our cities and provide economic opportunity in our community should be considered local.  Their presence will not keep you from shopping our locally developed businesses, but probably provide additional traffic to those local businesses who to choose locate near the regional and national tenants.  I am thankful that communities around the globe have embraced FedEx knowing that it is based in Memphis.  What if in the 1950’s other communities had felt in a similar fashion about Holiday Inn’s a national branded franchise based out of Memphis?

I know those smaller communities in the Mid-South are welcoming those national and regional retailers into their community as a way to improve the quality of life of their towns and to further economic development.  Memphis should do the same as we need more economic development and opportunity.

I would say it is more important to our community long term to shop at all of our stores/restaurants with a physical presence in Memphis or any of the Mid-South community whether they are national, regional or local than to order on-line which is the real threat to our LOCAL retail industry.  I will definitely hold that debate for another day!

I hope you will check out future weekly commentary at www.RetailRocksintheMidsouth.com

Cheers,

Shawn

Shawn Massey, CCIM, SCLS is a partner with The Shopping Center Group a 3rd party retail real estate advisory firm in their Memphis office, an adjunct professor in the graduate real estate program at The University of Memphis and a co-founder and Chairman of the Board for the Memphis Business Academy charter schools (K-12grade) in the Frayser area of Memphis.  

For all your retail real estate needs (tenant representation, landlord representation and property, investment & land sales) I hope that you will choose The Shopping Center Group and me to represent you and your business.  We understand that representation is a privilege and that you have a choice!

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One comment

  1. Point 2 is a good one I think this dvriisefication will help move the debate away from pay walls and pure advertising.Nice work. I look forward to looking back’!

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