As 2017 Winds Down Elk Grove Taxpayers, City Have No Public Updates From Retail Strategies

December 8, 2017 |  

With the calendar year 2017 winding down, and the agenda for the last Elk Grove City Council meeting for the year now posted, taxpayers have yet to hear an update on the city's highly-touted high-end retail consultant, Birmingham, Alabama-based Retail Strategies.

In April, the City of Elk Grove entered into a one-year agreement valued at $50,000 to retain the services of the company. At the time of the announcement, Elk Grove economic development director Darrell Doan said Retail Strategies would place "emphasis on increased retail quantity and quality, and lifestyle retailers" in their recruitment services for the city.

“The goal of this contract is to obtain national representation that will assist the City with recruiting high-quality retail, dining, and entertainment concepts to Elk Grove,” Doan said in the announcement.

According to the terms of the agreement, Retail Strategies will be under contract for one year and will be paid $50,000. In the first phase of the deal, Retail Strategies was paid $30,000 to conduct within 90 days a detailed market study, which is to include a tour of Elk Grove, a market assessment, and development of a retailer target list.

As of this posting, it is not known if the detailed marketing report has not been submitted. A public records information request that was filed with the city after the 90 day period report should have been presented did not reveal the existence of that report.

Additionally, Doan has not made a presentation at any of the city council meetings since that time. If the report was submitted by Retail Strategies after the public information request, it has not been discussed at any of the city council meetings. 

In their pitch to the city and the agreement, Retail Strategies said they would identify "a minimum of 30 retail prospects to be targeted in the first year of our partnership." Except for the Costco project, which was approved months ago and sweetened with economic incentives but not yet started, there have been no new major or high-end retailers who have announced plans to open in Elk Grove.

In the second phase of the agreement, which will cost $20,000, Retail Strategies is obliged to initiate recruitment of the retailers identified in the target list developed in the market study. Among the duties outlined include a variety of telemarketing services to groups such as potential retailers, attendance at retail conferences, and an assortment of reports. 

Interestingly, during the negotiations between the city and retail strategies, Doan noted that the Elk Grove city manager, Laura Gill, has the authorization to approve contracts up to $50,000 independent of city council review and approval. Doan said in an email to Retail Strategies, "I'm thinking we hire you initially for front end work and recruitment activities, as a 'trial' say for the balance of the year then do a longer term contract in 12 months that we take to Council for approval. So think over if that can work for you. Her limit of authority is $50,000."

On a separate retail note, according to a story published in the Elk Grove Citizen, Elk Grove Mayor Steve Ly acknowledged that the targeted opening date of the unfinished Outlet Collection at Elk Grove has again been pushed back. Ly said the shopping center's owner, Howard Hughes Corporation, told him that the earliest opening date is now 2019.

In each of the last two years, HHC has erected signs on the site, which was abandoned nine years ago this summer, that it would be opening the following year. HHC has consistently said construction of the so-called Ghost Mall would commence once they have leased 50-percent of the vastly reduced space at the shopping center.   

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D.J. Blutarsky said...

I seem to recall that the civic center plans show a small retail center. Is it possible that Retail Strategies is working on finding tenants for the city retail project?

Since the civic center will be a money loser and largely rely on the CFD tax assessments of homeowners (the vast majority of whom will probably not use the swimming pool, senior center, or vets hall), I hope the retail center can help keep the entire civic center out of the red.

If this is the covert mission of Retail Strategies, that work is confidential and good luck trying to see the report!

The other issue is the city competing with the private sector retail market with an unfair advantage of potentially offering free (or discounted) land. Wanna bet who gets the contract to manage the city's retail center? Hint: Starts with a "P"!

Eye on Elk Grove said...

How right you are D.J. In a records request, the city of Elk Grove refused to release the supposed Retail Strategies report citing attorney/client privilege. Does it even exist? You can't even get the city to acknowledge that it does. Why all the secrecy? Why no quarterly report from Darrell Doan to the Elk Grove City Council?

And that email from Doan, asking Retail Strategies to accept a contract of $50K so that there would be no agenda item, no public comment, or no council approval. I wonder how many $50K checks City Manager Laura Gill has slipped by the Elk Grove City Council?

D.J. Blutarsky said...

Yes, EG Voter, the number of $49,999.99 checks flowing out of city hall is a deep mystery to us taxpayers who are underwriting them. But regardless of the number of zeros in those checks, the leaders who fancy themselves as wannabe private-sector financial wizards wouldn't last a week in a Fortune 500 company!

Take for example, the 100-acre MLS soccer stadium site outside the city-limits that is now being used to grow hay. Or how about that $450,000 payment for a water park feasibility study? Need I say more?

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