Why is city not attractive to business?
City of Oconomowoc — La Fuente will not open a new location downtown, Mayor Maury Sullivan confirmed Friday. And recent news that large retailer Costco plans to open in Pewaukee has residents and even city Alderman Dave Nold asking, why not Oconomowoc?
Did Costco contact Oconomowoc or consider it as a potential location? Are big vendors not interested in locating here because of delays and other problems in working with the city? Nold posed these questions at the Jan. 19 Common Council meeting.
Similar questions have reached the office of Oconomowoc Director of Economic Development Bob Duffy, who said he's fielded queries asking why Oconomowoc isn't experiencing as much growth as some would like to see.
The Focus interviewed Duffy and Sullivan last week to gain some insight about Oconomowoc's retail development outlook. This story is the first of two installments after that interview.
Location, location, location
Duffy said people need to better understand how large companies make decisions to open a new location.
"They're making an investment and taking a huge risk if they choose a location that does not have enough people to support it," Duffy said. "They look at the demographic situation, and we're still viewed as 'on the edge.' "
He said that Oconomowoc is still a fairly small community, and although it is located midway between the bigger populations of Madison and Milwaukee, "are people willing to drive that hour to shop here regularly?"
"Obviously you may have heard this, but there's no doubt that retail follows residents," he said.
He agreed that a "destination retailer" - such as what is hoped for Pabst Farms - would attract people, but who will support it on weekdays?
"These guys need to have consistent people in the facility. On Monday through Friday, they need to rely on people within a short distance. I just don't know if we can expect people to drive an hour, and that's why they (potential retailers) look at site locations," he said.
Sullivan said he spoke with the owner of La Fuente about his reasons for declining an offer of incentives from the city and purchasing the former On the Deck building. Weighing heavily on that decision? There simply aren't enough people here.
"He has a growing concern that there may not be enough population to sustain the size of his operation. He was considering serving around 300 meals (a day)," Sullivan said.
Sullivan also brought up the recent news that retailer Von Maur plans to move into Brookfield Square - another retailer that could have been a good fit at Pabst Farms.
"They went to an existing shopping center and a trade area that is already established. I think you have to be aware of the economy and retail credit market and consolidation and withdrawal of shoppers," the mayor said.
Investing in downtown
Sullivan said La Fuente was the first time the city offered immediate assistance to a potential downtown business. And when asked whether the city was slow in securing the deal or contacting the business, he said no.
"It didn't seem too late to Mr. Zarate. When he was offered it (incentives), he was appreciative and said he would take it into consideration. He did not say it was too late. I think that is just someone talking and not understanding the whole situation," Sullivan said.
"The welcome mat is out" if he decides to change his mind, Sullivan said Friday.
What about Pabst?
Duffy noted that the Pabst Farms development is laid out as a 20-year plan.
"Is there stuff that has happened? Yes. We are in year eight, and there is a lot here," he said. He pointed to the residential development, the YMCA, two large hotels - Staybridge and Hilton Garden Inn - Summit Elementary School, Pick 'n Save and also the industrial development, which includes the Roundy's and Target centers.
He also said that when it comes to the delayed Pabst Farms Town Centre mall, conversations with potential retailers start with the project's developer, Developers Diversified Realty (DDR).
DDR has the connections and relationships with retailers to pursue them and have discussions, he said.
"When we become aware, obviously we will work with people," he said, adding that the economy has had a dramatic effect on the project.
"There has been a lot of change, and people in the marketplace are starkly different now," he said.
Public Relations Associate Cortnie Redington of DDR said there is nothing new to report on any discussions or progress at the mall.Read more about development in next Tuesday's Living Oconomowoc Focus.
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