The Big Picture Support for Small Businesses
By Boulder Chamber President & CEO John Tayer
At a recent special study session on the state of retail in Boulder, city council members sounded a note of urgency about the challenges we face due to relatively weak growth in sales revenues, especially compared to other local jurisdictions.
Ah . . . yeah!
The Boulder Chamber has been warning about flagging sales tax revenue for some time, so it’s good that the City Council is finally taking notice. It’s also fortuitous the same strategies that will reverse negative trends in our sales tax collections apply just as well to addressing a number of other community needs, including support for small business, expanded housing access, improved mobility and a more diverse population.
Here are some of the most significant take-aways from the City Council study session:
• Sales tax revenues from retail goods and services comprise almost one-third of total revenue, but growth has been relatively flat compared to inflation and growth rates in surrounding jurisdictions.
• Boulder’s sales tax revenues are highly dependent on non-resident customers — read visitors and commuting workers — providing about 30 to 40 percent of those revenues.
• Surveys show that retailers are looking for more affordable space, while shoppers are looking for more affordable goods and services.
• A large portion of Boulder’s population doesn’t live within walking distance of retail shopping, including grocery stores.
Thus, while we now have a relatively robust retail sector, there are clear deficits, and warning flags are waving regarding its future vitality.
Further, the Citywide Retail Study that formed the basis of the above findings also emphasized the challenge that Boulder’s regulatory system poses for small business development. In the words of City Council member Cindy Carlisle, “There has got to be some reason why this has been so difficult decade after decade after decade . . . It’s another method of torture in this community.” As if that isn’t painful enough to read, the Retail Study also reported that Boulder’s development and permitting fees are overly burdensome compared to neighboring cities, further compounding the hurdles to expanded retail development.
As I’ve written before, we need a “big picture” approach that aligns concerns about our retail base with other community challenges, like housing and transportation. Fortunately, recent research points the way to a very attractive solution: creating walkable, denser living and shopping spaces located near mobility hubs. This is the kind of environment we’ve envisioned for our opportunity zones, for example. Done right, such areas can help assure our economic vitality, while also improving mobility for residents and commuters and more diverse housing options.
In a recent column, noted urbanist Richard Florida described research on the relationship between business creation and mobility hubs. The research, by Kevin Credit from the Center for Spatial Data Science at the University of Chicago, assessed the kinds of businesses that tend to locate around transit hubs in five cities. Among the salient findings: “It’s the least technologically intensive industries — retail, services and food — that cluster the most around transit.” These are the very industries Boulder seeks to bolster. Of course, high-tech, broader knowledge-based and producer industries also flourish in transit hubs.
These are the same benefits of denser, mixed-use development that the Boulder Chamber has championed, for example, around the transit center near 30th and Pearl streets, at Diagonal Plaza and along East Arapahoe. These are underutilized spaces that could offer more affordable locations for both businesses and residences that allow retail stores to flourish and create more inclusive neighborhoods. As Florida concludes, combining strategies for mobility, affordable retail and residential development can foster new business creation, job generation and economic vitality. In the process, and most relevant to the subject of our City Council’s recent study session, these same strategies can help broaden the tax base to generate badly needed revenues.
Finally, as I noted in a recent BizWest column (“Think priorities, think balance, think economic vitality” – July 11, 2019), increasing tax revenues by encouraging retail — thus broadening the tax base — is a much more responsible strategy than continually raising sales tax rates and fees. Not only does it support our small businesses, but it also directly promotes economic fairness and inclusivity.
So, the next time you hear a city councilmember complain about declining sales tax revenue and a dearth of retail options, encourage them to take a look at the big picture.