Story by Cara D. Clark | Graphic by Audra Spears
Ann Rye sees a leak, and she’s working with a metaphorical monkey wrench to mend the dripping away of tax dollars from the Lake Martin area.
“For our community, we did a gap analysis to see what was leaking out of our area,” said Rye, president and CEO of the Alexander City Chamber of Commerce. “When looking at groceries, we realized we are losing $250,000 a week to stores outside our community.”
With that sobering fact, the chamber partnered with Birmingham-based Retail Strategies, a professional retail development and recruiting company, to increase the sales tax revenue that funds local schools and city services.
Rye said full-service restaurants are an area that leaks a tremendous amount of cash to other cities when local people dine outside of town. The study, Rye said, showed more than $10 million that could remain in the Lake Martin area is being gobbled up elsewhere.
According to her reports, the main reason local folks leave the community to dine out is that they eat where they shop, buying big-ticket items, such as appliances, as well as clothing.
“Often, people leave the area, not because they will get a better price, but to reach areas with concentrated retail developments,” Rye said. “If a consumer has a limited amount of time, they go to that area and acquire their entire shopping list of items. Concentrated retail developments with big box anchors have taken on the role of what a mall used to do.”
Those areas, including Opelika, tend to pull consumers from a 40-mile trade area, which is excessive, she said. With the right merchant mix, that trend could be altered.
“What we try to do with the chamber is recruit that type of retailer locally,” Rye said. “When we do that, we can begin to build and close the gaps and see that leakage decrease. We can even have reverse leakage by attracting people from Opelika to come here.”
Rye said many consumers don’t consider the impact their dollars make on the community in which they live.
“By not buying locally, we’re hurting ourselves,” she said. “Our educational needs and infrastructure benefit greatly from buying locally. It’s another role of the chamber to educate our community on where their dollars go.”
Part of that education mission has been invested in Alexander City’s new “Shop Local” campaign that distributes T-shirts and door decals to reinforce the need to local residents to buy from area shops, restaurants and car dealerships.
“As we start to see decals pop up on retailers’ doors and see people wearing the T-shirts, that will trigger the thought that people empower themselves by spending locally,” Rye said. “How we spend our dollars really, really matters here.”
The campaign officially kicked off in January 2015, and glass cling decals are available at the chamber for stores to adhere to their windows or for citizens to place in their car windows.
“This is a grassroots approach to community development and awareness of how we spend our dollars and how it can benefit us,” Rye explained. “If we don’t rethink how we spend our dollars, we are building better communities for our neighbors rather than ourselves.”
The chamber began the overall initiative in the middle of 2014 after raising $1.2 million to accomplish the goal of improving the local economic outlook over the next five years. While trying to recruit businesses to fill the gaps that draw consumers to other cities for items not available locally, the chamber is also working with area business to educate consumers about the items they do sell here.
One challenge storeowners face is communicating what items and designer names they carry, so shoppers looking for particular “in” brands realize they can purchase those labels locally. To achieve that, Rye said, it’s important to alter consumers’ perceptions through education and marketing components, as well as in spending advertising dollars to boost awareness.
Jeff Smith of Tallapoosa Ford is on board with the education component and would like to see consumers consider their options at home with local car dealers rather than paying to enhance other communities’ assets. His company pays $150,000 in annual tax revenues to the county and city, as well as $450,000 to $500,000 in payroll for the company’s employees.
“Some people may go out of town, because they don’t want other people to know their business if they are considering financing with a dealership,” Smith said. “Buyers need to know that information is strictly confidential, and no one discusses it.”
Smith said some consumers might not see the exact auto they want on the lot, but buyers should know that local businesses usually can get what the customer wants.
“We could find them what they want,” Smith said. “Sometimes people try, and it doesn’t work out, and we understand that. But for the most part, dealers here can do what any other dealer could do for them.”
For example, he said, with the purchase of one Ford Explorer, $400 goes back into the community in taxes with 1/16 to the board of education; 1/8 to the sportplex; 1/8 for roads; and the balance to the city’s general fund.
“People think just one person doesn’t matter,” Smith said. “They think everyone else is buying in town, so they can go elsewhere. Every bit matters when you consider the money is going to back to the community. Dealers outside our area are sucking dollars out of our market and putting nothing back.”
Alexander City Mayor Charles Shaw also knows firsthand the importance of keeping dollars local.
“Supporting the local economy helps pay for streets, police, fire and all of the services we have in the city that are essential to our community,” Shaw said. “It improves our schools and services, and I think people get better service from people who know them. If you’re shopping with someone you know, they are going to take care of you. We’ve got the best people in the state in Alexander City, and they will take care of you.”
Stephanie Smith, owner of Little Black Dress, said, “Shopping local doesn’t mean blocking out the outside world. It does mean nurturing locally-owned businesses that employ local people, support the school and local events and donate to local charities.”
Stephanie said not only are businesses like her boutique generating tax dollars for the community, but also her employees are enthusiastic and welcoming when they see customers coming in to peruse their selection.
“You can’t locate everything you need by shopping local all of the time, but you might be amazed to see what you can find,” Stephanie said. “If you don’t shop local, you might not have any local shops.”
It’s a philosophy small business owners embrace and one that consumers can learn to appreciate. If a school acquires new computers or classrooms, it’s possible that educational upgrade was funded by a purchase from a local shop.
“Buying local helps us grow,” said Peggy Bullard, owner of LaKays Flowers and Gifts in Dadeville. “We need the revenue to come into this town. I’m a very strong advocate for Dadeville. We work hard to keep businesses going to help our schools.”
Amy Hill, co-owner with Sarah Neighbors at Cloud 9, said she often sees customers who come from Auburn, or even as far as Birmingham, in their store.
“They like the small town atmosphere and the customer service they find here,” Hill said. “In larger stores, people don’t know them as well, and they can be overwhelmed with the selection, because they have so many choices. We try to get to know our customers and their style. We have them in mind when we buy, and they appreciate that.”
Linda Andrews of the Dadeville Chamber of Commerce said the city’s campaign to spend $20 on the 20th of each month is just one of the efforts to support local businesses.
“Dadeville has a wonderful variety of restaurants, florists, antique shops and other stores,” Andrews said. “There’s also a sense of charm and hospitality in the community you won’t find in larger cities.”
Rye said she would continue to wield the monkey wrench to educate others on preventing revenue leakage.
“There’s a lot of opportunity here, and the sooner we realize and develop that, the sooner we harness and capture sales tax dollars and keep them local to help the city’s budget,” Rye said. “When we do that locally, we enhance the community and attract people to live here. That’s the whole goal.”