Challenge
Located in the central portion of Northeast Arkansas, Newport is a community with 8,000 in population but the strong workforce from major manufacturing employers, the daytime population grows to more than 14,000. Newport acts as a regional shopping hub for their region of the state with retail options like Walmart, Walgreens, Tractor Supply, Dollar General, Factory Connection, and Ace Hardware. The community is made up of a strong, diverse residential and industrial base.
As Newport continued to grow and evolve, Jon Chadwell, the city’s economic development director, knew that focusing on quality of life amenities – both shopping and dining – needed to be part of the overall economic development strategy.
“Recruiting retail is different than recruiting industry,” said Chadwell, director of economic development for the city of Newport. “In industrial recruitment we’re talking to the decision maker. Retail seems a bit more complicated, there are so many more people involved from brokers and developers to franchisees and retailers themselves.”
Solution
In 2017, Chadwell made the decision to bring on an outside partner to help with the retail economic development. The city chose to partner with Retail Strategies to assist with retail, restaurant, and hospitality outreach.
“We knew the Retail Strategies team would be able to fix some of the issues we were having with retail development simply by knowing the players in the market, and understanding what retailers are looking for when evaluating a new market.”
“Newport had a good base of retail and a number of fast food restaurants, so we knew there would be interest from the development community once our team could start meeting the local property owners and identifying gaps in the market,” said Matthew Petro, chief development officer for Retail Strategies.
The initial step was a market analysis to understand what the consumer demand was compared to supply of current retail and restaurant concepts.
“After talking with Jon, we identified the need for both a national restaurant chain and a new hotel to the community,” said Clay Craft, retail development director for Retail Strategies. “The city had done an initial hotel study that showed 80% of people that visited or came to Newport for work ended up staying outside of town because of the limited hotel options. This became our initial priority.”
The recommendation from Retail Strategies was to conduct a full hotel feasibility study of which Craft was able to provide to the Cobblestone Hotel Group.
“From a hotel perspective the feasibility study was a good first step, but when we visited Newport our eyes really lit up,” said Jeremy Griesbach, president of development for Cobblestone Hotel. “We saw a community making an economic comeback and had a lot of positive movement but hadn’t had a new hotel built in 25 years. From a quality of lodging standpoint, there was nothing upper-to-midscale like Cobblestone.”
The hotel development required local investment and Chadwell made the connection to a group of local business owners interested in helping to redevelop a blighted portion of the city, just off the interstate in the northernmost part of Newport. Chadwell also led the charge on applying for a New Market Tax Credit, a federal program based on a census tract, that Newport was eligible for.
“Jon was instrumental in getting the new market tax credit for this project and was a huge in getting the investor group buy in,” said Craft.
The tax credit was ultimately an incentive of $1M toward the hotel itself.
Results
After six months of working with the investment group to secure outside funding and applying for the tax credit, Cobblestone Hotel was able to break ground on a 54 room, 3 story hotel. The new hotel is slated to open by end of 2020 and will feature an indoor swimming, a beer and wine bar, 50 person conference room, fitness center, and a convenience store for guests.
“The Retail Strategies team worked hard on this project, communicating very well with all of the teams involved,” said Chadwell. “Beyond this development, any time I need a resource, I call Clay and they get it turned around quickly.”
“Clay and Retail Strategies in general is a great fit for what we do as far as being able to find markets that need these hotels,” said Griesbach. “They connect the dots once we get into the market to help facilitate the project to move along.”
The next phase of the development for this area will focus on restaurant tenants to support this growing area of Newport.
