In a recent pitch to the Mitchell City Council, a retail recruitment group said the city is leaving nearly $100 million in potential revenue on the table every year.
Local leaders are considering using city dollars to attract more businesses.
Retail Strategies is a southern United States-based company that tries to lure business to towns and local communities. At the latest Mitchell City Council meeting, they said the city has untapped retail potential.
Banks Perry is the North and South Dakota Community Partnerships Associate with the company. He said the city has a chance to grow its economy.
“Mitchell is kind of the retail hub for a lot of the surrounding neighborhoods and communities and things like that. With that being said there, $97 million are leaking out of Mitchell in retail," Perry said. "What that means essentially is that $97 million year over year are being spent by consumers that live in this trade area, they are leaving the trade area to go spend that money elsewhere.”
He said that’s where Retail Strategies comes in.
“Obviously we cannot promise any retail openings just because this is a long game, it’s a hard game. You can’t ever, you never know what’s going to happen," Perry said. "But what we can promise is that every year of a partnership we will have a minimum of 30 retailers at the very least performing due diligence on Mitchell.”
In exchange, Retail Strategies is asking the city for $50,000 a year for three years. They say the city reserves the right to cancel the contract or request updates on the process at any point over that period. Retail Strategies would also have a list of matching retailers within 90 days of city council approval. The membership present said they'd previously worked with Box Elder and Harrisburg.
Jordan Hanson is the Mayor of Mitchell. He said expanding retail could benefit the city by adding revenue sources to its 2% municipal sales tax.
“Retail is by far our largest sector of sales tax revenue generation. So, obviously there’s a huge demand for it. It’s like 63% of all sales tax comes from retail, and that’s what we received in sales tax. So that’s our bread and butter, I mean that’s our big winner," Hanson said. "That’s how we fund this city is with retail, 63% and then actually if you add in property tax it’s 45%. So over half of all of our money that comes from here is from retail. And then 75% of all that money comes from people outside of town.”
City councilors mentioned a 2018 Buxton study they said offered similar excitement but didn't amount to much return on investment. They said that study didn't offer much opportunity for space south of Havens Avenue and didn't recruit any of the retailers to Mitchell.
Perry said that's not how they plan to operate.
"We are not partial to any corridor or any part of town," Perry said. "We are obligated to represent the city as a whole. So, we're not going to be looking at just one part of town."
He said they plan to explore new retailers and bring them to Mitchell by using data from cell phones. So, they can explore when people who own a cell phone are staying at a location—for example, Scooter's Coffee—and stay there for longer than five minutes. The Retail Strategies team said by parsing how long a person stays at a given location, the data can help determine if that person spent money without tapping into credit card data, which in turn can preserve privacy.
Hanson said that's exciting given the current city market.
"If you're a retailer and you're looking for land for sale, not all the land that's for sale in Mitchell is available online," Hanson said. "These guys are going to become a matchmaker for maybe someone that's got it for sale or they'd sell at a certain price. They're going to put the pieces together."
While the city council didn’t approve a contract just yet, they suggested continuing the conversation to fund the prospect. Any investment in the partnership with Retail Solutions would come from the 2026 city budget.
