For smaller suburbs, landing upscale retailers is an uphill climb

Shakopee Mayor Brad Tabke was relieved when the city's latest newsletter was published. Finally, he would have something to say when people asked why their city, which can support three tire shops, can't bring in an upscale Trader Joe's grocery store.

The article gets to the point from the start: "Cities are limited when it comes to enticing retailers, restaurants."

Or as Tabke described it, "You can't force people to build in your community."

You can't keep them from building there, either, said Samantha DiMaggio, the city's economic development coordinator. Some residents complained in September when Aldi, a discount grocery store, announced plans to open a store on three acres on the east side of town.

"I could hold that Aldi spot for years," DiMaggio said, "and Trader Joe's might never come."

For a smaller suburb like Shakopee, population 39,000, it's a simple matter of demographics. When a retail business considers opening a location, DiMaggio said, it bases that decision on characteristics of a community that change gradually, like income or population, and can't be engineered by city staff.

Of the eight Minnesota cities with Trader Joe's locations, for example, all have larger populations and higher per capita incomes than Shakopee does.

But, he said, most residents who want officials to entice a particular business to their town aren't aware of that adage or the formula behind it. "Probably the most common thing we'll hear is that 'We want business X to come to town,' " Kienberger said. "People always want whatever their favorite restaurant is," or their favorite store.

That refrain is familiar to Peter Leatherman, the CEO of market research firm Morris Leatherman. He said that over the course of a decade, his company surveys nearly all the cities in the metro area at least once. Over the years, he's seen how the desires of communities change, he said, but one thing stays the same.

"The demand never dissipates," he said. "Even (in) the communities that have everything, residents still can come up with things that they want to go in."

The changing demand follows a cycle, Leatherman said. After a small community's population grows, it brings in malls, grocery stores and dining to serve residents. After that, he said, people want diversity, such as adding a Wal-Mart or a Lowe's to a city that already has a Menards or a Home Depot.

Short-term economic trends also influence demand. With the improving economy, more people are voicing their desire for movie theaters and entertainment businesses like a Brunswick Zone and Dave & Buster's. They're also less willing to offer incentives for businesses to locate in town.

Kienberger agreed. It's only worth luring a company with special deals if they bring head-of-household jobs to the community, he said. Those jobs are more likely to be created by a new manufacturing business, and those employers are looking at something else before incentives.

"It's having that educated workforce," he said. "It's having the employees nearby that they want to work here."

Other issues make it hard for Shakopee to consider incentives for restaurants and grocery stores, she said. For one, where does the city draw the line? Second, she doesn't want to hurt longtime businesses like Turtle's Bar and Grill downtown.

That downtown, in fact, is part of Mayor Tabke's appeal to would-be employers. He mentions "telling the story" and plays up Shakopee's Prohibition-era gangster connections.

"People want to be in a place," he said, "not just a faceless, nameless location."

"It doesn't work as well when you get into national chains," he said.

But after the city's failed bid for a Hy-Vee store — Tabke led residents in a write-in campaign to the company — better times for retail appear to be on the horizon. Several new businesses will open downtown next spring, he said, and the city is seeing new retail activity, including the mixed-use development at Canterbury Park.

In all, Shakopee expects to have 5,000 more jobs by 2018 than it did in 2013, he said. Nearly half will have come from large employers that expanded or moved to Shakopee, such as Emerson Electric, Datacard and the digital photo and printmaker Shutterfly, which opened in August.