WebMD will bring a hypochondriac to the point of panic because it is designed to be a rolodex of physical symptoms that are prevalent with disease and health problems. How those symptoms are interpreted usually differs significantly between the hypochondriac and their physician however.
When it comes to retail vacancy at the mall, how should we interpret this? I grew up in the 80s where the mall, MTV, roller skating, record shops, and video stores were the rage. But this I know: over time things change; and we now stream music from our phones, watch movies on NETFLIX, and buy things online that arrive at our house the next day. My kids don’t know the pain of popping a blank cassette tape in a boom box and waiting to hit “PLAY/RECORD” when the next song for your mix tape began.
For four years as your mayor, I was ultimately responsible for the city’s financial well-being. As I analyzed things, it was apparent to me how important sales tax revenue was to provide the quality of life our citizens desired. Meanwhile as a financial adviser, my clients that owned Amazon stock were rewarded with the changing dynamics of our world; and these changes were not ignored by me at City Hall. Was Grand Island, Neb., any different than the rest of the world? If Amazon was thriving, how much were they taking away from Main Street of Grand Island?
At City Hall, I was the CEO of an organization that had labor cost growing annually at about 400% of our projected revenue growth. We worked and worked to build models of how to project the future. Meanwhile I pounded the table to, regardless of how painful it was, have a balanced budget.
While our community is fortunate to be recognized as a regional retail hub, this doesn’t mean we have no reason for future concern. Just like a WebMD search, the mall vacancies are simply a symptom of a much larger issue that needs professional attention.
As a business owner, imagine going to your bank and telling them this: “I’m concerned about my future. Over the next 10 years, I will probably lose 5% of my customer base per year. Hopefully over this time, I can still grow my total revenue, though, at 2% per year if everything goes well. About 80% of my employees are unionized and their wages are dictated to me by comparability of folks in other states, which means pay scales and increases are not accurate when compared to other jobs of Grand Island, and also the cost of providing benefits to these folks is skyrocketing. Mr. Banker, what do you think I should do for my business plan? Can you extend my line of credit?”
Online retail is here to stay, and while there may come a time when governments can collect some tax revenue for the transactions, it doesn’t change the fact that traditional brick and mortar retail will suffer. Those retailers who don’t evolve will soon be out of business, and only those that have a truly unique product — or an incredible customer experience — will survive. During the 80s, going to the mall was the thing to do. Fast-forward to today…that just isn’t the case anymore. I challenge anyone to identify a new mall that has been constructed over the past twenty years. Today if you aren’t ordering on Amazon or Adidas.com, you are looking towards the SouthPointe Pavilions with outdoor parks and walkways, not food courts and craft shows in the walkway.
Ladies and Gentlemen, welcome to municipal finance of the 2020s for Grand Island, Neb. The vacancies at the mall are just one symptom of the greater problem. Cities will be forced to look at alternative revenue sources or drastically cut services provided because retail sales as we have known them are on the verge of extinction. And some of you even believe minimum wage should be $15? Haven’t you noticed how Walmart has shifted to “Self-Checkout” stations vs. paying for more cashiers?
Perhaps we should use our city’s cash reserves to buy Amazon stock to hedge our future frustrations? In the meantime, I can’t wait to listen to the brilliant folks running for president that offer more “free” stuff in exchange for votes. The pandering politicians and the blind ignorance of so many voters concerns me. I would argue that economics isn’t taught at the Ivy League schools that many of these politicians attended, and if they at least had term limits they would be forced back into the colossal disaster they create in the real world. We don’t need athletes and celebrities to be political activists. We need politicians who solve problems and consumers who will support their local businesses, which would require all of them to completely change behavior — yeah, right.
In conclusion, remember this: None of the greatest civilizations of history were ever conquered; they were always destroyed from within.