7 A8 SUNDAY, SEPTEMBER 29, 1996 GREAT PLAINS THE SALINA JOURNAL BUSINESSFACES ^ SHOPPING JOINT FROM PAGE A1 T he medium-sized, small- townish Salina scared Jim Stevens as he considered opening an Applebee's restaurant. But Stevens, owner of Stevens Enterprises in Wichita, gulped, took a deep breath and brought a restaurant to Salina in November 1993. Business couldn't be better. "It's probably doing as well as I had hoped," Stevens said. Stevens doesn't have a target population base, but he was nervous about Salina's population. Before lie moved to Salina, he had opened two stores in Wichita and one hi Omaha. Both cities outnumber Salina by at least 250,000 residents. "It was a new venture," he said. "But this town was pretty economically healthy, so we thought we'd give it a try." Salina's surrounding market and the opening of the Wal-Mart and Target stores near the site of his restaurant convinced him to give it a try. "I was a little nervous because we really weren't close to any homes," Stevens said. "But, really, with all the shopping activity out there, it's a good drawing card." With Applebee's good business, the south Salina area might look attractive to other casual-dining chains. But Stevens said Salina's market, no matter how healthy, may not support many more. DAVIS TURNER / The Salina Journal Cherlse Larson, general manager at Applebee's, says business has been steady In the 2\ years she has worked there. "When you get in the bigger cities, you can absorb more of the population," he said. "But once something is established in a smaller market, you may get other restaurants that are reluctant to come into town with such a strong competitor. "That's not to say they won't, of course. But I'd just as soon have it without anyone else." McDonald's DAVIS TURNER / The Salina Journal Doug Rempp opened the McDonald's on Diamond Drive near 1-70 In December, making It the fifth McDonald's In Salina. W hen Doug Rempp's son wanted to have a birthday party, he noticed there wasn't anywhere for the rowdy, screaming children to go. So Rempp, owner of Salina's five McDonald's franchises, got the idea to build a $200,000 playground addition at the restaurant at 2236 Planet. "It makes the whole building look new," he said. "Kids have a field day in those things. I think it's going to be a wonderful playground for the entire area." Rempp, owner^ of G.D.R. Management, bought the franchises Dec. 1, 1995, after the previous owner, Fred D'Albini, died earlier t;hat year of a heart attack. When Rempp came to Salina from Lenexa, where he owned Mr. Qoodcents sandwich restaurants, he was impressed with Salina's location and retail market. ; "I think it's going to be a regional hub," Rempp said. "You're tak- ing care of people within a 50-mile radius. You've got good roads, and they're in good places." Rempp didn't make the decision to open a new restaurant in the expanding Interstate 70 and North Ninth area — the McDonald's corporation already had targeted the area and offered him the franchise — but he's optimistic about the move, stating that he thinks "it will be a great area." Rempp later opened a McDonald's in Wal-Mart, 2900 S. Ninth. "I think it might be premature to tell what's going to happen," Rempp said. "People are creatures of habit; they tend to stop at the same place every time when they travel. People will change those habits, but it takes time." With five franchises and the new playground, Doug Rempp thinks he's got enough of Salina's territory — for now. "I think we'll just leave it the way it is," he said. Assessed valuation, the value of all property in Saline County as figured by the county appraiser's office, has grown by an average of 8.25 percent annually in the past five years, to $279 million last year. "We've grown this fast before," Peterson said. "But it's very unusual. It's like every day we've heard from someone new to inquire about moving to Salina." An attractive site Most of the new businesses are retail chains, and Dean Andrews, Salina's assistant director of planning and development, said that speaks well of the city's attractiveness to retailers. "I think they all follow one another," Andrews said of the chains. One positive factor, he said, is that Salina has a good supply of land that can be developed. In some communities, such as Manhattan, sites are more difficult to find. Also attractive to retailers is the state of Salina's economy. Gerald Cook, president of the Salina Area Chamber of Commerce, said Salina has enjoyed solid economic growth the past two years. "We've had lots of new jobs created, and we've had a lot of wealth in the community," Cook said. "That tends to attract a lot of attention. Once you get the ball rolling, it tends to continue on for a while." The labor force stood at 29,027 workers in 1994, and in the past four years has been growing by a bit less than 1 percent annually, according to state figures. Per-capita income, $22,125 in 1994, grew by more than 4 percent annually in the previous four years. Cook doesn't have a specific list of businesses he'd like to see come to Salina, but he generally knows what he wants based on population. The county's population was 51,831 last year and has been growing at about 1 percent a year, according to the federal Census Bureau. But Cook looks at larger communities to compare with Salina. "If you would go to a city with a population of 60,000 to 70,000, and look at the businesses that are there that aren't in Salina, that's what we would go for," Cook said. "That's the population we shoot for with the immediate county, and we've got a primary and secondary market population of 100,000 to 150,000." What Salina can pull The reason for that can be demonstrated in the "retail pull factor," an economic yard stick developed by David Darling, a professor of economics at Kansas State University who specializes in community economic development. The pull factor reflects the retail dollars a city attracts from surrounding markets. For fiscal'1996, Salina's rating was 1.58, meaning that Salina captured its full local market potential, its full dollar, plus an additional 58 cents from its surrounding markets. That pull factor was fifth best among Kansas first-class cities. Mall-rich Lenexa was first, with a rating of 2.39, and its suburban Kansas City neighbor Overland Park was second, with a rating of 2.14. Liberal, in far southwest Kansas, was third, and Topeka was fourth. Salina's market area doesn't extend far to the south or east because of competition from Hutchinson, Wichita, Manhattan and Topeka, but opportunities to draw shoppers from the west and north are abundant. "There's nothing that competes with Salina in central Kansas," Darling said. "You're even more dominant than Hutchinson." Darling measures the size of Salina's retail market by multiplying local population by the pull factor; the result is 69,783. TOM DORSEY / The Salina Journal Phyllis Mansfield, a food-service employee at Petro 2, dips ice cream at the new Baskin- Robblns Ice cream counter at the truck stop at Interstate 70 and Ninth Street. Sutherland's Journal photo tfat Wlngler Is manager of the Salina Sutherland's store that has tjjeen In Salina since 1993. But downtown suffers Even so, Darling said the retail growth might not be good for everyone. Downtown sales might suffer because shoppers are drawn to the south and north edges of the city. "When you see a lot of construction and commercial development, one would expect that would create a larger pie, but it doesn't necessary happen that way," he said. "It will reapportion money to other segments of town; it turns out that the downtown no longer is a key commercial zone, so it has to redefine itself." Part of the problem is that many of the products that tend to sell well aren't located in the downtown area. A 1996 survey published in "Sales and Marketing Management" found that, in Salina, grocery sales grab 16.8 percent of retail dollars. Other significant categories include auto sales at 21.7 percent, eating and drinking sales at 8,9 percent, and miscellaneous at 18.3 percent. Growing pains Salina's population is growing steadily at about 1 percent a year. That's a rate local officials are comfortable with. A growth rate of 3 percent is considered out of control. But is the retail sector growing too quickly? Traffic is high, more than the city is used to having on its main roads, Peterson said, prompting the city to spent millions of dollars in road improvements. The city will spend millions more. Plans are to turn Ninth Street, from Cloud to Schilling streets, into an urban street with widened lanes by the year 2001. The city would divide the improvements into three more sections, with each section estimated to cost at least $500,000. The cost of improving the Ninth and Broadway intersection is $1 million. Land prices soar Even so, Peterson doesn't believe the city is growing too fast. He said the retail growth has been mostly "infill," meaning stores are being built within the existing city limits and around growing areas. That's as the city intends, for growth beyond the city stresses the ability to provide services from streets and utilities to fire protection. "I don't think the growth has taken away the small-town character of Salina," Peterson said. But Salina City Commissioner Abner Perney is concerned. Perney agrees that most of the development was infill, but he notes that developers continually want to push the limits of the city. An example is a proposal to relocate Long McArthur Ford dealership from downtown to the Ninth and Schilling intersection south of town. The city is against the move, saying it would encourage scattered growth. "The problem is, unless you have a majority of people who are worried about it, you really can't do anything except complain," he said. Part of the dilemma in halting scattered growth, Perney said, is that some owners of undeveloped Salina property "are so incredibly greedy" that they have priced their land to the moon, forcing potential buyers to look elsewhere. "I mean, we're talking millions of dollars for some land out there," he said, referring to land along South Ninth Street. Crossroads of Kansas Realtors, developers and professors say that Salina's retail growth probably will continue, though not at the rate it has enjoyed recently. Still, the opportunity to profit from retail sales is a strong lure to investors. An example is Trace Walker, president of Blue Beacon International, 500 Graves, which owns the Petro 2 truck stop complex at 1-70 and North Ninth Street. Walker has enhanced the Petro 2 with the addition of a Wendy's and a Pizza Hut, as well as smaller shops. Those developments reflect not only the number of travelers delivered to the corner by the interstate highway, but also a trend of truck stops to offer visitors more opportunities to spend money. Travelers, not just truckers, are stopping at truck stops more than ever, Walker said. "You've got to keep improving," he said. "Look at the traffic we've had out here lately. It's a great location. Salina is a great place to grow." Advantages of the chains Glenn Headley, owner of Headley's Clothing, 1829 S. Ninth, a business that's been around for 20 years, said the recent boom was a continuation of Salina's retail growth pattern. "It goes up and down over the years," Headley said. "I don't think Salina is doing- anything different." Headley expressed some concern about the/ lack of new small, home-grown businesses. .;.. "I think the chains are killing us, in a way," he said. "But on the other hand, I think you get people from western Kansas because they (the; chains) are here, and then it helps us, because' they might want to snag a suit on the way home:" Mike Renk, director of the Small Business; Development Center at Kansas State Universi- : ty-Salina, said he didn't know whether opening a retail chain franchise store, instead of starting from scratch, offered a greater chance of success. But he did say it's easier. ., "It's all laid out for you," Renk said. "It tells, you how to market, how to stay in business, how, to succeed. But that doesn't mean you won't fail.", Prospective business owners shouldn't be scared of failure, Renk said. Only 18 percent of all small businesses — those with assets under $500,000 — close within the first eight years. '.' One encouragement to new business ventures is Salina's personal income growth of more than 4 percent annually in recent years, said Norman Clifford, director of research at the Institute for Public Policy and Business Research at the University of Kansas. "That's a good, moderate growth rate," Clifford said. "Overall, the Kansas economy is do-, ing relatively well the last couple years — npt booming, but doing well." Rural areas doing well Charles Krider, professor of economics at KU and the director of the Institute for Public Policy and Business Research, said SalinalSi standing as a regional center would help it grow, especially because growth is strong in rural areas and midsized communities. Rural areas are doing better now than they were in the '80s, Krider said. Sue Coding, co-owner of Coding Realty uv Seward, Neb., studied Salina's growth potential before she completed plans to bring a Casey's convenience store to a site near. Schilling Road and 1-135. She liked the city's !OT cation and its two major highways. "It's sort of a crossroads, that's how I became familiar with the town," she said. "It's a good place to stop and sleep for the night. It's nice to get to a little bit bigger town because you might want to go to a movie or something*: "You've got a lot of retail and it should only attract more." • ark Sutherland made the decision to bring „ .his building materials company to Salina in 1984, but \\ took him nine years to make the move. 5 When Wal-Mart moved out of ^[id-State Mall, Sutherland's wived in, and Sutherland, vice president, couldn't be happier. " "We kind of got involved in oth- ar deals," he said of the delay from Ala Kansas City office. "But now tye're very happy. We really like t-he retail businesses and the peo- l ' Sutherland's talked about ex- Handing in the wall, but plans for now, he pansion. "We want to explore some other opportunities," he said. That doesn't mean Sutherland's, based in Kansas City, Mo., with seven stores in Kansas, is thinking about leaving Mid-State Mall. "We've got some land that's vacant by the Wal-Mart out there," Sutherland said. "But we're going to stay where we are for now." Unlike some of the other recent businesses that moved to Salina, Sutherland's had a history of doing well in rural markets. Sutherland's has been in Kansas for more than 50 years. "Salina is a nice place for us to be because it's a nice-sized city, and yet there's a good draw from surrounding counties," he said. Tight job market shows evidence of growth . . » . i <-i _ 11 _ _ __ T _ t_ n IT.MM wM*vtnv* 14n4-fi vii-t+oil VMI DI v» ttoo Q e sivta oe» By DAN ENGLAND The Salina Journal Stores by DAN ENGLAND /The Salina Journal The black-and-white $50 bill may not be real money, but it represents a very real problem for Salina businesses. The coupon, placed in the Salina Journal by Wendy's, gives a $50 hiring bonus to anyone accepted as an employee at two locations: 750 S. Broadway or 1940 S. Ohio. The wages at the two locations start ,at $4.75 an hour and climb if a worker is experienced. Wages at the Wendy's in the Petro 2 area, 1-70 and N. Ninth, start at $5.50 an hour. Is it bribery? Maybe. But it's also a message in black and white: Some Salina businesses can't find people to work. Salina had fewer than 840 unemployed people in August when the rate stoood at 3.3 percent. That number is down from 1,027 unemployed in July at a 3.4 percent rate, said Ken Dreiling, research analyst for the Salina Job Service human resource center, 128 N. Santa Fe. Economists say 4.5 percent is considered full employment. "That's pretty low," Dreiling said. Wendy Watson, branch supervisor for Manpower Temporary Services, 249 S. Santa Fe, said Wendy's is one of many Salina businesses having trouble finding employees. "Everyone is having a hard time finding people," Watson said. "Right now, we can't fill positions. There's not a lot of people out there." Even with all the employment opportunities, some people either need training to fill the jobs or aren't able to work because of other factors. "Some of them have some bad histories out there, and obviously that's going to hurt their chances," Watson said. Watson said that Exide, 413 E. Berg, has 58 positions available, and Tony's Pizza Service, 3019 Scanlan, was "hiring like bandits out there." Manpower lists retail business as one sec-; tion that plans to expand the work force, and Salina's recent retail explosion would confirjn that. What those businesses are paying confirms Salina's labor shortage. "The wages have been rising, to $5 or $5.5Q an hour," said Darrell Carlton, manager of thes Salina Careers Center, formerly called the Salina Job Service Center. "Usually those businesses pay minimum wage." Carlton said certain positions were hard to fill, including nursing, machinists and welders. But he also said anyone could be taught to work in retail. "It's not the most desirable occupation for some, but certainly anyone could be trained without any problem," he said. Judy Phinney, owner of Ranger's Steak and Seafood, 716 N. 13th, said she's having trouble filling people to bus tables. Every other position, she said, has been easier to fill.
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