ISU study looks at shopping trends in central Iowa

Associated Press

DES MOINES (AP) – A new study from Iowa State University says the booming expansion in the suburbs has siphoned retail sales from Des Moines.

“We knew this was going on, but we didn’t know the magnitude of losses, especially to the city of Des Moines,” said David Swenson, an ISU research scientist and economist.

The overall retail growth for Polk, Dallas, Warren, Madison and Guthrie Counties in fiscal years 2004 and 2006 was 5.5 percent, better than the state’s growth of 1 percent.

However, the study says the growth in some areas came at the expense of other areas.

Jordan Creek Town Center, a sprawling $200 million mall in the portion of West Des Moines that sits in Dallas County, helped shoot retail sales up 500 percent in that area.

Mall officials had claimed it would draw shoppers from at least a 100-mile radius, but the study says declines in nearby cities suggest that the booming retail center is adding shoppers at the expense of the rest of the metro area.

“Nearly 100 percent of this growth was driven by capture of customers from other communities inside and outside” the metro, the study said.

The shift not only means fewer shoppers in those areas, but also less revenue from the local-option sales tax from Polk County school districts.

While retail sales in the Dallas County portion of West Des Moines increased $310.8 million from 2004 to 2006, the part of the city that sits in Polk County had a 2.4 percent decline during the period, the study said.

Steven Watson of Watson Centers Inc. in Minneapolis, which manages Valley West Mall, said sales have finally leveled off after the initial hit when Jordan Creek first opened.

“They added nearly 50 percent more retail space to the metro area,” he said. “We knew everyone was going to feel it. We figured it would take three years to level off, and that’s what happened.”

The city of Des Moines appears to be the biggest loser in the battle for retail dollars, with sales dropping 5.2 percent or $194 million. The study said that about $144 million of that total appears to be spending shifted to areas outside the city.

As more people start moving to new living spaces in downtown Des Moines, that trend could change, said Swenson, who conducted the study with Liesl Eathington, an ISU economist.

County officials are keeping an eye on retail sales figures as consider the “Yes to Destiny” proposal. It’s a 1-cent regional sales-tax increase that would be used for property tax relief and regional attractions.

Voters in Dallas, Polk and Warren counties are scheduled to vote on the increase July 10.

Smaller communities west of the mall including Guthrie Center, Earlham and Adel saw declines in retail sales after the mall opened. Perry, which is in Dallas County, saw retail sales decline 16.8 percent, or $16 million, during the period measured.

Other cities, including Grimes, Dexter and New Virginia saw substantial increases in retail sales during the period. Swenson said retail outlets have been added in Grimes and north Urbandale in recent years, attracting shoppers commuting from places like Perry and Granger.