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HomeMy WebLinkAboutItem 3a: Direct Mail Marketing Project to Promote Restaurants in Downtown ArcadiaDATE: TO: SUMMARY BACKGROUND March 16, 2010 Chairman and Members of the Agency Board FROM: Don Penman, Executive Director By: Linda Garcia, Communications, Marketing and Special Projects Manager STAFF REPORT Arcadia Redevelopment Agency SUBJECT: AUTHORIZE A DIRECT MAIL MARKETING PROJECT TO PROMOTE RESTAURANTS LOCATED IN DOWNTOWN ARCADIA Recommendation: Approve As part of a "Shop Arcadia" campaign to promote the concept of shopping locally for goods and services, staff is recommending that the Redevelopment Agency Board approve a program that will involve the use of Agency marketing funds to promote, through a direct mail discount card, sit -down restaurants located in downtown Arcadia. Agency approval is being requested due to the advertising nature of the project. An appropriation of funds is not necessary. In coordination with the Arcadia Chamber of Commerce, the City is taking a more assertive approach to promoting the concept of shopping locally. Chamber Member Ann Luke recently made a suggestion to get more proactive in this regard and both the City and Chamber agree that it is a great idea. Subsequent to that initial discussion, the Chamber formed a Shop Arcadia Committee that will meet periodically and the City Manager /Executive Director committed to dedicating some staff time and financial resources to the effort. A comprehensive Shop Arcadia campaign takes into account that there are two target audiences: Arcadia residents who the City hopes shop here because patronage of local businesses helps pay for the public services they enjoy and secondly, residents of surrounding communities who we hope will shop here because we have what they need — a diverse and convenient business community....something for everyone. At this time, primarily due to financial constraints, Shop Arcadia efforts will be focused on residents. Agency Chairman and Board Members March 10, 2010 Page 2 Sales tax is a very important revenue source for municipal services. Until recently, it was the largest source of revenue for the City of Arcadia. The Chamber and City recognize that this is a difficult time financially for many people and as such, the Shop Arcadia program is not viewed as a "spend more" campaign. Rather, it is intended to remind people on a regular basis that if you have a purchase to make and it can be made at a business located in Arcadia, why not use that business where a portion of the sales tax will be returned to the resident in the form of a City service. In addition to the project described in this report, plans are also in the works to purchase an over - the - street banner with (a version of) the Shop Arcadia logo (attached); enhance the existing economic development pages on the City website; have a Shop Arcadia promotion at one of the summer concerts; and at the start of the holiday season send a letter from the City Council and a brochure to all Arcadia postal customers that features local attractions and entertainment options as well as sit -down restaurants, a summary of each business district and a colorful map. On an ongoing basis staff and the Chamber will use the Shop Arcadia logo in publications and on our respective websites; place articles, announcements and advertising -type mentions in our publications, on occasion using the actual name /logo of local businesses; and resources permitting, have a Shop Arcadia presence at larger City and community events. Down the line the City could potentially consider creating a Shop Arcadia website, either within the existing City website or as a stand -alone site; purchasing and providing to interested businesses a Shop Arcadia decal for placement in their window or at the cash register; and if /when the Chamber of Commerce publishes another Business Directory, work with them to include a section about patronizing local merchants. Actual implementation of these items is subject to the availability of funds in the current budget and in the fiscal year 2010 -2011 budget. DISCUSSION The proposal at hand is to offer sit -down restaurants located within the Redevelopment Project Area the ability to have their name included on an oversized postcard that will be designed with a "Discover Downtown Arcadia /Dine Downtown Arcadia /Summer Specials in Downtown Arcadia" theme. To participate, the restaurant will need to commit to offer patrons a 15% discount on their meal purchase within a specified period of time. The Redevelopment Agency will pay for the printing and mailing of the postcard to all Arcadia postal customers and will not subsidize the discounts. Our hope is that this discount will encourage residents to visit the participating restaurants and at the same time promote and remind people of the dining options available in the downtown. An additional benefit would be a public and financial demonstration to the restaurant owners and managers that the City supports their operation in Arcadia and appreciates their value as a corporate citizen. Although this type of promotion is new for Arcadia, the concept of sending a direct mail discount card is fairly standard in the marketing world. Further, as more and more cities are seeing a decline in sales tax they too are getting more aggressive in promoting local businesses with special mailings, inclusion of logos in City publications, placing ads in Agency Chairman and Board Members March 10, 2010 Page 3 newspapers and magazines, and increasing their presence on the Internet. While Arcadia is fortunate to have a diverse and fairly stable commercial community, staff understands that many businesses are struggling these days and need support to bring their operation to the attention of customers and then get customers to the store, or in this case the restaurant. Successful businesses help the City and its residents by providing convenient access to stores, services and restaurants as well as by providing sales tax revenue that pays for many of the municipal services Arcadia residents use on a daily basis. The anticipated expenditure for this project is viewed as an investment in helping to maintain a thriving downtown district because, as stated previously, sales tax is a critical source of funding for City services. As a final note, the main reason this project is limited to restaurants in the downtown district (the Central Redevelopment Project Area to be specific) is funding. The Redevelopment Agency /Economic Development Division has a marketing budget and money available to cover the cost. No General Fund money will be needed. FISCAL IMPACT The cost of the downtown restaurant postcard (design, photography, printing and mailing) is expected to be approximately $6,400- 6,500. Funds are available in the adopted Agency budget and no appropriation is needed. RECOMMENDATION It is recommended that the Redevelopment Agency Board authorize staff to proceed with the Downtown Arcadia restaurant marketing project as outlined in this report. 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