(The Center Square) – Spokane Valley taxpayers learned Tuesday that they are subsidizing a $184,533 initiative to drive more traffic toward 10 car dealerships located on “Auto Row” along Sprague Avenue.
The marketing campaign presentation from Economic Development Director Terri Stripes took some of the city council by surprise, with two officials arguing that they are “putting the cart before the horse.”
Stripes said the Valley’s Community & Economic Development Department launched the initiative back in May to brand the city as a regional auto sales destination. The car industry accounts for about 14% of the Valley’s sales tax revenues in the general fund, which covers police, fire and other vital services.
While Stripes confirmed the funding was within her budget during Tuesday’s meeting, Councilmembers Al Merkel and Michael Kelly cited concerns about the final cost and outreach with the local dealerships.
“Putting the cart before the horse is a good phrase,” Kelly said on Tuesday, referring to a meeting with the dealerships set for July 29, after Stripes had already committed nearly $185,000 to the campaign.
Merkel said he spoke to five dealerships leading up to Tuesday night, and claimed that only two were aware of the July 29 meeting. He thought the campaign was something the city was considering, not a taxpayer-funded initiative that was already months underway before much of the dais heard about it.
“Dealers are marketing people. They’re out there, you know, spending probably more than any other single business in our community [is] spending on marketing,” he said, citing “Auto Row” as a “passion point” of his. “If they’re not hearing anything about this, that tells me that it’s probably not hitting.”
Stripes said the city told the car dealerships about the campaign last fall and played an advertisement on Tuesday for the council with a slogan that reads: “Shop, compare, go. Spokane Valley’s Auto Row.”
She said the campaign is intended to advertise the area as a destination city, not the 10 dealerships themselves, which she said generate $400 million to $500 million in annual sales and about $4.7 million in taxes.
“Our per capita retail sales is higher than the city of Spokane and the county … we’re always importing dollars from outside the area,” Stripes said, noting how the effort could help expand the city’s coffers.
She said the campaign started in May because a consultant told the city that auto sales are highest in spring, summer and early fall. Stripes reported “good click-through rates” over the first month after its launch and claimed that the local dealerships saw a roughly 4% increase in foot traffic through June.
It’s only “anecdotal” data, so the city can’t attribute it directly to the campaign yet, but she says that next year, the Valley should have better metrics about whether the campaign is driving that increase.
Stripes said the campaign will help inform the city on how to invest in improvements along Sprague in the next five to 10 years, so taxpayers get the most bang for their buck. Still, Merkel said he would’ve held off until they had spoken with all the dealers if he had known about the campaign from the start.
“We will be working with [the dealers] on identifying what we can do through our projects that will not hurt them, but will actually enhance their business opportunities,” Deputy City Manager Erik Lamb said in response to Merkel’s comments. “We want the dealers engaged, but it’s also about the city as well.”
Mayor Laura Padden chimed in at the end of the briefing, arguing that it’s “not out of the ordinary” for the city to commission studies and marketing campaigns to determine where to invest down the road.
Merkel said there is a lot of work the city could do along Sprague Avenue to attract more customers.
“There’s a lot of beautification that could be done on that corridor that really wouldn’t cost anything,” he said, citing tree maintenance and new flags or banners. “When we’re talking about $180,000, I can imagine that we could spend considerably less and just do a little bit of that, and it’d be a nicer place.”