The D.C. government paid $100,000 last year for a study designed to help local officials develop a sound business-retention program.
A primary purpose of the study was "to provide guidance to the District government on steps which may be effective in retaining business activity in the city and halting the outflow of business firms, jobs and taxes which is now occurring."
About 250 District firms were surveyed as part of the study. They were questioned about the nature and size of their work forces, cost of doing business, their relationship with the District government, expansion plans and decisions relating to relocation.
D.C. Mayor Marion Barry justified the expenditure in commissioning the study by emphasizing the need for a "scientific" approach in addressing the problem of business retention.
Lawrence P. Schumake III, executive director of the District's Office of Business and Economic Development, announced that his agency and others have developed and are carrying out a business-retention strategy that responds to many of the study's findings.
But business retention suffered a kick to the shins last week when Sears, Roebuck & Co. announced that it is closing its Northeast Washington store after 53 years.
Neither the business-retention study nor periodic on-site visits to District-based firms by OBED "to identify business problems and concerns" provided a clue to Sears' decision.
Chagrined District officials admitted being surprised by the announcement, although J. Pat Galloway, Sears' general manager for area stores, said he had informed Barry of the decision shortly before it was reported publicly.
A final decision to close the store on Bladensburg Road NE wasn't announced until recently, but Sears concluded several years ago that it was no longer a viable retail operation. Galloway recounted that when he was assigned here five years ago, he was instructed to begin phasing out the store.
The decision was put off however, awaiting a clearer assessment of the market.
Sears based its decision on factors that District officials apparently failed to recognize--that sales continued to decline and that the company couldn't operate in the old building as efficiently as it can in nearby Landover Mall, for example.
It still isn't clear what the loss in sales taxes will be and, although Sears has offered to absorb the 70 or so employes in its other stores, some may find it difficult to commute to work outside the city.
Ironically, it was Galloway, as president of the Greater Washington Board of Trade last year, who suggested that the District become "more aggressive in its campaign in attracting and retaining business and look at other areas and see how they do it."
While the loss of jobs resulting from the closing of Sears' Northeast store in April may be insignificant, as some District officials believe, there remains the potential for more closings or relocations.
In the city's overall effort to retain business, "we generally seek out the problems by talking with the private sector," said council member Charlene Drew Jarvis, who chairs the committee on Housing and Economic Development.
Jarvis, who said she has been actively pursuing a strong policy on business and economic development, said she is "concerned because the liaison which should exist between government and business needs to be strengthened."
She admitted the Sears decision "was a surprise to me" but pointed out that "unless those institutions come to us, we don't know their plans."
By now, District officials should know that there is a possibility that Woodward & Lothrop Inc. could decide to relocate its operations division outside the city.
Woodies has agreed to a property swap with the developer of the site on which its north store annex sits in downtown Washington. Nonretail operations that are housed in the north building will have to be relocated.
Woodies' Chairman Edwin K. Hoffman recently indicated that no new site had been selected, but Woodies could follow Perpetual American Federal Savings and Loan Association's lead and move its operations division to the suburbs.
About 350 Perpetual American employes will move to a new operations center in Alexandria this year. At least a third of those employes already have moved to the new building.
Thomas J. Owen, Perpetual American's chairman, said the consolidation required 125,000 to 130,000 square feet of space--something the District government couldn't provide.
Meanwhile, District officials should also know by now that Hecht's, the Washington-based department store chain owned by May Department Stores of St. Louis, has considered the possibility of moving its downtown store.
Hecht's had discussed the possibility of relocating its 7th Street store to the Metro Center development, which has been proposed for 12th and G streets NW. But after four years, the Redevelopment Land Agency board hasn't given final approval to the developers.
And Hecht officials indicated in an interview last year that if the Metro Center project negotiations didn't work out, they would consider leaving downtown.