Economic Development Summit 2019 Speech
The RailYard owner, Josh Massey spoke at the Economic Development Summit this January. The video is above and his speech has been typed out below. Enjoy!
“If you ask my wife what I do for a living she will sigh and tell you that I’m an entrepreneur. That means I’m willing to work 80 hours a week to avoid working 40 hours a week. I except that’s probably an ailment strongly suffered in this crowd.
I grew up through 2 downtown renovations, one of them was the county seat in Mississippi, the other is an ancillary, a secondary city in North Carolina. What we saw in those two experiences is that the downtown tends to be the heart of the regrowth of a small town from a secondary city satellite to the county seat. The major downtowns of the county seat are generally built around a square and this economic driver is the courthouse. With population in the county you get activity both good and bad at the courthouse, so its economic engine is generally going to be a population of the county at large. Your downtown, lower-level tenants are often associated with that courthouse; you’ve got folks who are in the accounting, insurance, real estate services or the legal fields. So stable, but in Texas especially, you’re gonna get about half the rent rate that you would in a loft environment. In order to drive investment into these communities, you really need what amounts to an inland port type city; Denison fit that metric for us. You’ve got a railroad driver that built vertical in your downtown communities, that’s the same in my hometown. Its driver was the river that ran through town, so you get two and three-story developments, that’s important from a developer’s prospective. Because now I can repurpose those well-engineered upstairs into residential living spaces. Texas A&M did a study, you’re looking at a dollar to $1.40 a square foot on a monthly rent basis for those spaces. Again, about twice what you can get downstairs.
In order for the renovation for a secondary city, so along Main Street like Denison’s got, you need a couple of ingredients. The recipe really follows anchors in the downstairs commercial or retail space. Those anchors are primarily going to be driven first by restaurants. Denison has historically for the past 100 years been a destination for shopping from Oklahoma, from Sherman, from the cities, but that’s generally a weekend past time. What we need in a city like Denison, where I saw in Washington, North Carolina is until somebody is a first mover on the restaurant space, you go through these ups and downs sporadically. In order to hit that excape velocity, you finally get that economic engine that replaces the primary driver, in this case a railroad, in Washington’s case, textile factories moving to Mexico and the fallout of tobacco in vogue. To replace that kind of driver, you’ve got to have people coming here and staying here. In order for Denison to have a reputation as a place to come, you need about three restaurants. You need three restaurants that have a quality that allows their reputation to exceed the geographic boundaries of Denison, and even of Sherman. We see Rustico as one of the first anchors in that space, we’ve got Bon Apetite Y’all coming in, that’ll help broaden our footprint. We’re hoping to bring not only The RailYard (TRY as The RailYard abbreviated, somebody in Denton used The RailYard before we got the copyright) so The RailYard downstairs is going to have 6 savory and one beer garden type operation. And we’re involved over across from the Denison Hotel in another development for a white tablecloth type restaurant space there. The idea is between those two is we’ve created that critical mass of restaurant space. What we’ve found is that you get an in fill backwards from other consumers, things like a hotel renovation now make a lot more sense because you’ve got things that bring people into town, and they’re staying there, and they can have a lunch and then stay long enough to have a dinner. You can also in fill with population density as loft developments, so you’re seeing an acceleration of the loft development investment because it costs about twice as much to develop the upstairs for which you get twice the rent. It really takes a vision and a stomach for financial risk to be able to build that density downtown. But as we do, we’ll backfill the tenant spaces, you’ll see rents on the downstairs rise, and ultimately, you’ll get longevity of tenant spaces as well. We’re really hoping that this town follows the same footprint I’ve seen twice before where you go through the renovation driven by a restaurant reputation being built and then the tenants following.”