Retirees, Restaurants and Boutiques

Julien Patterson and Terri Wesselman in their art gallery. Photo credit: Virginia Business magazine.

Julien Patterson and his wife Terri Wesselman spent two decades building their Chantilly-based company, Omniplex World Services, into a security and investigative services firm employing more than 3,500 and generating annual revenue of more than $100 million. After selling the company in 2012, they “retired,” dividing their time between Florida and Virginia’s Northern Neck.

But it wasn’t in their temperament to spend their free time playing golf or mahjongg. According to Virginia Business magazine, the couple has started four small businesses in the Northern Neck: an art gallery, a home decor store, a coffee shop, and a clothing boutique.

“For me, I think retirement is the change in venue that allows you to do the things you want to do that benefit others and brings you satisfaction and a sense of well being,” says Patterson, now 65.

As Virginia Business notes, Virginia, like the United States as a whole, is on the verge of a retirement wave. Virginia is home to 1.4 million people who are over the age of 65. By 2030, the over-60 crowd will reach 2.3 million. Thousands of them will be successful corporate executives, entrepreneurs and professionals. And, like the Pattersons, many might be ready to slow down, but they’re not prepared to drop out.

Rural economic development has been a recurring theme of Bacon’s Rebellion. It’s clear to most people that the traditional strategy of clinging to Virginia’s mill-town roots has done little to reverse the decline in jobs and opportunity in Virginia’s rural economy. There’s nothing wrong with recruiting light manufacturing, but economic developers need to look at other strategies as well. One such strategy is exploiting the retirement boom.

Retirement represents a stage of life when people are more willing to consider relocating to a rural community than when they were pursuing career and raising families. Quality of life matters more than career opportunities or good schools. Retirees are drawn to scenery — waterfronts, rolling hills and mountains — all of which Virginia has in abundance.

But wealthier retirees can’t live on scenery alone. They also want amenities — precisely the kind of amenities that the Pattersons were providing in their Northern Neck community. (Virginia Business did not identify the specific town where they live.) Coffee shops and art galleries don’t create a lot of jobs, or even especially high-paying jobs, but they do provide employment that didn’t exist before. Affluent retirees also create a market for personal services such as handyman repairs, landscaping and the like, which locals can turn into business opportunities. Equally important, retirees and small businesses bolster the tax base of local jurisdictions — without adding to the burden of local school districts.

One nice thing about the retiree market is that you don’t have to bribe newcomers with subsidies and tax breaks. What a retiree-focused economic development strategy does require is a sharp focus on place making — creating the kinds of places where affluent people like to hang out. It gets old staring at the mountains or sailboats all day long. People crave places to go and interact with others. More specifically, they want charming, walkable/bikable places — not roads lined with gas stations and fast food joints where there aren’t any sidewalks and cars whiz past at 40 miles per hour.

The good news is that it doesn’t take a lot of money to create charming, walkable/bikable  places — sidewalks and bicycle trails are not expensive — but it does require zoning codes and comprehensive plans that don’t mandate rural sprawl. In my profile of Aspen, Colo., last year, I described the virtuous cycle that can take place when small towns invest in walkable/bikable places, attract visitors and second homes, stimulate the restaurants-and-boutiques economy, and boost property values and the tax base. Virginia communities really need to give this strategy a look.

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6 responses to “Retirees, Restaurants and Boutiques

  1. Well I just got this article link off to about 2/3 of my city council. Thanks!

  2. The Northern Neck is an interesting example. I’d really like to know where they reside in the Neck.

    It is not too far to Fredericksburg/Stafford/Spotsylvania and good health care and amenities. So, it’s easy to envision a “cozy”less expensive life as a retiree in the Neck during the week and going to Fredericksburg on weekends as well as for health care.

    While I think there is some validity in your idea, I really wonder if it’s also only valid in communities within an hour of urban areas with good restaurants, amenities, and health care. It’s not hard to envision a similar life in Shenandoah County where Harrisonburg and Winchester are very close, but yet you can settle down in one of Shenandoah County’s small towns and start a business.

    But I question the validity of this economic development possibility in isolated areas in SWVA and Southside, Virginia.

    • Agreed, this strategy will work better for rural areas close to major metros than isolated communities in Appalachia. No solution works for everyone. Every community has to identify its strengths and build on them.

  3. The Northern Neck, Virginia’s Eastern Shore – you’ve got it … wealthy retirees are a market onto themselves. You need some reason why the people want to live in these areas (natural beauty will work just fine). You need access to high quality healthcare. You need amenities like restaurants, beds and breakfasts, etc. Finally, it can’t be too far from reasonable air transportation (gotta be able to see the grandkids).

    Virginia should be targeting states with high state estate taxes. Maryland, for example.

    However, this won’t happen by itself. Seaside in Florida didn’t just spring up from the sand. If Virginia wants to develop the Eastern Shore it will have to be done with a plan in mind. The Norfolk International Airport needs investment. Basic medical care needs to be improved. Land use planning has to be changed to create the kinds of walkable communities that Jim Bacon frequently describes.

    This should be mandatory reading for Virginia politicians …

    https://dupress.deloitte.com/dup-us-en/industry/investment-management/us-generational-wealth-trends.html

    By 2029 / 2030 Baby Boomers will be 17.2% of the US population but will hold 45% of America’s wealth. This is the generation that is retiring now. But where are they retiring? Florida? Northern Neck? Charlottesville? Savannah?

    This is one of Virginia’s biggest opportunities.

    • And this gets to my ultimate beef with how Virginia operates. It may not be “politically correct” to say it, but the state does need to pick winners and losers when it comes to localities. I’m not talking about “economic development” in the sense of grants. I’m talking about state investments in legitimate state sectors (roads, infrastructure, land use, etc.) to make certain economic development strategies work.

      djrippert is 100% correct about targeting Marylanders and Baby Boomers. But targeting them by saying “Move to Virginia” and then simply including every locality in the state is ridiculous. I agree that if the infrastructure and health needs are addressed, the Eastern Shore of Virginia could really benefit. I think Shenandoah and Augusta Counties could also be major players in the moutains if the right state investments are made.

      But knowing Virginia, the state will try to apply this strategy to 40 or 50 “distressed” localities and it will never take flight because resources and attention are spread too thin.

  4. It’s my recollection that part of then Governor Mark Warner’s tax reform removed all or part of a tax exemption/credit for retirement income. And doesn’t Pennsylvania have some generous tax breaks for retirement income? While I don’t think taxes alone would drive retirement decisions, they are a factor that most people think about. I wonder how that tax change enters into the mix for people who are planning to move for retirement.

    Targeting Maryland residents and those of other high-tax East Coast states seems like a good approach.

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