South Suburban Retail Investment Study Steering Committee. Jan. 14 th, 2011 Matteson, IL. Agenda

Transcription

1 South Suburban Retail Investment Study Steering Committee Jan. 14 th, 2011 Matteson, IL Agenda Redlining Hypothesis Development Update SWOT Analysis Market Share Analysis Shopping Center Design Charrette Model Centers Comparison to Models Business Opportunity Profiles Next Steps

2 REDLINING ANALYSIS UPDATE What was A. J. Wright thinking? 10 Minute Drive Time Matteson Markham Lansing Calumet Park Hammond 47th, Chicago Population 91, , , , , ,223 Average Income $83,487 $63,711 $63,652 $55,781 $65,966 $47,359 Median Income $63,888 $51,097 $50,754 $42,634 $53,617 $29,989 % Black Population 42.1% 41.5% 36.2% 58.8% 13.9% 33.1% % White Population 44.2% 43.6% 49.7% 25.9% 73.2% 30.3% Demographic data 2010 by Experian/Applied Geographic Solutions. TJX is shutting A.J. Wright 12 years after starting the chain to attract consumers less affluent than its T.J. Maxx and Marshalls shoppers.

3 New Development Pattern: Atlanta Brookwood Camp The Forum Creek The Forum The Avenue Brookwood Marketplace Marketplace (stalled) at Webb Gin Marketplace Population 93, , ,314 99,695 Average Income $142,976 $57,438 $120,556 $84,990 Median Income $113,748 $40,977 $89,409 $71,580 % Black Population 7.1% 76.8% 14.2% 19.43% % White Population 79.0% 16.7% 69.9% 63.96% The Avenue Total Employees 47,316 33, ,939 39,517 Webb Gin Demographic data 2010 by Experian/Applied Geographic Solutions. 10 Minute Drive Time Camp Creek Marketplace Brookwood Marketplace

4 The Avenue at Webb Gin Camp Creek Marketplace

5 New Development Pattern: Local Lincoln Mall Marshfield Plaza Redeveloped Rand & Palatine Randhurst Yorktown Population 90, , , , ,746 Average Income $84,256 $61,887 $95,311 $91,463 $108,011 Median Income $66,797 $47,256 $78,079 $72,604 $71,993 % Black Population 42.08% 57.40% 10.05% 9.94% 4.50% % White Population 45.06% 29.10% 71.46% 69.64% 81.59% Total Employees 34,358 38,059 70,904 68, ,285 Demographic data 2010 by Experian/Applied Geographic Solutions. 10 Minute Drive Time Most Similar Racial Composition Lincoln Mall River Oaks Population 90, ,944 Average Income $84,256 $61,815 Median Income $66,797 $48,696 % Black Population 42.08% 40.45% % White Population 45.06% 45.01% Total Employees 34,358 51,705 Demographic data 2010 by Experian/Applied Geographic Solutions. Not a good income comparison. Any other suggestions?

6 Shops of Beverly 95 th and Western Lincoln Mall Beverly Population 42,905 63,619 Average Income $83,581 $81,257 Median Income $66,521 $62,891 % Black Population 48.40% 45.64% % White Population 38.77% 43.51% Total Employees 17,639 20,638 Total Retail Expenditure $406,909,956 $572,803,217 Limited Service Restaurants $18,861,493 $26,452,571 Phase 2: Investigate Retail Redlining Hypothesis General Assumptions Racial bias causes inadequate service to racially split mixed communities. National databases used to make retail location decisions do a poor job of documenting these types of communities. Diverse markets fail to attract businesses that readily serve segregated markets. Racial bias impacted development between 1970 and 2000 but the new economy is changing that pattern

7 Phase 2: Investigate Retail Redlining Hypothesis (cont.) Local Assumptions Local conditions contribute to study area retail opportunities National Mall developers do not own properties in the area and therefore retailers who only do business with those developers do not locate in the study area Retailers do not seek locations in the study area and therefore shopping center developers do not invest in area locations Hypotheses to test (formally stated) 1: Retail patterns in the study area are attributed to supply and demand mismatch (leakages, gaps, surplus). 2: Retail patterns in the study area are attributed to investment barriers/challenges (local, regional, national). To test each, we will: stratify analysis across the retail categories in consumer survey. assume similar patterns will be found in comparison communities; if not, we can assume there are other factors contributing to the patterns found in the study area. 3: Retail patterns in the study area are attributed to retailer racial biases (must reject both above before testing this H). If we fail to reject this H, then we will attempt to determine what type of retail redlining it is likely to be using the following typology.

8 D Rozario and Williams Typology of Retail Redlining (proposed, 2005) Nature of each type of retail redlining Higher fees charged to minority franchisees Restricting minority franchisees to minority areas Refusal of service to all customers in certain areas Removal of a successful store from an area by a chain Lack of a discount chain store s presence in an area Lack of an upscale chain store s presence in an area Lack of a sizable mall in a promising retail area Denigration of the retail potential of a geographic area SWOT ANALYSIS SUMMARY

9 Study Area Overview Study Area Retail Square Feet: 4.1 million Healthy retail is about $300/ square foot If ⅓ of space is services, sales need to be $200/square foot Spending power to support existing space is $820 million+ support for freestanding stores Over stored by about 100,000 to 150,000 square feet How much space is in obsolete formats? Sales Spending Power Capture Rate Total Retail $747,992,058 $500,541, % Source: Demographic data 2009 by Experian/Applied Geographic Solutions, Illinois Department of Revenue, BDI. Study Area Vacancy Overview Community Total Vacant Vacant % Matteson 2,963, , % Olympia Fields 332,700 78, % Park Forest 484, , % Richton Park 336, , % Total 4,118, , % October 2009 Are all vacant property properly classified as retail?

10 Most Similar Racial Composition 7 Minute Drive time Lincoln Mall Beverly Calumet City Population 42,905 63,619 68,207 Average Income $83,581 $81,257 $61,876 Median Income $66,521 $62,891 $49,234 % Black Population 48.40% 45.64% 43.50% % White Population 38.77% 43.51% 42.11% Total Employees 17,639 20,638 23,195 Total Retail Expenditure $406,909,956 $572,803,217 $557,470,598 Demographic data 2010 by Experian/Applied Geographic Solutions. Recruitment Platform A new study area retail business benefits from: Over 271,000 customers within a 15 minute drive spending $2.3 billion on retail purchases Communities where household incomes exceed Chicago market medians by as much as 72% Exposure to high average daily traffic 88,700 on I 57 37,700 on Lincoln Highway 22,600 on Western Avenue Government incentive programs supporting modernization and redevelopment of retail property Government ownership of land Co tenancy with newly built anchors J C Penney (2006) Target (2006)

11 MARKET SHARE ANALYSIS Methodology Capture Rate Actual sales as reported to Illinois Department of Revenue/ spending power calculates the capture rate Calculated for each community and for the combined communities Market share The willingness of customers to drive different distances for categories determines the market. Actual sales / spending power of the logical market sets market share Data Limitations Only 10 categories are reported by IDR Businesses can be improperly categorized

12 Total Sales Spending Capture Sales Tax Sales Power Rate Matteson $6,145,727 $614,572,708 $225,964, % Olympia Fields $706,447 $70,644,695 $65,360, % Park Forest $293,826 $29,382,613 $189,144, % Richton Park $333,920 $33,392,042 $112,738, % Combined $7,479,921 $747,992,058 $500,541, % Source: Demographic data 2009 by Experian/Applied Geographic Solutions, Illinois Department of Revenue, BDI. Eating & Drinking Sales Spending Power Capture Rate Matteson $42,861,568 $40,013, % Olympia Fields $5,089,240 $17,689, % Park Forest $2,436,704 $51,033, % Richton Park $9,190,007 $30,346, % Combined $59,577,519 $139,082, % 10 Minute Drive $59,577,519 $82,414, % Source: Demographic data 2009 by Experian/Applied Geographic Solutions, Illinois Department of Revenue, BDI. Data sources do not allow segregation of full service concepts. Major Opportunity

13 Groceries Capture Sales Spending Power Rate Matteson $27,042,535 $40,974, % Olympia Fields $19,088,265 $18,085, % Park Forest $3,803,549 $52,302, % Richton Park $3,131,560 $31,094, % Combined $53,065,909 $142,456, % 5 Minute Drive $53,065,909 $53,481, % Source: Demographic data 2009 by Experian/Applied Geographic Solutions, Illinois Department of Revenue, BDI. Chicago Heights significantly impacts this category. Department & Warehouse Stores Sales Spending Power Capture Rate Matteson $159,350,540 $29,798, % Olympia Fields $0 $13,661, % Park Forest $0 $37,125, % Richton Park $0 $22,276, % Combined $159,350,540 $102,862, % 15 Minute Drive $159,350,540 $468,786, % Source: Demographic data 2009 by Experian/Applied Geographic Solutions, Illinois Department of Revenue, BDI. Supports opportunity for additional Lincoln Mall department store.

14 Apparel Classification problems? Sales Spending Power Capture Rate Matteson $35,829,964 $7,326, % Olympia Fields $375,251 $3,263, % Park Forest $0 $9,250, % Richton Park $279,510 $5,534, % Combined $36,484,725 $25,374, % 15 Minute Drive $36,484,725 $115,625, % Source: Demographic data 2009 by Experian/Applied Geographic Solutions, Illinois Department of Revenue, BDI. Furniture, Computers & Appliances Sales Spending Power Capture Rate Matteson $20,695,818 $22,365, % Olympia Fields $1,112,576 $10,342, % Park Forest?? $27,014, % Richton Park?? $16,554, % Combined $21,808,394 $76,276, % 15 Minute Drive $21,808,394 $348,015, % Major Opportunity

15 Hardware & Home Centers Sales Spending Power Capture Rate Matteson $44,398,768 $9,906, % Olympia Fields $0 $4,536, % Park Forest $0 $12,205, % Richton Park $0 $7,403, % Combined $44,398,768 $34,053, % 15 Minute Drive $44,398,768 $115,625, % Source: Demographic data 2009 by Experian/Applied Geographic Solutions, Illinois Department of Revenue, BDI. Automotive Sales Spending Power Capture Rate Matteson $226,783,089 $41,419, % Olympia Fields $16,332,436 $17,259, % Park Forest $6,829,247 $53,440, % Richton Park $1,981,315 $31,682, % Combined $251,926,087 $143,801, % 15 Minute Drive $251,926,087 $651,543, % Source: Demographic data 2009 by Experian/Applied Geographic Solutions, Illinois Department of Revenue, BDI. National dealership realignment. Local service station opportunities.

16 SHOPPING CENTERS BY CATEGORIES Shopping Center Lifecycle

17 Study Area Shopping Centers Categories Defined by International Council of Shopping Centers Specialty concentrations Hybrids Models Built after 2004 Test fit with study area properties Potential Tenants Super Regional/Regional Center ICSC Definition Variety of goods like the CBD of a major city Variety in apparel, home goods, services Recreational facilities Super Regional: 3+ full line departments stores (75,000+ SF) Regional: Up to 2 full line departments stores Total square feet Super Regional approximately 1,000,000 Regional approximately 500,000

18 Super Community/Community Centers ICSC Definition No Department Store but usually discount store Subcategories Power Center: at least four anchors of 20,000 SF Town center: two or more pedestrian streets with streetfront retail and public space Lifestyle center: Upscale national specialty stores, open air format, entertainment, amenities like fountains Outlet: out of season, surplus or discontinued items Average: 180,000 SF Range: 100,000 to 500,000 Study Area Community Centers Existing Matteson Matteson Center (include Home Depot) Matteson Marketplace (include LA Fitness) Matteson Town Center Potential Olympia Fields: Lincoln & Western (includes both north and south of Lincoln Highway) Richton Park: Flying J Site at I 57 Interchange Matteson: E J & E Harlem & Lincoln

19 Neighborhood Centers ICSC Definition Principal tenant: supermarket Centered around the sale of convenience goods and personal services Average size: 60,000 Range: 30,000 to 100,000 Study Area Neighborhood Centers Existing Matteson: Matteson Plaza Olympia Fields: Olympia Square Olympia Corners Potential Matteson Route 30 at Ridgeland Vollmer Road At Harlem Park Forest: Norwood Plaza (total redevelopment) Richton Park: Lakewood Plaza

20 Convenience Centers At least 3 stores usually including mini mart or drug store Size: less than 30,000 square feet Existing Study Area Convenience Centers Matteson Woodgate Plaza Cicero Avenue Corridor East Old Downtown (Transit Oriented) Olympia Fields: Butterfield Plaza Gateway Site (Transit Oriented) Park Forest: Central Park Plaza Orchard Park Plaza Richton Park Super Saver Plaza Governor s Plaza (requires significant demolition) Sauk Trail Plaza BP Plaza

21 Potential Convenience Centers Olympia Fields Metra Stations (203 rd and 211 th ) Park Forest Family Video (needs anchor) Orchard Park Plaza (needs anchor) Hybrid Hybrid and Specialty Centers Emerging concept to replace Lifestyle Center Lost anchor strategy Building boom mistake Specialty Auto Mall Food Court

22 Study Area Hybrid Centers Matteson Rose Plaza combined with Century Plaza Lincoln Square combined with Liberty Plaza Olympia Fields Lincoln Highway & Governors Park Forest 211 th Street Mixed Use (emerging concept) Richton Park Poplar Place Prairie Thistle Plaza Study Area Specialty Centers Matteson Auto Mall Holiday Inn Plaza Potential Food Court across from High School at Vollmer and Harlem Park Forest Downtown as entertainment and food court

23 Center Design Exercise Goal: Design or Redesign and present a shopping center in 30 minutes 4 Teams Convenience Team: 203 rd Street Community Team: Flying J Regional Team: Lincoln Mall Neighborhood Team: Norwood Plaza Example

24 Format Each Team will have a Consultant Facilitator who will: Review background on the type of center Explain site, toy blocks, and parking assumptions Answer questions and record comments/plan Each Team will: Identify uses and arrange blocks and parking on the plan Elect a spokesperson to report back to full committee NEXT STEPS Phase 3 Retail Attraction Action Plan Suggested Enhancements for each center over 20,000 Sq. Ft. Tenant mix by category and where possible specific business for each center Responsibility Assignments Next Meeting March 11 th???