TATE ECONOMIC RESEARCH INC. Silver Creek Junction Retail Market Demand and Impact Analysis. Hanlon Parkway and Wellington Street. City of Guelph, ON

Transcription

1 Silver Creek Junction Retail Market Demand and Impact Analysis Hanlon Parkway and Wellington Street City of Guelph, ON Prepared for: Silvercreek Guelph Developments Ltd. April 2012 TATE ECONOMIC RESEARCH INC.

2 TATE ECONOMIC RESEARCH INC. Mr. Matt West Director of Development Silvercreek Guelph Developments Ltd. c/o Fieldgate Commercial Yonge Street Toronto, ON M2N 5R5 April 9, 2012 Re: Silver Creek Junction Retail Market Demand and Impact Analysis Hanlon Parkway and Wellington Street City of Guelph Dear Mr. West: Tate Economic Research Inc. is pleased to submit our report that examines the market demand and impact implications of modifying the current retail permissions on a portion of the Silver Creek Junction site. Thank you for the opportunity to conduct this assignment on your behalf and we look forward to discussing these results with you. Yours truly, TATE ECONOMIC RESEARCH INC. James P. Tate President Sameer Patel Director 212 King Street, Suite 202 Toronto, Ontario M5H 1K5 Tel: Fax:

3 Table of Contents EXECUTIVE SUMMARY... I 1 INTRODUCTION BACKGROUND CITY OF GUELPH OFFICIAL PLAN POLICIES PROVINCIAL POLICY STATEMENT (2005) SILVER CREEK JUNCTION CHRONOLOGY STUDY APPROACH STUDY YEARS REVIEW OF SITE AND SURROUNDINGS SITE LOCATION MIXED USE NODE THE SITE AND SURROUNDING LAND USES ACCESSIBILITY OF THE SITE SITE AND SURROUNDINGS CONCLUSION STUDY AREA DEFINITION OF THE TERM STUDY AREA THE DELINEATED STUDY AREA STUDY AREA SUMMARY INVENTORY OF COMPETITIVE RETAIL SPACE INVENTORY OF COMMERCIAL RETAIL AND SERVICE SPACE IN GUELPH DOWNTOWN (CBD) GUELPH INVENTORY PRIMARY ZONE RETAIL PROPOSALS INVENTORY OF COMPETITIVE SPACE & PROPOSED RETAIL SPACE CONCLUSION POPULATION LEVELS STUDY YEARS POPULATION FORECAST POPULATION LEVELS CONCLUSION NON FOOD ORIENTED RETAIL (NFOR) EXPENDITURE POTENTIAL NFOR EXPENDITURE POTENTIAL FOOD ORIENTED RETAIL (FOR) EXPENDITURE POTENTIAL FOR EXPENDITURE POTENTIAL OTHER NFOR MARKET DEMAND AND IMPACT ANALYSIS DEVELOPMENT TIMING OTHER NFOR SHARE OF TOTAL NFOR EXPENDITURES OTHER NFOR MARKET DEMAND ANALYSIS OTHER NFOR MARKET IMPACT ANALYSIS OTHER NFOR MARKET DEMAND AND IMPACT ANALYSIS CONCLUSION SUPERMARKET DEMAND AND IMPACT ANALYSIS... 21

4 9.1 MARKET DEMAND AND IMPACT METHODOLOGY SUPERMARKET SHARE OF TOTAL FOR EXPENDITURES SUPERMARKET DEMAND ANALYSIS SUPERMARKET IMPACT ANALYSIS SUPERMARKET DEMAND AND IMPACT ANALYSIS CONCLUSIONS RETAIL MARKET DEMAND AND IMPACT CONCLUSIONS CITY OF GUELPH OFFICIAL PLAN POLICIES CONCLUSIONS AND RECOMMENDATIONS APPENDIX A INVENTORY OF COMPETITIVE RETAIL SPACE... A-1 APPENDIX B DEFINITION OF TERMS... B-1

5 Executive Summary Background Tate Economic Research Inc. (TER) was retained by Silvercreek Guelph Developments Ltd. (Silvercreek) to investigate the market demand and impact implications of modifying the current retail permissions on a portion of their site located at the intersection of Hanlon Parkway (Highway 6 and 7) and Wellington Street (Highway 24 and 7), in the City of Guelph. This entire site is known as Silver Creek Junction in the City of Guelph Official Plan. Silver Creek Junction totals approximately 54 acres and was formerly operated by Lafarge Canada Inc. as a gravel extraction facility. The site is currently vacant. Lands within Silver Creek Junction are designated Mixed Use Node, Specialized Corporate Business Park, High Density Residential and Open Space. This report addresses the retail permissions on a portion of the Mixed Use Node known as Sub Area 1. Sub Area 1 has retail permissions for 245,000 square feet of total retail space, including a warehouse membership club or a home improvement centre. Silvercreek is not seeking to increase the total 245,000 square foot maximum retail permission on the Site. The changes being requested by Silvercreek are outlined below: Silvercreek is requesting the following: A modification to the existing permission to allow up to 245,000 square feet of retail store space in Sub Area 1 for additional retail uses which will provide greater flexibility in leasing in lieu of developing only a warehouse membership club or home improvement centre tenant; A modification to the existing permission to allow a maximum store size of 60,000 square feet instead of 40,000 square feet in the current zoning for the retail store uses; A modification to the existing permissions to allow the development of a supermarket; and A modification to the existing permissions to delete the timing restrictions with respect to the development of the retail store space. i

6 The current retail permissions on Sub Area 1 as per the City of Guelph Official Plan 2001 (August 2011 Consolidation) are as follows: Mixed Use Node: The Mixed Use Node is intended provide a wide range of retail, service entertainment and recreational commercial uses as well as complementary uses including open space, institutional, cultural and educational uses, hotels and live work studios. Medium and high density multiple residential development and apartments shall also be permitted in accordance with the policies of Section 7.2. The policies contained in Sections to shall apply to the Mixed Use Node. The Silver Creek Junction Mixed Use Node is divided into 2 Sub Areas. Sub Area 1 which is the focus of the study is defined as: Sub Area 1: A maximum of 22, 760 sq m (245,000 sp. ft.) of retail gross leasable floor space shall be permitted in Sub Area 1 only as shown on Schedule A. This total floor area will be comprised of: a) a maximum of one (1) large-format retail store comprised of either a warehouse membership club or a home improvement retail warehouse, to a maximum gross floor area of 13, 470 sq. m (145,000 sq. ft.), b) ancillary retail stores (excluding supermarkets), to a maximum aggregate gross floor area of 9,300 sq. m (100,000 sq. ft.), in a minimum of at least two (2) separate buildings, to be located in Sub-Area 1 only as shown on Schedule A to this amendment, subject to a maximum retail unit size of 3,716 sq. m (40,000 sq. ft.). Commercial development to this area shall incorporate a reduced retail parking standard, to be established through the site-specific implementing zoning provisions. Appropriate phasing requirements shall be imposed on the retail commercial components in Sub Area 1 through appropriate implementing zoning provisions. Silvercreek is proposing to modify Section b) of the Guelph OP in order to: Permit the development of up to 245,000 square feet of retail store space; Permit a maximum store size of 60,000 square feet; and, A modification to the existing permissions to allow the development of a supermarket. ii

7 In addition to outlining the above uses and sizes, the Zoning By-law for Silver Creek Junction also outlines development timing restrictions. These timing restrictions are summarized below: Building permits shall be issued no sooner than September 1, 2012 for up to 5,200 sq. m (56,000 sq. ft.) of the above Aggregate Gross Floor Area Building permits shall be issued no sooner than September 1, 2014 for the remaining balance of the permitted maximum aggregate Gross Floor Area Silvercreek is proposing to modify the Zoning By-law to reflect the proposed changes in the Official Plan with respect to the maximum store size of 60,000 square feet as well as to remove the timing restrictions. Silvercreek has requested that TER examine the market demand and potential impact of constructing the approved 245,000 square feet of retail store space with no timing restrictions in Sub Area 1 at Silver Creek Junction as well as the market demand and potential impact of increasing the maximum building size from 40,000 square feet to 60,000 square foot and permitting a supermarket. Silver Creek Junction Chronology TER has conducted a number of retail market demand and impact studies for Silver Creek Junction. TER 2005 Report TER prepared a report entitled Retail Centre Market Demand and Impact Analysis, Hanlon Parkway and Wellington Street, City of Guelph, ON on behalf of Silvercreek in September This report supported the development of approximately 450,000 square feet of retail and service space at Silver Creek Junction. TER 2008 Report TER prepared a report entitled Retail Centre Market Demand and Impact Analysis, Hanlon Parkway and Wellington Street, City of Guelph, ON on behalf of Silvercreek in June This report also supported 450,000 square feet of retail and service space at Silver Creek Junction. Mediated Settlement In December 2008, Silvercreek and the City of Guelph reached a mediated settlement, with respect to the retail permissions at Silver Creek Junction. As part of this process, Silvercreek agreed to a reduction in the amount of space from 450,000 square feet to 245,000 square feet and agreed to phasing of the ancillary retail space. It is our understanding that the phasing of the retail space was included in the settlement to iii

8 allow further intensification of sites in Guelph to proceed, in particular, the redevelopment of Willow West Mall. OMB Decision As a result of an appeal from Armel Corporation (the owners of the lands and developments at the Paisley Road & Imperial Road Mixed Use Node) an Ontario Municipal Board (OMB) hearing was held, the result of which was that the mediated settlement between Silvercreek and the City of Guelph was upheld in January Study Years For the purposes of our analysis, TER has also assumed that the retail space in Sub Area 1 will be in operation in Therefore, TER has analyzed the first full year of operation of In order to test the longer term market conditions in the Study Area, TER has also analysed the years 2016 and Conclusions The proposed modifications to the current retail permissions at Silver Creek Junction will not alter the intent of the Mixed Use Node policies in the City of Guelph Official Plan. Silver Creek Junction is one of five mixed use nodes in the City of Guelph. Silver Creek Junction currently has permissions for retail development on the Sub Area 1 portion of the site. Sub Area 1 has retail permissions for 245,000 square feet of total retail space, including a warehouse membership club or a home improvement centre. Silvercreek is not seeking to increase the total 245,000 square foot maximum retail permission on the Site. Silver Creek Junction is well located to serve City-wide residents and beyond. Silver Creek Junction is centrally located within the City of Guelph, approximately 2 kilometres west of Central Business District (Downtown Guelph). It is located adjacent to Highway 6 (Hanlon Parkway) and Highway 7 (Wellington Street), which provide access to the site from the entire City of Guelph and surrounding communities. There is approximately 7.1 million square feet of retail and service in the City of Guelph. iv

9 There is approximately 427,500 square feet of vacant space in the Primary Zone. This space represents a vacancy rate of 6.0%. It is our opinion that normal vacancy rates in a balanced retail commercial market are typically between 5.0% and 7.5%. The downtown currently has a vacancy rate of 6.6%. This vacancy rate is in the balanced range of 5.0% and 7.5% rate found in other markets. There is sufficient market demand to implement the proposed modifications to the current retail permissions at Silver Creek Junction. Based on the analysis summarized in this report, there is sufficient demand to warrant the development of the 245,000 square feet of retail store space in Sub Area 1 at Silver Creek Junction by Based on this analysis, there is sufficient market demand to warrant a 60,000 square foot supermarket at Silver Creek Junction in Overall, it is the opinion of TER that no supermarkets will be in jeopardy of closing as a result of a proposed 60,000 square foot supermarket in Sub Area 1 at Silver Creek Junction. Conclusions and Recommendations Based on the results of this retail market demand and impact study, it is the opinion of TER that the proposed modifications to the current retail permissions for Silver Creek Junction can be justified without detriment to the overall function or economic vitality of the Central Business District or the key functions that contribute to the CBD s overall vitality. It is the opinion of TER that the achievement of the City s Major Goals and the Commercial and Mixed Use policy objectives of the Official Plan will not be compromised by the proposed modifications. It is the opinion of TER that the ability of existing designated commercial or mixed use lands to achieve their planned function will not be compromised by the proposed modifications. It is the professional opinion of Tate Economic Research Inc. that the Silvercreek proposal to modify the current retail permission to allow a maximum of 245,000 square feet of retail store space including a 60,000 square foot supermarket, without phasing and timing restrictions should be approved on the basis of market demand and impact. v

10 1 Introduction 1.1 Background Tate Economic Research Inc. (TER) was retained by Silvercreek Guelph Developments Ltd. (Silvercreek) to investigate the market demand and impact implications of modifying the current retail permissions on a portion of their site located at the intersection of Hanlon Parkway (Highway 6 and 7) and Wellington Street (Highway 24 and 7), in the City of Guelph. This entire site is known as Silver Creek Junction in the City of Guelph Official Plan. Silver Creek Junction totals approximately 54 acres and was formerly operated by Lafarge Canada Inc. as a gravel extraction facility. The site is currently vacant. Lands within Silver Creek Junction are designated Mixed Use Node, Specialized Corporate Business Park, High Density Residential and Open Space. This report addresses the retail permissions on a portion of the Mixed Use Node known as Sub Area 1. Sub Area 1 has retail permissions for 245,000 square feet of total retail space, including a warehouse membership club or a home improvement centre. Silvercreek is not seeking to increase the total 245,000 square foot maximum retail permission on the Site. The changes being requested by Silvercreek are outlined below: Silvercreek is requesting the following: A modification to the existing permission to allow up to 245,000 square feet of retail store space in Sub Area 1 for additional retail uses which will provide greater flexibility in leasing in lieu of developing only a warehouse membership club or home improvement centre tenant; A modification to the existing permission to allow a maximum store size of 60,000 square feet instead of 40,000 square feet in the current zoning for the retail store uses; A modification to the existing permissions to allow the development of a supermarket; and A modification to the existing permissions to delete the timing restrictions with respect to the development of the retail store space. The current retail permissions on Sub Area 1 as per the City of Guelph Official Plan 2001 (August 2011 Consolidation) are as follows: Mixed Use Node: 1

11 The Mixed Use Node is intended provide a wide range of retail, service entertainment and recreational commercial uses as well as complementary uses including open space, institutional, cultural and educational uses, hotels and live work studios. Medium and high density multiple residential development and apartments shall also be permitted in accordance with the policies of Section 7.2. The policies contained in Sections to shall apply to the Mixed Use Node. The Silver Creek Junction Mixed Use Node is divided into 2 Sub Areas. Sub Area 1 which is the focus of the study is defined as: Sub Area 1: A maximum of 22,760 sq m (245,000 sq. ft.) of retail gross leasable floor space shall be permitted in Sub Area 1 only as shown on Schedule A. This total floor area will be comprised of: a) a maximum of one (1) large-format retail store comprised of either a warehouse membership club or a home improvement retail warehouse, to a maximum gross floor area of 13, 470 sq. m (145,000 sq. ft.), b) ancillary retail stores (excluding supermarkets), to a maximum aggregate gross floor area of 9,300 sq. m (100,000 sq. ft.), in a minimum of at least two (2) separate buildings, to be located in Sub-Area 1 only as shown on Schedule A to this amendment, subject to a maximum retail unit size of 3,716 sq. m (40,000 sq. ft.). Commercial development to this area shall incorporate a reduced retail parking standard, to be established through the site-specific implementing zoning provisions. Appropriate phasing requirements shall be imposed on the retail commercial components in Sub Area 1 through appropriate implementing zoning provisions. Silvercreek is proposing to modify Section b) of the Guelph OP to: Permit the development of up to 245,000 square feet of retail store space; Permit a maximum store size of 60,000 square feet; and, A modification to the existing permissions to allow the development of a supermarket. In addition to outlining the above uses and sizes, the Zoning By-law for Silver Creek Junction has development timing restrictions. These timing restrictions are outlined below: 2

12 Building permits shall be issued no sooner than September 1, 2012 for up to 5,200 sq. m (56,000 sq. ft.) of the above Aggregate Gross Floor Area Building permits shall be issued no sooner than September 1, 2014 for the remaining balance of the permitted maximum aggregate Gross Floor Area Silvercreek is proposing to modify the Zoning By-law to reflect the proposed changes in the Official Plan with respect to the maximum store size of 60,000 square feet as well as to remove the timing restrictions. Silvercreek has requested that TER examine the market demand and potential impact of constructing the approved 245,000 square feet of retail store space with no timing restrictions in Sub Area 1 at Silver Creek Junction as well as the market demand and potential impact of increasing the maximum building size from 40,000 square feet to 60,000 square foot and permitting a supermarket. 1.2 City of Guelph Official Plan Policies An Official Plan Amendment (OPA) and associated Zoning By-law Amendment (ZBA) will be required for the proposed modifications to the Silver Creek Junction permissions. In this case, the market impact study is not required by the Official Plan because a new node is not being created or expanded. The market impact study has been requested by the City as part of the requirements for the application to be considered complete. TER s market demand and impact analysis has been designed to address the policies in the Guelph OP with respect to impact studies. The Guelph OP has the following policies with respect to amendments to existing permissions: Impact Studies Market impact, planning and infrastructure impact studies shall be submitted and approved by Council: to establish or expand a Mixed Use Node or Intensification Node beyond the designation limit boundaries as shown on Schedule 1; to exceed the retail floor area limitations within a Mixed Use Node established in policy or the number of large retail uses in policy ; to extend or enlarge a Neighbourhood Commercial Centre to provide more than 10,000 square metres (108,000 square feet) of gross leasable floor area. 3

13 An appropriate market impact study shall demonstrate that: the proposal can be justified without detriment to the overall function or economic vitality of the 'Central Business District' or the key component functions that contribute to the C.B.D. s overall vitality; the achievement of the City s Major Goals, the Urban Form policies or the Commercial and Mixed Use policy objectives of the Official Plan will not be compromised; and the ability of existing designated commercial or mixed use lands to achieve their planned function will not be compromised A market impact study shall include: a) An assessment of the current market situation, and the future potential for the expansion of retail facilities in light of projected population and employment growth; b) An evaluation of the economic feasibility of the proposal on the basis of current market demand or retail market opportunity; c) An indication the scale of any adverse effects on the economic viability of the C.B.D., the key functions that contribute to the C.B.D. s overall vitality, and on any existing or planned designated commercial or mixed use lands provided for in this Plan. d) An assessment of the implications of the proposal relative to the City s approved Commercial Policy Review Study and the objectives and implementing policies of this Plan. 1.3 Provincial Policy Statement (2005) The Provincial Policy Statement (2005) (PPS) provides direction on matters of provincial interest related to land use planning and development. As it relates to this market demand and impact study, the PPS states: Healthy, liveable and safe communities are sustained by: b) accommodating an appropriate range and mix of residential, employment (including industrial, commercial and institutional uses), recreational and open space uses to meet long-term needs; 1 1 Ministry of Municipal Affairs and Housing, Provincial Policy Statement 2005, Policy (b), p.4. 4

14 Long-term economic prosperity should be supported by: b) maintaining and, where possible, enhancing the vitality and viability of downtowns and mainstreets; 2 TER s market demand and impact analysis has been designed to address these policies. 1.4 Silver Creek Junction Chronology TER has conducted a number of retail market demand and impact studies for Silver Creek Junction. TER 2005 Report TER prepared a report entitled Retail Centre Market Demand and Impact Analysis, Hanlon Parkway and Wellington Street, City of Guelph, ON on behalf of Silvercreek in September This report supported the development of approximately 450,000 square feet of retail and service space at Silver Creek Junction. TER 2008 Report TER prepared a report entitled Retail Centre Market Demand and Impact Analysis, Hanlon Parkway and Wellington Street, City of Guelph, ON on behalf of Silvercreek in June This report supported 450,000 square feet of retail and service space at Silver Creek Junction. Mediated Settlement In December 2008, Silvercreek and the City of Guelph reached a mediated settlement, with respect to the retail permissions at Silver Creek Junction. As part of this process, Silvercreek agreed to a reduction in the amount of space from 450,000 square feet to 245,000 square feet and agreed to phase the ancillary retail space. It is our understanding that the phasing of the retail space was included in the settlement to allow further intensification of sites in Guelph to proceed, in particular, the redevelopment of Willow West Mall. OMB Decision As a result of an appeal from Armel Corporation (the owners of the lands and developments at the Paisley Road & Imperial Road Mixed Use Node) an Ontario Municipal Board (OMB) hearing was held, the result of which was that the mediated settlement between Silvercreek and the City of Guelph was upheld in January Ibid, Policy (b), p.13. 5

15 1.5 Study Approach TER s work plan is based on primary research, consumer research, field inspections and a detailed market demand and impact analysis. The study approach is outlined below in greater detail: Review of Site and Surroundings TER reviewed Silver Creek Junction in terms of its accessibility, visibility, surrounding land uses and the proposed road and transportation network in the vicinity of the site. This review was concluded with commentary regarding the site s appropriateness for the modified retail permissions as proposed. Review of Previous Research TER reviewed the previous studies that we conducted for this site. Study Area Delineation TER examined the appropriateness of the Study Area used in the previous work for Silver Creek Junction. Inventory of Competitive Retail/Service Space An inventory of commercial retail and service space in the City of Guelph was conducted. This information was incorporated into our analyses (see Appendix A for a summary of the inventory and maps). Population and Expenditure Forecast Based on projections provided by the City of Guelph, Wellington County and Halton Region, TER has forecast population levels to Based primarily on Census and Statistics Canada information, retail expenditure volumes were forecast over this study period. Market Demand Analysis Based on existing and anticipated shopping patterns, TER forecast the demand for new retail space in the Guelph market. Impact Analysis - TER forecast any potential impact of the proposed modification of the existing permissions at Silver Creek Junction on the existing, planned and proposed retail structure of Guelph. This research program has allowed TER to develop our professional opinion regarding the market impact implications of modifying the retail permissions on Sub Area 1 of the Silver Creek Junction Mixed Use Node. 1.6 Study Years TER has assumed the year 2011 as the base year for the calculation of per capita expenditure volumes and population levels in this analysis. For the purposes of our analysis, TER has also assumed that the retail space in Sub Area 1 will be in operation in Therefore, TER has analyzed the first full year of operation of

16 In order to test the longer term market conditions in the Study Area, TER has also analysed the years 2016 and

17 SITE & ACCESS Mixed Use Node Silver Creek Junction Sub Area 2 Sub Area 1 - Silver Creek Junction

18 2 Review of Site and Surroundings From the perspective of market demand and impact, it is important to review Silver Creek Junction in terms of its access, visibility, surrounding land uses and the road and transportation network in the vicinity of the site. It is the purpose of this section of the report to determine the suitability of Silver Creek Junction for the proposed modified retail permissions from the market demand perspective. 2.1 Site Location Silver Creek Junction, indicated on the accompanying map, is approximately 54 acres. The site is centrally located in the City of Guelph, Ontario, on the east side of Hanlon Parkway and north of Wellington Street. The site is triangular in shape, with frontage onto Hanlon Parkway. Silver Creek Junction is situated in an established area within the City of Guelph. It is located approximately 2 kilometres west of the Guelph Central Business District (CBD), also indicated in the accompanying map. 2.2 Mixed Use Node Silver Creek Junction is designated Mixed Use Node, Specialized Corporate Business Park, High Density Residential and Open Space in the Guelph OP. With respect to the Mixed Use Node portion, Silver Creek Junction is one of five designated Mixed Use Nodes in the City of Guelph. The policies regarding Mixed Use Nodes for Silver Creek Junction are as follows: The Mixed Use Node is intended provide a wide range of retail, service entertainment and recreational commercial uses as well as complementary uses including open space, institutional, cultural and educational uses, hotels and live work studios. 2.3 The Site and Surrounding Land Uses Silver Creek Junction was formerly operated by Lafarge Canada Inc. The site is currently vacant and has been since Lafarge s facility closed in Silver Creek Junction represents a significant brownfield redevelopment opportunity for the City of Guelph. Silver Creek Junction is bounded to the north, east and south by railway tracks. The Hanlon Parkway forms the western boundary of the site. For the most part there are residential uses surrounding the site. Residential uses near the site are primarily single family detached, although there is a five storey apartment building located to the south. Further south of this apartment building, with access from Silvercreek Parkway South, is the Manor Adult Entertainment Complex. 8

19 2.4 Accessibility of the Site Silver Creek Junction is centrally located within Guelph and is situated near the intersection of Hanlon Parkway (Highway 6 and 7) and Wellington Street (Highway 7 and 24). Within the City of Guelph, the north/south portion of Highway 6 is known as Hanlon Parkway. Similarly, the north/south portion of Highway 7 also forms part of Hanlon Parkway and the east/west portion of Highway 7 is known as York Road or Wellington Street. Significant improvements are anticipated for Silvercreek Parkway including the connection of Silvercreek Parkway South and North by way of grade-separated crossing of the CNR railway. These improvements are expected to increase access to Silver Creek Junction and the surrounding area. To the south, Hanlon Parkway (Highway 6 outside of Guelph) leads to Highway 401, approximately 12 kilometres to the south. To the north, the City of Guelph is connected to communities, such as Fergus, via Highway 6. To the northwest, Highway 7 connects Guelph to the Cities of Kitchener and Waterloo. To the southwest, Guelph is connected to Cambridge via Highway 24 (known as Wellington Street west of Hanlon Parkway). To the east, Highway 7 leads to the Town of Halton Hills, including Acton and Georgetown. 2.5 Site and Surroundings Conclusion Silver Creek Junction is centrally located within Guelph. As the current retail permissions suggest, the site is suitable for the development of a retail centre. The site will be readily accessible to consumers located throughout the City of Guelph and beyond. It will serve current and future residents of Guelph. The proposed modifications to the existing permission will not alter the intent of the land use policies for the Silver Creek Junction Mixed Use Node. 9

20 STUDY AREA Legend Primary Zone Secondary Zone

21 3 Study Area The total market influence attributable to shopping centres and major retailers often extends over a wide geographic area and it may be difficult to define with an absolute degree of certainty. However, TER has defined a Study Area for the purposes of making estimates of the market demand and potential impacts of the proposed retail development in Sub Area 1 at Silver Creek Junction. This section of the report discusses the extent of this Study Area and the primary inputs into its delineation. 3.1 Definition of the Term Study Area TER has utilized the same Study Area for Silver Creek Junction as in previous studies we conducted for this site. The Study Area, as defined by TER in this and previous reports, refers to the geographic area from which the proposed retail development at Silver Creek Junction is expected to derive the majority of its sales support. In general terms, this Study Area recognizes a number of factors, including: The access and visibility of the Silver Creek Junction; The size and type of the proposed tenants; Previous licence plate research conducted in Guelph; The locations of other major retail concentrations in other communities; Travel distance and driving times; Previous research conducted in the market; and, The professional experience of TER. In addition to the market support from residents within the delineated Study Area, it is typical that a portion of sales support for this, or any, retail project would be generated from customers living beyond the borders of the Study Area. These potential customers have been recognized in the analysis that follows as inflow. 3.2 The Delineated Study Area The Study Area, illustrated opposite, included two zones; a Primary Zone consisting of the City of Guelph and a Secondary Zone consisting of: Town of Erin Township of Guelph-Eramosa Township of Puslinch 10

22 Township of Centre Wellington (portion) Town of Milton (portion) Town of Halton Hills (portion) The Secondary Zone surrounds the Primary Zone and is limited by competing retail facilities in Kitchener/Waterloo to the west, Cambridge to the south, Milton to the east and Orangeville to the north. 3.3 Study Area Summary Silver Creek Junction is proposed to be a mixed use development with retail, office and residential space. The proposed modifications to the current retail permissions on Sub Area 1 will allow Silvercreek the flexibility to develop retail uses that will serve the local area as well as the wider Study Area. The Study Area represents the geographic boundary from which the proposed Silvercreek Development is expected to receive the majority of its sales support. 11

23 TABLE 1 SILVERCREEK JUNCTION RETAIL MARKET DEMAND AND IMPACT ANALYSIS SUMMARY OF RETAIL AND SERVICE SPACE IN PRIMARY ZONE (1 Downtown Gordon & Paisley & Woodlawn & Kortright & Silvercreek & Stone & Eramosa & Speedvale & Woodlawn Northwest Northeast South Total Primary Guelph Clair Imperial Woolwich Gordon Willow Edinburgh Stevenson Stevenson Node Guelph Guelph Guelph Zone Nodes Percent Distribution Food Oriented Retail (FOR) Supermarkets 0 35, , ,900 74,100 50,700 72,700 32, , % Convenience & Specialty Food Stores 41, ,600 3,600 16,300 12,800 16,500 1,800 4, ,700 48,800 20, , % Sub-Total Food Oriented Retail (FOR) 41,800 35, ,600 3, ,200 86,900 67,200 74,500 36, ,700 48,800 20, , % Non Food Oriented Retail (NFOR) Department Stores , ,700 58, , % General Merchandise 5, ,400 4,100 18,800 91,400 7,800 14, ,100 5,200 51, , % Clothing, Shoes & Accessories 80, ,700 27,500 3,600 49, , ,000 5,000 4, , % Furniture, Home Furnishings & Electronics 65,300 1, ,500 6,000 94,900 89, , ,200 58,200 43, , % Pharmacies & Personal Care Stores 23,300 20,600 1,200 2,600 10,200 23,100 39,900 31,200 5,200 4,700 27,000 11,900 6, , % Building & Outdoor Home Supplies 1,800 7, ,600 13,300 3,500 3, , ,600 17,900 45, , % Miscellaneous Retailers 92,500 2, ,300 9,400 53, ,300 4,200 15,200 5, ,900 36,200 46, , % Automotive 4, , , ,000 22,900 16, , % Sub-Total Non Food Oriented Retail (NFOR) 272,500 31,800 2, ,200 46, , , ,000 35,200 72, , , ,700 2,966, % Other Retail & Service Space Liquor, Beer & Wine 1,900 17, ,400 13, , , ,000 68, % Food Services 210,000 15,000 5,700 26,900 38,700 32,900 96,900 11,400 10,100 47, ,900 51,400 67, , % Personal Services 58, ,000 5,200 12,800 13,200 19,700 3,300 5, ,600 24,800 10, , % Financial & Real Estate Services 101,600 20,400 16,100 10,100 20,400 19,400 33,400 6,800 7,600 12,600 81,600 25,400 3, , % Other Services 586,700 2,000 6,600 13,400 48,400 42,200 59,400 45,400 6, , , , ,300 1,757, % Sub-Total Other Retail & Service Space 958,600 55,500 32,400 55, , , ,400 66,900 41, , , , ,300 3,084, % Total Occupied Retail & Service Space 1,272, , , , , ,900 1,038, , , ,100 1,238, , ,200 6,725, % Vacant 90,400 2,500 10,100 7,100 6,500 75,600 49,300 8,300 2,800 28, ,400 17,200 25, , % Vacancy Rate (%) 6.6% 2.0% 6.8% 1.3% 2.3% 14.4% 4.5% 3.3% 2.4% 9.8% 7.7% 3.6% 4.3% 6.0% Total Retail & Service Space 1,363, , , , , ,500 1,087, , , ,500 1,342, , ,100 7,153, % Percent Distribution 19.1% 1.7% 2.1% 7.7% 3.9% 7.3% 15.2% 3.5% 1.6% 4.0% 18.8% 6.7% 8.4% 100.0% Source: TATE ECONOMIC RESEARCH INC. 1) Rounded to the nearest 100 square feet.

24 4 Inventory of Competitive Retail Space An inventory of commercial retail and service space was conducted in April This inventory was updated in February/March Inventory of Commercial Retail and Service Space in Guelph Table 1, opposite, illustrates the Primary Zone (City of Guelph) inventory. The existing inventory can be summarized as follows: Overall, there is approximately 7,153,000 square feet of retail, service and vacant commercial space in the Primary Zone; Overall, the retail space (food and non food oriented retail space) accounts for 50.9% of the total retail, service and vacant commercial space in the Primary Zone; In terms of the geographic distribution of space, the Central Business District (hereafter referred to as the downtown) represents the largest node of retail and service space (19.1%) followed by the Stone Road and Edinburgh Road node (15.2%). Although Northwest Guelph accounts for 18.8% of the total space, this space is dispersed over a wide area and therefore cannot be called a node in the geographical sense; and, There is approximately 427,500 square feet of vacant space in the Primary Zone. This space represents a vacancy rate of 6.0%. It is our opinion that normal vacancy rates in a balanced retail commercial market are typically between 5.0% and 7.5%. 4.2 Downtown (CBD) Guelph Inventory With respect to the downtown, Section 2.3 of the Guelph OP states: Maintain and strengthen the role of the Central Business District (Downtown) as a major focal area for investment, employment and residential uses. The Central Business District (Downtown) will be a vibrant multiple function district and community focus of the City for commercial, recreational, entertainment, institutional, cultural and public service uses. The following observations are made with respect to the downtown inventory: As stated in the previous section, the downtown represents the largest concentration of retail and service space in the City of Guelph; 12

25 TABLE 2 SILVER CREEK JUNCTION RETAIL MARKET DEMAND AND IMPACT ANALYSIS ACTIVE COMMERCIAL APPLICATIONS Node/Location Total FOR NFOR Service Other Square Feet (Rounded to the Nearest 100) Woodlawn Rd. W. - 6 & 7 Developments (1 11,000 11, Paisley Rd. - Armel Corporation (2 130,000 17,000 85,000 28, Gordon St. S. - FCHT Holdings (Ontario) (3 146, ,000 96, Clair Road W. - Fieldgate/Sobeys Capital (4 87,100 51,000 27,000 9, Wellington St. W Ontario Inc. (5 37,700 15,000 5,200 17, Starwood Dr. - KLM Planning Partners Inc. (6 11,500 11, Gordon St. - Astrid J Clos Planning Consultants (7 17,400 13,100 4, ,000 68, , ,400 17, Woodlawn Rd. E. - Astrid J Clos Planning Consultants (8 20,000 8,000 12, Paisley Rd. - Armel Corporation (9 297, ,000 38, , Gordon St. S. - Westminster Market - Phase 2 (10 114,000 53,100 37,300 23, Watson Parkway N. - Loblaw Properties Ltd. - Phase 1 (11 131,200 54,700 55,000 21, Watson Parkway N. - Loblaw Properties Ltd. - Phase 2 (11 13, ,300 4, , 1221, 1231 Gordon St. - Erikam Investments (12 16, ,100 4, Victoria St. N. - Astrid J Clos Planning Consultants (13 42, ,500 10, , , , , ,000 Source: TATE ECONOMIC RESEARCH INC. 1) There is approximately 11,000 square feet of space under construction. 2) West Hills Shopping Centre Phase 2 and 3. Based on information from West Hills Commercial Node Expansion Traffic Impact Study, November TER has assumed that the Zehrs will expand by 17,000 sf. Of the remaining space TER assumes approximately 75% will be retail and the remainder service. 3) The TER assumptions are based on a site plan posted on the FCHT website. 4) TER assumptions are based on Guelph report # TER has assumed 75% of the non supermarket space will be retail oriented. 5) TER assumptions are based on Guelph report # The report states there will be a 17,500 sf organic food store. TER has assumed 75% of the remaining space will be retail oriented. 6) TER assumptions are based on Guelph Notice of Complete Application. TER has assumed all of the space will be service oriented. 7) TER assumptions are based on Guelph Public Meeting Notice. TER has assumed 75% of the space will be retail oriented. 8) TER assumptions are based on Guelph Notice of Complete Application. TER has assumed 40% of the space will be retail oriented. 9) 10) 11) 12) 13) TER assumptions based on information from West Hills Commercial Node Expansion Traffic Impact Study, November TER has assumed there will be a 145,000 sf Costco. Of the remaining space approximately 75% will be retail and the remainder service. The assumptions for the Phase 2 Westminster Market are from the City of Guelph Council Report dated November 3, This report states the supermarket has been reduced from 161,500 sf to 113,929 sf. Based on the Kircher Research Associates reports for the Gordon & Clair supermarket (using the Phase 1 size of 140,000 sf) and the Kircher Research Associates Starwood & Watson report (150,000 sf), TER has assumed that 46.6% of the proposed 114,000 sf store is food, 32.7% is NFOR, and 20.7% is service and mezzanine space. The assumptions for 115 Watson Road North is based on Zelinka Priamo letter dated April 14, 2009 which states Phase 1 will include a 93,534 sf supermarket with a 10,634 sf mezzanine and 27,000 sf ancillary retail. Phase 2 will include an expansion of 13,329 sf to the supermarket. With respect to the supermarket, based on the Kircher reports for Gordon & Clair supermarket (using the Phase one size of 140,000) and the Kircher Starwood & Watson report (150,000), TER has assumed Phase 1: FOR 54,967 sf, NFOR 34,737 sf, Service/Mezzanine 14,734 sf. Phase 2: NFOR 9,329 sf, Service 4,000 sf. With respect to the 27,000 sf of ancillary retail space in Phase 1, TER has assumed 75% is NFOR and 25% is service. Of the NFOR space TER has assumed 10% is BOHS space and the remaining space is other NFOR. The assumptions for 1211, 1221, 1231 Gordon Street is based on the approved Zoning on the site (NC-8) which states maximum retail is 1,500 sm (16,145 sf). TER has assumed 75% is NFOR and 25% is service. Of the NFOR space, TER has assumed 10% is BOHS space and the remaining is Other NFOR. The assumptions for 671 Victoria are based on information from the City of Guelph, in which they indicate a site plan for 42,000 sf has been submitted. TER has used 25% coverage and assumed 25% is service and 75% is NFOR. Of this NFOR 10% is BOHS and the remaining is Other

26 Approximately 23.1% of downtown space is retail oriented and 70.3% is service oriented; and, The downtown currently has a vacancy rate of 6.6%. This vacancy rate is in the normal range for a balanced market. Overall, the downtown has a wide range of retail, service and institutional uses, fulfilling its roles as a multiple function district. 4.3 Primary Zone Retail Proposals Table 2, opposite, illustrates the current development applications that are active in the Primary Zone (a map of these proposals is found in Appendix A). For the purpose of this analysis, TER has made assumptions with respect to how much of the space may potentially be retail and service. TER has also made assumptions with respect to the first full year of development of each of the proposals. TER has accounted for these proposals in the analysis that follows. 4.4 Inventory of Competitive Space & Proposed Retail Space Conclusion The City of Guelph has approximately 7.1 million square feet of retail and service space of which approximately 19.1% is located within the CBD. The vacancy rate in the City of Guelph is 6.0%. This vacancy rate is within the accepted range of 5.0% - 7.5%. 13

27 TABLE 3 SILVER CREEK JUNCTION RETAIL MARKET DEMAND AND IMPACT ANALYSIS STUDY AREA POPULATION LEVELS ( Primary Zone City of Guelph 126, , , ,600 Total Primary Zone 126, , , ,600 Period Change 5,000 4,600 18,000 Annual Growth Rate 1.3% 1.8% 2.7% Secondary Zone Town of Erin 11,200 11,500 11,900 14,200 Township of Guelph-Eramosa 12,800 13,400 13,800 15,100 Township of Puslinch 7,300 7,700 8,200 9,600 Township of Centre Wellington (portion) 26,900 29,100 31,300 37,500 Town of Milton (portion) 3,700 4,200 4,600 4,600 Town of Halton Hills (portion) 13,900 15,000 15,700 17,100 Total Secondary Zone 75,800 80,900 85,500 98,100 Period Change 5,100 4,600 12,600 Annual Growth Rate 2.2% 2.8% 2.9% Total Study Area 201, , , ,700 Period Change 10,100 9,200 30,600 Annual Growth Rate 1.7% 2.2% 2.8% Source: TATE ECONOMIC RESEARCH INC. 1) See Appendix B for the population projections methodology.

28 5 Population Levels This section of the report presents the population forecasts for the Study Area Zones. The population forecast incorporated into this analysis is based on published forecasts and TER assumptions. 5.1 Study Years TER used 2011 Census data to establish 2011 population levels. The population levels for 2014, 2016 and 2021 were forecast by TER as summarized in Table 3 (the details of the population projections are found in Appendix B). The year 2011 is the base year for the market demand and impact analysis, with 2014 assumed to be the first full year of operation for the proposed retail development in Sub Area 1 at Silver Creek Junction. Therefore, we have assumed that the retail development in Sub Area 1 at Silver Creek Junction will be completed and in operation before the end of Population Forecast The projections illustrated opposite were adjusted for 2011 Census undercoverage. The population of the Primary Zone is forecast to increase from 126,000 in 2011 to 153,600 by The population of the Secondary Zone is forecast to increase from 75,800 in 2011 to 98,100 by Population Levels Conclusion Overall, the Study Area is forecast to experience an increase in population from 201,800 in 2011 to 251,700 by

29 TABLE 4 SILVER CREEK JUNCTION RETAIL MARKET DEMAND AND IMPACT ANALYSIS STUDY AREA NON FOOD ORIENTED RETAIL (NFOR) EXPENDITURE POTENTIAL 2011 Province of Ontario - Average Per Capita NFOR Expenditures Per Capita NFOR Expenditures (1 $5, Dollars ($Millions) Primary Zone Income Index to Province ( NFOR Expenditure Index ( Per Capita NFOR Expenditures (4 $5,520 $5,770 $5,935 $6,350 Population (5 126, , , ,600 Total Adjusted NFOR Potential $695.5 $755.9 $804.8 $975.4 Secondary Zone Income Index to Province ( NFOR Expenditure Index ( Per Capita NFOR Expenditures (4 $6,035 $6,305 $6,490 $6,940 Population (5 75,800 80,900 85,500 98,100 Total Adjusted NFOR Potential $457.5 $510.1 $554.9 $680.8 TOTAL STUDY AREA Total NFOR Potential ($ Millions) $1,153.0 $1,266.0 $1,359.7 $1,656.2 Source: TATE ECONOMIC RESEARCH INC. 1) Per capita expenditure based on Statistics Canada, Retail Trade data. 2) Based on Statistics Canada, Census of Canada ) Based on the income relationship between the Province and Study Area residents using the NFOR regression equation of y= (x), where x is the income index. 4) Forecast to increase at 1.5% per annum, excluding inflation. 5) Repeated from Table 3.

30 6 Non Food Oriented Retail (NFOR) Expenditure Potential In this section of the report, TER has calculated the total Non Food Oriented Retail (NFOR) expenditure potential for the Study Area. 6.1 NFOR Expenditure Potential For the purpose of this analysis, the NFOR category includes the following merchandise categories: Department Stores General Merchandise Furniture, Home Furnishings & Electronics Pharmacies & Personal Care Clothing, Shoes & Accessories Building & Outdoor Home Supplies Miscellaneous Retailers The NFOR category utilized in this study excludes the merchandise categories which are included in the Food Oriented Retail (FOR) category, namely: Supermarkets, Other Grocery Stores and Other Food Stores. In addition, services such as fast food, restaurants, entertainment and personal services are also excluded from the NFOR category. As indicated in the upper portion of Table 4, TER estimates that, on average, each Ontario resident spends approximately $5,599 at NFOR stores. Based on previous market trends, TER has forecast that these NFOR expenditures will increase at 1.5% per year, exclusive of inflation. Table 4 also includes the total NFOR expenditure volume of the Study Area residents over the study period. The Table indicates that Study Area residents currently spend $1,153.0 million annually at NFOR stores in the Primary Zone, elsewhere in the Study Area and beyond. This expenditure potential is forecast to increase to $1,656.2 million by 2021, excluding inflation, as a result of population and expenditure growth. 15

31 TABLE 5 SILVER CREEK JUNCTION RETAIL MARKET DEMAND AND IMPACT ANALYSIS STUDY AREA FOOD ORIENTED RETAIL (FOR) EXPENDITURE POTENTIAL 2011 Province of Ontario - Average Per Capita FOR Expenditures Supermarkets (1 $1,905 Convenience and Specialty Food Stores (1 $279 Per Capita FOR Expenditures $2, Dollars ($Millions) Primary Zone Income Index to Province ( FOR Expenditure Index ( Per Capita FOR Expenditures (4 $2,175 $2,210 $2,230 $2,285 Population (5 126, , , ,600 Total Adjusted FOR Potential $274.1 $289.5 $302.4 $351.0 Secondary Zone Income Index to Province ( FOR Expenditure Index ( Per Capita FOR Expenditures (4 $2,220 $2,255 $2,275 $2,330 Population (5 75,800 80,900 85,500 98,100 Total Adjusted FOR Potential $168.3 $182.4 $194.5 $228.6 TOTAL STUDY AREA Total FOR Potential ($ Millions) $442.4 $471.9 $496.9 $579.6 Source: TATE ECONOMIC RESEARCH INC. 1) Per capita expenditure based on Statistics Canada, Retail Trade data. 2) Based on Statistics Canada, Census of Canada ) Based on the income relationship between the Province and Study Area residents using the FOR regression equation of y= (x), where x is the income index. 4) Forecast to increase at 0.5% per annum, excluding inflation. 5) Repeated from Table 3.

32 7 Food Oriented Retail (FOR) Expenditure Potential In this section of the report, TER has calculated the total Food Oriented Retail (FOR) expenditure potential for the Study Area. 7.1 FOR Expenditure Potential The FOR category utilized by TER includes the following merchandise categories: Supermarkets and Other Grocery Stores; Convenience Stores; and, Specialty food stores such as meat markets, fish and seafood markets, fruit and vegetable markets. As indicated in the upper portion of Table 5, TER estimates that, on average, each Ontario resident spends approximately $2,184 at FOR stores. Based on previous market trends, TER has forecast that these FOR expenditures will increase at 0.5% per year, exclusive of inflation. Table 5 also includes the total FOR expenditure volume of Study Area residents over the study period. The table indicates that Study Area residents currently spend $442.4 million annually in FOR stores in the Primary Zone, elsewhere in the Study Area and beyond. This expenditure potential is forecast to increase to $579.6 million by 2021, excluding inflation, as a result of population and expenditure growth. 16

33 8 Other NFOR Market Demand and Impact Analysis This section of the report examines the market demand for and potential impact of modifying the current Silver Creek Junction retail permissions to allow 245,000 square feet of retail store space (hereafter referred to as Other NFOR space) in Sub Area 1 without phasing or timing restrictions. TER has defined Other NFOR space to include the following retail categories: General Merchandise (excluding WMC) Furniture, Home Furnishings & Electronics 8.1 Development Timing Pharmacies & Personal Care Miscellaneous Retailers Clothing, Shoes & Accessories Building & Outdoor Home Supplies Silvercreek is requesting a modification to the existing permissions to remove the phasing and timing restrictions with respect to the development of the retail store space. For the purposes of our analysis, TER has assumed that the retail space in Sub Area 1 will be in operation in Therefore, TER has analyzed the first full year of operation of It is our understanding that the phasing of the ancillary retail store space was included in the settlement to allow the development of intensification site to occur, in particular, the redevelopment of Willow West Mall, as well as the development of the existing mixed use nodes. It is the opinion of TER that the development of Silver Creek Junction without timing restrictions will not delay the development of other sites in the City of Guelph. This is based on the following observations Willow West Mall At the time of the mediated settlement, Willow West Mall had not yet commenced its renovation and not signed any anchor tenants for the new space. As of March 2012, Willow West Corners (rebranded) has been renovated and has signed a 76,400 square foot Leon s, an 18,800 square foot Pet Smart and a 6,000 square foot Moores Clothing for Men. With the anchors in place, including the existing No Frills supermarket, Willow West Corners will be able to lease out the remaining vacant ancillary units. Woodlawn / Woolwich Street Node This node is largely built out with the recent expansion of the Wal-Mart and completion of the ancillary retail space on the SmartCentres site. Gordon / Clair Node This node continues to experience new development, including a new application for development that has already secured an anchor tenant (Fieldgate Developments with Sobeys). 17

34 TABLE 6 SILVER CREEK JUNCTION RETAIL MARKET DEMAND AND IMPACT ANALYSIS OTHER NFOR MARKET DEMAND AND IMPACT ANALYSIS 2011 Dollars ($Millions) Primary Zone NFOR Expenditure Potential (1 $695.5 $755.9 $804.9 $975.4 Other NFOR Share % (2 76.0% 76.0% 76.0% 76.0% Other NFOR Share $ $528.6 $574.5 $611.7 $741.3 Primary Zone Share % (2 91.0% 91.5% 91.5% 91.5% Primary Zone Share $ $481.0 $525.7 $559.7 $678.3 Secondary Zone NFOR Expenditure Potential (1 $457.6 $510.1 $554.9 $680.8 Other NFOR Share % (2 78.0% 78.0% 78.0% 78.0% Other NFOR Share $ $356.9 $397.9 $432.8 $531.0 Primary Zone Share % (2 35.0% 36.0% 36.0% 36.0% Primary Zone Share $ $124.9 $143.2 $155.8 $191.2 Total Study Area Other NFOR Expenditures $885.5 $972.4 $1,044.5 $1,272.3 Total Primary Zone Other NFOR Sales $605.9 $668.9 $715.5 $869.5 Inflow % (3 17.0% 17.5% 17.5% 17.5% Inflow $ $124.1 $141.9 $151.8 $184.4 Total Primary Zone Other NFOR Sales $730.0 $810.8 $867.3 $1,053.9 Primary Zone Other NFOR Space (4 2,497,900 2,497,900 2,497,900 2,497,900 Silvercreek Development Proposed Space 245, , ,000 Other Proposed NFOR (5 201, , ,300 Total Existing and Proposed NFOR 2,497,900 2,944,000 3,211,200 3,211,200 Other NFOR Sales Per Square Foot (6 $290 $275 $270 $330 Percent Change From Current -5.2% -6.9% 13.8% Source: TATE ECONOMIC RESEARCH INC. 1) Repeated from Table 5. 2) TER estimate based on previous research conducted in the Study Area, an examination of the inventory of competitive space and TER professional judgement. 3) TER estimate based on previous research conducted in the Study Area, an examination of the inventory of competitive space, and TER professional 4) Based on TER inventory. 5) Taken from Table 2. 6) Sales rounded to the nearest $5.00, per square foot.

35 Paisley / Imperial Node An application has been made to zone additional lands to accommodate a proposed Costco and ancillary retail space. It is our understanding that Costco is a confirmed anchor tenant. For the purpose of this analysis, TER has examined the introduction of all 245,000 square feet of Other NFOR space in The following analysis will examine the retail market demand and potential impact of the development of Silver Creek Junction. 8.2 Other NFOR Share of Total NFOR Expenditures Section 6.1 and Table 4 outlined the calculation of the total Study Area NFOR potential. Statistics Canada Retail Trade information, the results of previous research conducted in Guelph, an examination of the inventory of competitive space and TER s professional judgment resulted in the estimate of the Other NFOR share indicated in our analysis and presented in Table 6. The Other NFOR share of NFOR expenditures in the 2011 base year is estimated to be 76.0% in the Primary Zone and 78.0% in the Secondary Zone. These shares are expected to remain constant over the Study Period Other NFOR Market Demand Analysis In the 2011 base year, based on previous research conducted in the Study Area and TER s professional judgement, it is estimated that the existing inventory of Other NFOR space in the Primary Zone captures: 91.0% of Primary Zone residents Other NFOR expenditures; and, 35.0% of Secondary Zone residents Other NFOR expenditures. Currently, inflow of expenditures from non-study Area residents is estimated at 17.0% of total sales volumes. The TER analysis indicates that the existing 2,497,900 square feet of Other NFOR space located in the Primary Zone is estimated to be performing at $290 per square foot. This level is considered by TER to be within industry averages. In 2014, it is estimated that the introduction of the proposed 245,000 square feet of Other NFOR space at Silver Creek Junction, as well as the assumed 201,100 square feet of Other NFOR space in future developments, will increase the Primary Zone capture rates to: 91.5% of Primary Zone residents Other NFOR expenditures; and, 36.0% of Secondary Zone residents Other NFOR expenditures. 3 TER has assumed there will be an increase in the Warehouse Membership Club (WMC) portion of General Merchandise expenditures. This increase is assumed to come at the expense of the Department store share of NFOR expenditures as opposed to the Other NFOR share of expenditures. 18

36 TABLE 7 SILVER CREEK JUNCTION RETAIL MARKET DEMAND AND IMPACT ANALYSIS OTHER NFOR DIRECTIONAL IMPACT ANALYSIS 2011 Dollars ($Millions) Primary Zone Downtown Gordon & Clair Woodlawn & Woolwich Kortright & Gordon Silvercreek & Willow Stone & Edinburgh Eramosa & Stevenson Speedvale & Stevenson Woodlawn Node Northwest Guelph (7 Northeast Guelph South Guelph Other Proposed NFOR Space (6 Proposed Silvercreek Other NFOR Space ( Sales From Study Area Residents (1 $605.9 $52.1 $13.3 $109.1 $10.3 $53.3 $146.6 $30.9 $6.4 $12.7 $106.6 $30.3 $33.9 n.a. n.a. Percent Market Share Primary Zone ( % 8.6% 2.2% 18.0% 1.7% 8.8% 24.2% 5.1% 1.1% 2.1% 17.6% 5.0% 5.6% n.a. Plus Inflow Estimate (3 17.0% 12.0% 15.0% 20.0% 12.0% 12.0% 25.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% n.a. n.a. TOTAL SALES (4 $729.8 $59.2 $15.6 $136.4 $11.7 $60.6 $195.5 $35.1 $7.3 $14.4 $121.1 $34.4 $38.5 n.a. n.a. Square Footage 2,497, ,500 31, ,200 46, , ,710 43,800 35,200 72, , , ,700 n.a. n.a. Sales per sq. ft. (5 $290 $215 $490 $445 $250 $245 $385 $800 $205 $200 $210 $230 $195 n.a. n.a Sales From Study Area Residents (1 $668.9 $48.3 $12.4 $101.1 $9.6 $49.4 $136.0 $28.7 $5.9 $11.8 $98.9 $28.1 $31.5 $48.3 $58.8 Percent Market Share Primary Zone ( % 7.2% 1.8% 15.1% 1.4% 7.4% 20.3% 4.3% 0.9% 1.8% 14.8% 4.2% 4.7% 7.2% 8.8% Plus Inflow Estimate (3 17.5% 12.0% 15.0% 20.0% 12.0% 12.0% 25.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 20.0% 20.0% TOTAL SALES (4 $810.8 $54.9 $14.6 $126.4 $10.9 $56.1 $181.3 $32.6 $6.7 $13.4 $112.4 $31.9 $35.8 $60.3 $73.5 Square Footage 2,944, ,500 31, ,200 46, , ,710 43,800 35,200 72, , , , , ,000 Sales per sq. ft. (5 $275 $200 $460 $410 $235 $225 $355 $745 $190 $185 $195 $210 $180 $300 $300 Percent Change Sales per sq. ft. -5.2% -7.0% -6.1% -7.9% -6.0% -8.2% -7.8% -6.9% -7.3% -7.5% -7.1% -8.7% -7.7% 2016 Sales From Study Area Residents (1 $715.5 $47.9 $11.4 $96.6 $9.3 $47.9 $126.6 $26.5 $5.7 $11.4 $97.3 $27.2 $30.8 $114.5 $62.2 Percent Market Share Primary Zone ( % 6.7% 1.6% 13.5% 1.3% 6.7% 17.7% 3.7% 0.8% 1.6% 13.6% 3.8% 4.3% 16.0% 8.7% Plus Inflow Estimate (3 17.5% 12.0% 15.0% 20.0% 12.0% 12.0% 25.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 20.0% 20.0% TOTAL SALES (4 $869.4 $54.4 $13.4 $120.8 $10.6 $54.4 $168.8 $30.1 $6.5 $13.0 $110.6 $30.9 $35.0 $143.1 $77.8 Square Footage 3,211, ,500 31, ,200 46, , ,710 43,800 35,200 72, , , , , ,000 Sales per sq. ft. (5 $270 $200 $420 $390 $225 $220 $330 $685 $185 $180 $190 $205 $180 $305 $320 Percent Change Sales per sq. ft. -6.9% -7.0% -14.3% -12.4% -10.0% -10.2% -14.3% -14.4% -9.8% -10.0% -9.5% -10.9% -7.7% 2021 Sales From Study Area Residents (1 $869.5 $58.3 $13.9 $117.4 $11.3 $58.3 $153.9 $32.2 $7.0 $13.9 $118.3 $33.0 $37.4 $139.1 $75.6 Percent Market Share Primary Zone ( % 6.7% 1.6% 13.5% 1.3% 6.7% 17.7% 3.7% 0.8% 1.6% 13.6% 3.8% 4.3% 16.0% 8.7% Plus Inflow Estimate (3 17.5% 12.0% 15.0% 20.0% 12.0% 12.0% 25.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 20.0% 20.0% TOTAL SALES (4 $1,057.0 $66.3 $16.4 $146.8 $12.8 $66.3 $205.2 $36.6 $8.0 $15.8 $134.4 $37.5 $42.5 $173.9 $94.5 Square Footage 3,211, ,500 31, ,200 46, , ,710 43,800 35,200 72, , , , , ,000 Sales per sq. ft. (5 $330 $245 $515 $475 $275 $265 $400 $835 $225 $220 $230 $250 $215 $370 $385 Percent Change Sales per sq. ft. 13.8% 14.0% 5.1% 6.7% 10.0% 8.2% 3.9% 4.4% 9.8% 10.0% 9.5% 8.7% 10.3% Source: TATE ECONOMIC RESEARCH INC. 1) Total Study Area expenditure calculated in Table 6. Distribution of sales based on previous research conducted in the Study Area. 2) TER estimate based on previous research conducted in the Study Area and TER professional judgement. 3) TER estimate based on an examination of the inventory of competitive space and previous research conducted in the Study Area. 4) Total sales may not match Table 6 due to rounding. 5) Sales rounded to the nearest $5.00, per square foot. 6) Ancillary NFOR entry sales per square foot level based on TER estimate. 7) At the time of this analysis, the Paisley & Imperial Mixed Use Node had 2,900 square feet of Other NFOR space. This space is considered by TER to be too small to run a directional impact on and therefore has been included in the Northwest Guelph node.

37 These capture rates are expected to remain constant over the remainder of the study period despite an additional increase in proposed space in Inflow is expected to increase to 17.5%. Total Other NFOR sales volumes of the 2,944,000 square feet of existing and proposed Other NFOR space in 2014 are forecast at $810.8 million resulting in the average Primary Zone Other NFOR sales level of $275 per square foot. In 2016, TER estimates that the sales levels of the 3,211,210 square feet of existing and proposed Other NFOR space will perform at $270 per square foot increasing to $330 per square foot by Based on the preceding analysis, there is sufficient demand to warrant the development of the 245,000 square feet of Other NFOR space in Sub Area 1 at Silver Creek Junction by Other NFOR Market Impact Analysis Table 7, opposite, examines the impact of the introduction of the 245,000 square feet of Other NFOR space in Sub Area 1 at the Silver Creek Junction and the assumed 201,100 square feet of Other NFOR space in future developments in It also examines the impact of an additional 267,200 square feet of Other NFOR in TER estimates that the proposed 245,000 square feet of Other NFOR space at Silver Creek Junction and the additional 468,300 square feet of Other NFOR space (201,100 square feet in 2014 and 267,200 square feet in 2016) will initially operate at approximately $300 per square foot. The introduction of this space in 2014 and 2016 is forecast to result in a decline of the overall Other NFOR sales from $290 per square foot in 2011 to $275 per square foot in 2014 and $270 per square foot by It is the opinion of TER that the impacts of the proposed 713,300 square feet of Other NFOR space in 2014 and 2016 will be spread out over all nodes in the Primary Zone. This assumption is based on the geographic distribution of the proposed space in the Primary Zone as well as the relatively central location of Silver Creek Junction. In 2014, TER estimates that the existing nodes will experience declines ranging from 6.0% to 8.7%. In 2016, TER forecasts further declines in the sales per square foot levels in all nodes as a result of the additional space introduced into the market. TER estimates that the downtown (Central Business District) will experience a decline in its sales performance level from $215 per square foot in 2011 to $200 per square foot in 2014 and The sales performance level is forecast to increase to $245 per square foot by It is the opinion of the TER that the resulting sales per square foot performance levels are within industry averages and will not result in closures in the downtown. 19

38 8.5 Other NFOR Market Demand and Impact Analysis Conclusion There is sufficient demand to warrant the development of 245,000 square feet of Other NFOR space in Sub Area 1 at Silver Creek Junction without phasing and timing restrictions. It is the opinion of TER that modifying the current retail permissions at Silver Creek Junction to permit 245,000 square feet of retail space can be justified without detriment to the overall function or economic vitality of the Central Business District or the key component functions that contribute to the CBD s overall vitality. Furthermore, it is the opinion of TER that the Commercial and Mixed Use policy objectives of the Official Plan will not be compromised. 20

39 TABLE 8 SILVER CREEK JUNCTION RETAIL MARKET DEMAND AND IMPACT ANALYSIS SUPERMARKET AND GROCERY MARKET DEMAND AND IMPACT ANALYSIS 2011 Dollars ($Millions) Primary Zone FOR Expenditure Potential (1 $274.1 $289.5 $302.4 $351.0 Supermarket Share % (2 85.0% 88.0% 92.0% 92.0% Supermarket Share $ $233.0 $254.8 $278.2 $322.9 Primary Zone Share % (2 98.1% 98.1% 98.1% 98.1% Primary Zone Share $ $228.7 $250.1 $273.0 $316.9 Secondary Zone FOR Expenditure Potential (1 $168.3 $182.4 $194.5 $228.6 Supermarket Share % (2 85.0% 87.0% 90.0% 90.0% Supermarket Share $ $143.1 $158.7 $175.1 $205.7 Primary Zone Share % (2 31.4% 31.4% 35.0% 35.0% Primary Zone Share $ $44.9 $49.8 $61.3 $72.0 Total Study Area Supermarket Expenditures $376.1 $413.5 $453.3 $528.6 Total Primary Zone Supermarket Sales $273.6 $299.9 $334.3 $388.9 Transferred to Wal-Mart Food Component % (3 4.5% 4.5% 4.5% 4.5% Transferred to Wal-Mart Food Component $ $12.3 $13.5 $15.0 $17.5 Transferred to WMC % (3 n.a. n.a. 7.0% 7.0% Transferred to WMC $ n.a. n.a. $23.4 $27.2 Total Primary Zone Supermarket Sales less WMC transfer $261.3 $286.4 $295.9 $344.2 Inflow % (4 10.5% 10.5% 11.0% 11.0% Inflow $ $18.3 $33.6 $36.6 $42.5 Total Primary Zone Supermarket Sales $291.9 $320.0 $332.4 $386.7 Primary Zone Supermarket Space (5 451, , , ,500 Proposed Silvercreek Supermarket 60,000 60,000 60,000 Proposed Gordon & Clair - Sobeys (6 51,000 51,000 51,000 Proposed Paisley & Imperial Zehrs Expansion (6 17,000 17,000 17,000 Proposed Gordon & Clair - Loblaws (6 53,100 53,100 Proposed Starwood & Watson - Loblaws (6 54,700 54,700 Total Proposed & Existing Supermarket Space 451, , , ,300 Supermarket Sales Per Square Foot (7 $645 $550 $485 $565 Percent Change From Current -14.7% -24.8% -12.4% Source: TATE ECONOMIC RESEARCH INC. 1) Repeated from Table 6. 2) TER estimate based on previous research conducted in the Study Area, an examination of the inventory of competitive space and TER professional judgement. 3) TER Estimate 4) TER estimate based on previous research conducted in the Study Area, an examination of the inventory of competitive space, and TER professional judgement. 5) Based on TER inventory. 6) Taken from Table 2. 7) Sales rounded to the nearest $5.00, per square foot.

40 9 Supermarket Demand and Impact Analysis This section of the report examines the market demand for and potential impact of modifying the current Silver Creek Junction retail permissions to allow a 60,000 square foot supermarket in Sub Area Market Demand and Impact Methodology In order to undertake this analysis, the supermarket & grocery (hereafter referred to as supermarket) share of the total FOR expenditure potential has been calculated for the base year and future years. A Study Area share of the Study Area residents supermarket expenditures was estimated based on previous research conducted in the Study Area and TER s professional judgement. An inflow factor was then applied to account for expenditures by persons residing outside the Study Area, based on the results of previous research conducted in the Study Area and TER s professional judgement. These inputs resulted in a 2011 sales estimate for the existing supermarkets in the Primary Zone. This analysis also estimated the future sales of a proposed supermarket at Silver Creek Junction as well as the three other proposed supermarkets in the Primary Zone. All sales levels are TER estimates. 9.2 Supermarket Share of Total FOR Expenditures Section 7.1 and Table 5 outline the calculation of the total Study Area FOR potential. Statistics Canada Retail Trade information, previous research conducted in the Study Area, an examination of the inventory of competitive space and TER s professional judgement resulted in the estimate of the supermarket share of FOR expenditures in the 2011 base year as illustrated in Table 8. The supermarket share of FOR expenditures in the 2011 base year is estimated to be 85.0% in the Primary and Secondary Zones. In 2014, the supermarket share of FOR expenditures is forecast to increase to 88.0% in the Primary Zone and 87.0% in the Secondary Zone. In 2016, the supermarket share is forecast to further increase to 92.0% and 90.0% in the Primary and Secondary Zones respectively. 9.3 Supermarket Demand Analysis In the 2011 base year, based on previous research conducted in the Study Area and TER s professional judgement, it is estimated that the existing supermarkets in the Primary Zone capture: 98.1% of Primary Zone residents supermarket expenditures; and, 31.4% of Secondary Zone residents supermarket expenditures. 21

41 TER has assumed that approximately 4.5% of Study Area residents supermarket expenditures are being and will continue to be transferred to the Wal-Mart Supercentre at Woodlawn Road W. and Woolwich Street. Currently, inflow of expenditures from non-study Area residents is estimated at 10.5% of total sales volumes. The TER analysis indicates that the sales per square foot levels of the ten Primary Zone supermarkets combined is estimated to be $645 per square foot. TER estimates that the Study Area capture rates will remain the same in 2014 after the introduction of a supermarket at Silver Creek Junction, the expansion of Zehrs at Paisley Road and Imperial Road, and the introduction of the Sobeys at Clair Road and Gordon Street. Inflow is also expected to remain at 10.5%. Total Study Area supermarket sales are forecast to increase to $320.0 million from $291.9 in The overall sales per square foot performance level of the existing and proposed supermarkets are forecast to decrease to $550 per square foot. By 2016, TER has assumed the Costco proposed at Paisley Street and Imperial Road will be in operation and therefore, in addition to the 4.5% transfer of expenditures to the Wal-Mart Supercentre, TER has also assumed there will also be a 7.0% transfer of expenditures to the Costco. TER estimates that the Primary Zone capture rate will remain at 98.1% and the Secondary Zone capture rate will increase to 35.0%. Inflow is expected to increase to 11.0% as a result of the additional two supermarkets introduced into the market. The overall sales per square foot performance level of the existing and proposed supermarkets are forecast to decrease to $485 per square foot in This sales decrease is a function of the introduction of the proposed Costco, as well as the introduction of two additional supermarkets totalling 107,800 square feet. This sales performance level is forecast to increase to $565 per square foot by Based on this analysis, there is sufficient market demand to warrant a 60,000 square foot supermarket at Silver Creek Junction in Supermarket Impact Analysis Table 9, on the following page, examines the impact of a proposed 60,000 square foot supermarket in Sub Area 1 at Silver Creek Junction in 2014, the introduction of the other proposed supermarkets in 2014 and 2016, as well as the impact of the proposed Costco in The following observations are made with respect to the impact analysis: TER has assumed that each of the proposed supermarkets will perform at approximately $450 per square foot when initially introduced into the market; 22

42 TABLE 9 SILVER CREEK JUNCTION RETAIL MARKET DEMAND AND IMPACT ANALYSIS SUPERMARKET DIRECTIONAL IMPACT ANALYSIS 2011 Dollars ($Millions) Primary Zone Food Basics - Clairfield Commons Food Basics - Bullfrog Mall Food Basics Silvercreek N No Frills - 35 No Frills - Willow Harvard West Mall Freshco - Speedvale Centre Metro - Edinburgh Mkt. Pl. Zehrs Eramosa Zehrs - Hartsland Market Square Zehrs Paisley Gordon & Clair Silvercreek - Sobeys (6 Junction (6 Proposed Supermarkets Gordon & Clair - Loblaws (6 Starwood & Watson - Loblaws ( Sales From Study Area Residents (1 $261.3 $14.1 $22.2 $16.5 $21.7 $28.0 $22.7 $20.1 $31.6 $38.4 $45.9 n.a. n.a. n.a. n.a. Percent Market Share Primary Zone ( % 5.4% 8.5% 6.3% 8.3% 10.7% 8.7% 7.7% 12.1% 14.7% 17.6% n.a. n.a. n.a. n.a. Plus Inflow Estimate (3 10.5% 12.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 12.0% n.a. n.a. n.a. n.a. TOTAL SALES (4 $291.7 $16.0 $24.7 $18.3 $24.1 $31.1 $25.2 $22.3 $35.1 $42.7 $52.2 n.a. n.a. n.a. n.a. Square Footage 451,500 35,000 30,600 32,000 28,900 42,100 32,100 50,700 42,100 58, ,000 n.a. n.a. n.a. n.a. Sales per sq. ft. (5 $645 $455 $805 $570 $835 $740 $785 $440 $835 $735 $520 n.a. n.a. n.a. n.a Sales From Study Area Residents (1 $286.4 $13.7 $20.3 $15.2 $19.8 $24.9 $20.9 $19.5 $27.8 $33.2 $47.0 $20.2 $23.8 n.a. n.a. Percent Market Share Primary Zone ( % 4.8% 7.1% 5.3% 6.9% 8.7% 7.3% 6.8% 9.7% 11.6% 16.4% 7.1% 8.3% n.a. n.a. Plus Inflow Estimate (3 10.5% 12.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 12.0% 12.0% 12.0% n.a. n.a. TOTAL SALES (4 $320.9 $15.6 $22.6 $16.9 $22.0 $27.7 $23.2 $21.7 $30.9 $36.9 $53.4 $23.0 $27.0 n.a. n.a. Square Footage 579,500 35,000 30,600 32,000 28,900 42,100 32,100 50,700 42,100 58, ,000 51,000 60,000 n.a. n.a. Sales per sq. ft. (5 $550 $445 $740 $530 $760 $660 $725 $430 $735 $635 $455 $450 $450 n.a. n.a. Percent Change Sales per sq. ft % -2.2% -8.1% -7.0% -9.0% -10.8% -7.6% -2.3% -12.0% -13.6% -12.5% n.a. n.a. n.a Sales From Study Area Residents (1 $295.9 $12.1 $17.2 $12.7 $16.9 $21.3 $17.5 $17.2 $24.9 $29.3 $43.2 $18.9 $22.2 $21.0 $21.7 Percent Market Share Primary Zone ( % 4.1% 5.8% 4.3% 5.7% 7.2% 5.9% 5.8% 8.4% 9.9% 14.6% 6.4% 7.5% 7.1% 7.3% Plus Inflow Estimate (3 11.0% 12.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 12.0% 12.0% 12.0% 12.0% 12.0% TOTAL SALES (4 $332.6 $13.8 $19.1 $14.1 $18.8 $23.7 $19.4 $19.1 $27.7 $32.6 $49.1 $21.5 $25.2 $23.9 $24.6 Square Footage 687,300 35,000 30,600 32,000 28,900 42,100 32,100 50,700 42,100 58, ,000 51,000 60,000 53,100 54,700 Sales per sq. ft. (5 $485 $395 $625 $440 $650 $565 $605 $375 $660 $560 $420 $420 $420 $450 $450 Percent Change Sales per sq. ft % -13.2% -22.4% -22.8% -22.2% -23.6% -22.9% -14.8% -21.0% -23.8% -19.2% n.a. n.a. n.a. n.a Sales From Study Area Residents (1 $344.2 $14.1 $20.0 $14.8 $19.6 $24.8 $20.3 $20.0 $28.9 $34.1 $50.2 $22.0 $25.8 $24.4 $25.1 Percent Market Share Primary Zone ( % 4.1% 5.8% 4.3% 5.7% 7.2% 5.9% 5.8% 8.4% 9.9% 14.6% 6.4% 7.5% 7.1% 7.3% Plus Inflow Estimate (3 11.0% 12.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 12.0% 12.0% 12.0% 12.0% 12.0% TOTAL SALES (4 $386.3 $16.0 $22.2 $16.4 $21.8 $27.6 $22.6 $22.2 $32.1 $37.9 $57.0 $25.0 $29.3 $27.7 $28.5 Square Footage 687,300 35,000 30,600 32,000 28,900 42,100 32,100 50,700 42,100 58, ,000 51,000 60,000 53,100 54,700 Sales per sq. ft. (5 $565 $455 $725 $515 $755 $655 $705 $440 $760 $655 $485 $490 $490 $520 $ % 0.0% -9.9% -9.6% -9.6% -11.5% -10.2% 0.0% -9.0% -10.9% -6.7% n.a. n.a. n.a. n.a. Source: TATE ECONOMIC RESEARCH INC. 1) Total Study Area expenditure calculated in Table 8. Distribution of sales based on previous research conducted in the Study Area and TER professional judgement. 2) Based on the results of previous research conducted in the Study Area and TER professional judgement. 3) TER estimate based on an examination of the inventory of competitive space, previous research conducted in the Study Area and TER professional judgement. 4) Total sales may not match Table 8 due to rounding. 5) Sales rounded to the nearest $5.00, per square foot. 6) Entry sales per square foot level based on TER estimate.

43 Due to the proposed introduction of multiple supermarkets over the 2014 and 2016 periods, the impacts are expected to be dispersed over all supermarkets in the Primary Zone; Overall, TER estimates that the existing supermarkets will experience declines in sales per square foot levels in the range of 2.2% to 13.6% in In 2014, the overall market performance level of $550 per square foot is an indication that there is sufficient market demand for the existing and proposed supermarkets in the Primary Zone; In 2016, TER estimates that the existing supermarkets will experience declines in their sales per square foot levels in the range of 13.2% to 23.8% from their 2011 base year levels. These impacts are a result of the introduction of four proposed supermarkets into the market as well as a Costco. In 2016, the overall market performance level of $485 per square foot is an indication that there is sufficient market demand for the existing and proposed supermarkets in the Primary Zone; Overall, it is the opinion of TER that no supermarkets will be in jeopardy of closing as a result of a proposed 60,000 square foot supermarket in Sub Area 1 at Silver Creek Junction. 9.5 Supermarket Demand and Impact Analysis Conclusions There is sufficient demand to warrant the development of a 60,000 square foot supermarket in Sub Area 1 at Silver Creek Junction in conjunction with the other proposed supermarkets as well as the introduction of a Costco. It is the opinion of TER that modifying the current retail permissions at Silver Creek Junction to permit a 60,000 square foot supermarket can be justified without resulting in the closure of existing supermarkets in the Primary Zone. Furthermore, it is the opinion of TER that modifying the current retail permissions at Silver Creek Junction to permit a 60,000 square foot supermarket can be justified without detriment to the overall function or economic vitality of the Central Business District or the key component functions that contribute to the CBD s overall vitality. Furthermore, it is the opinion of TER that the Commercial and Mixed Use policy objectives of the Official Plan will not be compromised. 23

44 10 Retail Market Demand and Impact Conclusions This report has been designed to address the requirements of the City of Guelph Official Plan, as they relate to impact studies City of Guelph Official Plan Policies An OPA and associated ZBA will be required for the proposed modifications to the Silver Creek Junction permissions. In this case, the market impact study is not required by the Official Plan because a new node is not being created or expanded. The market impact study has been requested by the City as part of the requirements for the application to be considered complete. TER s market demand and impact analysis has been designed to address the policies in the Guelph OP with respect to impact studies. The Guelph OP has the following policies with respect to amendments to existing permissions: Impact Studies Market impact, planning and infrastructure impact studies shall be submitted and approved by Council: to establish or expand a Mixed Use Node or Intensification Node beyond the designation limit boundaries as shown on Schedule 1; to exceed the retail floor area limitations within a Mixed Use Node established in policy or the number of large retail uses in policy ; to extend or enlarge a Neighbourhood Commercial Centre to provide more than 10,000 square metres (108,000 square feet) of gross leasable floor area An appropriate market impact study shall demonstrate that: the proposal can be justified without detriment to the overall function or economic vitality of the 'Central Business District' or the key component functions that contribute to the C.B.D. s overall vitality; the achievement of the City s Major Goals, the Urban Form policies or the Commercial and Mixed Use policy objectives of the Official Plan will not be compromised; and 24

45 the ability of existing designated commercial or mixed use lands to achieve their planned function will not be compromised A market impact study shall include: a) An assessment of the current market situation, and the future potential for the expansion of retail facilities in light of projected population and employment growth; b) An evaluation of the economic feasibility of the proposal on the basis of current market demand or retail market opportunity; c) An indication the scale of any adverse affects on the economic viability of the C.B.D., the key functions that contribute to the C.B.D. s overall vitality, and on any existing or planned designated commercial or mixed use lands provided for in this Plan. d) An assessment of the implications of the proposal relative to the City s approved Commercial Policy Review Study and the objectives and implementing policies of this Plan Conclusions and Recommendations Based on the results of this retail market demand and impact study, it is the opinion of TER that the proposed modifications to the current retail permissions for Silver Creek Junction can be justified without detriment to the overall function or economic vitality of the Central Business District or the key functions that contribute to the CBD s overall vitality. It is the opinion of TER that the achievement of the City s Major Goals and the Commercial and Mixed Use policy objectives of the Official Plan will not be compromised by the proposed modifications. It is the opinion of TER that the ability of existing designated commercial or mixed use lands to achieve their planned function will not be compromised by the proposed modifications. It is the professional opinion of Tate Economic Research Inc. that the Silvercreek proposal to modify the current retail permission to allow a maximum of 245,000 square feet of retail store space including a 60,000 square foot supermarket, without phasing and timing restrictions should be approved on the basis of market demand and impact. 25

46 Appendix A Inventory of Competitive Retail Space An inventory of commercial retail and service space was conducted in April 2008 and updated in February/March This appendix contains a summary of the City of Guelph inventory (sorted by node), a map of these nodes, a map of the supermarkets located in Guelph and a map of the proposed retail developments outlined in Table 2. A-1

47 TABLE A-1 SILVERCREEK JUNCTION RETAIL MARKET DEMAND AND IMPACT ANALYSIS SUMMARY OF RETAIL AND SERVICE SPACE IN PRIMARY ZONE (1 Downtown Gordon & Paisley & Woodlawn & Kortright & Silvercreek & Stone & Eramosa & Speedvale & Woodlawn Northwest Northeast South Total Primary Guelph Clair Imperial Woolwich Gordon Willow Edinburgh Stevenson Stevenson Node Guelph Guelph Guelph Zone Nodes Percent Distribution Food Oriented Retail (FOR) Supermarkets 0 35, , ,900 74,100 50,700 72,700 32, , % Convenience & Specialty Food Stores 41, ,600 3,600 16,300 12,800 16,500 1,800 4, ,700 48,800 20, , % Sub-Total Food Oriented Retail (FOR) 41,800 35, ,600 3, ,200 86,900 67,200 74,500 36, ,700 48,800 20, , % Non Food Oriented Retail (NFOR) Department Stores , ,700 58, , % General Merchandise 5, ,400 4,100 18,800 91,400 7,800 14, ,100 5,200 51, , % Clothing, Shoes & Accessories 80, ,700 27,500 3,600 49, , ,000 5,000 4, , % Furniture, Home Furnishings & Electronics 65,300 1, ,500 6,000 94,900 89, , ,200 58,200 43, , % Pharmacies & Personal Care Stores 23,300 20,600 1,200 2,600 10,200 23,100 39,900 31,200 5,200 4,700 27,000 11,900 6, , % Building & Outdoor Home Supplies 1,800 7, ,600 13,300 3,500 3, , ,600 17,900 45, , % Miscellaneous Retailers 92,500 2, ,300 9,400 53, ,300 4,200 15,200 5, ,900 36,200 46, , % Automotive 4, , , ,000 22,900 16, , % Sub-Total Non Food Oriented Retail (NFOR) 272,500 31,800 2, ,200 46, , , ,000 35,200 72, , , ,700 2,966, % Other Retail & Service Space Liquor, Beer & Wine 1,900 17, ,400 13, , , ,000 68, % Food Services 210,000 15,000 5,700 26,900 38,700 32,900 96,900 11,400 10,100 47, ,900 51,400 67, , % Personal Services 58, ,000 5,200 12,800 13,200 19,700 3,300 5, ,600 24,800 10, , % Financial & Real Estate Services 101,600 20,400 16,100 10,100 20,400 19,400 33,400 6,800 7,600 12,600 81,600 25,400 3, , % Other Services 586,700 2,000 6,600 13,400 48,400 42,200 59,400 45,400 6, , , , ,300 1,757, % Sub-Total Other Retail & Service Space 958,600 55,500 32,400 55, , , ,400 66,900 41, , , , ,300 3,084, % Total Occupied Retail & Service Space 1,272, , , , , ,900 1,038, , , ,100 1,238, , ,200 6,725, % Vacant 90,400 2,500 10,100 7,100 6,500 75,600 49,300 8,300 2,800 28, ,400 17,200 25, , % Vacancy Rate (%) 6.6% 2.0% 6.8% 1.3% 2.3% 14.4% 4.5% 3.3% 2.4% 9.8% 7.7% 3.6% 4.3% 6.0% Total Retail & Service Space 1,363, , , , , ,500 1,087, , , ,500 1,342, , ,100 7,153, % Percent Distribution 19.1% 1.7% 2.1% 7.7% 3.9% 7.3% 15.2% 3.5% 1.6% 4.0% 18.8% 6.7% 8.4% 100.0% Source: TATE ECONOMIC RESEARCH INC. 1) Rounded to the nearest 100 square feet.

48 COMMERCIAL RETAIL NODES 1. Downtown Guelph 2. Gordon & Clair 3. Paisley & Imperial 4. Woodlawn & Woolwich 5. Kortright & Gordon 6. Silvercreek & Willow 7. Stone & Edinburgh 8. Eramosa & Stevenson 9. Speedvale & Stevenson 10. Woodlawn Node 11. Northwest Guelph 12. Northeast Guelph 13. South Guelph 14. Watson Pkwy & Starwood (Undeveloped Lands) Silver Creek Junction Primary Zone Boundary

49 TABLE A-2 SILVER CREEK JUNCTION RETAIL MARKET DEMAND AND IMPACT ANALYSIS ACTIVE COMMERCIAL APPLICATIONS Map Key Node/Location Total FOR NFOR Service Other Square Feet (Rounded to the Nearest 100) 0 Woodlawn Rd. W. - 6 & 7 Developments (1 11,000 11, Paisley Rd. - Armel Corporation (2 130,000 17,000 85,000 28, Gordon St. S. - FCHT Holdings (Ontario) (3 146, ,000 96, Clair Road W. - Fieldgate/Sobeys Capital (4 87,100 51,000 27,000 9, Wellington St. W Ontario Inc. (5 37,700 15,000 5,200 17, Starwood Dr. - KLM Planning Partners Inc. (6 11,500 11, Gordon St. - Astrid J Clos Planning Consultants (7 17,400 13,100 4, ,000 68, , ,400 17, Woodlawn Rd. E. - Astrid J Clos Planning Consultants (8 20,000 8,000 12, Paisley Rd. - Armel Corporation (9 297, ,000 38, , Gordon St. S. - Westminster Market - Phase 2 (10 114,000 53,100 37,300 23, Watson Parkway N. - Loblaw Properties Ltd. - Phase 1 (11 131,200 54,700 55,000 21, Watson Parkway N. - Loblaw Properties Ltd. - Phase 2 (11 13, ,300 4, , 1221, 1231 Gordon St. - Erikam Investments (12 16, ,100 4, Victoria St. N. - Astrid J Clos Planning Consultants (13 42, ,500 10, , , , , ,000 Source: TATE ECONOMIC RESEARCH INC. 1) There is approximately 11,000 square feet of space under construction. 2) West Hills Shopping Centre Phase 2 and 3. Based on information from West Hills Commercial Node Expansion Traffic Impact Study, November TER has assumed that the Zehrs will expand by 17,000 sf. Of the remaining space TER assumes approximately 75% will be retail and the remainder service. 3) The TER assumptions are based on a site plan posted on the FCHT website. 4) TER assumptions are based on Guelph report # TER has assumed 75% of the non supermarket space will be retail oriented. 5) TER assumptions are based on Guelph report # The report states there will be a 17,500 sf organic food store. TER has assumed 75% of the remaining space will be retail oriented. 6) TER assumptions are based on Guelph Notice of Complete Application. TER has assumed all of the space will be service oriented. 7) TER assumptions are based on Guelph Public Meeting Notice. TER has assumed 75% of the space will be retail oriented. 8) TER assumptions are based on Guelph Notice of Complete Application. TER has assumed 40% of the space will be retail oriented. 9) TER assumptions based on information from West Hills Commercial Node Expansion Traffic Impact Study, November TER has assumed there will be a 145,000 sf Costco. Of the remaining space approximately 75% will be retail and the remainder service. 10) The assumptions for the Phase 2 Westminster Market are from the City of Guelph Council Report dated November 3, This report states the supermarket has been reduced from 161,500 sf to 113,929 sf. Based on the Kircher Research Associates reports for the Gordon & Clair supermarket (using the Phase 1 size of 140,000 sf) and the Kircher Research Associates Starwood & Watson report (150,000 sf), TER has assumed that 46.6% of the proposed 114,000 sf store is food, 32.7% is NFOR, and 20.7% is service and mezzanine space. 11) The assumptions for 115 Watson Road North is based on Zelinka Priamo letter dated April 14, 2009 which states Phase 1 will include a 93,534 sf supermarket with a 10,634 sf mezzanine and 27,000 sf ancillary retail. Phase 2 will include an expansion of 13,329 sf to the supermarket. With respect to the supermarket, based on the Kircher reports for Gordon & Clair supermarket (using the Phase one size of 140,000) and the Kircher Starwood & Watson report (150,000), TER has assumed Phase 1: FOR 54,967 sf, NFOR 34,737 sf, Service/Mezzanine 14,734 sf. Phase 2: NFOR 9,329 sf, Service 4,000 sf. With respect to the 27,000 sf of ancillary retail space in Phase 1, TER has assumed 75% is NFOR and 25% is service. Of the NFOR space TER has assumed 10% is BOHS space and the remaining space is other NFOR. 12) The assumptions for 1211, 1221, 1231 Gordon Street is based on the approved Zoning on the site (NC-8) which states maximum retail is 1,500 sm (16,145 sf). TER has assumed 75% is NFOR and 25% is service. Of the NFOR space, TER has assumed 10% is BOHS space and the remaining is Other NFOR. 13) The assumptions for 671 Victoria are based on information from the City of Guelph, in which they indicate a site plan for 42,000 sf has been submitted. TER has used 25% coverage and assumed 25% is service and 75% is NFOR. Of this NFOR 10% is BOHS and the remaining is Other NFOR.

50 - Silver Creek Juction - Study Area Boundary ACTIVE COMMERCIAL APPLICATIONS

51 SUPERMARKETS IN THE PRIMARY ZONE Fresh Co. Speedvale Ave E & Stevenson St N 2. Food Basics Eramosa Rd & Stevenson St N 3. Zehrs Eramosa Rd & Stevenson St N 4. Food Basics Silvercreek Pkwy N & Speedvale Ave W 5. No Frills Silvercreek Pkwy N, north of Willow Rd 6. Zehrs Paisley Rd & Elmira Rd S 7. Metro Edinburgh Rd S & Stone Rd W 8. No Frills Harvard Rd & Gordon St 9. Zehrs Kortright Rd W & Edinburgh Rd S 10. Food Basics Clair Rd W & Gordon St Silver Creek Junction Primary Zone Boundary 9 10