DOWNTOWN PLAN ADVISORY COMMITTEE MEETING #5 Thursday, October 6, 2016
Market Analysis What is a Market Analysis? 1. Compilation of demographic, economic, and market factors to evaluate demand and supply 2. The Market Analysis helps to identify gaps or opportunities in the market 3. Can also provide strategies for enhancing or optimizing existing strengths in the market
Market Analysis Guide to Development Can provide general or specific recommendations depending on the assignment For Stillwater, intended to quantify market demand potential for retail space, comment on other real estate products that could be developed to enhance market potential for the Downtown Assist in providing strategies to improve the long term market performance for the Downtown Not here to identify specific brands or franchises for the Downtown If you optimize the Downtown s best assets, provide support for existing businesses, the market should respond accordingly.
Trade Area Traditional Retail Rings
Trade Area Drive Times
Stillwater-Primary Trade Area
Primary Trade Area Primary customer base Households and employment in closest proximity to Downtown Stillwater that will patronize year round Seasonal Households with second homes on the River Households in the Metro Area (infrequent trips) Households from out of town (events and visiting) Summer continues to be the high season Strategies to increase traffic in the off season and manage the high traffic levels in the high season As traffic has increased, a higher proportion of traditional customers opt for other shopping locations
Traffic Volumes Main Street General consensus among business owners that a high level of traffic congestion is regularly deterring shoppers from Downtown Stillwater and those that want to park to shop have many challenges. The new bridge is estimated to reduce traffic volumes day one: From 16,200 to 10,000 south of Chestnut From 7,200 to 6,500 vehicles per day north of Myrtle.
Demographics Growth Trends Population/Household Base in the Trade Area Projected to rise by 3,710 people and 1,486 households over the next five years; Median age is 42.4 years and the average household size is 2.58 people per household Age Distribution Largest population increases are anticipated to be among those 65+ Household Incomes (2016) Median ($79,858) Average ($107,075) Per Capita ($40,130)
Demographics Employment City of Stillwater 9,052 jobs 1 st Q 2016 Comparison 10,511 in 2000 and 9,374 in 2010 Total employee/resident ratio estimated 0.49:1 Employment Stillwater Trade Area 37,017 jobs as of 2 nd Quarter 2016 Total employee/resident ratio 0.49:1
Household Type 22.1% of HH s have one person 77.9% of HH s have two people 72.7% of HH s are Families 60.3% of HH s are husband wife 26.4% of Family HH s have related children 12.4% of HHs are Other Family (no spouse present) 5.2% of HH s are Non Family 1.8% of HH s are multi generational 6.0% of HH s are unmarried partners
Commuter Patterns Stillwater Area Stillwater exports workers to nearby communities
Consumer Expenditures Breakdown
Consumer Expenditures Retail Segments
Retail Gaps Analysis Total Retail Demand Potential $1.6 Billion Total Retail Supply (Retail Sales) $873 Million Households are spending dollars outside of the PMA for some types of goods and services Retail concentrations in Hudson and Woodbury draws shoppers for items such as building supplies, lawn and garden supplies, additional clothing purchases Retail gaps exist in every major retail type and there is the potential to capture a portion of those sales in Stillwater for some types of goods and services
Retail Gaps Analysis
Stillwater Mix of Businesses Clothing and Accessories Outdoor, Men s, Womens, Jewelry Restaurants/Bars Fine dining, family restaurant, bars, brewery Groceries Gifts Specialty gifts General Merchandise Home Furnishings Several Artwork Gallery Specialty Foods Candy, Ice Cream, Olive Oil, Spices Craft/Hobby Yarn, Books, Music, Antiques, Beads Services Hair Salons, Body Massage, Acupuncture Hotel hotels and B & B s
Downtown s Key Strengths Historic buildings that evoke a traditional Downtown Compact district with most retail/services concentrated on Main Street Grid street pattern that allows for vehicle access Close proximity to the River provides attractive views Diverse mix of businesses; since the Recession, businesses seem to have some staying power Stillwater has been exceptionally successful in attracting visitors, perhaps too successful (potential for event overload)
Downtown s Key Weaknesses Substantial traffic congestion which deters a portion of patrons Parking often fills with event and visitor patrons, less with Downtown customers (summer season, most often); local customers complain that they cannot find parking Downtown primarily in the summer months Downtown mix is focused primarily on specialty goods/services and less on daily goods and services (i.e. drugstore, hardware);
Concerns Expressed by Businesses/Committee Downtown s greatest challenge pre Bridge is traffic flow Need to make the Downtown a more attractive environment (clean, inviting) Provide more visual interest (artwork, murals, etc.) Building and sidewalk upkeep and maintenance Parking lots along the River Excited and optimistic about new Bridge, but cautiously. How will removing the traffic impact current business?
Shoppers and Businesses Shoppers want choices, service and an attractive, pleasant environment in which to shop and recreate. Businesses want to generate revenue. In today s world, shoppers have many different options available to them (TV, internet, brick and mortar); all of these segments compete directly for the consumer s dollars. As of 2014, 8.2% of all retail sales were on line sales and this segment is growing rapidly. Total brick and mortar sales still comprise 92% of all retail sales. How can Stillwater provide customers and visitors with an optimal visitor/shopping experience? Comments received from the tours identify some of the initiatives that could be implemented to achieve better access to the Downtown and offer more inviting shopping environment.
Stillwater Opportunity Segments People that live Downtown People that work Downtown Create a more attractive shopping environment Create a reason for people to come and linger Current Downtown sponsored events do bring people Ladies Thursday night out 36 participating businesses Hometown for the Holidays Paint the Town Red Valentine s weekend January Ice Cream Social Trick or Treat on Main Intended to spur activity and sales in the Downtown What happens if events get too big, there are too many of them or the events are focused on activities, not businesses? What are the goals of the events?
Office/Residential Uses Support Local Retail Those that live in or very near the Downtown will view the Downtown as their shopping district; Those that work Downtown are more likely to spend money during the day for breakfast, lunch, dinner and may also purchase items during a break or after work How can we attract more people to office in the Downtown/live in or near Downtown?
Residential Rental Housing 2 nd Quarter 2016 1.6%, tight rental market; Average rent is $827 compared to $1,078 for Metro Area. New construction would bring HH s to Downtown. Owned Housing Condo/Townhomes Median Price $205,000 Average Price $256,600 Built after 2000 Median Price $208,000 Average Price $273,477
Office Lease Rates Lease rates generally ranging from $7 to $12 per square foot, below market for new space. Three buildings for sale, one of which is mixed use, retail on 1 st floor with office uses above; one is multitenant office and the other is vacant with the potential for retail or office Parking availability may be an issue in some locations for staff.
Three Things Brick and Mortar Stores Provide to Customers Touch, trial or any other sensory stimuli Immediate gratification Social interaction You want to go where everybody knows your name.
Parking How Much? Where? Parking Supply? Management? 750 free parking spaces in Downtown in 13 free lots When large events are in town, parking seems still to be difficult
Demand Calculations Retail Demand from the PTA 2016 2021 2026 Retail Trade Area Households 28,355 29,841 31,326 (times) Annual Household Expenditures 1 x $28,998 $32,016 $35,348 (equals) Total Trade Area Expenditures = $822,238,290 $955,389,456 $1,107,311,448 (plus) Approx. % Leakage Outside the Trade Area 2 + 28% 28% 28% (equals) Leakage Outside of Trade Area = $230,226,721 $267,509,048 $310,047,205 (equals) Total Purchasing Power 3 $592,011,569 $687,880,408 $797,264,243 (divided by) Average sales per Sq. Ft. / $248 $274 $303 (equals) Total Retail Space Demand (Sq. Ft.) = 2,384,042 2,508,971 2,633,809 Growth in retail demand (times) % of PTA demand growth capturable by subject Site x (equals) Retail space supportable on subject Site (sq. ft.) = 2 Leakage is the estimated amount of retail dollars spent outside the PTA. 3 2016 purchasing power is equal to the estimated PTA retail sales based on information from ESRI. Sources: ESRI; Maxfield Research and Consulting, LLC DEMAND FOR RETAIL SPACE STILLWATER TRADE AREA 2016 to 2026 1 Excluding expenditures for home buying, finance & insurance, travel, vehicle sales. 2016 to 2021 249,767 15% to 20% 37,465 to 49,953 Note: The 2016 leakage factor is derived from subtracting the estimated retail sales in the PTA from the total retail expenditures by PTA residents.
Summary Modestly growing population and household base, but larger potential for growth in Western WI once bridge is opened. Population is aging, median age is just over 40 High proportion of married couples without children High median household income Diverse business mix continue to add, but moderately Manage parking effectively Increase utilization of spaces north of Mrytle Street Optimize the attractiveness of the Downtown environment
Traffic Analysis Updates MnDOT Meetings Initial: September 2, 2016 Follow up: October 27, 2016 MnDOT Discussion Topics Chestnut Street (Access & Ownership) Main Street (Right of way Uses) Draft Traffic Memorandum
Next Steps- Charrette November 15 6:30 pm 9:30 pm, Community Workshop 2 Community invited to brainstorming charrette Committee will be actively involved November 16 8 am 5:00 pm, Concept refinement by consultant team November 17 8:00 am 3:00 pm, Consultant work 3:00 pm to 5:00 pm, Committee and agencies review materials and discuss potential implementation steps 7:00 pm to 9:00 pm, Community Open House 1 November 18 8:00 am noon, De brief charrette and discuss next steps Committee member attendance on an as available basis
Next Steps November 15-18 Charrette January 26, 2017 DPAC #7