Pittsburg/Bay Point Master Plan Market Study Final Report

Transcription

1 Pittsburg/Bay Point Master Plan Market Study Final Report July 21, 2009 prepared for: City of Pittsburg PMC

2 Table of Contents I. INTRODUCTION... 3 Project Area Context... 3 Master Plan Project Area... 4 Proposed Development Programs... 5 Report Organization... 5 II. DEMOGRAPHICS AND EMPLOYMENT CONTEXT... 6 Population and Households... 6 Pittsburg s Role in the Region... 8 Employment Trends... 9 Pittsburg Employment Commute Patterns Summary of Employment and Commute Trends III. REAL ESTATE MARKET TRENDS Residential market Existing Housing Stock New Construction New and Planned Housing Development For-Sale Market Impact of the Foreclosure Crisis Rental Market Renting v. Buying in Pittsburg Office Market Retail Site-Specific Considerations IV. DEMAND ESTIMATES Regional TOD Demand Residential Demand Feasibility Factors Office Retail Conclusions V. APPENDIX Pittsburg/Bay Point Market Study -2-

3 I. INTRODUCTION This market study focuses on testing the general market opportunities and constraints for future development in the Pittsburg/Bay Point BART Master Plan Area, looking at both demand factors (i.e., the overall magnitude of demand for each use under consideration) and feasibility factors (i.e., the prices that future users and residents are willing to pay compared to the construction cost of the various buildings). Unlike a traditional market study, this analysis focuses exclusively on the potential for TOD at Pittsburg- Bay Point based on the idea that the right mix of uses at any given station can promote ridership, and because land in close proximity to BART stations is limited (and therefore other uses that do not promote ridership should be encouraged to locate elsewhere in the region). Thus, this report takes a somewhat narrow view of potential demand for land uses in the station areas, because it starts with the assumption that certain uses are more likely to promote transit ridership than others. TOD typically refers to a mix of uses within a ½-mile radius, or walking distance, of a transit stop, where there is a synergism between these uses and transit. Strategic Economics research as a partner in the Center for Transit Oriented Development (CTOD) shows that certain household types and economic sectors show a greater propensity to locate near transit. These households and employers are more likely to move to an area simply to be located near a transit station, though they would not otherwise locate in that particular neighborhood or district. While transit is certainly a driving force in this location decision, the broader mix of land use types and the high quality pedestrian environments that are also typically associated with TOD also account for some of transit-oriented locations market draw. Thus, a regional or corridor level market analysis is necessary because the transit system and TOD are amenities that attract demand from throughout the region. This approach to TOD market analysis frequently yields a higher estimate of potential future demand than conventional market analysis techniques because it assumes that the market for TOD is regional, rather than local. PROJECT AREA CONTEXT The Pittsburg/Bay Point Bay Area Rapid Transit (BART) station is located in the City of Pittsburg, but is surrounded on the north and east by Bay Point, an unincorporated community under the jurisdiction of Contra Costa County. Pittsburg and Bay Point are the westernmost communities in what is commonly considered East County, and border the Central County city of Concord. The Pittsburg/Bay Point station is the terminus station on the existing BART line that runs northeast through Central and East Contra Costa Counties from San Francisco International Airport. A proposed BART extension in East County (the ebart extension) would link to the existing system at Pittsburg/Bay Point and include two new stations in Pittsburg and Antioch. Compared to its neighboring cities to the east, Pittsburg has the location advantage of relative proximity to Central County and the rest of the Bay Area. This advantage is enhanced by the presence of the existing BART station and the fact that Highway 4 the main transportation corridor connecting East County to the rest of the region currently narrows significantly to the east of Pittsburg, often creating a bottleneck during rush hour. Pittsburg s relative accessibility to the rest of the Bay Area makes the city an excellent location for families looking for affordable housing who are willing to drive or take BART to destinations in Central County, Alameda County, or San Francisco. Compared to other East County cities, more Pittsburg and Bay Point residents do commute to western cities such Concord, Walnut Creek, San Francisco, and Oakland. At the same time, however, Pittsburg has traditionally served as a job center within East County, and as a home for blue-collar workers attracted by the city s many manufacturing jobs. Over the Pittsburg/Bay Point Market Study -3-

4 last several years, the City has invested in significant improvements in the historic downtown and marina districts. These demographic and economic characteristics, as well as the public sector revitalization efforts, set Pittsburg apart from most of the other communities in the East County subregion. Master Plan Project Area The master plan project area spans 50 acres to the southwest of the Pittsburg/Bay Point BART station, and is bordered by Highway 4 to the north, Bailey Road to the east, and W. Leland Road to the south (Figure I-1). The project area includes 27 acres owned by BART, which is currently occupied by 2,000 parking spaces, bus loading, and other transportation uses. BART also owns a 3-acre strip of land to the east of the parking lots. The western half of the project area (approximately 24 acres) is a vacant lot owned by West Coast Home Builders. The project area is bordered on the east by the neighborhood-serving Oak Hills Shopping Center (owned and managed by Sierra Pacific Properties, Inc), and on the south by Oak Hills neighborhood of singlefamily homes. The vacant land to the west of the project area, known as the Alves Ranch Property, has received entitlements for the development of 4 business commercial sites, 167 single-family homes, 98 townhomes, and two apartment neighborhoods. Another 7.6 acres to the east of the Oak Hills residential neighborhood, on Bailey Road, is being assembled by the Contra Costa County Redevelopment Agency for eventual redevelopment as a high-density mixed-use neighborhood. Figure I-1. Pittsburg/Bay Point Master Plan Project Area Pittsburg/Bay Point Market Study -4-

5 Project Area Development Programs Over the last decade, two development programs were proposed for the Pittsburg/Bay Point BART station area. In the late 1990 s, the City of Pittsburg, Contra Costa County, and BART drafted a specific plan for the land within approximately one-half mile of the station area. 1 Within the vicinity of the project area, the specific plan envisioned multi-family and senior housing with a minimum density of 65 dwelling units per acre (dua). The plan required that at least 50 percent of the frontage along W. Leland Road be devoted to commercial and/or residential units with a strong orientation to the street. Permitted commercial uses included restaurants, delis, coffee shops, florists, dry cleaners, bankers, and other convenience retail and office. BART parking would be replaced by a four-level parking garage. On the land to the east and north of the current study area, the Specific Plan envisioned a mix of lower-density multi-family and mixed used development, and neighborhood commercial and office/light industry on the undeveloped portion Willow Pass Road in the community of Bay Point. More recently, West Coast Home Builders drafted a preliminary site development plan for the 24-acre property west of the BART parking lot that was the subject of a recent Memorandum of Understanding between the City and the developer; however, it is not a current development application with the City. The development plan proposes approximately 1,040 units on 21 acres of land, or 48 dua. The units would be accommodated in two or possibly three story wood frame buildings, with surface parking. The plan also proposes 32,000 square feet of ground floor retail with two stories of office above. The preliminary plan shows gates around the proposed development, with no explicit connections to the BART station or existing shopping center. REPORT ORGANIZATION This report is organized into four main sections. Following this introduction, Chapter II introduces the regional demographic and economic context for the market analysis (demand factors). Chapter III describes the real estate market trends in Pittsburg and the East County (supply factors). Chapter IV discusses the demand potential for residential, office and retail development in the master plan area. 1 The Pittsburg/Bay Point BART Station Area Specific Plan was not adopted by the City of Pittsburg. Pittsburg/Bay Point Market Study -5-

6 II. DEMOGRAPHICS AND EMPLOYMENT CONTEXT Pittsburg and Bay Point are located at the western edge of East Contra Costa County, just on the border of the Central County city of Concord. Residents of Pittsburg and Bay Point benefit from easier access to Central County than other East County residents not only because of physical proximity, but also because of the Pittsburg/Bay Point BART station and the current Highway 4 bottleneck east of Pittsburg. Because of the close relationship between these two subregions as a result of this accessibility, it is important to understand demographic and employment trends occurring in both East and Central Counties in order to determine the market demand for development at Pittsburg/Bay Point. POPULATION AND HOUSEHOLDS Due to the available supply of land for housing development, East Contra Costa County has experienced rapid population growth over the last several decades, expanding much more quickly than Central County and the rest of the Bay Area. Between 1990 and 2000, East County 2 grew 34 percent, from 165,003 to 220,403 persons, while Central County 3 grew by 11 percent. During this same time period, Contra Costa County as whole grew by 18 percent and the Bay Area s population increased 13 percent. Within East County, the population is increasingly shifting to the eastern-most cities. Between 1990 and 2000, Brentwood, Antioch and Oakley experienced explosive growth, while Pittsburg expanded more moderately. 4 The trend of more rapid growth in the eastern parts of the region continued during this decade, and is projected to continue in coming years (Table II-1). 5 Table II-1. Population Growth, Estimate 2035 Projection % Change % Change % Change Pittsburg 47,564 56,769 63,960 82,700 19% 13% 29% Bay Point N/A 21,534 23,027 N/A N/A 7% N/A Antioch 62,195 90, , ,400 46% 14% 25% Brentwood 7,563 23,302 49,814 90, % 114% 82% Oakley 18,374 25,619 31,152 42,950 39% 22% 38% East County* 165, , , ,750 34% 25% 32% Central County** 413, , , ,800 11% 2% 26% Contra Costa County 803, ,816 1,041,845 1,300,600 18% 10% 25% *For 1990, 2000, and 2009, East County is defined as East Contra Costa County and Antioch-Pittsburg Census County Divisions; the 2035 projection includes Pittsburg, Antioch, Brentwood, Oakley, and ABAG's "Rural East C.C.CO." area. ** For 1990, 2000, and 2009, Central County is defined as the Central Contra Costa County Census County Division; the 2035 projection is calculated from ABAG's projections for Central County cities and cities' spheres of influence. Sources: U.S. Census, 1990 & 2000; Claritas, Inc., 2009; ABAG, 2007; Strategic Economics, Defined as the East Contra Costa County and Antioch-Pittsburg Census County Divisions unless otherwise noted. 3 Defined as the Central Contra Costa County Census County Division unless otherwise noted. 4 U.S. Census, 1990 and Association of Bay Area Governments (ABAG), 2007 Projections. Pittsburg/Bay Point Market Study -6-

7 Compared to other East County cities, Pittsburg and Bay Point s populations have lower median household incomes and lower levels of educational attainment. In 2009, 6 25 percent of Pittsburg s adult population and 29 percent of Bay Point s adult population had attained less than a high school education (Table II-4, below). Pittsburg and Bay Point are also more ethnically diverse compared to other cities. In 2009, just 38 percent of Pittsburg residents and 39 percent of Bay Point s were white, compared to 56 percent in East County as a whole. Forty percent of Pittsburg s population and 49 percent of Bay Point s population was Hispanic (Table II-4). Families particularly married couple families with children have driven most of East County s growth, while singles and other non-family households comprise a larger proportion of the population in Central County. Married couple families with children accounted for 34 percent of all households in East County in 2009, compared to 25 percent in Central County and 27 percent in Contra Costa County as a whole. In the Bay Area as a whole, married couples with children make up just 24 percent of households (Figure II- 1). Family households are drawn to East County s recreational opportunities, its reputation as a good place to raise children, and the relatively affordable single-family homes. Central County shares many of these family-friendly amenities, but the I-680 office corridor, Contra Costa County s primary employment center, makes Central County more attractive to singles and other households without children who are willing to pay slightly more for housing in order to live near their jobs. Within East County, there are important differences in household types. In 2009, about 48 percent of Pittsburg households were singles, non-family households, or married-couple households with no children. Only 29 percent of households in Pittsburg were married-couple families with children, compared to 40 percent and 43 percent in Brentwood and Oakley, respectively (Table II-5, below). Figure II-1. Household Types in the Bay Area and Eastern Contra Costa County, 2009 The housing stock in East and Central Counties reflects the subregions respective household compositions. In 2009, detached, single-family homes made up 75 percent of East County s housing 6 Claritas, Inc., Pittsburg/Bay Point Market Study -7-

8 stock, compared to 61 percent in Central County (Table II-6, below). In both East and Central Counties, just over 70 percent of housing units were occupied by homeowners. Pittsburg s Role in the Region Most of the East County does not have convenient access to transit, and the region s appeal has traditionally been its family-friendly atmosphere and the availability of relatively affordable, spacious homes. As a result, the area has not attracted the types of households who are usually most interested in living near transit, such as singles, non-family households and families without children. Pittsburg is something of an exception to this trend, most likely because of the relatively short commute (both by BART and car) to job centers in Central County and the rest of the Bay Area, compared to other East County cities. Although Pittsburg has traditionally had a more insular economy than other East County cities, with a large share of blue collar workers attracted to the city s manufacturing jobs, there are signs that the city and its unincorporated neighbor are drawing certain types of households who prefer to live near transit. These households include: Households with no children: Compared to the rest of East County, Pittsburg and Bay Point have a higher share of singles and non-family households, and lower share of households with children (Figure II-2). Figure II-2. Family Households by Presence of Children Pittsburg/Bay Point Market Study -8-

9 Renters: In 2009, 38 percent of housing units in Pittsburg and 35 percent in Bay Point were occupied by renters, compared to 28 percent of housing units East County as a whole (Table II-6). Residents of multi-family and attached single-family units: The majority (64 percent) of Pittsburg s housing stock was composed of detached, single-family homes in However, the city had significantly more multi-family (25 percent) and attached single-family (8 percent) units than East County as a whole. Bay Point had approximately the same share of detached and attached single-family homes as Pittsburg, but fewer households living in multi-family units and more (11 percent) living in mobile homes and other types of housing (Table II-6). The prevalence of renter households and the supply of multi-family units in Pittsburg and Bay Point reflect the fact that the Pittsburg area has been attractive to Section 8 and other low- and moderate-income households, which have a higher propensity to use transit. The Pittsburg/Bay Point area therefore has a competitive advantage relative to other East County cities in capturing the types of households interested in living in a transit-oriented development. The experience of new multi-family development such as San Marco Villas and Oak Hills Apartments, which has a 7%-15% share of renters commuting by BART, seems to support this. In addition, several new market-rate and affordable age-restricted apartment complexes have been built in the city recent years, indicating that the area is attractive for seniors another demographic group with a high propensity to use transit. EMPLOYMENT TRENDS In 2002, Strategic Economics prepared an employment and real estate overview for Contra Costa Shaping our Future, which provided a detailed analysis of employment patterns in the County. This section draws from and builds upon the information presented in that report to provide an overview of employment patterns and growth trends and patterns in East County and the greater region. In a very simplified sense, an economy can be thought of as having two types of industries, basic and non-basic. Basic industries are part of the economic base of a region; they export their goods or services and bring in money from outside the region. Non-basic, or local-serving, industries sell their products within the region and do not bring in money from outside. Oil refining is an example of a basic industry in Contra Costa County, while retail and construction contracting are non-basic industries. Most of the job growth in East County has been due to growth of non-basic industries, while basic industries such as manufacturing and heavy industry have declined. Most of the employed residents of East County commute to other parts of the region that offer location advantages for basic employment. As shown in Table II-7, Central County has significant employment in export-oriented basic industries like financial and professional services, concentrated along the I-680 Corridor cities of Concord, Pleasant Hill, and Walnut Creek. Meanwhile, East County s employment is concentrated in mainly residentserving non-basic industries. The top employment sectors East County region are health, educational, and recreational services (39 percent) and other (16 percent). 7 The other category is largely made up of construction jobs, which have been drawn to the East County as a result of rapid population growth and housing construction. Compared to Central County and Contra Costa County as a whole, East County has more manufacturing, retail, and health, educational & recreational service jobs, and significantly fewer of the higher-skilled financial and professional service jobs. Many of the service jobs that are located in East County are lower skilled and command lower wages than the professional services jobs located along the I-680 office corridor. 7 ABAG, Pittsburg/Bay Point Market Study -9-

10 East County was historically an agricultural and industrial area, and has been shifting over time to include increasing amounts of suburban development and jobs in the construction industry and other businesses that provide services for the population. This trend is expected to continue in the future, as jobs in nonbasic industries continue to follow population growth, and jobs in basic industries continue to locate in areas that are more central to the Bay Area population and offer better access. Pittsburg Employment Despite Pittsburg and Bay Point s relative accessibility to Central County, they have not traditionally served as bedroom communities for Central County s job centers to the same extent as other East County cities such as Oakley or Brentwood. As Table II-2 shows, Pittsburg had the highest jobs-housing ratio in East County in 2005, with 0.81 jobs per household. Within East County, Pittsburg has a relatively high share of manufacturing, transportation, and warehousing jobs (basic industries), while Antioch, Brentwood and Oakley have a higher share of retail, health, educational, and recreational services (nonbasic industries) (see Table II-7, below). The occupations of many residents match the types of jobs that are most common in the city. In 2000, 8 30 percent of Pittsburg s resident workforce was employed in health, educational and recreational services, which accounts for 35 percent of the city s jobs (the school system is one of the largest employers in the city). Another 22 percent worked in financial and professional services, mostly in the administrative, support, and waste management services category. Nearly 19 percent of Pittsburg s residents worked in manufacturing, wholesale, and transportation. In contrast, workers living in Antioch, Brentwood, and Oakley were far more likely to be employed in professional, scientific, and technical services. Bay Point s resident workforce was employed in similar types of jobs as Pittsburg s workforce (Table II-8). Table II-2. Jobs Housing Balance, East and Central County, 2005 Total Jobs Total Households Jobs-Housing Ratio Pittsburg 15,770 19, Antioch 20,510 32, Brentwood 6,750 13, Oakley 3,220 9, East County* 54,450 89, Central County** 254, , Total Contra Costa County 379, , *Includes Pittsburg, Antioch, Brentwood, Oakley, and ABAG's "Rural East C.C.CO." area. **Calculated from ABAG's projections for Central County cities and cities' spheres of influence. Sources: Association of Bay Area Governments, 2007; Strategic Economics, Commute Patterns East County residents are willing to travel long distances to work in exchange for lower cost housing. About 23 percent of East County s working residents are employed in East County. Another 25 percent are employed in Central County. Oakland, San Francisco, and San Jose are also top commute destinations 8 U.S. Census, Most recent reliable data available. Pittsburg/Bay Point Market Study -10-

11 (Table II-3). 9 Nearly 30 percent of East County commuters traveled an hour or more to get to work in Over 70 percent traveled in single-occupancy vehicles. 10 An estimated 37 percent of Central County workers both live and work within Central County. Approximately 11 percent of Central County s workers live in East County; Brentwood, Antioch and Oakley are the top commute origins within East County. 11 Central County residents are more likely than other county residents to take transit to work in 2000, 9 percent of Central County s residents commuted by rail, compared to 3 percent in East County and 7 percent in the county as a whole. 12 Within East County, Pittsburg offers shorter commute times than neighboring cities. As shown in Figure II-3, Pittsburg residents were more likely to have commute times of less than 45 minutes that were residents of Antioch, Brentwood, and Oakley in Pittsburg residents are also much more likely to commute to Central County transit-accessible destinations. About 27 percent of Pittsburg residents and 29 percent of Bay Point residents commute to Pleasant Hill, Walnut Creek, Concord, and Martinez. By contrast, 17 percent of Antioch residents commuted to these cities. Only 14 percent of Pittsburg residents and 7 percent of Bay Point residents worked in the East County cities of Pittsburg, Antioch, Brentwood and Oakley. However between 25 and 27 percent of Antioch, Oakley, and Brentwood residents worked in the East County area (Table II-3). 14 Figure II-3. East County Commute Times by City, US Census Bureau, Longitudinal Employer-Household Dynamics Origin-Destination Database (LEHD), U.S. Census, US Census Bureau, LEHD, U.S. Census, U.S. Census, American Community Survey (ACS), US Census Bureau, LEHD, Pittsburg/Bay Point Market Study -11-

12 Table II-3: Places Where East County Residents Work, 2006 Place of Residence Pittsburg Bay Point Antioch Brentwood Oakley East County Total Commuters 20,580 7,338 37,601 11,913 11,168 89,090 Commute Destinations Antioch, Pittsburg, Oakley, Brentwood 14% 7% 27% 25% 26% 20% Concord, Walnut Creek, Martinez, Pleasant Hill 27% 29% 17% 11% 15% 17% San Francisco, Oakland 12% 12% 11% 11% 10% 11% San Ramon, Pleasanton, Livermore 2% 3% 2% 7% N/A 2% San Jose 2% 3% 3% N/A 3% 3% Other 46% 47% 43% 46% 50% 47% Sources: LEHD, 2006; Strategic Economics, 2009

13 Summary of Employment and Commute Trends Pittsburg is distinct from other East County communities because of its high share of basic industry jobs and the relatively short commute to job centers in Central County and other Bay Area cities. The commute trends indicate that Pittsburg attracts transit riders because of its BART access. Pittsburg residents are commuting to employment centers along the BART corridor, including Concord, Walnut Creek, San Francisco and Oakland: In 2006, 31 percent of Pittsburg residents and 33 percent of Bay Point residents worked in the BART-accessible cities of Concord, Walnut Creek, San Francisco, or Oakland. This is significantly higher than the share of workers commuting to those same employment centers from Antioch (25 percent), Oakley (21 percent), or Brentwood (20 percent). 15 Pittsburg residents are more likely to be transit riders: In 2000, Pittsburg residents were slightly more likely than other East County residents to take transit to work, including both bus (2 percent) and rail (6 percent). Similarly, 1 percent of Bay Point residents took bus to work and 5 percent took rail. In East County as a whole, just 5 percent of residents took transit to work. 15 LEHD, 2006.

14 Table II-4. Population Characteristics in East and Central Counties, 2009 Population Characteristics Pittsburg Bay Point Antioch Brentwood Oakley East County Central County Contra Costa County Population 63,960 23, ,848 49,814 31, , ,297 1,041,845 Race White 38% 39% 52% 66% 71% 56% 74% 60% African-American 19% 12% 15% 4% 5% 11% 2% 9% Asian/Pacific Islander 15% 14% 11% 5% 4% 9% 13% 14% Other 28% 35% 21% 26% 20% 25% 11% 17% Hispanic/Latino 40% 49% 28% 31% 30% 33% 14% 23% Educational Attainment (Population 25+) Total Population 25 and Older 39,583 13,702 62,313 29,307 18, , , ,810 Less than high school 25% 29% 13% 18% 16% 19% 8% 14% High school graduate (or equivalency) 25% 26% 28% 26% 30% 27% 16% 20% Some college, no degree 28% 26% 30% 29% 32% 29% 23% 25% Associate degree 7% 7% 9% 8% 8% 8% 8% 8% Bachelor's degree 12% 9% 15% 15% 11% 12% 29% 22% Graduate or professional degree 3% 3% 5% 6% 3% 4% 16% 12% Household Income Household Income Brackets Under $15,000 9% 13% 7% 4% 5% 8% 5% 7% $15,000-$24,999 7% 9% 6% 5% 4% 7% 5% 6% $25,000-$34,999 8% 11% 6% 6% 4% 7% 6% 6% $35,000-$49,999 14% 15% 11% 10% 8% 12% 10% 11% $50,000-$74,999 21% 21% 18% 18% 22% 20% 16% 18% $75,000-$99,999 16% 16% 17% 15% 23% 16% 14% 15% $100,000-$149,999 18% 13% 22% 25% 25% 20% 20% 20% $150,000 and up 6% 4% 13% 17% 9% 11% 23% 18% Median Household Income (2009 Dollars) $63,334 $53,434 $78,081 $87,800 $82,320 $71,768 $88,701 $78,815 Source: Claritas, Inc., 2009; Strategic Economics, Pittsburg/Bay Point Market Study -14-

15 Table II-5. Household Types in East and Central Counties, 2009 Pittsburg Bay Point Antioch Brentwood Oakley East County Central County Contra Costa County Total Households 19,700 6,845 32,387 15,624 9,266 87, , ,652 Household Types Single and other non-family households 25% 25% 21% 19% 18% 22% 33% 30% Married couple families without children 23% 20% 26% 29% 26% 26% 30% 28% Married couple families with children 29% 30% 36% 40% 43% 34% 25% 27% Other families 23% 25% 18% 12% 14% 18% 12% 15% Sources: Claritas, Inc., 2009; Strategic Economics, Table II-6. Housing Stock in East and Central Counties, 2009 Pittsburg Bay Point Antioch Brentwood Oakley East County Central County Contra Costa County Total Housing Units 20,723 7,172 33,729 16,619 9,483 93, , ,820 Housing Unit Types Single Family Detached 64% 63% 78% 83% 92% 75% 61% 66% Single Family Attached 7% 8% 4% 4% 1% 5% 10% 8% Multi-Family 25% 18% 17% 9% 2% 15% 28% 24% Other 4% 11% 1% 4% 5% 5% 1% 2% Occupied Housing Units 19,700 6,845 32,387 15,624 9,266 87, , ,652 Tenure Owner-Occupied 62% 65% 74% 80% 85% 72% 71% 70% Renter-Occupied 38% 35% 26% 20% 15% 28% 29% 30% Sources: Claritas, Inc., 2009; Strategic Economics, Pittsburg/Bay Point Market Study -15-

16 Table II-7. Jobs Located in East and Central Counties, 2005 Industry Count Pittsburg & Bay Point Antioch * Brentwood* Oakley* East County** Central County*** Total Contra Costa County Agriculture & Natural Resources ,050 1,200 2,550 Manufacturing, Wholesale, & Transportation 4,450 2, ,310 28,210 52,730 Retail 2,720 3, ,250 30,760 46,890 Financial & Professional Services 2,000 2,770 1, ,220 70,530 88,510 Health, Educational, & Recreational Services 6,380 9,150 2,970 1,660 21,120 79, ,740 Other 2,700 3,100 1, ,500 43,810 62,610 Total Jobs 18,260 21,270 7,610 3,400 54, , ,030 Share Agriculture & Natural Resources 0% 0% 5% 1% 2% 0% 1% Manufacturing, Wholesale, & Transportation 24% 11% 9% 8% 15% 11% 14% Retail 15% 18% 12% 14% 15% 12% 12% Financial & Professional Services 11% 13% 16% 14% 13% 28% 23% Health, Educational, & Recreational Services 35% 43% 39% 49% 39% 31% 33% Other 15% 15% 19% 15% 16% 17% 17% Total Jobs 100% 100% 100% 100% 100% 100% 100% *Includes cities and their "spheres of influence" **Includes Pittsburg, Antioch, Brentwood, Oakley, and ABAG's "Rural East C.C.CO." area. ***Calculated from ABAG's projections for Central County cities and cities' spheres of influence. Sources: Association of Bay Area Governments, 2007; Strategic Economics, Pittsburg/Bay Point Market Study -16-

17 Table II-8. Industries in Which East and Central County Residents are Employed, 2000 Bay Point Antioch Brentwood Oakley East County Central County Contra Costa County Pittsburg Count Agriculture & Natural Resources , ,311 Manufacturing, Wholesale, & Transportation 4,668 1,361 8,209 1,704 2,481 18,701 36,324 78,493 Retail 3,053 1,113 5,873 1,138 1,633 12,724 26,899 53,231 Financial & Professional Services 5,314 2,264 8,166 1,943 2,159 19,425 67, ,693 Health, Educational, & Recreational Services 7,314 2,568 11,603 2,377 3,221 26,871 64, ,531 Other 4,177 1,399 7,563 2,061 2,568 18,433 36,741 74,098 Total Workers 24,671 8,773 41,598 9,459 12,126 97, , ,357 Share Agriculture & Natural Resources 1% 1% 0% 2% 1% 1% 0% 1% Manufacturing, Wholesale, & Transportation 19% 16% 20% 18% 20% 19% 16% 17% Retail 12% 13% 14% 12% 13% 13% 12% 12% Financial & Professional Services 22% 26% 20% 21% 18% 20% 29% 25% Health, Educational, & Recreational Services 30% 29% 28% 25% 27% 28% 28% 29% Other 17% 16% 18% 22% 21% 19% 16% 16% Total Workers 100% 100% 100% 100% 100% 100% 100% 100% Source: U.S. Census, 2000; Strategic Economics, Pittsburg/Bay Point Market Study -17-

18 III. REAL ESTATE MARKET TRENDS In order to project future demand for TOD at the Pittsburg/Bay Point BART station area, Strategic Economics interviewed local residential and commercial brokers, and reviewed data on residential building permits, rental and home sales trends, and the existing office and retail supply. This section reviews the findings on Pittsburg s residential, office, and retail markets. RESIDENTIAL MARKET Existing Housing Stock As the previous section describes, Pittsburg has a higher share of multi-family units than the cities to its east, although the majority of the city s housing stock is made up of detached, single-family homes. Pittsburg also has a higher share of renters than its neighbors. Indeed, Pittsburg and Antioch are the only cities in East Contra Costa County with a substantial multi-family rental market including tenants that participate in the Section 8 program. 16 The city has some condo buildings, but apartments are more common. Pittsburg also has a relatively high share of attached single-family homes. Local residential brokers interviewed for this report described the attached, single-family housing stock as being mostly composed of duplexes or duets. Small, detached patio homes clustered around a single driveway are another common housing product in the city. The relatively high concentration of apartments, duplexes and small single-family homes reflects the demographics of Pittsburg s residents. These housing products offer an affordable option for lower- or middle-income households, and particularly for singles or couples without children and families with young children. Highway 4, which currently bottlenecks east of Pittsburg, and the BART station make the city especially attractive for commuting households. Local brokers suggested that families often leave Pittsburg as their children age because of the school system s reputation, although one broker noted that this trend may be changing as a result of increased parent involvement and public investment in area schools. New Construction Between 2000 and 2008, Pittsburg issued 3,508 residential building permits (including permits for remodeling), accounting for 8 percent of the residential permits issued in Contra Costa County. 17 Relative to other East County cities, Pittsburg issued permits at a much slower and more consistent rate. Since the beginning of the decade, Pittsburg has accounted from 4 percent (in 2004) to 15 percent (in 2007) of Contra Costa County s total residential permits (Table III-1). In comparison, Antioch s share fluctuated from 3 percent to 27 percent, while Brentwood accounted for anywhere from 2 to 29 percent of the county s residential permits in a given year. The slower pace of construction in Pittsburg is largely due to the low absorption rate. While the majority of Pittsburg s residential permits from 2000 to 2008 were issued for single-family homes, the city has built multi-family units at a much faster rate than other East County cities. Between 2000 and 2008, 31 percent of the city s total residential building permits were issued for multi-family structures (Table III-1). The share of residential permits issued for multi-family structures in other cities ranged from 4 percent in Brentwood, to 16 percent in Oakley. 16 RealFacts, Market Overview, Pittsburg CA, January Construction Industry Research Board (CIRB), "Residential Building Permits," Calendar Years Pittsburg/Bay Point Market Study -18-

19 Table III-1. Building Permit Trends in Pittsburg and Contra Costa County, (numbers include permits for remodels) Building Permits Issued Pittsburg Share Multi- Family Contra Costa County Building Permits Issued Share Multi- Family Share of County's Permits Issued in Pittsburg % 5,639 23% 8% % 5,136 19% 8% % 5,805 13% 5% % 6,895 28% 11% % 5,483 23% 4% % 6,312 14% 5% % 4,488 26% 6% % 3,607 25% 15% % 1,894 48% 9% Total ,508 31% 45,259 22% 8% Sources: Construction Industry Research Board, 2009; Strategic Economics, 2009 New and Planned Housing Development Nearly all of Pittsburg s newly completed multi-family buildings are apartment complexes, and most of them are subsidized affordable housing projects (Table III-2). While a few scattered projects have been built throughout the city, two areas of the city have seen the most recent multi-family development: San Marco and Downtown Pittsburg. The San Marco area is located just southwest of the Pittsburg-Bay Point BART station, and is mostly composed of large single-family homes. Recently, Discovery Builders completed the development of San Marco Villas, a 330-unit, luxury apartment complex that opened in fall 2008 at San Marco Boulevard and W. Leland Road, about a mile and half west of the Pittsburg/Bay Point BART station. Rents start at $1,295 for a one-bedroom unit and go up into the low $2,200 s for threebedroom units. The location is able to command higher rents because of the convenience it offers, the commute time savings, access to Highway 4, the Mount Diablo school district, luxury finishings, community amenities, and high level of security. As the developers and property managers, Discovery Builders/Sierra Pacific Properties believes that the renters of these apartments are mainly higher income households who value the commute time savings, households that have lost their homes to foreclosures, and single women who value security. Downtown Pittsburg has not seen more affordable development than private development. Recently completed projects include subsidized affordable and mixed-income rental developments by Domus Development. In 2005, the City Redevelopment Agency selected AF Evans, an Oakland-based developer, to build a condominium project, Vidrio. The Redevelopment Agency invested over $20 million to the project. It was planned to include 195 for-sale condos and townhouses and almost 40,000 square feet of restaurant and retail space on three blocks, but the developer fell into bankruptcy in March 2009 due to the high project costs, housing slowdown and national credit crunch. The project is currently in foreclosure by Union Bank; however, the Redevelopment Agency and bank are looking for potential investors willing to purchase the entitlements and complete two of the three entitled blocks. The City recently entered into an agreement with Domus Development to build 111 units of affordable senior housing and commercial space on one of the blocks. According to brokers, Downtown Pittsburg has a negative image, and values for market-rate development are considerably lower than in other parts of town like San Marco. Domus Development recently Pittsburg/Bay Point Market Study -19-

20 completed Entrata, a mixed-income rental project that included market-rate units and subsidized lowincome units targeted at households at 60 percent of area median income. The subsidized units were difficult to lease because they were very close to the market-rate rental rates for apartments in this area. In other words, there is a considerable discount for market-rate housing in Downtown Pittsburg compared to San Marco, which has attracted a greater amount of high-end housing development without public subsidy. Several, relatively small, market-rate senior apartment complexes have been built recently on Railroad Avenue, south of Highway 4. Creekside Village Senior Apartment Homes opened in 2004 with 88 agerestricted units. Creekside Village is a gated community with a heated pool and spa, assigned lighted parking, fireplaces, and washer/dryers. The units are one- and two-bedrooms, and range from 687 to 900 square feet, with prices from $915 to $1,230. Another project targeted at seniors, Delta Hawaii Apartments, is under construction on Stoneman Avenue, between Railroad Avenue and Loveridge Road. This apartment complex will include 24 units. Another proposed mixed-use project, in unincorporated Bay Point, would be developed in the Orbisonia Heights neighborhood just across from the Oak Hills Shopping Center on Bailey Road. The Contra Costa County Redevelopment Agency issued an RFP several years ago for over 300 units of high-density residential housing and 40,000 square feet of retail on the 7-acre site, and received several proposals from interested developers. In order to provide a stronger incentive for development, the County decided to acquire and assemble the parcels in the project area and reissue the RFP. At the moment, the County has acquired almost all of the parcels. In addition, the County received a proposal for a ten-unit for-sale housing development on Canal Road, which is located north of State Route 4; however, the project has been on hold since the crash of the housing market. Finally, the Naval Weapons Station in Concord is a 13,000-acre site that is slated to be redeveloped into a large mixed-use development in mid-rise buildings oriented around the North Concord BART station, with thousands of acres of open space, housing units, office development, hotel, retail, recreation, and other amenities and services. The development program has not been defined, but it is likely that the area will be planned for thousands of multi-family housing units. The effects from that the Concord Naval Weapons Station Reuse Project will have on the Pittsburg /Bay Point Master Plan is not known. Pittsburg/Bay Point Market Study -20-

21 Table III-2. New and Planned Multi-Family Housing in Pittsburg Project Location Status Type Units Market-Rate Units San Marco Villas Alves Ranch Creekside Village Senior Apartment Homes Delta Hawaii Apartments Entrata Vidrio Affordable Units San Marco Blvd. & W. Leland Rd. Completed (2008) Apartments 330 Alves Ranch Rd. & W. Leland Rd. Planned Apartments 215 Railroad Ave. & Buchanan Rd. Completed (2004) Apartments (Senior) 88 Railroad Ave. & Stoneman Ave. Under Construction Apartments (Senior) 24 Railroad Ave. & Cumberland Apartments (Mixed- St. Completed (2007) Income) 15 Under Townhomes (Market- Railroad Ave. & E. 8th St. Construction/Stalled Rate) 57 Subtotal 729 East Leland Family Housing 2555 E. Leland Rd. Under Construction Apartments 63 Los Medanos Village Apartments 1111 Frontage Rd. Under Construction Apartments 71 Presidio Village Apartments 200 Presidio Ln. Under Construction Apartments (Senior) 104 Siena Court Railroad Ave. & E. 8th St. Approved Apartments (Senior) 111 Railroad Ave. & Cumberland Apartments (Mixed- Entrata St. Completed (2007) Income) 13 To Be Decided (TBD) Orbisonia Heights Projects Bailey Rd. & W. Leland Rd. Planned TBD Subtotal 362 TBD (hundreds) Sources: City of Pittsburg, 2008; Strategic Economics, 2009 Total 1,091 Pittsburg/Bay Point Market Study -21-

22 For-Sale Market Pittsburg and neighboring Bay Point have historically offered a relatively low-cost alternative for homeowners. Although Pittsburg experienced extremely rapid price appreciation during the first half of the decade, Pittsburg s median home price remained significantly lower than Antioch s, Oakley s, or Brentwood s even at the peak of the housing boom in 2006 (Table III-3). On a per-square-foot basis, Pittsburg, Bay Point, and Antioch temporarily rose above Oakley and Brentwood prices in 2006, but have recently fallen back below prices in the more eastern cities. Like the other East County cities, the foreclosure crisis and recession caused Pittsburg s prices to drop approximately to 2000 levels by the first quarter of Table III-3. Home Prices in East County Cities, Median Home Price Pittsburg Bay Point Antioch Oakley Brentwood 2000 $161,000 $116,000 $185,000 $172,000 $258, $475,000 $450,000 $530,000 $550,000 $699,000 Jan-March 2009 $160,500 $117,625 $185,000 $219,552 $300,000 Percent Change, % 288% 186% 220% 171% Percent Change, % -74% -65% -60% -57% Average Price/Square Foot 2000 $108 $106 $108 $117 $ $352 $364 $366 $300 $284 Jan-March 2009 $110 $111 $108 $127 $135 Percent Change, % 243% 239% 156% 117% Percent Change, % -70% -70% -58% -52% Source: Trulia.com, April 2009 In contrast to the detached single-family homes that make up most of the city s market, the residential real estate brokers interviewed for this analysis observed that attached product consistently sells for higher prices in Pittsburg than in the cities to its east. This premium is likely due to the relatively short commute from Pittsburg to job centers like Concord, Walnut Creek, Oakland, and San Francisco. Brokers reported that during the height of the housing boom in 2006, condos were selling in the $300,000 to $400,000 range. As a result of the foreclosure crisis and the recession, condo prices fell to the low $100,000s in 2008 and early 2009, with some bank-owned units have selling for as low as $50,000 or $60,000. Pittsburg/Bay Point Market Study -22-

23 Impact of the Foreclosure Crisis Pittsburg s housing prices have been driven down significantly since 2006 by the national foreclosure crisis and recession. The foreclosure crisis has hit East Contra Costa County particularly hard, although Antioch, Oakley and Brentwood have seen higher foreclosure rates than Pittsburg (Figure III-1). 18 In comparison, cities in Central County, like Martinez and Concord, have been somewhat less affected by foreclosures. This pattern follows the statewide trend of the highest foreclosure rates being concentrated in more affordable inland communities, which saw both rapid housing development and higher rates of subprime loans targeted at lower-income homeowners during the first half of the decade. Figure III-1. Foreclosure Rates in East and Central County Cities, March 2009 Pittsburg s slightly lower foreclosure rates may be a result of the fact that the city built housing at a slower, more consistent rate than some of its neighbors, particularly Oakley and Brentwood. However, foreclosure rates were suppressed from late 2008 through spring 2009 because several large banks instituted temporary foreclosure moratoriums. As these moratoriums begin to expire in April and May 2009, foreclosure rates are likely to rise, and it is unclear how the impact will be felt in different cities. Analysts have also recently become concerned about a shadow inventory of homes that have been foreclosed but not yet put on the market. RealtyTrac, a private firm that tracks foreclosure data, estimates that only 30 percent of bank-owned properties in California were being marketed at the end of April, probably because the lenders are overwhelmed by the number of foreclosures. Locally, the moratorium, the shadow foreclosure inventory, and recent changes in California law have had the combined effect of causing a sharp drop in inventories during the first several months of As a result, Pittsburg real estate brokers have observed that potential buyers are bidding prices up slightly. It is unclear what longterm impact the foreclosure backlog will have. Among other scenarios, prices could experience another steep fall if a large number of foreclosed units go on the market all at once, or the backlog could continue to suppress prices into RealtyTrac.com, Contra Costa County, CA Real Estate Trends, available at (accessed April 2009). 19 Merle, Renae, Backlog of Foreclosed Homes Weighs on Prices, Washington Post, April 24, 2009; Carolyn Said, Mortgage Defaults Hit Record in State, Bay Area, San Francisco Chronicle, April 23, 2009; Said, Banks Aren t Reselling Many Foreclosed Homes, San Francisco Chronicle, April 8, 2009; Pittsburg/Bay Point Market Study -23-

24 According to local residential brokers, the two main types of buyers who are currently in the market for new homes in Pittsburg are first-time homebuyers and investors. Both of these groups are trying to take advantage of low prices, and are currently more interested in single-family homes than in condos or other attached product. First-time homebuyers who might, at the height of the market, have found that a condo, townhouse or duplex was their most affordable option, can now purchase an older single-family home for $200,000 less than the price of a condo or townhouse several years ago. Investors are also drawn to the relative affordability of detached single-family homes, and are also eager to avoid paying the homeowners association (HOA) fees required of condo and townhouse owners. As a result of these considerations, brokers report that sales of attached product in Pittsburg have slowed to a trickle. Rental Market Pittsburg is one of the few cities in East Contra Costa County with a substantial number of apartment complexes. Although the city s rents and occupancy rates have historically remained significantly below rents in Central and West Contra Costa County, Pittsburg s rental market is competitive with Antioch, the other major East County market. The average rental rate in Pittsburg in the fourth quarter of 2008 was $1,125 a month for an 830 square foot unit, or $1.36 a square foot. Table III-4 shows the mix of unit types in the city, and the average size and rent for each type. Table III-5 shows how Pittsburg compares to other Contra Costa Cities. The average unit in Antioch leased for $1,113 at the end of Prices were slightly higher in nearby Central County cities such as Concord ($1,187) and Martinez ($1,247). Occupancy rates in Pittsburg are the lowest in the county s major markets, at 92.5 percent in Table III-4. Mix of Apartment Units and Average Size and Rent, Pittsburg, Fourth Quarter 2008 Unit Type Units Average Square Feet Average Rent Average Rent per Square Foot Studio $699 $ bedroom/1 bath 1, $966 $ bedoom/1 bath $1,139 $ bedroom/1.5 bath $950 $ bedroom/2 baths 1, $1,236 $ bedroom/3+ bath 114 1,114 $1,467 $ bedroom/2 bath 103 1,004 $1,446 $1.44 All Units 2, $1,125 $1.36 Only includes apartment communities with 50 or more units. Source: RealFacts, 2009 Pittsburg/Bay Point Market Study -24-

25 Table III-5. Rents and Occupancies, Fourth Quarter 2008 Cities in Contra Costa County with Four or More Apartment Communities with At Least 50 Units Each Average City Average Rent Occupancy Rate San Ramon $1, % Walnut Creek $1, % Pleasant Hill $1, % San Pablo $1, % Martinez $1, % Richmond $1, % Concord $1, % Pittsburg $1, % Antioch $1, % Contra Costa County $1, % Based on apartment communities with 50 or more units. Source: RealFacts, While Pittsburg s rents have consistently remained below the average rent in the Bay Area, the city s rental prices have historically been relatively steady compared to the region as a whole (Figure III-2). Between 2001 and 2005, Northern California experienced a dip of approximately 15 percent in rental prices. In Pittsburg, prices fell just 4 percent during this period. When prices began rising after 2005, rent increases in Pittsburg were again more moderate than in the rest of the region. Rents in Northern California rose approximately 25 percent between 2005 and 2008, while Pittsburg s rents rose just 9 percent. Both Pittsburg and the region began to see a slight decline in rental prices in the last quarter of 2008, but Pittsburg s history suggests that even a protracted decline may be moderate compared to the rest of the region. Figure III-2. Rental Trends in Pittsburg and the Bay Area, Source: RealFacts, Renting v. Buying in Pittsburg The recent depreciation in home prices has impacted the relative affordability of rental and ownership housing. Table III-6 shows the maximum monthly rent that various household sizes at different income levels can afford to pay in the Oakland-Fremont metropolitan area, and the maximum prices at which these households can afford to purchase a home. For example, a two-person household earning 120 Pittsburg/Bay Point Market Study -25-

26 percent of median income could afford to pay $2,005 in rent, or purchase a house for $321,352, without spending more than 30 percent of income on housing. If this household were looking for housing in Pittsburg, where homes can now be purchased for $200,000, they would probably choose to buy. Whereas in previous years, the household might have had to settle for a condo or townhouse, at today s prices they could probably afford a single-family home. Or, depending on where the household s members were employed, they might choose to rent or purchase a home in a community further to the west that might previously have been unaffordable. Although price depreciation has made ownership housing more affordable for many likely Pittsburg residents, the rental market has not dried up. For lower-income households, renting will still make more financial sense than buying a two-person household earning 80% of area median income would need to find a home for $185,351 or less in order to buy. Households may also choose to rent because they are not interested in homeownership, or because they cannot qualify for a mortgage. Families who have lost their homes to foreclosure are also returning to the rental market, at least in the short term. San Marco Villas has reportedly had success attracting renters who have lost their homes due to foreclosure. The depreciation of home prices makes it more difficult for high-end luxury apartment projects to remain competitive. According to representatives from Discovery Builders/Sierra Pacific Properties, the construction of San Marco Villas has driven down rental rates at other high-end properties such as Oak Hills Apartments. This suggests that the demand for luxury rentals in Pittsburg is fairly shallow, particularly now that homeownership is much more accessible to moderate- and middle-income households. Pittsburg/Bay Point Market Study -26-

27 Table III-6. Maximum Affordable Rental and Homeownership Prices, Oakland-Fremont Metropolitan Area, 2009 Three-Person Household Two-Person Household One-Person Household Income Level (% Area Median Income) 80% 120% 160% 80% 120% 160% 80% 120% 160% Annual Income $64,240 $96,360 $128,480 $57,200 $85,800 $114,400 $50,000 $75,000 $100,000 Monthly Housing Budget* $1,606 $2,409 $3,212 $1,430 $2,145 $2,860 $1,250 $1,875 $2,500 Rental Housing Est. Utilities $160 $160 $160 $140 $140 $140 $120 $120 $120 Maximum Monthly Rent $1,446 $2,249 $3,052 $1,290 $2,005 $2,720 $1,130 $1,755 $2,380 Ownership Housing Est. Expenses** $591 $671 $751 $553 $625 $696 $515 $578 $640 Monthly Mortgage Payment $1,015 $1,738 $2,461 $877 $1,521 $2,164 $735 $1,298 $1,860 Principal $178,834 $306,117 $433,400 $154,459 $267,793 $381,127 $129,449 $228,518 $327,586 Maximum Home Price*** $214,601 $367,341 $520,081 $185,351 $321,352 $457,353 $155,339 $274,222 $393,104 *Assumes households pay 30% of income for housing **Taxes, insurance, utilities, HOA fees ***Assumes 20% downpayment Source: Department of Housing and Urban Development, 2009; Strategic Economics, 2009 Pittsburg/Bay Point Market Study -27-

28 OFFICE MARKET While Pittsburg does have a significant number of jobs per household compared to other East County cities (see Table II-2, above), few of these jobs are in sectors that use significant amounts of office space. Top employers include local government and educational institutions, manufacturers, and retailers (Table III-7). Table III-7. Top Employers in Pittsburg Number Employer Employees Pittsburg Unified School District 1,400 USS-POSCO Industries 1,000 Los Medanos Community College 640 City of Pittsburg 400 Dow Chemical Company 380 Wal-Mart 220 Home Depot 180 Target 170 Loctite Aerospace 160 Safeway 150 American Color Graphics 140 Ramar International Corporation 120 Best Buy 100 Redwood Painting 100 Raleys 100 SBC 100 Source: City of Pittsburg, Economic Development Department Reflecting the city s employment base, Pittsburg has just 32,500 square feet of office. In comparison, Antioch s office space totals 196,240 square feet. The average asking rent in both Antioch and Pittsburg was $1.85 in the first quarter of Antioch and Pittsburg compete for office developers and tenants with the I-680 office corridor, which includes several of the largest office nodes in Contra Costa County and is located just 10 miles to the east of Pittsburg. This competition is particularly difficult in the current economic climate. As of the first quarter of 2009, the overall vacancy rate in the I-680 Corridor market was 15 percent, up from a low of around 10 percent in As a result of falling demand, property owners on the corridor decreased rents 11 percent between the fourth quarters of 2008 and Office brokers interviewed for this report described Pittsburg s office market as underdeveloped. In general, the East County cities on Highway 4 have a much smaller, more local-serving office market than the cities located directly on I-680. Compared to the cities to its east, Pittsburg does have the advantage of better accessibility, both on Highway 4 and BART. However, office brokers did not think that many workers currently use the train to commute to Pittsburg. Pittsburg-Bay Point continues to be an origin 20 CB Richard Ellis (CBRE), Market View: I-680 Contra Costa Office, First Quarter CBRE, Pittsburg/Bay Point Market Study -28-

29 station for commuters from East County to Central County and other Bay Area cities, rather than an employment center for office workers in its own right. In contrast with other Central County and East County cities, Pittsburg lacks a hospital, and therefore does not have a concentration of medical offices. Several new office projects are underway, which will be largely occupied by government uses. The East Contra Costa County Courthouse is being expanded from approximately 23,900 square feet to about 49,600 square feet. In 2007, a five-story mid-rise office building was approved for development adjacent to City Hall, and across the street from the Courthouse. Prospective tenants of the new office building include the public library, the Pittsburg Unified School District's administrative offices, and other professional office uses. In addition, the expanded East Contra Costa County Courthouse will likely attract attorneys and other legal service office uses to the office building. RETAIL Figure III-3 is a general plan land use map showing commercial areas in Pittsburg and Bay Point. The study area is located immediately to the east of Oak Hills Shopping Center, a neighborhood-serving center anchored by a Safeway and Rite Aid. In addition, there is a small amount of convenience retail located just north of Highway 4 on Bailey Road, in the unincorporated community of Bay Point. The nearby intersection of W. Leland Road and San Marco Boulevard is slated for commercial uses, but is currently not developed. Railroad Avenue, which is located approximately three miles from the project site, is the city s main commercial corridor, and includes several car dealerships and large neighborhoodserving shopping centers. Most of the city s regional serving retail is located at the Century shopping center on the east end of the city, and is visible from Highway 4. The Century center includes largeformat general merchandise and home improvement stores as well as restaurants and some smaller in-line tenants. Overall, Pittsburg has relatively high per capita taxable transactions compared to Contra Costa County as a whole (Table III-8). The city s per capita taxable sales are among the highest in East County, second only to Antioch. This suggests that Pittsburg is fairly well served in most retail categories. Pittsburg shows particular strength in motor vehicles and parts sales and in building materials. Sales at eating and drinking places and service stations are also above the countywide average. The city s sales are slightly below the county average in the apparel, general merchandise, home furnishings and appliances, and other retail categories. Table III-9 shows retail leakage in Pittsburg based on a comparison of the total spending potential of Pittsburg residents and actual spending in retail stores in the city. As shown, the city competes very well in the categories of motor vehicles and parts, building materials, eating and drinking places, and service stations (see Figure III-4). Pittsburg s food stores have performed well, capturing almost all of the local potential demand. The areas of leakage include apparel stores, home furnishings and appliances, general merchandise stores, and other retail stores. 22 Much of the spending in these categories is likely captured at regional malls in neighboring cities like Concord and Antioch. 22 The other retail category includes stores selling gifts, sporting goods, musical instrument, stationary and books, jewelry, office supplies, etc. Pittsburg/Bay Point Market Study -29-

30 Figure III-3. Pittsburg's Retail Corridors Source: Dyett and Bhatia, Figure 2.2. General Plan Diagram. Study Area Pittsburg/Bay Point Market Study -30-