Downtown Market Analysis

Transcription

1 Downtown Market Analysis 22

2 V. DOWNTOWN MARKET ANALYSS To ensure long-term economic results and success, Romeo's Downtown enhancement effort must be market-driven. This means that the effort must be one that results in all of Downtown's investors -- business owners, property owners, developers, patrons, the local government, etc. -- being able to realize an increasing return on their investments. This can only be achieved via an enhancement effort that is based on a sound, realistic understanding of Downtown's economic potentials. The following chapter quantifies Downtown's economic potentials in terms of retail, office, and housing development. Downtown Retail Opportunities Retail Trade Area - Downtown Romeo's primary retail trade area has been defined as the geographic area from which the majority of retail customers are currently drawn and the geographic area which presents the greatest opportunity in the immediate future for gaining additional retail customers. Based on current customer travel patterns, discussions with local business leaders and government officials, and the opinion of HyettPalma, nc., Downtown's primary retail trade area has been identified as the area shown on the attached map. Retail Economic ndicators - Downtown's primary retail trade area can be currently characterized by the following economic indicators. THE PRMARY TRADE AREA HAS AN ESTMATED POPULATON OF 72,961 - WlTH AN ESTMATED 25,718 HOUSEHOLDS (Source: ESRl estimate) THE PRMARY TRADE AREA POPULATON S ES'TMA'TED TO NCREASE TO APPROXMATELY 79,706 BY WlTH AN ESTMATED 28, ESTMATED HOUSEHOLDS (Source: ESRl estimate) 23

3 Site Map Almont Armada Romeo Michigan Memphis Shelby O 2005 ESR, GDT ESRl Ondemand reports and maps from Business Analyst Online. Order at or call

4 'THE AVERAGE HOUSEHOLD SZE S 2.80 PERSONS, WHCH S SLGHTLY LARGER THAN THE NATONAL AVERAGE OF 2.59 (Source: ESRl estimate) THE TOTAL COMBNED NCOME OF HOUSEHOLDS WTHN THE PRMARY TRADE AREA S APPROXMATELY $2,287,000,000 PER YEAR (Source: ESRl estimate) 'THE AVERAGE HOUSEHOLD NCOME FOR THOSE N THE PRMARY 'TRADE AREA S APPROXMATELY $87,046 AND S PROJECTED TO NCREASE TO $1 00,509 ANNUALLY BY (Source: ESRl estimate) Current Retail Businesses - Downtown Romeo currently contains 48 retail businesses, which occupy approximately 85,000 square feet of building space. The retail inventory was completed by the Downtown Romeo Process Committee and is shown on the following pages. 25

5 Downtown Romeo Retail Businesses SC CODE BUSNESS TYPE # BUS. TOT. SQ. FT Food Store 5499 Miscellaneous Food 2 4, Automotive Dealers and Service Stations 5521 Used Cars AutolHome Supply Gas Service Station 2-56 Apparel and Accessories 5632 Women's AccessoriesSpecialty Miscellaneous Apparel 1-57 Furniture and Home Furnishinqs 5712 Furniture Store Floor Covering Misc. Home Furnishings Radio/TVlElectronics 1-58 Eatin~lDrinking 5812 Eating Places 5813 Drinking Places Miscellaneous Retail Liquor Store Antiques Hobby/Toys/Games GiftlNovelty SewingPiece Goods Tobacco Stand lwiscellaneous Retall Select Support Services 7216 Dry CleanersTailors Beauty Shops Barber Shops 1 26

6 Downtown Romeo Retail Businesses SC CODE BUSNESS TYPE # BUS. TOT. SQ. FT. Amusement and Recreation Services 7911 Dance Studios/Schools Mic. AmusementlRecreation 1 Source: Downtown Romeo Process Committee 27

7 Retail Potential - Currently, within Downtown's primary trade area, the total estimated demand for retail products is approximately $367,000,000 per year. This demand is shown on the following graphs. A complete presentation of retail product demand for the primary trade area is shown in THE RETAL REPORT@, contained in the Appendix of this document. As a conservative estimate, it is assumed that Downtown Romeo retail businesses now generate an average (blended figure) of approximately $160 per year per square foot in retail sales. Since Downtown currently contains approximately 85,000 square feet of occupied retail space, Downtown Romeo should currently be generating approximately $14,000,000 in retail sales per year. By dividing the project area's estimated annual retail sales - $14,000,000 - by the total estimated demand for retail products within the primary trade area - $367,000,000 - it call be concluded that Dow~itown Romeo may currently be capturing approximately 3.8% of the retail sales potential within the primary trade area. And, the balance of the demand is being captured by businesses within other parts of the primary trade area and/or by businesses in other trade areas. Taking steps to further enhance Downtown Romeo, and barring a significant decline in the national or regional retail economy, it is conservatively anticipated that Downtown may have the potential to increase its share of retail sales in its primary trade area from the current level of approximately 3.8% to between 4.25% and 4.5% by the year This should be considered a qoal of the economic enhancement program. f Downtown Romeo is able to increase its market share to between 4.25% and 4.5% by the year 2011, it is possible that the project area may be able to increase its total capture of retail sales to between $15,600,000 and $16,500,000 by the year considered in constant 2006 dollars. 28

8 TOTAL PRODUCT DEMAND BY PRODUCT TYPE Tobacco Products & Smoking Supplies Pets, Toys &Playground Equipm Televisions, Radios & Sound Equlpm Entertainment Fees & Admissio Children's Apparel -- Women's Apparel and 0 Boy's Apparel -- 2 to Men's Apparel -- 6 and 0 Miscellaneous Household Equipmen Small Appliances & Miscellaneous Housewares Major Appliances Household Textiles Alcoholic Beverages Food Away From Home Food At Home (Millions)

9 TOTAL PRODUCT DEMAND BY NCOME GROUP

10 This increase in total retail sales could potentially support the development of between approximately 10,000 and 16,000 net square feet of additional retail space by the year which could include expansions or sales increases by existing Downtown Romeo retail businesses andlor the construction of some limited amount of new retail space. t must be noted that Downtown's ability to gain a larger market share will be contirlgent on efforts to enhance its business climate, enhance and expand its existing businesses, and recruit additional retail businesses to the area. f such efforts are aggressively and diligently implemented - on an on-going basis - the actual growth in Downtown's market share could potentially be much higher than projected. Conversely, by the year 2011, Downtown Romeo's market share could be much less than projected above if efforts to enhance the area and expandlrecruit businesses are not diligently and continually pursued. NOTE: No attempt was made to determine the condition of vacant space. Therefore, no judgment is made concerning the marketability of space based on condition. Retail Business Development - Based on the findings of this retail market analysis, the opportunity exists to enhance and expand certain types of retail businesses that are currently located in Downtown Romeo. n addition, the opportunity also exists to attract additional businesses to Downtown. A list of the types of retail businesses recommended for potential enhancement, expansion, and attraction is presented in the chapter of this document titled Course of Action. Downtown Office Opportunities Office Market ndicators - Several key economic indicators that characterize,the current office operations within Downtown Romeo follow. Downtown Romeo currently co~itains a total of 40 various ofice occupants occupying approximately 89,000 square feet of building space. Downtown Romeo is the traditional professional services center of the Village. 31

11 Downtown's occupied office space serves, primarily, the personal needs of those who live within the broader community. The most significant concentrations of offices include finance, real estate, health services, membership organizations, accounting/bookkeeping services, and government. Current Office Uses - The variety of office occupants found in Downtown can be seen in the following table, in which office tenants are listed by SC nurnbers. The office inventory was completed by the Downtown Romeo Process Committee. Office Potential - t is anticipated that most of Downtown's office market growth will continue to consist of office uses which serve, primarily, the personal needs of those who live in, or in proximity to, Downtown Romeo's primary trade area. Cornniur~ities nationwide have experienced the fact that - as improvements are made in the overall economic and physical conditions of their Downtowns - an associated increase in demand for office space normally follows. This is also expected to hold true for Downtown Romeo. n addition, demand for office space is anticipated to increase due to natural household growth in the area, which is projected for the immediate future. Therefore, it is estimated that approximately 12,000 to 18,000 square feet of additional office space could potentially be supported in Downtown Romeo between now and the year This should be considered an economic goal for the enhancement effort. t must be noted that the actual growth in Downtown's office demand could be higher if Downtown is able to attract general offices, or back office operations from outside the area, to attract office occ~.~pants C-~rrently located elsewhere in,the community; or to experience significant expansion by current Downtown of ice operations. 32

12 Downtown Romeo Offices by SC Code SC CODE BUSNESS TYPE # BUS. TOT. SQ. FT Publishing 271 Newspapers 1 4, Transportation Services 472 Passenger Trans. Arrangement Depository nstitutions 603 Savings nstitutions 1-61 Non-Depository Credit nstitutions 616 Mortgage BankerslBrokers 1-62 Securitv and Commoditv Brokers 621 Security Brokers 1 63/64 nsurance 641 nsurance AgentslBrokers 2-65 Real Estate 653 Real Estate AgentsMgrs SubdividersDevelopers 4-73 Business Services 731 Advertising ComputerData Processing 1 Health Services OfficesClinics of Doctors 1 OfficesClinics of Dentists 3 Offices of Other Medical 3 83 Social Services 836 Residential Care - 86 Membership Or~anizations 864 CivicSocial Organizations Religious Organizations 1 33

13 Downtown Romeo Offices by SC Code SC CODE BUSNESS TYPE # BUS. TOT. SQ. FT EnaineerinalManaaement Services 871 EngineeringlArchitecture 3 6, AccountinglBookkeeping 4 1, ManagementlPublic Relations 4 3,427 Services Not Elsewhere Classified Services 2 General Government General Government Source: Downtown Romeo Process Committee MSHDA, MEDC, 8 MML

14 NOTE: No attempt was made to determine the condition of vacant space. Therefore, no judgment is made concerning the marketability of space based on condition. Office Business Development -- A listing of office types recommended for recruitment and expansion in Downtown Romeo is presented in the chapter of this document titled Course of Action. Downtown Housinq Opportunities The Downtown Blueprint project area contains approximately 58 dwelling units at this time. And, Downtown Romeo is also fortunate to be completely surrounded by historic residential neighborhoods. While Downtown Romeo currently has a sizable number of units in the upper.:loors of Downtowr~ buildings, it appears to offer some liniited opportunities in the immediate future for additional upper floor housing development - particularly if zoning modifications are made to enable more first floor office development in the fringe areas of Downtown. Due to the importance of maintaining Downtown's historic architecture, it is unlikely that opportunities for new housing construction will surface in the near futi-re, unless housing is developed in association with mixed-use new projects. As has been found throughout the nation during the past three decades - regardless of community size or location - as a Downtown's physical environment and mix of businesses is improved, it is very likely that the demand for housing in and near that Downtown will also increase. This can also be expected in Downtown Romeo. Every effort should be made, consistent with the Downtown Blueprint, to introduce more quality housirrg - both market-rate and affordable housing - in and in proxirr~ity to Downtown Romeo. As market conditions allow, every effort should be made to introduce: More loft apartments in the upper floors of appropriate existing structures throughout Downtown - market rate and affordable; 35

15 Mixed-use projects - market-rate and affordable - if redevelopment takes place in or near Downtown; and Both owner-occupied and rental units. Every effort shol-~ld also be made to protect the extremely valuable housing at the edges of Downtown. n addition, specific programs offered through the Michigan State Housing Development Authority should be considered to assist with the development of housing in and near Downtown Romeo. Rather than placing arbitrary or artificial limits on the number of housing units appropriate for Downtown Romeo - and in neighborhoods near the commercial district - it is suggested that the absorption of units in the marketplace be used as the indicator of demand. And, that every effort be made to develop the greatest number of quality units possible in and near Downtown when market conditions allow. 36