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Memo Avienda USACE Response wo City Doc Attachments 26105 Wild Rose Lane, Shorewood, Minnesota 55331, Phone: 952-401-8757, Fax: 952-401-8798 Memorandum Date: June, 5, 2017 To: Ryan Malterud, US Army Corps of Engineers (USACE) Andi Moffatt, WSG & Associates (LGU Representative for the City of Chanhassen) Cc: Mark Nordland, Level 7 Development Darren Lazan, Landform Professional Services Mark Kjolhaug, Kjolhaug Environmental From: Melissa Barrett, Kjolhaug Environmental Services Company (KES) Peder Larson, Larkin Hoffman Attorneys Kendra Lindahl, Landform Professional Services Steven Sabraski, Landform Professional Services Re: Response to USACE letter dated May 3, 2017 for AVIENDA REGIONAL/LIFESTYLE CENTER PROJECT, CHANHASSEN MVP-2015-03075-RMM This memorandum provides responses to comments provided by the U.S. Army Corps of Engineers (“USACE”) for the Avienda Mixed Use Regional Lifestyle Center Wetland Permit Application and the from the U.S. Environmental Protection Agency incorporated in to the USACE comments. The USACE comments are paraphrased below. USACE Comments 1 and 3 – Please provide information that documents why the individual project components (residential and several different types of commercial development) are interdependent and substantiate the interdependence of identified in the Chanhassen City Code for the project. You will need to substantiate the interdependence of the various features in order for the project to pass the guidelines. Avienda Response: City of Chanhassen Established Its Vision for a Regional/Lifestyle Center for the City and Site in 2008: The City of Chanhassen has taken a number of specific steps important to the analysis of this project to plan responsible development for the city. Important for this project are the city actions defining their vision for a Regional/Lifestyle Center in the city, identifying the project property as the location for the Regional/Lifestyle Center and establishing specific ordinance requirements with which the Project must comply. 2 The Chanhassen Alternative Urban Areawide Review (AUAR) update (Attachment A) prepared by the City describes a number of steps that the city has taken to move towards its goal of a Regional/Lifestyle center within the City at the proposed site: 1. City staff began exploring the concept of performing an AUAR for the project area originally in September and October of 2002 in response to heightened developer interest in the project area. The City hired a consulting team to assist with the preparation and assembled a task force to provide community input into the process. 2. The City of Chanhassen adopted its plan for 2030 in November of 2008. The comprehensive plan evaluates land supply and projects growth of the community over a 20 year period. The plan identifies future land use patterns and suggests that the City of Chanhassen will be fully built out by the year 2030. This update identified the desire for a regional/lifestyle center within the AUAR study area, and has changed the guided land uses to include commercial uses. 3. A Concept PUD (called Avienda) for Regional Commercial zoning was approved by Planning Commission and the City Council in 2015. 4. As part of the entitlement process for the Avienda development proposal, the update of the 2005 AUAR was authorized by Chanhassen’s City Council in November of 2016. 5. The process to update the AUAR included presentations to the City Council and Planning Commission, a public open house held on February 28, 2017 and a public hearing on March 7, 2017. According to the AUAR: When the City updated the Comprehensive Plan in 2008, the City identified property within this project area as a significant development opportunity due in part to the residential development potential in the western portion of the City and the need to provide regional commercial for Chanhassen residents. While the AUAR was not updated with the Comprehensive Plan, the City did discuss land use changes from the residential land uses shown in the Chanhassen 2005 AUAR to the regional/ lifestyle mixed use shown in the 2030 Comprehensive Plan. The City of Chanhassen’s vision for a Regional/Lifestyle Center at the proposed project site was defined on November 8, 2008 when it adopted its new Comprehensive Plan (Attachment B). The “Definition/Vision” of “Regional/Lifestyle Center Commercial” is contained in Section 2.7.4 and includes these specific requirements for a Regional/Lifestyle Center showing that the characteristics of the project components and their locations are interdependent: 1. a scale and function that serves a regional market; 2. physical environment emphasizes an attractive comfortable walking experience for shoppers and visitors; 3. designed to serve trail users and mass transit as well as automobile traffic; 4. have at least two major retail anchors; 5. characterized by the diversity and mix of retail and service uses within their boundaries; 6. planned as a group of organized uses and structures to accommodate a sensitive transition between commercial activities such as loading, parking of automobiles, lighting and trash collection and surrounding residential uses; 8. Vehicle and pedestrian access is coordinated and logically linked to provide a comprehensive circulation system. Importantly, the Section 2.7.4 of the Plan specifically calls out only the project site as the place for a Regional/Lifestyle Center: A new zoning district RC (Regional Commercial) will be created in the City Code to implement this land use. The City has given a dual land use of the 160 acres at the southeast corner of Powers and Lyman Boulevards to accommodate this use. 3 Thus, the City’s established its vision for the project over eight years ago. The test for approval is not whether individual project components could exist independently. The city’s test is the opposite – does the proposed project contain the proper interdependent components in an acceptable design that as a whole constitutes a viable Regional/Lifestyle Center. Additional City Code Provisions Require an Integrated Project Design: The City Code (select provisions attached as Attachment C) imposes additional restrictions that must be accommodated in the design, driving the interdependence of project components:  Sec. 20-502 provides that for a Regional/Lifestyle center commercial PUD residential development “may only occur in conjunction with a commercial or office development and may not encompass more than 20 percent of the proposed development.”  Sec. 20-509 regarding “Standards and guidelines for regional/lifestyle center commercial planned unit developments” provides that: o This district is intended to provide for the development of regional and community scale integrated retail, office, business services, personal services and services to the traveling public near freeway interchanges. o Development of these centers shall be planned as a group of organized uses and structures to accommodate a sensitive transition between commercial activities such as loading, parking of automobiles, lighting and trash collection and surrounding residential uses. o Vehicle and pedestrian access is coordinated and logically linked to provide a comprehensive circulation system. It is important to note that for project design purposes a mixed development of residential, commercial and office development reduces the designer’s flexibility regarding grading the site and locating uses. Residential development alone provides far more flexibility to adjust grading plans and layouts on a site that does a mixed-use Regional/Lifestyle Center that meets the requirements of Sec. 20-502 and Sec. 20- 509 of the city code. The “Staff Report” for the Chanhassen Planning Commission meeting on May 16, 2017 (Attachment D) contains additional information on city requirements that mandate interdependent components. For example:  On page 2 the staff notes that “The use of the PUD zoning also allows for greater specificity in the types, location and sizes of uses. The city has the expectation that the development plan will result in a significantly higher quality and more sensitive proposal than would be the case with the other, more standard zoning districts. It is the applicant's responsibility to demonstrate that the city's expectations are to be realized as evaluated by the city' s goals and policies.”  On page 8 the city staff describe the “Vision” of the city for the property, stating: “The land use change to either Office or Regional Commercial District as a part of the 2030 Comprehensive Plan was based on the city' s vision for a lifestyle center.”  On page 10 the staff report states that “In 2009, the city created the Regional Commercial (RC) zoning district to differentiate from the Central Business District (CDB). The CBD district is intended to meet the" daily needs" whereas the RC district is intended to be a regional draw with comparison shopping. The RC district was placed in the PUD District in order to be prescriptive in the use permitted.  On the same page the staff then quotes Section 20-509 of the city code which states that the intent of the use of PUD developments for regional/lifestyle centers is to “strive to create a self- 4 sustaining pattern of land uses with cultural, employment, entertainment, housing, shopping and social components.” The Staff Report also includes language stating that “activity generators” are critical for a successful lifestyle center, evidencing the interdependence of project components. On page 11 the City staff provides this statement to the Planning Commission members and the public from the developer based on the market study for the project: No lifestyle center can be successful without activity generators. These are businesses that draw customers to the site (sometimes called anchors). In today's changing retail market, those draws may be individual users, but are just as likely to be the experience itself. A collection of quality businesses in an interesting and accessible environment acts as an activity generator. The City strictly applies all these standards in its review and approval process. Attached is the draft “Exhibit A” of the Development Design Standards that the City produced for the project (Attachment E). In additional to tailoring the requirements of the City Code to the project, on Page 5 the city staff include a graphic of the “Master Plan” of the project. That Master Plan is the additional evidence of the interdependence of project components. The “Village Retail District” is the “Retail Hub” referenced in the Wetland Permit Application. The Master Plan showing 5 “sub-districts” is the foundation of the plan for the site. The components and layout are integral to a viable project and any statement of purpose and need must recognize that. From that foundation the “Preliminary Plat” for the project on page 17 of the Staff Report was produced showing more detail for the project. The very clear and specific City requirements show that interdependent project components are mandatory component of the project design and any statement of purpose and need for the project must incorporate the requirement that project design consists of interdependent components. Those City requirements must be met by a project design consisting of components that are interdependent in characteristic and location, inherently limiting the range of possible alternatives. Interdependent Uses Correctly Arranged Are Required for a Regional/Lifestyle Center: The interdependence of project components as an essential component of the project is also amply evidenced by the project proposer’s purpose and need to develop a viable project within the City’s constraints. Avienda appreciates that the USACE directly communicated this assumption in its comment letter regarding the interdependence of individual components in a viable Regional/Lifestyle Center: “We presume they are not because the open market has shown they are not interdependent.” That presumption might be correct for some commercial developments. It is incorrect for this project. It is inconsistent with the City of Chanhassen requirements for the property and is inconsistent with the economic realities of developing a viable Regional/Lifestyle project. Our alternatives analysis process identified the project elements that fundamentally define a Regional/Lifestyle Center in the City of Chanhassen. Our team also defined the fundamental elements that define a viable Regional/Lifestyle Center. We are providing information on that analysis in response to the USACE request for more information on the interdependence of individual project components. Most simply, the “Application for Rezoning to PUD, PUD Development Plan, Conditional Use Permit, Variance and Preliminary Plat” (Attachment F) on page 3 defines the project as a combination of interdependent components, a description that is an integral part of the project Statement of Purpose and Need: This project provides this opportunity for this diverse mix of uses in a high- quality lifestyle center. Lifestyle centers create a lifestyle experience, rather than a simple shopping experience, 5 for customers though creation of a main street in the center of the project with places to dine, converge and socialize. A viable project must first meet the City’s defined need for a mixed-use regional lifestyle center project within the City of Chanhassen. In our design process and discussion with the city we concluded that the required elements for this project are a centrally located retail hub, sufficient viable additional individual components, a circulating traffic system and a walkable environment. The required additional components include specialty shops, restaurants, medical and professional services and entertainment/hospitality uses. Residential components must include a variety of housing types and must be sited to provide a transitional buffer between uses. The proposed individual components and their gross areas in a viable project must be of a scale and function necessary to serve the regional market. The required components must all be sited to provide a centrally-located retail hub bordering a pedestrian promenade with complementing and supporting uses immediately surrounding the hub to create an inviting, walkable environment and a comprehensive circulation system for all transit types throughout the entire project area. Developing the individual component uses within an integrated, contiguous and buildable footprint is critical for project viability, sustainability, and feasibility. Section 2.2 of the Avienda Wetland Permit Application contains significant additional text on the conclusions reached from this analysis. Avienda and the City both depend on the expertise of Jim McComb to provide accurate and well- supported information on the retail industry and current retail trends. His analyses are provided in the following documents (Attachment G):  Retail Trends and Shopping Centers dated March 2017  Alternatives Evaluation Memorandum to Landform dated April 12, 2017  Response to USACE Letter memorandum to Landform dated May 31, 2017 The Retail Trends report documents the evolution of regional retail development from shopping malls to lifestyle shopping centers. The report describes the economic, generational and retail trends driving that evolution. Most importantly for the purposes of this response, the Retail Trends report on page 7 states that “the purpose of this analysis was to identify trends in tenant mix.” Understanding the “tenant mix” for a successful project is a critical part of the report for both the City and Avienda. That is fundamentally an acknowledgement that the Avienda project as a Regional/Lifestyle Center is a mix of interdependent tenants, not a group of tenants that might survive alone in an “open market.” This project is designed to support shops that would not/could not exist on their own. They are the desired tenants and will only locate in an environment with diverse shopping to create an environment and experience where they will agree to locate and can survive. As an example, downtown Chanhassen is the community center. Downtown will not attract stores typical of comparison shopping stores. What has always been missing is the “shopping goods’ component with a comparison shopping environment. Anchors and lifestyle centers are required to attract the small store comparison shopping base that’s critical for a regional draw. The city’s goal was to create this project to bring to the community a group of stores that are not there and will not locate in the downtown Chan community center. The Alternatives Memorandum directly addresses the Avienda project from Mr. McComb’s expert perspective. The report “provides analysis and conclusions regarding the site layout considerations that must be addressed to achieve the objective of ‘a viable mixed use Regional/Lifestyle Center within the City of Chanhassen that will meet local and regional demand and need for the designated uses.’” 6 It provides an analysis and conclusions for each of the alternatives provided in the Wetland Permit Application. The memorandum makes clear that the interdependent nature of all project components is a fundamental consideration in the layout of a viable Regional/Lifestyle project. Mr. McComb concludes: The mixed use regional lifestyle center continues this evolution by incorporating medical, office, hotels, and residential uses in a coordinated development. This evolution is a continuation of the development formula where two plus two equals five. Avienda combines the same mix of uses that developed around Southdale 60 years ago. While the regional shopping center evolved with the times, the site concept remained the same: the anchor stores and smaller specialty stores and their associated parking were contained on a site surrounded by roads that provided access to the retail component. The placement of anchor stores and smaller retail stores and food services is designed to encourage comparison shopping and pedestrian circulation. Additionally, Mr. McComb’s analysis of individual site layout alternatives focuses on the interdependent nature of individual project components. For the “Complete Avoidance Alternative” he concludes:  There is inadequate parking in front of the supermarket and the parking lot to the east of the supermarket does not relate to the entrance to the supermarket.  The site plan has only one restaurant pad site.  The four buildings for small shops are unrelated to the larger store and do not constitute a shopping center.  Other than the two buildings south of WL9, there is no likely pedestrian activity between these four building clusters.  These buildings, due to their size and orientation, are unlikely to attract knowledgeable retail and service tenants. Those tenants that do lease a space in these buildings will most likely fail.  This site plan with only 193,300 square feet does not represent a regional lifestyle center in scope, design, or size.  This development concept is not consistent with the City of Chanhassen vision contained in the Comprehensive Plan. For the “Minimization Alternative” Mr. McComb concludes:  The Minimization Alternative (Figure 8 from the Wetland Permit Application) represents a very small supermarket anchored power center without enough square feet to compete as a destination with larger shopping areas in the southwest market.  The site plan has only one restaurant pad site.  Section L contains two unanchored strip shopping buildings with 32,000 square feet and 18,000 square feet, which is excessive for the anchor store space represented by the power center component.  The smaller building does not orient toward incoming traffic on Bluff Creek Boulevard and has poor visibility.  This site plan, with only 250,000 square feet of retail space (shown in Table 3), does not represent a regional lifestyle center in scope, design, and size.  Shopping center industry experience has found that successful power centers have 90 percent of their space devoted to anchor stores and 10 percent small stores. The Minimization Alternative, with 65 percent anchor store and 35 percent small store space, would not be built by a knowledgeable shopping center developer.  This development concept is not consistent with the City of Chanhassen vision contained in the Comprehensive Plan. For the “Proposed Alternative” Mr. McComb concludes:  The retail component is inside a ring road that provides access to the main component of the regional lifestyle center. 7  The anchor stores are located to the west and north bordering the ring road.  The small shop main street area is located in the southeast portion of the site with excellent visibility from the shopping center entrance on Bluff Creek Boulevard.  Avienda Parkway encircles the site on the west, north and east.  The main street small shops retail area connects Avienda Parkway to the parking lot in front of the western row of anchor stores.  Parking located in front of the north row of anchor stores also abuts the main street retail shops.  The location of anchor stores and small shops encourage patrons to park once and walk to the stores they plan to visit.  The parking lots have convenient access and circulation.  The site’s open design provides stores with excellent visibility.  The convenience goods shopping area with 143,000 square feet, anchored by a supermarket, has an excellent location on the southeast corner of the site with excellent visibility and convenient access from Powers Boulevard.  The convenience goods component is consistent with regional lifestyle centers as demonstrated by The Shoppes at Arbor Lakes, The Shops at West End, Central Park Commons, and City Place.  The two retail components totaling 435,500 square feet represent a lifestyle center in scope, design, and size.  Non-retail uses total about 691,000 square feet, which provide additional support for the retail component.  This development concept is consistent with the City of Chanhassen vision for a regional lifestyle contained in the Comprehensive Plan. Finally, the Response to USACE letter document contains additional comments from Mr. McComb based on his expertise in the field. His expertise in advising the City of Chanhassen is unassailable and his conclusions regarding the City’s expertise are important. He provides important responses to USACE comments in the interdependence of project elements, stating directly: The location, design, and proximity of the individual components of a viable regional mixed use lifestyle center are based on the need to create a synergistic development in which each individual component is successful and contributes to the success of the entire development. The principals that create successful mixed use regional lifestyle centers are based on lessons learned over about 25 years of design and development for this type of center. The successful regional mixed use lifestyle centers have reinforced how the individual components should be designed and located so that they support the other components. The retail component is the central focus of these developments. USACE Comment 2 – The proposed project is a conglomeration of five separate parcels all of which are zoned A2-Agricultural Estate District. If this site is able to be re-zoned PUD it is presumed that other sites can also be re-zoned to PUD. Substantiate that this is the only parcel in the City can be re-zoned to a PUD. Avienda Response – The proposed site is currently zoned A2-Agricultural Estate District, but is intended to be re-zoned to Regional Commercial (RC) as part of the Planned Unit Development (PUD) once the project has final approval by the City. The A2 zoning district, in this case, is a holding zone until development is proposed that this consistent with the Regional Commercial designation in the Comprehensive Plan. The vision of the Comprehensive Plan for the site is described in detail above. MN Statute §473 requires cities to adopt zoning that is consistent with the adopted Comprehensive Plan. 8 Section 20-509 allows this RC PUD only for the area designated for regional/lifestyle center in the Comprehensive Plan. The proposed project (Regional/Lifestyle Center) is consistent with the City of Chanhassen Comprehensive Plan and so the option is in place for re-zoning of the property. The two potentially practicable alternative sites identified in the Wetland Permit Application are also currently zoned A2-Agricultural Estate District but are not guided in the City Comprehensive Plan for a Regional/Lifestyle Center. They are instead guided for residential low density development. Rezoning is possible for the proposed project site only because it is guided for such a use in the Comprehensive plan. That same option is not available for re-zoning of the potentially practicable alternative sites because re- zoning to anything but residential low density would be inconsistent with the City’s Comprehensive Plan. There is no other site/parcel/conglomeration of parcels within the City or straddling City limits (under private ownership and without considerable shoreland) that could accommodate the proposed project as demonstrated in the alternative sites analysis; therefore, this is the only parcel within the City of Chanhassen that is undeveloped, large enough, and can be re-zoned to Regional/Commercial to accommodate the proposed project. The project plan is being developed under a PUD which allows for the project to meet overall density and land use goals without being bound by standard zoning requirements. Any parcel within the City of Chanhassen could be developed under a PUD, no matter the zoning. However, as stated in City Code Sec. 20-502 – Allowed Uses (1) Each PUD shall only be used for the use or uses for which the site is designated in the comprehensive plan. For this site, the PUD use must follow City Code Sec. 20-509 – Standards and guidelines for regional/lifestyle center commercial planned unit developments. USACE Comment 4 – Table 1 Section 3.1 appears speculative. There are no tenants listed to support what the minimum acreages need to be. Provide supporting evidence for the minimum dimensions needed for each individual component, including the minimum area of each attendant feature. Avienda Response – For the this project, in this area of Chanhassen and the southwest metro, with this trade area population (both in size and economics), the proposed components/dimensions/ attendant features will result in a viable and successful project that will meet current and future market demands. As noted in great detail above, the project is driven by the interdependent characteristics and locations of project components that constitute a Regional/Lifestyle center. The “minimum acreages” are provided based on the need to build a viable, integrated project with a mix of uses that will attract and serve residents of the region. The minimum acreages are therefore not the sum of minimum dimensions needed for individual tenants but rather are derived from a combination of the expert analysis of Mr. McComb and the experience of the project proposer and its expert advisors. That is why the City’s materials for the Planning Commission public meeting in May (Attachment D) included Mr. McComb’s Retail Trends Report that includes a significant analysis of other “Lifestyle Centers.” That analysis notably describes as significant the total square footage of the Lifestyle Centers and the number of a variety of individual components. The report does not detail the size of individual components. Neither total Projects nor individual components like the Retail Hub are sized by adding up the square footage predicted to be used by individual components. Rather, they are sized to accommodate the types and quantity of uses needed to provide the necessary mix of individual tenants and uses over the life of the project. 9 The attached “Regional Commercial Site Metrics” spreadsheet (Attachment H) shows the calculations that produce a minimum total area of 90 acres for a Regional/Lifestyle center. The table utilizes factors specific to Chanhassen City code to develop a methodology for selecting a project site to meet the anticipated mix of users to support a Regional/Lifestyle center. Additionally, stormwater management would typically consume a large part of the project, but given the need to cluster development and maximize project density, it was assumed the majority of the stormwater management would be constructed in underground facilities. A small portion of the stormwater management facilities are assumed to be part of the site efficiency factor (grades and amenities) are therefore accounted for. We understand that it would be useful for the USACE to have information defining the size of each individual piece in each portion of the project to allow a precise analysis of alternatives by moving around individual pieces on alternative site plans. That analysis is not possible because assigning any minimum square footage numbers to individual tenants would be completely speculative. Attempting to downsize individual components or redistributing square footage among uses for the purpose of assessing alternatives is contrary to the need to design a viable project that also meets city requirements. Downsizing retail and/or other components on the site would be contrary to this goal. The design is based on years of developer’s professional experience and the advice of experts in building what retailers, and ultimately consumers, want thereby resulting in a successful project. The developer will only build what is expected to be a successful/viable project. The developer and design consultants determine the layout required for success (building numbers and size, orientation, proximity to each other, number of retail anchors, etc.) and that layout is the basis for both the Master Plan and the resulting Preliminary Plat referenced above. The developer finalizes tenancy by showing that plan to potential tenants. Tenants then choose their desired location based on their needs. Individual tenant choices often lead to adjustments in the details of the final design within the major project components like the Retail Hub shown in the Master Plan. Tenants expect and require that process so they can make decisions based on what the end product/layout will be before committing to the project. Minimum dimensions needed for each component including the minimum area of each attendant feature cannot be provided as it varies from project to project. Market studies support the proposed components and their densities. In fact, market studies show that a Regional/Lifestyle Center in this location could support an even larger retail component than is being proposed. The developer would be happy to include more retail in the design; however, there is no additional space on the site to provide more viable retail. The attached Draft Development Design Standards prepared by the city(Attachment E) contains information in response to the USACE request for information on “minimum attendant features.” An important note is that as a Planned Unit Development the city will tailor the requirements for those features to accommodate the goal of creating a Regional/Lifestyle project. USACE Comment 5 – The alternatives analysis provided is insufficient to determine compliance with the Guidelines. Once we have determined the overall project purpose and needed, you may have to complete a new off-site alternatives review, which could include reviewing each individual component on alternative sites. Avienda Response –As noted in great detail above, the purpose of the project is to create a mixed use Regional/Lifestyle Center. The need for the proposed development was provided in Section 2.3 of the Wetland Permit Application. The Applicant/developer is not seeking approval to develop scattered 10 parcels to different uses within the City of Chanhassen or beyond and such an alternative clearly would not meet the Purpose and Need for the project.. USACE Comment 5 a) Provide evidence documenting the amount and location of aquatic resources present on each site. Avienda Response – For preparation of the Alternative Sites figures (Figures G through M), some or all of the following publicly available natural resource data layers were used (as indicated by the figure name and/or legend): NWI maps (Minnesota Geospatial Commons 2009-2014 and U.S. Fish and Wildlife Service); soil survey data (USDA NRCS 2015), DNR Public Waters Maps (Minnesota Department of Natural Resources 2015). The shoreland layer zone was created in Arcview and was equal to 300-feet for DNR Public Watercourses, and 1000-feet for DNR Public Waters. The Bluff Creek Primary Corridor shapefile was provided by the City of Chanhassen. Offsite Waterway and Wetland Determinations followed routine Level 1 (offsite) methodology by observations based on multiple years of aerial photography, soils, and LiDAR to determine the presence of wetland/waterways/tributaries that were not shown by any other data layer. National Hydrography Dataset (NHD) (U.S. Geological Survey 2015) layers were not originally used. NHD data for each alternative site is now included in a the application as Attachment D – Figures G2 through M2. No NHD features were omitted during the original assessment. b) Provide us a statement in writing that Bluff Creek Overlay District (BCOD) cannot be impacted. If the City has the ability to be flexible on impacts within the BCOD then other sites that may have less aquatic resource impacts but more BCOD impacts should be explored. Avienda Response –Impacts to the BCOD are discouraged. Reference to this can be found in within The Bluff Creek Watershed Natural Resources Plan (www.ci.chanhassen.mn.us/DocumentCenter/Home/View/323). Article XXXI. Sections 20-1551 to 20-1564 of the Chanhassen City Code (www.municode.com/library/mn/chanhassen/codes/code_of_ordinances) prohibits impact to the Bluff Creek Primary Zone. Sec. 20-1561. states “ Natural habitat preservation. Natural habitat areas within the primary zone shall be preserved as permanent open space. Section 20-1563 states “Open Space shall comprise 100 percent of the area located within the primary zone.” Therefore, the applicant applied for a Conditional Use Permit (CUP) and will be submitting a variance application to the City for permission to impact BCOD primary and secondary zones for: (1) the extension of Bluff Creek Boulevard into the proposed site and connecting to the existing roadway stub, (2), a one-lane emergency fire access road (as required by the City) through the east part of the woodland, and (3) grading contours associated with the proposed development. The applicant will be revising the application as the City has removed the requirement for the fire lane. The Staff Report attached as Exhibit D contains a significant discussion of the BCOD starting at page 30. The project site contains 20 acres in the BCOD. The project proposes impacts to 2.9 acres of BCOD. As evidence of the City staff commitment to protecting the BCOD, page 32 states that “Staff recommends no encroachment on the [Bluff Creek Overlay District] primary zone be allowed.” The City of Chanhassen City Code includes the “Bluff Creek Overlay District” requirements in Article XXXI. An important City tool in the protection of areas within the BCOD is “Density clustering.” Density clustering is used to compensate for the loss of use of land in the primary zone of the BCOD by 11 transferring the density from the BCOD area to an area in the site outside the primary zone. That tool is being used for the Avienda project and is a significant factor in the proposed site layout. Section 20-1559 (included in Exhibit C) provides that density clustering “may be used in areas where portions of the site are unsuitable for development because of the location of the primary zone.” The result is the proposed layout of the proposed Regional/Lifestyle center, protecting the 20 acres on the site within the BCOD and transferring that density to the remainder of the property. The BCOD within the Proposed Site contains bluff slopes, remnant big woods habitat, and an identified cultural resource site. The proposed plan avoids these key features of the onsite BCOD. Even if development were allowed within more, or even all, of the onsite BCOD, the retail hub footprint and adjacent Bluff Creek Boulevard alignment could not be rearranged to completely avoid or to minimize impact to Wetland 1/2 and meet project purpose and need (as explained at the end of this memo). The two potentially practicable alternative sites identified (Alternative Site 5, and Alternative Site 6) both contain substantial acreages of BCOD. Table 3 of the Wetland Permit Application details that:  Development of Alternative Site 5 would result in more aquatic resource impacts and more BCOD impact (over 14 acres of required BCOD impact ) than the Proposed Site (2.9 acres of BCOD impact), and would still not meet project purpose and need in terms of layout and scope.  Development of Alternative Site 6 would result in more aquatic resource impacts than the Proposed Site, and would still not meet project purpose and need in terms of layout and scope. BCOD within Alternative Site 6 is comprised of very high, steeply sloping topography directly bordering Bluff Creek and located immediately upstream of the Minnesota River. Impact to the BCOD on Alternative Site 6 is not feasible from a construction perspective, and it is extremely unlikely that development within the BCOD would ever be permitted by the City or the RPBC Watershed District. The BCOD within the City of Chanhassen is primarily comprised of either steeply sloping or floodplain topography with wetlands along Bluff Creek. There are no other sites that may have less aquatic resource impacts but more BCOD impacts that could be developed into a Regional/Lifestyle center project. c) Alternatives should have one clear and concise set of screening criteria use to evaluate alternatives against one another. In your application you used three different sets of screening criteria found in Sections 3.1, 3.2, and 3.4. Consolidate your list and include one set screening criteria used to compare alternatives to one another. Avienda Response – The format/sequence of the alternatives analysis followed various guidance documents issued by the USACE; specifically the following two documents (1) Guidelines for Preparation of Analysis of Section 404 Permit Application Pursuant to the Section 404(B)(1) Guidelines of the Clean Water Act (http://www.sas.usace.army.mil/Portals/61/docs/regulatory/IP_SAS_404_b_1_Guidelines.pdf), and (2) Preparing An Alternatives Anaysis under Section 404 of the Clean Water Act (http://www.swf.usace.army.mil/Portals/47/docs/regulatory/Handouts/Preparing_An_Alternatives_%20A nalysis.FINAL.pdf). To clarify the content of the application, as outlined in Section 3.2 of the Wetland Permit Application, screening criteria used to identify potential alternative sites were defined and include: (1) final site boundary wholly or partially within the City of Chanhassen that primarily undeveloped/available land; (2) tract of contiguous land 90+ acres in size; (3) located within 0.5-mi of a 4-lane highway/freeway interchange and existing arterial roads; (4) accessible from at least two locations and with the potential for 12 internal connections; (5) sites consistent with City planning/zoning; and (6) a project area that is generally square/rectangular in shape. Table 1 of Section 3.1 was included to support screening criteria item (2) above. Section 3.3 (Table 2) assessed all of the potential alternative sites against the screening criteria for practicability. Even though many of the sites were determined to be too small, additional reasons for a site failing the practicality determination were also provided in the event that one or more of the screening criteria were called into question. From this practicability assessment, Alternative 5, Alternative 6, and the Proposed Site were determined to be potentially practicable alternative sites for the proposed project. These sites were then evaluated for LEDPA determination using environmental factors defined in Section 3.4 with results provided in Table 3. Site screening criteria for practicability (Sections 3.1/3.3) cannot be combined with LEDPA determination criteria. For example, Alternative Site 1 has a total of 2.15 acres of wetland. If all wetlands on the site were impacted, this would result in less impact than the proposed site. However, Alternative Site 1 is not a practicable site because it failed the practicability analysis not only in size, but in access, and zoning criteria. Also note the response by Jim McComb in the attached “Response to USACE Letter.” He specifically states: KES’s Alternatives Site Selection Criteria (3.2) are consistent with the site selection criteria for a regional mixed use lifestyle center that would be utilized by a developer and/or a retail store. Developers understand the location characteristics that result in successful shopping centers and recognize that retailers will not sign leases in developments that do not meet these criteria. d) The no action alternative for our review is considered to be the project that could occur without a Corps permit. Update the no action alternative to describe what could take place without discharging dredged or fill material into waters of the US. The no action alternative can’t be dismissed for not meeting the applicant’s purpose and need. The no action alternative should be evaluated for what development could take place without a permit. Avienda Response – Per Corps guidance, the "No-Action” alternative comprises one or more alternatives that would not involve a discharge of dredged or fill material into WOTUS, which could involve reconfiguring the project to avoid all wetlands on the site, siting the project entirely in uplands offsite, or no action, i.e. not implementing the project. The No Action Alternative provided in Table 3 of the Wetland Permit Application is comparable to the No-Build alternative for WCA purposes. Although the no-build alternative would directly avoid all wetland impacts (because no project would be built on the Proposed Site or any other site), it would not meet the project purpose and need which is a mixed use Regional/Lifestyle Center within the City of Chanhassen. This has been an identified need since 2008, and there have been multiple attempts to develop a viable site plan. The current project team has been working with the City for over 2.5 years, and has developed a plan that meets both the City’s need/vision/rules, and is also a viable plan for the developer. The No Action Alternative is also described by reconfiguring the project to avoid all wetlands on the site and was provided in Section 5.3 as the Complete Direct Avoidance Alternative (Figure 7 of the Wetland 13 Permit Application). The end result of that alternative is not a mixed use Regional/Lifestyle Center project and therefore does not meet the project purpose and need. Justification of the non-viability of the Complete Direct Avoidance Alternative as a mixed use Regional/Lifestyle Center is provided in the attached Memorandum from McComb Group Ltd. Siting the project entirely on upland offsite is not a reasonable or feasible option for project. The City of Chanhassen has demonstrated the need for the project; therefore, the project must be constructed partially or entirely within the City of Chanhassen. No other alternative sites within or straddling the City of Chanhassen meet the requirements of the proposed project and result in less impact to waters of the U.S. (WOTUS). e) Additional on-site configurations should be considered and compared to the screening criteria. Configurations could include apartments located on top of commercial development or removing certain portions of the project all together or moving certain components to other sites. Avienda Response – This comment is addressed above in the responses to USACE Comments 1 and 3 that will not be repeated here. The on-site configurations for the project are defined by the City requirements for a Regional/Lifestyle Center, site constraints imposed under the City Code including density clustering to avoid impacts to the BCOD and the requirements for the design of a viable project that produces the required “two plus two equals five” synergies described by Mr. McCombs. Site screening criteria were used to determine if sites were practicable. The three sites that were determined to be potentially practicable were then compared to one another for their impact to environmental factors. It was determined that development of the proposed site would result in the least impact to WOTUS and other environmental factors. Onsite alternatives that avoid and minimize wetland impacts for the proposed site were prepared and were evaluated as to whether they met project purpose, need, goals and requirements (items 1 through 14 of Section 5.1 of the Wetland Permit Application as well as the four bullet point items on Page 4 of the Wetland Permit Application). The requirement of a retail hub and comprehensive traffic system (aka “ring road”) was specifically identified in bullet point 3 of Page 4. The most important component missing in the avoidance and minimization alternatives (Figures 7 and 8 of the Wetland Permit Application) is the retail hub and ring road. The retail hub is the essence of the lifestyle center and cannot be eliminated. The retail hub (aka “the village”, “main street”, an activity generator) is integral to the project because it creates the energy/excitement to draw in customers, while components located outside of the hub provide daily daytime and nighttime support. Examples of similar successful developments are provided in the attached Memorandum from McComb Group Ltd. Figures from that report (Attachment G) illustrate that recently developed comparable Regional/Lifestyle Centers in the metro area have (1) retail hubs much larger than 35 acres (see Attachment G – Shoppes at Arbor Lakes, West End), and (2) overall project areas of more than 95 acres when outer ring supporting components are included. A mixed use Regional/Lifestyle Center is one, well thought out, integrated plan with complementary and supporting uses. If the project/site layout lacks a retail hub it is not a mixed use Regional/Lifestyle Center, or if the retail hub is built on a separate site (i.e., not immediately adjacent to or surrounded by supporting components) the project is not a mixed use Regional/Lifestyle Center. If components were spread out over multiple locations, the result would not be a mixed use Regional/Lifestyle Center. An alternative plan that includes the retail hub and avoids or minimizes impact to Wetland 1/2 cannot be prepared. To illustrate the spatial effect that the retail hub and associated ring road have on the 14 development layout, a hypothetical situation is provided. If the proposed project was a football stadium, it would be clear to see that locating the stadium anywhere on the proposed site would result in impact to Wetlands 1/2 (Attachment I – Figures 1 and 2 of the application). For this scenario, existing site constraints are considered and include: (1) avoidance of the BCOD to the extent possible, (2) housing along the west portion of the site for a transitional buffer, and (3) extension of Bluff Creek Boulevard through the site. With these site constraints in place, the football stadium is then imposed, and it is clear to see that avoidance of Wetland 1/2 is not a feasible option. The retail hub should be looked at like a football stadium which is of a shape and size that cannot be manipulated or downsized without destroying the function of the internal components and producing a layout that is not a Regional/Lifestyle Center as described in great detail above. Even though the retail hub is comprised of separate buildings, the number, layout, and even orientation of buildings are assembled in such a way to attract customers. The design is based on years of developer’s professional experience in building what effectively meets the needs of consumers, thereby resulting in a viable project. The developer will only build what is expected to be a successful/viable project. Eliminating, downsizing, or relocating the retail hub offsite is not a feasible option for the project as it would not attract retailers/tenants and would therefore result in a failed project and an unmet need in the City. Figure 2 of the wetlands application shows that given the 3 primary site constraints (i.e., housing, BCOD, and the alignment of Bluff Creek Boulevard), the footprint of the stadium (and with respect to the Avienda project, the footprint of the retail hub) results in impact to Wetlands 1/2. Just as a developer could not reduce the size of a football stadium and meet project purpose and need, this developer cannot eliminate or reduce the size of the retail hub and produce a project that results in a viable Regional/Lifestyle Center. As proposed, the retail hub is smaller than comparative projects due to the site constraints mentioned above, plus the need to allocate space for surrounding supporting components. The developer, his consultants/engineer, and the City agree that they have arrived at a project layout that meets the City’s vision and meets consumer’s needs, and will result in a successful project. Removing certain portions of the project is not feasible or consistent with the production of a Regional/Lifestyle Center. Components located outside of the hub provide daytime and nighttime support. Medium and high density housing is required as a transitional buffer between existing low density residential to the west and proposed retail, meets a housing need in the City, and provides continual support for the retail components. Without the surrounding support uses, the retail hub will fail and the project would not be a Regional/Lifestyle Center. Scaling down components (e.g., reducing the amount of housing or medical offices, etc.) will not result in practicable project with less wetland impacts because the project requires a retail hub, and it is the retail hub that impacts Wetlands 1/2. Without the surrounding support uses, the retail hub will fail. It has been stated in previous market analyses that the project could support even more retail if the site was larger. However, although the site can support more retail, going vertical with more retail or adding apartments above commercial development – although physically possible – will not be attempted as it is predicted to fail based on professional experience and knowledge of the local market. The professional judgement of the developer, design professionals, and tenants based on years of experience dictates site design down to whether parking spaces should be straight or angled to best draw consumers. Adding apartments above commercial space would also not remove the need for the retail hub, which is the reason for impact to Wetland 1/2. 15 Jim McComb directly addresses multi-story development in the attached “Response to USACE Letter.” In it he states: There are practical limitations for office and residential. Small office and residential floor plates are only compatible with the floor plates of small shop retail buildings. Residents generally do not want to live above restaurants or fast food establishments, which limits retail tenant choice. Some resident parking can be underground, but any parking demand not accommodated below grade would conflict with shopper parking. The same is true of office parking. Office tenants/employees will arrive first and take the most convenient parking spaces conflicting with retail shopping. More importantly, since it’s the small store buildings that are suitable for office or residential mixed use, it does not change the shopping center design or location of the small shop main street area, it only increases costs and reduces retail space by the areas needed for entrance lobbies, elevators, and exit stairs. Providing automobile access to the basement level of small buildings complicates site design for access ramps. 16 Attachment A -- Chanhassen Alternative Urban Areawide Review Attachment B -- City of Chanhassen 2030 Comprehensive Plan Attachment C – City of Chanhassen City Code Select Provisions:  Article XXXI titled “Bluff Creek Overlay District.”  Sec. 20-502 – Allowed Uses (1) Each PUD shall only be used for the use or uses for which the site is designated in the comprehensive plan.  City Code Sec. 20-509 – Standards and guidelines for regional/lifestyle center commercial planned unit developments Attachment D -- Staff Report for the Chanhassen Planning Commission meeting on May 16, 2017 Attachment E –Draft “Exhibit A” of the Development Design Standards that the City produced for the project. Attachment F -- Application for Rezoning to PUD, PUD Development Plan, Conditional Use Permit, Variance and Preliminary Plat Attachment G – Jim McComb Documents: • Retail Trends and Shopping Centers dated March 2017 • Alternatives Evaluation Memorandum to Landform dated April 12, 2017 • Response to USACE Letter memorandum to Landform dated May 31, 2017 • 2006 and 2014 Market Studies (In response to EPA comment) Attachment H – Regional Commercial Site Metrics Spreadsheet Attachment I – Retail Hub Spatial Effect Figures 4847-3434-0938, v. 1 AVIENDA, CHANHASSEN Response to USACE letter dated May 3, 2017 Attachment G – Jim McComb Documents RETAIL TRENDS AND SHOPPING CENTERS Prepared for Landform March 2017 Copyright© 2017 McComb Group, Ltd. RETAIL TRENDS AND SHOPPING CENTERS Prepared for Landform Prepared by McComb Group, Ltd. March 2017 i TABLE OF CONTENTS Chapter Subject Page I RETAIL TRENDS AND SHOPPING CENTERS ..............................................1 Economic Trends ......................................................................................................1 Generation Trends .....................................................................................................3 Retail Sales Trends ...................................................................................................3 Food Service .............................................................................................................6 Department Stores .....................................................................................................6 II SHOPPING CENTER TENANT TRENDS .........................................................7 Downtown Chanhassen .............................................................................................7 Eden Prairie Retail Area ...........................................................................................8 Southdale Shopping Area .........................................................................................9 Ridgedale Shopping Area ........................................................................................10 Summary ..................................................................................................................11 III LIFESTYLE CENTERS .......................................................................................12 Galleria .....................................................................................................................13 Shoppes at Arbor Lakes ...........................................................................................13 Woodbury Lakes ......................................................................................................13 The Shops at West End ............................................................................................13 Central Park Commons ............................................................................................13 City Place .................................................................................................................14 Summary ..................................................................................................................14 APPENDIX ........................................................................................................... A-1 ii LIST OF TABLES Table Subject Page 1 Median Household Income and Consumer Price Index Minneapolis-St. Paul- Bloomington MSA: 2000 and 2010 Census; 2016 Estimated ..............................1 2 Seven-County Metro Area Annual Employment; 2000, 2008, and 2015 .................2 3 United States Retail Sales Selected Categories; 2000, 2007 and 2014 .....................4 4 Chanhassen: Downtown and Highways 5 and 101 Retail and Services Store Openings and Store Closings ...............................................................................7 5 Eden Prairie Retail Area Retail and Services Store Openings and Store Closings ................................................................................................................8 6 Southdale Shopping Area Retail and Services Store Openings and Store Closings ................................................................................................................9 7 Ridgedale Shopping Area Retail and Services Store Openings and Store Closings ...............................................................................................................10 8 Summary of Metro Area Lifestyle Centers Retail Tenant Mixes ............................12 1 Chapter I RETAIL TRENDS AND SHOPPING CENTERS The retail industry is in the midst of an evolution driven by economic trends, generational shifts in the population, changing lifestyles, and spending patterns. Major trends and their impact on retailing are summarized below. Economic Trends Economic trends have not been favorable for retailers for many years. Household income has not kept pace with inflation, as shown in Table 1. Between 2000 and 2010, median household income increased at an annual rate of 1.44 percent compared to a 2.21 percent increase in inflation. Inflation adjusted median household income dropped from $53,969 in 2000 to $50,036 in 2010, a decline of 9.3 percent. Since 2010, inflation has moderated and median household income has grown at a faster rate, but inflation adjusted median household income of $52,852 is below that of $53,969 in 2000. Metropolitan area employment has been slow to recover from the recession, as shown in Table 2. Employment in industry categories peaked in 2007 and 2008. Total employment in 2008 was 1,612,796, an average annual rate of growth of less than one-tenth of one percent since 2000. During this boom period, seven industry categories recorded declining employment. Between 2008 and 2015, employment grew at an annual rate of slightly more than one-half of one percent. In 2015, six major industry categories—natural resources and mining; manufacturing; wholesale trade; retail trade; transportation and warehousing; and information—had not surpassed their employment in 2008. Total employment had increased to 1,675,275 in 2015, an increase of 62,479. The sluggish employment market left many working age men and women with limited employment opportunities. One of the frequent comments from employers is that they are seeking the “best and brightest of the millennial generation. Unfortunately, only a small segment of the millennial generation will qualify as “best and brightest”. Those millennials that don’t qualify as “best and brightest” are left with limited employment options. Table 1 MEDIAN HOUSEHOLD INCOME AND CONSUMER PRICE INDEX MINNEAPOLIS-ST. PAUL-BLOOMINGTON MSA (MINNESOTA ONLY) 2000 AND 2010 CENSUS; 2016 ESTIMATED Item 2000 2010 2016 Median Household Income 53,969$ 62,273$ 72,738$ Growth Rate 1.44 % 2.62 % Consumer Price Index 170.1 211.7 234.1 Growth Rate 2.21 % 1.69 % Inflation Adjusted Median HH Income 53,969$ 50,036$ 52,852$ Source: U.S. Census, Scan/US, Inc., and McComb Group, Ltd. 2 There are several industry categories that employ a high proportion of workers under age 30. These industries—retail trade; administration and support; arts, entertainment and recreation; accommodations and food service; and other services—have the lowest weekly wages ranging from $358 to $703. Many millennials that graduated from college after 2007 have not been able to establish careers that will provide them with steady incomes and upward mobility. Many millennials are working in low paying service jobs referred to above. Many have two or three part-time jobs. Those workers that have not been able to establish a career job following college face an uphill battle when applying for a career job opportunity after a long period of under employment. The shortage of suitable full-time employment has led to what is referred to as the GIG economy. While much has been written about the attractiveness of the GIG economy, these are short-term engagements with no vacation, health plans, or retirement benefits. While experiencing lower incomes than previous generations, millennials face other expenditures that reduce disposable income. Millennials have the highest level of college loan debt in the history of the loan program. Debt service on these loans reduces income available for other purchases. For households that don’t receive health care benefits from an employer, the Affordable Health Care Act has been anything but affordable. The monthly premiums for a high deductible ($7,000 to $10,000) health care plan appear to range from about $200 to $400 or $2,400 to $4,800 annually. For those households, this is income that is not available for other purchases. Table 2 SEVEN-COUNTY METRO AREA ANNUAL EMPLOYMENT; 2000, 2008, AND 2015 Industry 2000 2008 2015 2000-08 2008-15 Natural Resources & Mining 3,220 3,509 3,432 1.08 % (0.32) % Construction 75,163 64,948 66,726 (1.81) 0.39 Manufacturing 217,161 178,118 168,419 (2.45) (0.80) Utilities 6,819 5,747 6,130 (2.12) 0.93 Wholesale Trade 83,643 83,139 80,511 (0.08) (0.46) Retail Trade 173,328 164,327 163,457 (0.66) (0.08) Transportation & Warehousing 77,387 66,222 63,231 (1.93) (0.66) Information N/A 43,692 38,764 N/A (1.70) Financial Activities 126,979 134,059 137,040 0.68 0.31 Professional & Business Services 263,779 258,808 277,617 (0.24) 1.01 Education & Health Services 263,963 332,551 380,333 2.93 1.94 Leisure & Hospitality 138,716 154,999 164,784 1.40 0.88 Other Services 55,632 55,725 55,991 0.02 0.07 Public Administration N/A 66,915 68,837 N/A 0.41 Total 1,600,741 1,612,796 1,675,275 0.09 % 0.54 % Source: MN DEED and McComb Group, Ltd. of Change Annual Rate 3 Generation Trends The nation is in the midst of a shift in generations. For 50 years, baby boomers have been the largest and wealthiest generation in history. Those businesses that provide goods and services focused on that group as their core customer face a challenging future. The baby boomer generation is shrinking each year and their lifestyles are also changing resulting in different purchasing habits. Millennials are the new generation with the largest population and have lifestyle characteristics that are different from baby boomers. Millennials, generally 17 to 37 years old, are just beginning their upward career trajectory, while baby boomers are at the end of their careers. The result is that, as a group, millennials will have increasing spending power and baby boomers will have reduced spending power. Baby boomers are spending less on “things” and more on services and experiences. Millennials, compared to past generations, spend less on “things” and more on electronic services and experiences, but they are spending on different things and experiences. Based on available information, the millennial generation is less affluent than the baby boomer generation at the same age. This is resulting in shifts in lifestyle. Examples include:  Millennials are marrying at an older age than past generations and delaying having children. This has resulted in an increase in the number of adult millennials living at home. The result is fewer new households and reduced demand for starter housing or apartments, which results in reduced demand for home furnishings and other related goods. Lower birth rates reduces demand for children’s home furnishings, clothes, and toys, to list a few categories.  With a larger singles population, there is an increase in dining out, which has resulted in an increase in fast casual restaurants with a wider variety of cuisines.  Millennials are the most connected generation in history. This is reflected in larger expenditures for electronics, wireless services, and content compared to other generations.  With lower incomes, millennials are more frugal. This, combined with different lifestyles, causes millennials to seek out lower priced items from retailers that cater to their preferences. These are just a few of the ways in which millennials differ from past generations, but the impacts are being reflected in retail sales trends. Retail Sales Trends Retail sales trends reflect both changes in spending patterns and changes in the retail industry. These changes are reflected in sales trends of the store types contained in Table 3, which contains United States retail sales for 2000, 2007, and 2014. These years were selected because 2000 and 2007 were peaks of economic cycles and 2014 is the latest available sales information for all categories from the Census Bureau. During the 2000-07 period, total sales of retail and food services increased at an annual rate of 4.36 percent compared to a 2.43 percent growth in inflation. This indicates that retailers were experiencing unit sales growth. In the 2007-14 period, sales increased at an annual rate of 2.32 percent compared to 2.05 percent for inflation, indicating that increases in unit sales were nominal. As Table 3 demonstrates, sales changes vary widely between store categories. 4 General merchandise represents one of the largest retail categories and contains stores with the largest changes in sales. Sales of department stores have declined steadily since 2000 at an annual rate of over 3.0 percent. These sales declines have been accompanied by store closings, which continue. Discount store sales have also declined, due primarily to conversion of Walmart and Target stores into supercenters and closing of Kmart stores. Sales at warehouse clubs and supercenters increased dramatically in the 2000-07 period (12.83 percent annually), slowing to 4.2 percent annually in the 2007-14 period. About 40 percent of the sales in this category are groceries. Dollar stores are represented by the all other general merchandise category and have increased at annual rates of 4.68 percent and 5.75 percent, respectively. Department stores are the only full price retailers in the general merchandise category. During the last 14 years, department store sales have dropped $37.5 billion; while sales of discount stores, warehouse clubs, supercenters, and dollar stores have increased by $295.0 billion. Another indication of the consumer’s search for value is the rapid sales growth of used merchandise stores—5.87 percent annually since 2007. This category represents Goodwill and a growing number of consignment stores and other pre- owned merchandise stores. Table 3 UNITED STATES RETAIL SALES SELECTED CATEGORIES; 2000, 2007 AND 2014 (In Millions of Dollars) Store Type 2000 2007 2014 2000-07 2007-14 Retail and Food Services 3,287,537$ 4,439,733$ 5,211,542$ 4.39 % 2.32 % General Merchandise Department Stores 100,284$ 79,015$ 62,743$ (3.35) % (3.24) % Discount Stores 139,637 134,926 107,678 (0.49) (3.17) Warehouse Clubs & Supercenters 139,614 324,963 433,303 12.83 4.20 All Other General Merchandise 32,139 44,277 65,502 4.68 5.75 Used Merchandise Stores 9,832 10,930 16,297 1.52 5.87 Apparel & Accessories Men's Clothing Stores 9,507 8,772 8,901 (1.14) 0.21 Women's Clothing Stores 31,447 40,294 41,678 3.60 0.48 Family Clothing Stores 58,913 84,592 98,214 5.30 2.16 Other Clothing Stores 8,815 12,003 15,128 4.51 3.36 Shoe Stores 22,875 26,811 33,331 2.29 3.16 Jewelry Stores 24,821 30,820 31,625 3.14 0.37 Other Retailers Furniture & Home Furnishings 91,170 111,114 99,687 2.87 (1.54) Electronics & Appliance Stores 82,206 106,559 104,012 3.78 (0.35) Computers & Software Stores 20,645 20,487 27,966 (0.11) 4.55 Building Materials & Garden 197,649 283,847 273,466 5.31 (0.53) Food & Beverage Stores 444,746 547,837 669,902 3.02 2.92 Health & Personal Care Stores 155,234 237,164 299,891 6.24 3.41 Sporting Goods 25,308 35,804 44,631 5.08 3.20 Hobby & Games 16,947 16,344 17,355 (0.52) 0.86 Book Stores 14,879 17,171 11,320 2.07 (5.78) Electronic Shopping & Mail Order 113,790 223,681 386,135 10.14 8.11 Food Service Full-Service Restaurants 133,579$ 195,505$ 252,331$ 5.59 % 3.71 % Limited-Service Restaurants 110,485 153,812 204,704 4.84 4.17 Source: U.S. Census Bureau and McComb Group, Ltd. Rate of Change 5 Apparel and accessories stores have recorded stronger sales performance than department stores. This is significant in that apparel and accessories comprise 82 to 84 percent of sales at four of the major department store companies in the Twin Cities area. The six apparel, accessories, and jewelry stores are the categories that compete directly with department stores. In the 2000-07 period, men’s clothing stores recorded declining sales, while all the other categories experienced increased sales. Family clothing stores and other clothing stores recorded the strongest performance, averaging annual increases of 5.30 percent and 4.51 percent, respectively. In the 2007-14 period, all apparel and accessories stores recorded increases in sales with family clothing, other clothing, and shoe stores having the highest increases in sales. Men’s and women’s clothing stores and jewelry stores had weaker sales performance. Slowing apparel sales are reflected in apparel purchasing trends reported by the American Apparel and Footwear Association, which monitors apparel sales. In 1991, Americans purchased an average of 40 garments per person. This increased to a peak of 69 garments in 2005. In 2013, purchases had declined to 63.7 garments, a decline of about eight percent. This reflects declining purchases of both baby boomers and millennials. This is reflected in the closing of stores such as The Limited, Gap, New York & Company, Coldwater Creek, Christopher & Banks, and others that targeted baby boomers. Stores focused on juniors, such as Abercrombie & Fitch, Aeropostle, American Apparel, Buckle, Wet Seal, Pac Sun, and others with less appeal to millennials are also closing stores. These lists are sure to increase in the future. Millennial lifestyles and fashion tastes are spawning new specialty stores that cater to their desire for individuality. These stores are opening in shopping areas patronized by millennials such as the North Loop and Uptown in Minneapolis and other low rent shopping areas. Sales of furniture and home furnishings stores have declined due to fewer household formations. This category represents 12 to 18 percent of sales at four of the department store companies operating in the Twin Cities. Sporting goods stores had strong sales in the 2000-07 period and have slowed in the 2007-14 period. In 2016, Sports Authority closed all its stores and more recently several other sporting goods stores have closed including those focused on golf. Millennials favor different recreational activities than baby boomers and this is reflected in store closings. Electronics and appliance stores and computers and software stores are showing opposite sales trends. The former recorded annual average growth in the 2000-07 period followed by a modest decline in the 2007-14 period. Computers and software store sales were weak in the earlier period and increased at an annual rate of 4.55 percent in the 2007-14 period as demonstrated by sales of iPad, tablet, and other small electronic devices sold by Apple stores and other small electronics retailers. Food and beverage store sales have been relatively consistent over time. This category is a hot bed of competition as Hy-Vee, Whole Foods, Fresh Thyme, and Trader Joe’s, and deep discount grocery store Aldi expand in the Twin Cities area. Sales performance of book stores is declining as competition from internet retailers becomes more intensive. Interestingly, Amazon is testing a brick and mortar book store with a limited book selection with the option to purchase books and electronic devices online. 6 Electronic shopping and mail order sales have been increasing rapidly, but the rate of increase is decreasing. This category includes only pure play internet retailers. Internet sales of brick and mortar stores are not included and could be quite sizable since Walmart is the second largest internet retailer. More interesting is the trend for pure play internet retailers to open brick and mortar stores. Food Service The food service industry is experiencing a shift in dining habits. In the 2000-07 period, full- service restaurants experienced the faster sales growth than limited-service restaurants. The full- service category includes the traditional white table cloth restaurant, as well as the more popular casual dining restaurant. The limited-service category includes quick service (fast food) and fast casual restaurants. Limited-service restaurant sales have increased at a faster rate since 2007. Both full-service and limited-service restaurants are offering a wider variety of cuisine choices in response to millennial desires for different dining experiences. Department Stores Most department store chains have been in existence for over 100 years and have demonstrated a remarkable ability to adapt to changing trends. The current challenges for department stores may be more difficult to overcome. Today’s consumer is seeking value and there are a wide variety of retailers with merchandise sourcing and operating structure that enable them to sell merchandise at low prices. Also, the fast fashion chains (H&M, Zara, and Forever 21, to name a few) receive merchandise shipments several times a week or daily to keep their merchandise offerings new and on trend. Zara has the ability to take an apparel item from design concept to store shelves in 28 days. Department stores have sourcing cycles that range from four to six months, and an overhead structure that requires higher gross margins. These two characteristics make it impossible for department stores to maintain their previous market position of providing current fashion at competitive prices. Millennials and other shoppers with iPhones have instant awareness and access to current fashion trends. The four major department stores in the Twin Cities—Macy’s, Herberger’s, J.C. Penney, and Kohl’s—have remarkably similar merchandise categories. Apparel and accessories for women, men, juniors, and children represent 82 to 84 percent of sales with home furnishings representing 12 to 18 percent of sales. The apparel and accessories category is being successfully challenged by the specialty apparel retailers; and home furnishings has the added challenge of fewer household formations. Shopping center owners, developers, and financial institutions have taken note of the challenges facing department stores. Since the development of Southdale in 1956, department stores have been recognized for their ability to attract customers to regional malls. Department store companies used that fact to obtain large financial contributions to the cost of their stores from shopping center developers. The department store’s development budget depends on these developer contributions. In today’s retail environment, it would be difficult for a developer or financial institution to justify payments to a department store company with declining same store sales and plans to close numerous stores. Department stores can no longer be counted on as the long-term traffic generators for a new shopping center. Today, shopping center owners are purchasing weak department store buildings (i.e., Sears at Eden Prairie Center) to re-tenant with stores that have a record of sales growth. 7 Chapter II SHOPPING CENTER TENANT TRENDS Changes in retail and service tenants in downtown Chanhassen and competitive shopping areas contained in our previous report in 2014 were identified by visual inspection. These shopping areas included Eden Prairie Center, Southdale Center, and Ridgedale Center and surround retail areas. The purpose of this analysis was to identify trends in tenant mix by identifying stores that have opened and those that have closed. Due to the methodology, some stores may have been omitted inadvertently. This analysis focuses on businesses that typically locate in regional shopping areas. Downtown Chanhassen Downtown Chanhassen includes the retail areas north and south of Highway 5 and the commercial area at Highways 5 and 101. This analysis indicates that 31 retail and service establishments opened and 40 closed, as shown in Table 4. Individual stores that opened and closed are contained in the appendix. The largest changes in retail tenants occurred in the food service category where two full-service restaurants and nine limited-service establishments opened. These openings were offset by the closing of one full-service restaurant and six limited-service restaurants. Chanhassen is attracting some of the newer fast casual restaurants entering the Twin Cities market. Table 4 CHANHASSEN: DOWNTOWN AND HIGHWAYS 5 AND 101 RETAIL AND SERVICES STORE OPENINGS AND STORE CLOSINGS Store Type Open Close Convenience Goods 2 3 Full-Service Restaurant 2 1 Limited-Service Restaurant 9 6 Subtotal - Food Service 11 7 Convenience/Gasoline 2 General Merchandise Apparel & Accessories 1 1 Home Furnishings Electronics/Appliances 1 2 Other Shopping Goods 3 3 Subtotal Shopping Goods 5 6 Home Improvement Automotive Personal Services 9 10 Recreation 1 3 Automotive Services 1 3 Other Services 2 6 Subtotal Services 13 22 Total Retail and Services 31 40 Source: McComb Group, Ltd. 8 In the convenience goods category, two establishments opened including Total Wine & More, while three smaller establishments closed. In the shopping goods category, five stores opened and six closed. In personal services, nine new establishments opened and 10 establishments closed. Eden Prairie Retail Area The Eden Prairie retail area includes Eden Prairie Center and its adjacent retail areas. This area experienced 49 store openings, while 53 stores closed, as shown in Table 5. Individual stores that opened and closed are contained in the appendix. Most of the openings and closings occurred outside Eden Prairie Center. Eden Prairie Center experienced 18 closings, the most notable of which was Sears. Food service increased with the opening of Crave and the Eden Prairie Tap House, both full-service restaurants. In the shopping goods category, seven stores opened while 13 closed. Personal services experienced three openings and closings. In the rest of the shopping area, 35 stores opened and 35 closed. Notable openings included Lunds & Byerly’s and Aldi. Eight limited-service restaurants opened while two closed. This was offset by a loss of eight shopping goods when four stores opened and 12 closed. In the services category, 16 stores opened and 12 closed, including four automotive services. Table 5 EDEN PRAIRIE RETAIL AREA RETAIL AND SERVICES STORE OPENINGS AND STORE CLOSINGS Store Type Open Close Open Close Open Close Convenience Goods 4 3 4 3 Full-Service Restaurant 2 1 3 4 5 5 Limited-Service Restaurant 1 1 8 2 9 3 Subtotal - Food Service 3 2 11 6 14 8 Convenience/Gasoline 00 General Merchandise 1 0 1 Apparel & Accessories 1 3 4 1 7 Home Furnishings 3 2 2 5 2 Electronics/Appliances 1 1 1 2 1 Other Shopping Goods 2 8 1 6 3 14 Subtotal Shopping Goods 7 13 4 12 11 25 Home Improvement 1 0 1 Automotive 1 0 1 Personal Services 3 3 8 4 11 7 Recreation 3 3 3 3 Automotive Services 1 4 1 4 Other Services 1 4 1 5 1 Subtotal Services 4 3 16 12 20 15 Total Retail and Services 14 18 35 35 49 53 Source: McComb Group, Ltd. Eden Prairie Center Other Total 9 Southdale Shopping Area The Southdale shopping area includes the Southdale Center area and France Avenue extending south to I-494. The tabulation in Table 6 does not include The Galleria, which is discussed in the section on lifestyle centers. Store changes in this area were relatively balanced with 51 store openings and 45 store closings. Individual stores that opened and closed are contained in the appendix. Southdale Center, which is in a remerchandising mode, experienced 25 openings compared to 15 closings. Food service increased by six establishments with the opening of two full-service restaurants including Dave & Buster’s and six limited-service establishments, which was offset by the closing of two limited-service establishments. In the shopping goods category, 11 openings were offset by 12 closings. Marshalls relocated its store to a new location and was replaced by Gordmans, which recently filed bankruptcy. Four new personal services opened. Other shopping areas experienced the opening of 26 stores and closing of 30 stores for a net change of four stores. Changes in store categories were relatively modest. Food service increased by one full-service restaurant when two opened and one closed; while shopping goods stores declined by three stores including Golf Smith, Old Navy, and Christopher & Banks. Service establishments had an equal number of openings and closings. Table 6 SOUTHDALE SHOPPING AREA (EXCLUDING GALLERIA) RETAIL AND SERVICES STORE OPENINGS AND STORE CLOSINGS Store Type Open Close Open Close Open Close Convenience Goods 1 1 1 3 2 4 Full-Service Restaurant 2 2 1 4 1 Limited-Service Restaurant 6 2 1 7 2 Subtotal - Food Service 8 2 3 1 11 3 Convenience/Gasoline 1 0 1 General Merchandise 1 2 1 2 2 Apparel & Accessories 3 7 1 3 4 10 Home Furnishings 4 1 2 3 6 4 Electronics/Appliances 1 2 1 3 1 Other Shopping Goods 2 2 4 6 6 8 Subtotal Shopping Goods 11 12 10 13 21 25 Home Improvement 00 Automotive 00 Personal Services 4 9 10 13 10 Recreation 2 1 2 1 Automotive Services 00 Other Services 1 1 1 2 1 Subtotal Services 5 0 12 12 17 12 Total Retail and Services 25 15 26 30 51 45 Source: McComb Group, Ltd. Southdale Center TotalOther 10 Ridgedale Shopping Area The Ridgedale shopping area extends along I-394 from I-494 to Hopkins Crossroad. This area experienced 42 store openings and 50 store closings, as shown in Table 7. Individual stores that opened or closed are contained in the appendix. Ridgedale Center is in the later stages of a remerchandising of the shopping center following an expansion and opening of Nordstrom. Ridgedale increased its food services by three including two full-service restaurants and three limited-service restaurants, while two dated limited-service restaurants closed. In the general merchandise category, a dollar store closed and Nordstrom opened. The apparel and accessories category was upgraded by the closing 13 stores and opening of nine stores more attuned to Ridgedale’s trade area residents. Home furnishings stores count stayed the same with three stores opening and three stores closing; and electronics declined by four stores. In the other shopping goods category, nine stores opened with popular tenants while six stores of less popular tenants closed. In the shopping goods category, the decrease in apparel and accessories stores was offset by an increase in other shopping goods stores consistent with Ridgedale’s demographics. In the retail area surrounding Ridgedale, 12 stores have opened and 16 have closed. In the food service category, four establishments have opened and six have closed, a decline of two which corresponds to an increase of three food services at Ridgedale. In the shopping goods category, PGA Tour Superstore is the notable opening. Golf Smith and Sports Authority were notable Table 7 RIDGEDALE SHOPPING AREA RETAIL AND SERVICES STORE OPENINGS AND STORE CLOSINGS Store Type Open Close Open Close Open Close Convenience Goods 1 1 1 2 1 Full-Service Restaurant 2 2 3 4 3 Limited-Service Restaurant 3 2 2 3 5 5 Subtotal - Food Service 5 2 4 6 9 8 Convenience/Gasoline 00 General Merchandise 1 1 1 1 Apparel & Accessories 9 13 1 9 14 Home Furnishings 3 3 1 4 3 Electronics/Appliances 1 5 1 1 2 6 Other Shopping Goods 9 6 3 3 12 9 Subtotal Shopping Goods 23 28 5 5 28 33 Home Improvement 00 Automotive 00 Personal Services 1 3 1 5 2 8 Recreation 1 1 0 Automotive Services 00 Other Services 00 Subtotal Services 1 3 2 5 3 8 Total Retail and Services 30 34 12 16 42 50 Source: McComb Group, Ltd. Ridgedale Center Other Total 11 closings, both the result of bankruptcy. In the personal services category, one store opened and five stores closed. Summary The lists of opening and departing tenants at the three shopping centers and their associated retail areas are informative. The three regional malls have been maintaining occupancy as tenants leave and new stores replace them. In the shopping goods and food service categories, the new tenants are successful businesses with growing store count, while the departing stores are those with shrinking store count and declining comparable store sales. In the services categories, there is an increase in personal care stores—hair, nail, massage, and other related services. The number and types of exercise and wellness businesses is also expanding. The same trends are evident in the surrounding retail areas of these centers. The challenge for shopping centers is to be able to weed out the declining retailers in an orderly fashion to accommodate new tenants that cater to the emerging customer lifestyles in their trade areas. 12 Chapter III LIFESTYLE CENTERS Lifestyle shopping centers evolved as regional mall development slowed in the 1990s and early 2000s. Retail store chains continued to expand and were seeking new store locations. During this period, a new type of store, known as a category killer, evolved focused on specific shopping goods merchandise categories. These stores represented a range of sizes from 10,000 to 50,000 square feet. The physical size of these stores were difficult to accommodate in regional malls and they paid less rent than the smaller specialty stores that they would replace. These stores became tenants in power centers and lifestyle centers. The metro area currently has six lifestyle centers. The tenant mix of these centers are contained in Table 8. The characteristics of each of these centers are discussed in this section. The tenant mix list for each center is contained in the appendix. Table 8 SUMMARY OF METRO AREA LIFESTYLE CENTERS RETAIL TENANT MIXES The Central Shoppes at Woodbury Shops at Park City Merchandise Category Galleria Arbor Lakes Lakes West End Commons Place Lifestyle Center Size (SF) 417,000 391,151 318,853 348,541 434,000 170,000 CONVENIENCE GOODS Food Stores 0 21111 Specialty Food Stores 00 1 000 Other Convenience Goods 00 1110 Subtotal 0 2 3 2 2 1 FOOD SERVICE Full-Service 6 7 3 8 2 0 Limited-Service 0 2 0 256 Snacks & Beverage Places 1 1 0002 Subtotal 7 10 3 10 7 8 SHOPPING GOODS General Merchandise 0 1 002 0 Apparel & Accessories 21 26 31 10 1 1 Shoes 4 0 1 0 1 0 Home Furnishings 10 6 5 0 13 Home Appliances/Music 0 21121 Other Shopping Goods 10 9 4 3 4 3 Subtotal 45 44 42 14 11 8 OTHER STORES Home Improvement 00 001 0 Total Retail 52 56 48 26 21 17 SERVICES Personal Care 1 3 3 2 1 1 Personal Services 0 31220 Rental/Leasing 0 1 0000 Recreation/Entertainment 00 1311 Other Services 1 001 0 1 Financial 1 1 1 0 12 Medical 00 0021 Total Services 3 8 6 8 7 6 GRAND TOTAL 55 64 54 34 28 23 Source: McComb Group, Ltd. 13 Galleria The Galleria began as a small specialty center anchored by Gabberts Furniture. Over the years it expanded several times to 417,000 square feet of enclosed mall space. An expansion of 20,000 square feet is underway. The center is anchored by Gabberts and Crate & Barrel. Other significant tenants include Tiffany & Co., Restoration Hardware, Pottery Barn, and Williams Sonoma. Galleria has been implementing a remerchandising plan in connection with the expansion and has added 23 new tenants including several designer stores. Eighty percent of the Galleria tenants are shopping goods stores complemented by seven food service establishments. Shoppes at Arbor Lakes The Shoppes at Arbor Lakes, an open air shopping center with 391,151 square feet, is located in the largest shopping area in the northwest metropolitan area. It is flanked by two power centers: Arbor Lakes Shopping Center and the Fountains at Arbor Lakes. Anchor stores include Whole Foods, Cost Plus World Market, Trader Joe’s, Pottery Barn, Forever 21, and H&M, which is scheduled to open this year. Shopping goods stores represent 69 percent of the tenants, which are complemented by 10 restaurants. Personal care and personal services are represented by six establishments. Woodbury Lakes Woodbury Lakes is an open air shopping center located in the east metropolitan area’s largest retail concentration in Woodbury. With 318,853 square feet, Woodbury Lakes has 54 tenants, including 42 shopping goods tenant representing 78 percent of the tenants. Anchor tenants include Trader Joe’s, H&M, Loft, Gap, Michael’s, Ethan Allen, BuyBuy Baby, DSW, and Thomasville. Woodbury Lakes has three each of full-service restaurants and personal care. The Shops at West End The Shops at West End is an open air shopping center with 348,541 square feet, located at Highway 100 and I-394 in St. Louis Park. The center is anchored by Cub Foods, Showplace ICON Theater, and Punch Bowl Social. Other significant tenants include: Anthropologie, Cooper, and Yardhouse. Shopping goods is represented by 14 tenants, representing 40 percent of the stores. Ten restaurants represent about one-third of the tenants. The Shops at West End has an entertainment focus with its cinema, Punch Bowl Social, and restaurants. Central Park Commons Central Park Commons is a 434,000 square foot open air shopping center located in Eagan. The center opened in October 2016, and is in the final stages of leasing. Anchor tenants include Hy- Vee, Total Wine & More, Marshalls, DSW, Petco, Home Goods, Sierra Trading Post, Ulta Beauty, and Hobby Lobby. Seven of the 11 shopping goods stores are anchor tenants. Food service is represented by two full-service restaurants and five limited-service restaurants, all recent entries to the Twin Cities market. Services include one personal care establishment and two personal services. At this time, Central Park Commons has six vacant stores or pad sites totaling about 31,000 square feet. 14 City Place City Place is a mixed use development on the former State Farm Insurance office building site. The retail component is an open air shopping center with 170,000 square feet and is part of a mixed use development located between Tamarack Village and Woodbury Lakes shopping centers in Woodbury. City Place has 17 retail store and six services. Anchor stores include Whole Foods, Nordstrom Rack, La-Z-Boy, and Sierra Trading Post. Eight shopping goods stores represent about one-third of the tenants, complemented by eight food service establishments. City Place is completing its initial lease up and has about 50,000 square feet of available space in three small stores and a larger box store. Other uses include office, medical office, and hotel. Summary The lifestyle centers range in size from 170,000 square feet to 434,000 square feet. Excluding City Place, the range is much smaller—318,853 square feet to 434,000 square feet. All of the shopping centers, except Galleria, have a grocery store component and Shoppes at Arbor Lakes has two. All shopping centers, except Woodbury Lakes, have seven or more food service establishments. Three shopping centers have more than 40 shopping goods stores. The Shops at West End has a higher entertainment focus; and Central Park Commons and City Place have a higher concentration of mid box anchor stores. None of the lifestyle shopping centers are anchored by a department store. Instead, they are anchored by mid box retailers that have a narrower merchandise focus and more flexible method of operation. APPENDIX A-1 STORE OPENINGS AND CLOSINGS BY TENANT CHANHASSEN: DOWNTOWN AND HIGHWAYS 5 AND 101 (Changes since March 2014) Stores Opened Stores Closed CONVENIENCE GOODS CONVENIENCE GOODS Paragon Bakery Body Mind & Spirit Nutrition Center Total Wine & More Seattle Suttons Healthy Eating The Edge FOOD SERVICE Bonsai FOOD SERVICE Jungle Kitchen The School II Bistro & Wine Bar Chick-fil-A Greek Grill & Fry Company Smashburger Subzero Ice Cream & Yogurt Noodles & Company Gina Maria's Pizza Piada Italian Street Food Pizza Hut/Wing Street Davanni's Pizza & Hoagies Starbucks Coffee Jersey Mike's Subs FreeStyle Yogurt Potbelly Sandwich Dunn Bros. Coffee CONVENIENCE/GASOLINE Starbucks Coffee BP Ivan's Food & Tackle SHOPPING GOODS Boutique 78 SHOPPING GOODS AT&T Inspired Style Boutique Chuck & Don's Chanhassen Vacuum Sales Center Lavin Lacrosse Radio Shack Lotus Lake Gifts Westwood Sports The Hanger SERVICES Finding Joy Sport Clips Salon Concepts SERVICES Salon Essence Great Clips DS Nails Kids Klips Nail Salon on the Ponds Golden Tan Salon Palm Beach Tan Chan Prairie Laundry Center Amazing Lash Studio Orchid Salon & Spa EdgeTek Hockey Best Day Massage Hockey Shop Massera Orange Theory Fitness Global Recruiters Car Wash Horizon Childcare TK Karate Curves Uclick Photo Studios Fitness Revolution Fitness Together Tailoring & Alterations Victory Auto Service Youngstad's Goodyear Master Collision ESSE Driving School ATA Karate USA Karate America Classic Ballroom & Event Center Business Ware Solutions Computer Fixx A-2 STORE OPENINGS AND CLOSINGS BY TENANT EDEN PRAIRIE CENTER (Changes since March 2014) Stores Opened Stores Closed FOOD SERVICE FOOD SERVICE Crave Biaggi's Ristorante Italiano The Prairie Tap House SubZero Ice Cream & Yogurt Melts & Burgers SHOPPING GOODS SHOPPING GOODS Sears Ragstock Jos A. Bank My Pillow Gap Kids/Baby Gap Home & Beyond Lids Kitchens Cellairis Cell Solution Air Traffic Kites & Games Fan HQ SolarX Sunglasses Goldy's Locker Room Vine Vera Franchise Sports SERVICES Hair Pop Elite Sports Barbershop Invisible Shield Ochi Massage Spa Things Remembered Brow Studio 7 Gold Money Express VR Junkies SERVICES Massage Eastern Reflexology Massage Oriental Royal Eyebrows & Henna Tattoo A-3 STORE OPENINGS AND CLOSINGS BY TENANT EDEN PRAIRIE: PERIPHERY (Changes since March 2014) Stores Opened Stores Closed CONVENIENCE GOODS CONVENIENCE GOODS Lunds & Byerly's Rainbow Foods Aldi EP Florist Poornanand Foods Complete Nutrition Belladonna Florist FOOD SERVICE FOOD SERVICE Taste of Asia People's Organic Famous Dave's BBQ Kyoto Sushi Vnam Vietnamese Restaurant Sawatdee IHOP Naf Naf Grill Panera Bread Culver's Chanticlear Pizza Chipotle Mexican Grill Noodles & Company SHOPPING GOODS Café Zupas Famous Footwear Jet's Pizza Flying Cloud Carpets Red's Savory Pizza Sports Authority Caribou Coffee (2nd Location) Office Max Houndstooth Boutique SHOPPING GOODS The Running Room Mattress Firm (2nd Location) Touch Boutique Sleep Number Beckland Jewelers AT&T Party City Homade Gifts Crafts & More Paddyo Furniture Turnstyle Consignment Clothing SERVICES Smarty Pants Lotus Nails & Spa Weight Watchers HOME IMPROVEMENT Thomas Printworks Dolphin Pool & Spa Body Brite Royal Eyebrows AUTOMOTIVE Lighthouse Daycare Center O'Reilly's Auto Parts Orange Theory Fitness Pure Barre SERVICES The Exercise Coach Weight Watchers CPR Cell Phone Repair Yoga Prairie Device Pitstop Maly's Tailoring EP Auto Tire & Glass Modern Auto Care Cozy Asian Massage Precision Tune Auto Care Kindercare Learning Center (2nd Location) Abra Auto Body Best Brains Car Wash & Detail Center Northland Scuba Darque Tan Entertainment Retreat Day Spa Core Yoga Pro Fitness Albinson Repro Graphics A-4 STORE OPENINGS AND CLOSINGS BY TENANT SOUTHDALE CENTER (Changes since March 2014) Stores Opened Stores Closed CONVENIENCE GOODS CONVENIENCE GOODS Quick Snacks Godiva Chocolatier FOOD SERVICE FOOD SERVICE Buffalo Wild Wings Freshii Dave & Buster's Surf City Squeeze Health Express DeLeo Bros. Pizza SHOPPING GOODS Jimmy John's Gordmans Great Steak & Potato Company Marshalls Teavanna Aeropostale Chatime Buckle Len SHOPPING GOODS Arden B. Gordmans The Limited Maurices Wet Seal Torrid Mestad's Prom Shop Ragstock Infinity Lights My Pillow Avon Picadilly Prairie Munch & More China Handcrafts Cricket Wireless Presents Gifts The Body Shop California Closets SERVICES Weight Watchers Brow Art 23 Spectacular Shine George's Shoes & Repair Hennepin County Service Center A-5 STORE OPENINGS AND CLOSINGS BY TENANT OTHER SOUTHDALE AREA (Changes since March 2014) Stores Opened Stores Closed CONVENIENCE GOODS CONVENIENCE GOODS Grabba Green Fammie Mae Fairview Pharmacy FOOD SERVICE Complete Nutrition Giordano's The Original Pancake House FOOD SERVICE Pizza Rev Bakers Square SHOPPING GOODS CONVENIENCE/GASOLINE Marshalls Shell Gas Station Catherine's Nadeau Furniture with a Soul SHOPPING GOODS Warner Stallion Appliances Old Navy AT&T It's a Pets Life Club Champion 2nd Wind Exercise Art Resources Gallery Christopher & Banks National Salon Resources Heartbreaker La-Z-Boy Andrew Martin Bentley's Pet Stuff Borofka's Furniture Euro AM Bed & Bath SERVICES Verizon Wireless Gent Cuts and Grooming Golf Smith Salons by JC ABC Toy Zone Phoenix Salon Suites Lifeway Christian Store Salon Concepts Uptown Cheap Skate Sola Salons Envy Nails SERVICES Tide Dry Cleaners Kidz Hair AAA Travel Salon 71 New Horizon Daycare Salon Claire Baeu Orange Theory Fitness The Metropolitan Pure Barre Crystal Nail Salon Ultimate Self Defense Studios Clean-N-Press Venture Photography Bella Faccia First Memorial Funeral Chapel LA Fitness I Sold It On Ebay Fast Frames A-6 STORE OPENINGS AND CLOSINGS BY TENANT RIDGEDALE CENTER (Changes since March 2014) Stores Opened Stores Closed CONVENIENCE GOODS CONVENIENCE GOODS Lolli and Pops The Chocolate Chihuahua FOOD SERVICE FOOD SERVICE Kona Grill Oriental Express Redstone American Grill Dairy Queen LeeAnn Chin Haagen Dazs SHOPPING GOODS Field Day by Good Earth DollarSmart Ragstock SHOPPING GOODS Cache Nordstrom Coldwater Creek Tommy Bahama New York & Company Hammer Made The Limited Johnston & Murphy SoHo Fashions Athleta Gap Kids/Baby Gap Dry Goods Justice Evereve Swarovski Michael Kors Custom T-Shirt Central Banana Republic Aerosoles Charolette Rouse Crocs My Pillow Journeys Pottery Barn Modern Blinds Williams Sonoma Chazin Interiors Z Wireless AT&T Creative Kidstuff Shock City Cellular/Verizon Wireless Tumi Century Link JK John Knopf Gallery Smart Phone Fix White Barn Cellairis Disney Store Goodman Jewelers Huxley Optical Air Traffic Kites & Games Lush Heli-Pro Fan HQ Infinity Lights Brookstone Happy Days Sai by Design SERVICES Proactiv Solution Hemera Nails & Spa SERVICES Pure Beauty Salon Massage Oriental Brow Studio 7 A-7 STORE OPENINGS AND CLOSINGS BY TENANT OTHER RIDGEDALE AREA (Changes since March 2014) Stores Opened Stores Closed CONVENIENCE GOODS FOOD SERVICE Nothing Bundt Cakes Macaroni Grill Redstone American Grill FOOD SERVICE Chin Asia Fresh RS Sports Grill Wanderer's Chinese Cuisine Avenida Mexican Asian Kitchen Eddington's LeeAnn Chin Bruegger's Bagels Einstein Bros. Bagels SHOPPING GOODS SHOPPING GOODS CC& Mays Naturepedic Twins Pro Shop The Landing Shop US Internet Children's Orchard Sports Authority Century Link Golf Smith PGA Tour Superstore SERVICES SERVICES Ridge Plaza Barbers Yoga Pod Salon Concepts Cheers Pablo Fast Frame Fast Signs Web Unique A-8 GALLERIA RETAIL TENANT MIX, MARCH 2017 FOOD SERVICE SHOPPING GOODS (continued) Full-Service Shoes (continued) Restaurant with Liquor Family Shoes Big Bowl Cole Haan CRAVE Home Furnishings McCormick & Schmck's Furniture Peoples Organic Arhaus Pittsburgh Blue Gabberts Furniture Restaurant without Liquor Bath Shop/Linens Good Earth Restaurant PBteen Snacks & Beverage Places Scandia Down Coffee/Tea Home Accessories Starbucks Kiosk Ampersand Crate & Barrel SHOPPING GOODS Pottery Barn Clothing & Accessories Pottery Barn kids Men's/Women's Ready-To-Wear Restoration Hardware Vineyard Vines Kitchen Store Men's Wear Williams Sonoma Hammer Made Other Shopping Goods Twill by Scott Dayton Books Women's Wear Barnes & Noble Chico’s Stationery dugo Papyrus Eileen Fisher Jewelry Fawbush’s David Yurman Free People Scheherazade Jewelry H.O.B.O. Tiffany & Co. J. Jill Toys kate spade new york Creative Kidstuff lucy Eyeglasses - Optician Roe Wolfe Fifth Avenue Optical Women's Specialty/Accessories Cosmetics/Beauty Supplies/Body Care Coach bluemercury Louis Vuitton L’Occitane Tory Burch Origins Children's Wear Oh Baby!SERVICES Athletic Wear Personal Care lululemon athletica Women's Hair Salon Special Apparel - Unisex Lili Salon & Spa The North Face Other Services Trail Mark Lodging Lingerie Westin Hotel Allure Intimate Apparel Financial Shoes Real Estate Men's Shoes Lakes Sotheby's International Realty Allen Edmonds Women's Shoes VACANT Marmi Three Vacant Spaces Pumpz & Co. A-9 THE SHOPPES AT ARBOR LAKES RETAIL TENANT MIX - MARCH 2017 CONVENIENCE GOODS SHOPPING GOODS (continued) Food Stores Clothing & Accessories (continued) Supermarket Children's Wear Whole Foods Market Gap Kids/Baby Gap Gourmet Grocery Gymboree Trader Joe’s Family Apparel (Women/Men/Children) American Eagle Outfitters FOOD SERVICE Buckle Full-Service Gap Restaurant with Liquor H&M (opening Spring 2017) Biaggi’s Ristorante Italiano Athletic Wear Granite City Food & Brewery Goldy’s Locker Room P.F. Chang’s China Bistro Lingerie Patrick’s Restaurant & Bakery Soma Pittsburgh Blue Restaurant Victoria’s Secret Redstone American Grill Costume Jewelry Rodizio Grill - The Brazilian Steakhouse Claire’s Limited-Service Women's/Teen/Junior Apparel Pizza Hot Topic Punch Pizza Justice Sandwich Shop PacSun Potbelly Sandwich Works Home Furnishings Snacks & Beverage Places Beds/Mattresses Coffee/Tea Mattress Firm Teavana Sleep Number Home Accessories SHOPPING GOODS Kirklands General Merchandise Pottery Barn Other General Merchandise Pottery Barn Kids Cost Plus World Market Kitchen Store Clothing & Accessories Williams Sonoma Men's/Women's Ready-To-Wear Home Appliances/Music Express Appliances J. Crew Oreck Men's Wear Telephone Store/Telecom Store Jos A Banks Sprint PCS Women's Ready-To-Wear Other Shopping Goods Apricot Lane Boutique Jewelry Evereve Jared The Galleria of Jewelry Forever 21 The Gold Guys J. Jill Toys Lane Bryant Air Traffic Maurices Cards/Gifts Rubi Jubi Goodthings Talbots Eyeglasses - Optician White House Black Market Lenscrafters Women's Specialty/Accessories Cosmetics/Beauty Supplies/Body Care Francesca’s Collections Bath & Body Works Ulta Beauty A-10 THE SHOPPES AT ARBOR LAKES (CONTINUED) RETAIL TENANT MIX - MARCH 2017 SHOPPING GOODS (continued) Other Shopping Goods (continued) Arts/Crafts Color Me Mine Candle Shop Yankee Candle Co. SERVICES Personal Care Men's Barber 18/8 Fine Men’s Salons Women's Hair Salon Regis Salon Nail Salon Aqua Lifestyle Nail Salon & Spa Personal Services Day Spa The Woodhouse Day Spa Other Personal Services Ideal Image Laser Hair Removal Let’s Dish Rental/Leasing Formal Wear/Rental Savvi Formalwear Financial Bank/Savings & Loan BMO Harris Bank VACANT 15 Vacant Spaces A-11 WOODBURY LAKES RETAIL TENANT MIX CONVENIENCE GOODS SHOPPING GOODS (continued) Food Stores Clothing & Accessories (continued) Gourmet Grocery Lingerie Trader Joe’s PINK Specialty Food Stores Soma Lingerie Specialty Food Victoria’s Secret Olive Branch Oil & Spice Company Costume Jewelry Other Convenience Goods Claire’s Health Food/Nutrition/Diet Women's/Teen/Junior Apparel The Vitamin Shoppe Justice Pac Sun FOOD SERVICE Shoes Full-Service Family Shoes Retaurant with Liquor DSW Shoes CRAVE Home Furnishings Lakes Tavern & Grill Furniture Osaka Sushi & Hibachi Ethan Allen SHOPPING GOODS Thomasville Clothing & Accessories Beds/Mattresses Men's/Women's Ready-To-Wear Mattress Firm Banana Republic The Sleep Number Gap Decorative Accessories Men's Wear Kirklands Home Express Men Home Applieances/Music Jos A. Banks Telephone Store/Telecom Store Women's Ready-To-Wear Sprint Chico’s Other Shopping Goods Christopher & Banks Jewelry CJ Banks Gold Guys Evereve Knox Jewelers Express Sunglasses J. Jill Sunglass Hut LOFT Arts/Crafts Maurice’s Michael’s: The Arts & Crafts Store Primp White House Black Market SERVICES Women's Specialty/Accessories Personal Care Charming Charlie Women's Hair Salon Francesca’s Collection Juut Children's Wear Regis Salon Baby Gap Sola Salon & Studios buybuy Baby Personal Services Crazy 8 Day Spa Gap Kids Radiance Med Spa The Children’s Place Recreation/Entertainment Family Apparel (Women/Men/Children) Health Club American Eagle Outfitters Yoga Fresh Eddie Bauer Financial H&M Bank/Savings & Loan Buckle North American Banking Company VACANT 13 Vacant Spaces A-12 THE SHOPS AT WEST END RETAIL TENANT MIX CONVENIENCE GOODS SHOPPING GOODS Food Stores Home Appliances/Music Supermarket Telephone Store/Telecom Store Cub Foods Verizon Wireless Other Convenience Goods Other Shopping Goods Health Food/Nutrition/Diet Jewelry Nutra Shop Bergstrom Jewelers Wedding Day Jewelers FOOD SERVICE Other Retail Full-Service Creative Kids Stuff Restaurant with Liquor Blue Fox Indian Bar & Grill SERVICES Cooper Pub & Restaurant Personal Care Crave Restaurant Men's Barber Punch Bowl Social Roosters Men’s Center Raku Sushi Lounge Nail Salon Rojo Mexical Grill Glamour Nails The Loop Bar/Grill restaurant Personal Services Yard House Restaurant Day Spa Limited-Service Hand Stone Massage & Facial Other Fast Food/Carry Out Phresh Spa/Salon Noodles & Company Recreation/Entertainment Sandwich Shop Cinema - General Jimmy John’s Gourmet Sandwiches ICON Movie Theater Health Club SHOPPING GOODS Haute Barre Clothing & Accessories Solid Core Men's Wear Other Services Jos A. Banks Clothiers Other Specialty Entertainment Attraction Women's Specialty/Accessories Brush Studio Anthropologie Other Service Apricot Lane Boutique Regus and Baker Charming Charlie Evereve VACANT Francesca’s 14 Vacant Spaces Kittsonia Primp Cheap Chic Boutique White House Black Market Athletic Wear Lululemon Athletica A-13 CENTRAL PARK COMMONS RETAIL TENANT MIX CONVENIENCE GOODS SHOPPING GOODS (continued) Food Stores Other Shopping Goods Supermarket Sporting Goods - General Hy-Vee Sierra Trading Post Other Convenience Goods Pet Shop Liquor/Wine Petco Total Wine & More Cosmetics/Beauty Supplies/Body Care Ulta Beauty FOOD SERVICE Arts/Crafts Full-Service Hobby Lobby Retaurant with Liquor Tavern of Eagan BUILDING MATERIALS/GARDEN Hemisphere Other Home Improvement Limited-Service Tile Shop Greek Fast Food Naf Naf Grill SERVICES Italian Fast Food Personal Care Piada Italian Street Food Nail Shop Mexican Fast Food Central Nail R Taco Personal Services Other Fast Food/Carry Out Massage Café Zupas (coming soon) Massage Envy (coming soon) Pizza Other Personal Service Neapolitan Punch Pizza European Wax Center Recreation/Entertainment SHOPPING GOODS Health Club General Merchandise Orange Theory Fitness Junior Discount Department Store Financial Marshalls Bank/Savings & Loan Other General Merchandise Bank of America Five Below Medical Clothing & Accessories Physician's Office Men's Wear Fairview Clinic Men's Warehouse Other Medical Shoes Veverant Family Shoes DSW VACANT Home Furnishings Six Vacant Spaces Home Accessories Home Goods Home Appliances/Music Telephone Store/Telecom Store AT&T Xfinity A-14 CITY PLACE RETAIL TENANT MIX CONVENIENCE GOODS SHOPPING GOODS (continued) Food Stores Home Appliances/Music Supermarket Telephone Store/Telecom Store Whole Foods Verizon Other Shopping Goods FOOD SERVICE Sporting Goods - General Limited-Service Sierra Trading Post (Opening Spring 2017) Greek Fast Food Jewelry Naf Naf Grill Wedding Day Jewelers Italian Fast Food Pet Store Piada Italian Street Food Chuck & Don's Mexican Fast Food Qdoba SERVICES Other Fast Food/Carry Out Personal Care Café Zupas Nail Salon Pizza Tu Nails Pie Five Pizza Recreation/Entertainment Sandwich Shop Health Club Potbelly CycleBar Snacks & Beverage Places Other Services Bagels Lodging Einstein Bros. Bagels Marriot Residence Inn Coffee/Tea Financial Caribou Coffee Bank/Savings & Loan Bank of America SHOPPING GOODS Spire Credit Union Clothing & Accessories Medical Men's/Women's Ready-To-Wear Other Medical Nordstrom Rack (Opening 4/6/17) Tria Orthopedic Home Furnishings Furniture VACANT La-Z-Boy Four Vacant Spaces Beds/Mattresses Mattress Firm Kitchen Store Sur La Table 1 MEMORANDUM TO: Landform DATE: May 19, 2017 FROM: McComb Group, Ltd. RE: ALTERNATIVES EVALUATION In response to your request, we have prepared a report evaluating three alternatives: Complete Avoidance Alternative; Minimization Alternative; and Proposed Alternative. The purpose of this report is to evaluate alternative site layouts for the Avienda project in the context of the project proposer’s stated purpose and need of the project: “To provide a viable mixed use Regional/Lifestyle Center within the City of Chanhassen that will meet local and regional demand and need for the provided uses and implement the City’s vision and intent based on the current land use guidance plan.” This report provides analysis and conclusions regarding the site layout considerations that must be addressed to achieve the objective of “a viable mixed use Regional/Lifestyle Center within the City of Chanhassen that will meet local and regional demand and need for the designated uses.” City of Chanhassen Mixed Use Regional/Lifestyle Center Requirements1 According to Section 2.7.4 of the City of Chanhassen 2030 Comprehensive Plan, the definition/vision for the “Regional/Lifestyle Center Commercial” is as follows: “A mixed commercial district with retail and entertainment uses of a scale and function that serves a regional market. The physical environment emphasizes an attractive comfortable walking experience for shoppers and visitors and is designed to serve trail users and mass transit as well as automobile traffic. Centers of this type have at least two major retail anchors and are characterized by the diversity and mix of retail and service uses within their boundaries. Uses within this district should complement existing retail users in the other commercial districts. Development of these centers shall be planned as a group of organized uses and structures to accommodate a sensitive transition between commercial activities such as loading, parking of automobiles, lighting and trash collection and surrounding residential uses. Such centers shall be designed with one theme, with similar architectural style, similar exterior building materials, and a coordinated landscaping theme. Vehicle and pedestrian access is coordinated and logically linked to provide a comprehensive circulation system.” Specific standards and guidelines identified by the Chanhassen Zoning Ordinance drive the need for uses and services, project scale, and end layout of the proposed project. These guidelines are contained in page 4 of the Wetland Permit Application. 1 Wetland Permit Application. 2 The site is also zoned for office park development if a regional lifestyle center is not feasible. As a potential use, the office development potential is addressed at the end of this memorandum. REGIONAL SHOPPING CENTER EVOLUTION Regional shopping centers began to evolve in the post WWII era as suburban residential development began. Since that time, the physical characteristics of the regional mall has evolved as retailer needs have changed. Throughout this period, the regional mall has continued to consist of anchor stores, specialty shops, and food services located in close proximity to each other to facilitate convenient shopper circulation between stores. Evolution of the regional mall is illustrated in the following examples. One Anchor Regional Shopping Centers The early regional shopping centers were anchored by one department store with small stores encircling the anchor store like a donut. Northland Center in a Detroit suburb was an example of a one anchor regional shopping center. Northland was developed by J. L. Hudson Company and opened in 1954. Two Anchor Regional Shopping Centers Southdale Center, developed by Dayton Company, was the first regional shopping center to have two department store anchors. In addition, it was the first regional shopping center with two levels and a climate controlled enclosed mall with small shops. Southdale opened in 1956 as the first phase of a 500-acre mixed-use development located south of the planned right-of-way for County Highway 62. Southdale occupied a 95-acre site. Other planned components of the development were a hospital, medical office building, neighborhood shopping (Southdale Square), additional retail east of York Avenue, commercial office west of France Avenue, residential development, and a park west of Valley View Road. When it opened, Southdale Center had about 800,000 square feet and 72 stores. The center was anchored by Dayton’s and Donaldson’s department stores and smaller anchors: Walgreens, Woolworths, and Red Owl. The retail stores surrounded the Garden Court, which was similar to a town square. Dayton’s operated a sidewalk café in one corner of the Garden Court. The design objective by Victor Gruen, was to combine art, culture, entertainment, retail, and a park like open space together under one roof. Southdale Center is bounded by 66th Street, York Avenue, 70th Street, and France Avenue. The shopping center retail stores and parking area are served by a ring road, which provided access to the parking lots. Ring roads are common features of regional shopping centers and encircle the shopping center and its primary parking areas. The original footprint of Southdale, its parking lot and ring road (highlighted in yellow) are shown in Figure 1. Southdale Center, as the first shopping center to feature two levels, two department stores, and a climatized indoor environment along with a wide variety of specialty shops. These factors combined to create an environment where two plus two equaled five. This is the synergistic result of creating pleasant, convenient shopping areas that encourages lingering and relaxation if desired by the patron. Southdale set the stage for future regional shopping centers with multiple anchor stores. 3 Multi-Anchor Regional Shopping Center The success of two anchor shopping centers lead to shopping centers with more anchor stores. Shopping centers with four anchors were most common, but some were built with six anchor or more stores. Brookdale Center, developed by Dayton Company in 1962, was one of the early four anchor centers; however, with only one level and a less spacious center court than Southdale. The original footprint of Brookdale is shown in Figure 2. Due to being only one level, Brookdale has a larger footprint. 4 As the regional shopping center evolved, the center court narrowed and became similar to an indoor pedestrian street lined by stores. Rosedale Center is an example of this type of regional shopping center. The anchor stores were located at each end of the pedestrian street and the other anchors were located on the side of the mall building with corridors connecting them to the pedestrian street. Rosedale, shown in Figure 3, is typical of a four anchor regional mall. 5 Regional Lifestyle Center In the mid 1990s, regional shopping center development began to slow as most of the feasible trade areas had been developed and there were fewer department stores to serve as anchors due to industry consolidation. This led to the evolution of the regional lifestyle center that was typically developed as an open air center. Some of these centers had one or two small anchor department stores. Most, however, were anchored by mid box retail stores selling many of the merchandise lines sold by department stores. These mid box stores were aligned along the perimeter of the shopping center site with parking located between the anchor stores and smaller store buildings on either side of a main street. The main street created a pedestrian environment that encouraged walking and provided parking in front of the smaller stores, which the retailers desired. The main street retail building contained small specialty stores, full-service and limited-service restaurants, and personal services. Some restaurants preferred to be freestanding and these were located on pad sites on the edge of the shopping center site. Some regional lifestyle shopping centers also 6 included convenience goods stores such as supermarkets, drug stores, and liquor stores. Regional lifestyle centers frequently contained movie theaters and/or entertainment venues, such as Dave & Busters. The Arbor Lakes main street shopping area is representative of a regional lifestyle center. Small store buildings are located on both sides of Main Street with mid box stores located on the perimeter, as shown in Figure 4. Townhomes, located on the northwest portion of the site, are evidence of the on-site mixed use trend. The Shoppes at Arbor Lakes, shown in Figure 5, represents a regional lifestyle center that emulates the tenant building of a regional mall. The retail buildings flank a “main street” with auto access permitting shoppers to park in front of the stores. Auto and pedestrian access is provided by side streets connecting the parking areas to “main street”. 7 Mixed-Use Regional Lifestyle Center The mixed-use regional lifestyle center evolved to provide the additional synergy resulting from a wider range of uses. In addition to the mid box anchor stores, specialty shops, restaurants, and services of the regional lifestyle center. Other uses such as office buildings, medical clinics, and financial institutions were added to provide daytime employees to support food services. Hotels and residential were added to provide additional evening activity at the regional lifestyle shopping center. The central core of the mixed use regional lifestyle center remained as an integrated shopping center with the non-retail uses located nearby within walking distance. The West End area is a mixed use regional lifestyle center developed on a former office/industrial area. The Shops at West End is the central retail component and is anchored by Cub Foods and Kerasotes Showplace ICON movie theater. The West End regional lifestyle center is contained in Figure 6. Other components of this mixed use regional lifestyle center include apartments, hotels, 8 and offices. Adjacent uses include offices, hotels, and Park Place Plaza, a power center anchored by Costco and Home Depot. Summary Over the past 65 years, the regional shopping center has evolved from single level, one anchor shopping center to a two level, two anchor enclosed mall, to a multi-anchor, two or three level enclosed mall. When department store expansion ended the regional lifestyle shopping evolved to meet the store demand of mid box retailers, small specialty stores, food services, and services. Throughout this evolution, the shopping center concept remained the same. The retail stores that encourage pedestrian oriented shopping are located in the center of the site surrounded by their associated parking fields. The overall design for a regional mixed use lifestyle center has not changed. Retail stores and parking areas are integrated on one site that encouraged pedestrian activity as shoppers engage in comparison shopping, dining, and entertainment. 9 OFFICE POTENTIAL The City of Chanhassen has given a dual land use designation for the site of the proposed Avienda regional lifestyle center. The Comprehensive Plan comments: “Should a lifestyle center not be feasible, then an office development, corporate headquarters site would be appropriate.” The demand for multi-tenant office development and corporate headquarters buildings in the Twin Cities Metro Area has been limited. Between 2010 and 2016, 2.96 million square feet of single tenant space has been constructed, as shown in Table 1. Three companies, Target, United Health, and FBI Field Office represented about 2.25 million square feet or 76 percent of the space. United Health accounted for about 1.4 million square feet, much of which will be occupied by employees relocated from other buildings. Building C, built in 2010 with 254,107 square feet, is currently vacant. Seven smaller buildings totaling about 460,000 square feet have also been constructed. About 347,600 square feet of multi-tenant office has been built, over half of which is vacant. The Metro Area currently has about 12.4 million square feet of vacant multi-tenant space, representing 14.8 percent of the 83.8 million square foot inventory. The prospect for future office space development, other than medical uses, at Avienda is very limited. Table 1 METRO AREA OFFICE BUILDINGS (OVER 25,000 SQ FT) (Excluding Minneapolis and St. Paul) Building Name City Class Year Floors RBA SF Available Single Tenant Building C, Phase 3 Hopkins B 2010 7 254,107 254,107 Hellmuth & Johnson HQ Edina B 2010 2 35,000 FBI Field Office Brooklyn Center A 2011 5 179,332 UnitedHealth Group Minnetonka A 2012 10 312,500 Boulder Lakes V Eagan A 2013 1 60,448 13130 Dakota Ave Savage B 2013 2 39,160 Target Campus Expansion Brooklyn Park A 2014 9 650,000 North Tower Eden Prairie A 2014 8 341,700 South Tower Eden Prairie A 2014 8 256,700 Toro HQ - Expansion Bloomington A 2014 3 75,000 Tower 3 1100 Optum Circle Eden Prairie A 2015 15 505,900 Cardiovascular Systems, Inc. New Brighton A 2015 2 125,000 Anytime Fitness HQ Woodbury A 2016 3 80,293 1320 Old Highway 8 NW New Brighton B 2016 3 45,000 Total 2,960,140 254,107 Multi-Tenant 8147 Globe Dr W oodbury B 2011 2 29,000 25,851 1063-1123 Weir Dr W oodbury B 2011 1 25,600 6,000 The Offices at Mall of America Bloomington A 2015 7 183,000 80,519 7901 Computer Ave Bloomington B 2016 5 110,000 66,000 Total 347,600 178,370 Total 3,307,740 432,477 Source: CoStar Group, Inc. and McComb Group, Ltd. 10 ALTERNATIVES EVALUATION The Wetland Permit Application for the Avienda regional lifestyle shopping center contains three alterative site plans. Each of these site plans is evaluated in this section. Complete Avoidance Alternative The Complete Avoidance Alternative (Figure 7 from Wetland Permit Application) represents a grocery anchored neighborhood shopping center with about 141,000 square feet, as shown in Table 2. The site plan, however, is infeasible. There is inadequate parking in front of the supermarket and the parking lot to the east of the supermarket does not relate to the entrance to the supermarket. The site plan has only one restaurant pad site. Figure 7: Complete Direct Avoidance Alternative with Post-Development Wetland Drainage Areas Source: Kjolhaug Environmental Services Company. Section K contains five retail buildings with 58,000 square feet. The four buildings for small shops are unrelated to the larger store and do not constitute a shopping center. Other than the two buildings south of WL9, there is no likely pedestrian activity between these four building clusters. These buildings, due to their size and orientation, are unlikely to attract knowledgeable retail and 11 service tenants. Those tenants that do lease a space in these buildings will most likely fail. This site plan with only 193,300 square feet does not represent a regional lifestyle center in scope, design, or size. Non-retail uses total 312,500 square feet, much more than the retail gross leasable area. This development concept is not consistent with the City of Chanhassen vision contained in the Comprehensive Plan. Minimization Alternative The Minimization Alternative (Figure 8 from the Wetland Permit Application) represents a very small supermarket anchored power center without enough square feet to compete as a destination with larger shopping areas in the southwest market. The site plan has only one restaurant pad site. Section L contains two unanchored strip shopping buildings with 32,000 square feet and 18,000 square feet, which is excessive for the anchor store space represented by the power center component. The smaller building does not orient toward income traffic on Bluff Creek Boulevard and has poor visibility. This site plan, with only 250,000 square feet of retail space (shown in Table 3), does not represent a regional lifestyle center in scope, design, and size. Shopping center industry experience has found that successful power centers have 90 percent of their space devoted to anchor stores and 10 percent small stores. The Minimization Alternative, with 65 percent anchor store and 35 percent small store space, would not be built by a knowledgeable shopping center developer. Non-retail uses total 694,000 square feet, almost three times the amount of retail space. This development concept is not consistent with the City of Chanhassen vision contained in the Comprehensive Plan. Table 2 COMPLETE AVOIDANCE ALTERNATIVE (Square Feet) Anchor Small Component Store Stores Total Retail Neighborhood Center 108,000 20,000 128,000 Other Stores 58,300 58,300 Daycare 7,000 7,000 Subtotal - Retail 108,000 85,300 193,300 Office 162,500 Hotel 39,000 Apartments 75,000 Townhomes 36,000 Total 505,800 Source: Wetland Permit Application. 12 Figure 8: Minimization Alternative with Post-Development Wetland Drainage Areas Source: Kjolhaug Environmental Services Company. Table 3 MINIMIZATION ALTERNATIVE (Square Feet) Anchor Small Component Store Stores Total Retail Power Center 164,000 30,000 194,000 Other Stores 50,000 50,000 Daycare 6,000 6,000 Subtotal 164,000 86,000 250,000 Office 150,000 Hotel 39,000 Apartments 345,000 Townhomes 160,000 Total 944,000 Source: Wetland Permit Application. 13 Proposed Alternative The Proposed Alternative (Figure 9 from the Wetland Permit Application) is an adaptation of regional mixed use shopping center design to the Avienda site. The major component is a large regional lifestyle center with 292,500 square feet, as shown in Table 4. The retail component is inside a ring road that provides access to the main component of the regional lifestyle center. The anchor stores are located to the west and north bordering the ring road. The small shop main street area is located in the southeast portion of the site with excellent visibility from the shopping center entrance on Bluff Creek Boulevard. Avienda Parkway encircles the site on the west, north and east. The main street small shops retail area connects Avienda Parkway to the parking lot in front of the western row of anchor stores. Parking located in front of the north row of anchor stores also abuts the main street retail shops. The location of anchor stores and small shops encourage patrons to park once and walk to the stores they plan to visit. The parking lots have convenient access and circulation. The site’s open design provides stores with excellent visibility. Figure 9: Proposed Alternative with Post-Development Wetland Drainage Areas Source: Kjolhaug Environmental Services Company. 14 The convenience goods shopping area with 143,000 square feet, anchored by a supermarket, has an excellent location on the southeast corner of the site with excellent visibility and convenient access from Powers Boulevard. The convenience goods component is consistent with regional lifestyle centers as demonstrated by The Shoppes at Arbor Lakes, The Shops at West End, Central Park Commons, and City Place. The two retail components totaling 435,500 square feet represent a lifestyle center in scope, design, and size. Non-retail uses total about 691,000 square feet, which provide additional support for the retail component. This development concept is consistent with the City of Chanhassen vision for a regional lifestyle contained in the Comprehensive Plan. Proposed Alternative – Revised The Proposed Alternative – Revised (Figure 10) is an adaptation of the regional mixed use shopping center design for the Avienda site. The major component is a large regional lifestyle center with 293,000 square feet, as shown in Table 5. The retail component is inside a ring road that provides access to the main component of the regional lifestyle center. The anchor stores are located to the west and north bordering the ring road. The small shop main street area is located in the central portion of the site with excellent visibility from the shopping center entrance on Bluff Creek Boulevard. Avienda Parkway encircles the site on the west, north and east. The main street small shops retail area connects Avienda Parkway to the parking lot in front of the western row of small stores. Parking located in front of the north row of anchor stores also abuts the main street retail shops. The location of anchor stores and small shops encourage patrons to park once and walk to the stores they plan to visit. The parking lots have convenient access and circulation. The site’s open design provides stores with excellent visibility. Table 4 PROPOSED ALTERNATIVE (Square Feet) Anchor Small Component Stores Stores Total Regional Lifestyle Center Retail Stores 187,000 70,000 257,000 Food Service 19,500 19,500 Daycare 16,000 16,000 Subtotal 187,000 105,500 292,500 Convenience Goods Retail Stores 126,000 10,000 136,000 Food Service 7,000 7,000 Subtotal 126,000 17,000 143,000 Total Retail 313,000 122,500 435,500 Office 75,000 Hotel 75,000 Apartments 465,000 Townhomes 76,000 Total 1,126,500 Source: Wetland Permit Application. 15 Figure 10: Proposed Alternative – Revised Source: Landform. The convenience goods shopping area with 112,000 square feet anchored by a supermarket has an excellent location on the southeast corner of the site with excellent visibility and convenient access from Powers Boulevard. The convenience goods component is consistent with regional lifestyle centers as demonstrated by The Shoppes at Arbor Lakes, The Shops at West End, Central Park Commons, and City Place, all of which have grocery stores. A destination retail area is located west of the convenience goods area and is suitable for stores such as sporting goods, home furnishings, and furniture. The retail components, totaling 405,000 square feet, represent a lifestyle center in scope, design, and size. 16 FINDINGS Regional shopping centers have evolved from single level shopping centers with one anchor to multi-anchor shopping centers with two or three levels and up to six anchor stores as the needs of anchor department stores and specialty retailers evolved. In the mid 1990s, most of the areas that could support a multi-department store regional mall had been developed, but shopping center demand continued for mid box retailers and specialty stores creating demand for regional lifestyle centers to accommodate store expansion. The mixed use regional lifestyle center continues this evolution by incorporating medical, office, hotels, and residential uses in a coordinated development. This evolution is a continuation of the development formula where two plus two equals five. Avienda combines the same mix of uses that developed around Southdale 60 years ago. While the regional shopping center evolved with the times, the site concept remained the same: the anchor stores and smaller specialty stores and their associated parking were contained on a site surrounded by roads that provided access to the retail component. The placement of anchor stores and smaller retail stores and food services is designed to encourage comparison shopping and pedestrian circulation. On the Avienda site, the central location of the wetland will prevent the development of a regional lifestyle center that requires a central focus. To use an analogy, it would be like building a baseball field without a pitchers mound. Table 5 PROPOSED ALTERNATIVE - REVISED (Square Feet) Anchor Small Component Stores Stores Total Regional Lifestyle Center Retail Stores 177,000 69,000 246,000 Food Service 31,000 31,000 Daycare 16,000 16,000 Subtotal 177,000 116,000 293,000 Convenience Goods Retail Stores 98,000 8,000 106,000 Food Service 6,000 6,000 Subtotal 98,000 14,000 112,000 Total Retail 275,000 130,000 405,000 Office 150,000 Hotel 39,000 Apartments 262,200 Senior Apartments 183,000 Single Family 76,000 Total 1,115,200 Source: Wetland Permit Application. MEMORANDUM TO: Landform DATE: May 31, 2017 FROM: McComb Group, Ltd. RE: RESPONSE TO USACE LETTER DATED MAY 3, 2017 FOR AVIENDA REGIONAL/LIFESTYLE CENTER PROJECT, CHANHASSEN MVP-2015-03075-RMM McComb Group, Ltd. was asked to address some of the concerns contained in the USACE letter referenced above. The responses are provided using headings utilized in the memorandum prepared by Kjohaug Environmental Services Company (KES). USACE Comment #1 McComb Group has been a consultant to the City of Chanhassen for over 30 years as they guided retail, office, and residential development in the City. During this period, the City has been on the leading edge of development planning for a community of their size and location. Chanhassen has successfully incorporated modern retail, office, entertainment, and residential uses in their traditional downtown area. Over this period, downtown has evolved as a mixed use community center/downtown area. Downtowns are different from shopping centers and include a wide variety of uses, as shown in Table 1. Downtown Chanhassen has 69 retail stores and 107 services. The largest retail category is food service with 35 establishments, representing half of the downtown retail businesses. Downtown is also well served by convenience goods stores. Shopping goods stores are under represented with only two women’s clothing stores, a telecom store and mattress store, and a limited number of other shopping goods stores. Avienda’s tenant mix will be heavily oriented toward shopping goods stores including apparel and accessories, furniture and home furnishings, electronics and appliances, and other shopping goods. These stores are under represented in Chanhassen and the city’s residents must go to another city to shop for these items. Avienda will balance the merchandise offerings in Chanhassen and fill voids in the market place. Definitions of shopping center terms are attached in an appendix. The City of Chanhassen’s description of a regional mixed use lifestyle center is consistent with the City’s past practice of encouraging mixed use in its commercial areas. The City’s description of a mixed use regional lifestyle center is also consistent with the evolution of regional mixed use shopping center developments, which have been incorporating office, entertainment, and residential with retail stores in mixed use developments. The regional mixed use lifestyle center description is designed to create a shopping center with a mix of shopping goods stores that are not currently located in Chanhassen. 2 Table 1 SUMMARY OF DOWNTOWN CHANHASSEN RETAIL TENANT MIX February 2017 Merchandise Category Downtown CONVENIENCE GOODS Food Stores 3 Specialty Food Stores 2 Other Convenience Goods 8 Subtotal 13 FOOD SERVICE Full Service 13 Limited Service 18 Snacks & Beverage Places 3 Cafeterias 0 Drinking Places 1 Subtotal 35 CONVENIENCE/GASOLINE 2 SHOPPING GOODS General Merchandise 1 Clothing and Accessories 2 Shoes 0 Home Furnishings 1 Electronics & Appliances 1 Other Shopping Goods 12 Subtotal 17 OTHER STORES Building Materials/Garden 0 Motor Vehicles & Parts 2 Subtotal 2 Total Retail 69 SERVICES Personal Care 14 Dry Cleaning/Laundry 4 Personal Services 10 Rental/Leasing 0 Recreation/Entertainment 4 Household Goods Repair 0 Automotive Services 13 Other Services 15 Financial 18 Other Offices 6 Medical 18 Other 0 Community 5 Total Services 107 GRAND TOTAL 176 VACANT 11 Source: McComb Group, Ltd. 3 USACE Comment #3 The components of a regional mixed use lifestyle center are interdependent. The residents, office employees, and the hotel guests will patronize the retail stores, restaurants, and services. There is a segment of our society that desire to live and/or work in walkable communities where they can walk to a store, restaurant, or personal service. Mixed use regional lifestyle centers enable these households to reduce the amount of driving and as a result pollution and energy consumption. This is increasingly important to millennials and seniors, growing segments of our society. The retail stores in a regional lifestyle center are interdependent with each other. This is a fact that has driven regional shopping center design for 65 years. Before that, the interdependence of retail stores on each other created the downtown shopping areas of virtually every city and town in America. In most small towns, the retail areas were located in proximity to offices and residential neighborhoods. The large single purpose tract developments of residential and offices were a departure from historic development patterns. The location, design, and proximity of the individual components of a viable regional mixed use lifestyle center are based on the need to create a synergistic development in which each individual component is successful and contributes to the success of the entire development. The principals that create successful mixed use regional lifestyle centers are based on lessons learned over about 25 years of design and development for this type of center. The successful regional mixed use lifestyle centers have reinforced how the individual components should be designed and located so that they support the other components. The retail component is the central focus of these developments. USACE Comment #5c KES’s Alternatives Site Selection Criteria (3.2) are consistent with the site selection criteria for a regional mixed use lifestyle center that would be utilized by a developer and/or a retail store. Developers understand the location characteristics that result in successful shopping centers and recognize that retailers will not sign leases in developments that do not meet these criteria. The site much be large enough to accommodate about one million square feet or more of development. It must have convenient access from four directions and good to excellent visibility from adjacent highways. Rectangular or square sites are essential to efficient land use. The sites must be located with clear visibility from highway or freeway frontage at interchange or intersection locations. Sites without these characteristics are not suitable for regional mixed use lifestyle centers. USACE Comment #5e Vertical mixed-use office and residential development is possible and is included in some lifestyle centers. There are practical limitations for office and reside ntial. Small office and residential floor plates are only compatible with the floor plates of small shop retail buildings. Residents generally do not want to live above restaurants or fast food establishments, which limits retail tenant choice. Some resident parking can be underground, but any parking demand not accommodated below grade would conflict with shopper parking. The same is true of office parking. Office tenants/employees will arrive first and take the most convenient parking spaces conflicting with retail shopping. More importantly, since it’s the small store buildings that are suitable for office or residential mixed use, it does not change the shopping center design or location of the small shop main street area, it only increases costs and reduces retail space by the areas needed for entrance lobbies, elevators, and exit stairs. Providing automobile access to the basement level of small buildings complicates site design for access ramps. 4 Multi-level retail is not possible at Avienda. The tenants that typically locate in mixed use regional lifestyle centers do not have two level prototype stores. In mixed use development, the most valuable use will be dominant. In Avienda, the dominant use will be retail and the building locations and footprints are based on retail design criteria for the planned tenant mix. These building floor plates and the site design does not lend itself to functionally or economically viable mixed use development. Appendix DEFINITIONS OF SHOPPING CENTER TERMS Definitions of selected terms used in the shopping center industry listed below are from the ICSC’s Dictionary of Shopping Center Terms, Third Edition, published in 2008. Shopping Goods – Goods from variety, department, and general merchandise stores: toys, hobbies, sporting goods, small appliances, household, textile, garden and lawn supplies, luggage and leather, music, books, housewares, men’s, women’s and children’s apparel, candy, radios, and televisions. Convenience Goods – Goods from drug, grocery, liquor, and hardware stores; services from beauty, barber, and bake shops; and services from laundry and dry cleaning establishments. Lifestyle Center – Most often located near affluent residential neighborhoods, this center type caters to the retail needs and “lifestyle” pursuits of consumers in its trading area. It has an open- air configuration and typically includes at least 50,000 square feet of retail space occupied by upscale national chain specialty stores. Other elements help make the lifestyle center serve as a multipurpose leisure-time destination, including restaurants, entertainment, and design ambience and amenities such as fountains and backyard furniture that are conducive to casual browsing. These centers may or may not be anchored by one or more conventional or fashion specialty department stores. These centers range between 150,000 and 500,000 square feet of gross leasable area encompassing 10 to 40 acres and the primary trade area is 8 to 12 miles. Regional Center – This center type provides general merchandise (a large percentage of which is apparel) and services in full depth and variety. Its main attractions are its anchors: traditional, mass merchant or discount department stores, or fashion specialty stores. A typical regional center is usually enclosed, with an inward orientation of the stores connected by a common walkway, and parking surrounds the outside perimeter. Community Center – A community center typically offers a wider range of apparel and other soft goods than the neighborhood center. Among the more common anchors are supermarkets, super drugstores, and discount department stores. Community center tenants often include value- oriented, big-box, category-dominant retailers selling such items as apparel, home improvement/furnishings, toys, electronics, or sporting goods. The center is usually configured in a straight line as a strip, or L, or U shape. Of the nine most common center types, community centers encompass the widest range of formats. CHANHASSEN RETAIL MARKET ANALYSIS AND DEVELOPMENT POTENTIAL Prepared for City of Chanhassen June 2006 Copyright © 2006 by McComb Group, Ltd. CHANHASSEN RETAIL MARKET ANALYSIS AND DEVELOPMENT POTENTIAL Prepared for City of Chanhassen Prepared by McComb Group, Ltd. June 2006 i TABLE OF CONTENTS Chapter Subject Page INTRODUCTION ...............................................................................................1 I CHANHASSEN SHOPPING AREAS.................................................................3 Retail Areas.........................................................................................................3 Traffic Counts......................................................................................................6 Future Development Areas...................................................................................8 Accessibility......................................................................................................10 II COMPETITIVE SHOPPING AREAS...............................................................12 Super Regional Shopping Areas.........................................................................12 Eden Prairie Center Area...............................................................................12 Southdale Area..............................................................................................12 Ridgedale Area..............................................................................................14 Competitive Shopping Areas..............................................................................14 Eden Prairie...................................................................................................14 Chaska...........................................................................................................14 Shorewood-Excelsior.....................................................................................15 Minnetonka ...................................................................................................16 Shakopee.......................................................................................................16 Victoria .........................................................................................................16 Waconia........................................................................................................17 Summary...........................................................................................................17 III CHANHASSEN CUSTOMER SURVEY..........................................................18 Summary...........................................................................................................21 IV CHANHASSEN MERCHANT INTERVIEWS SUMMARY .............................22 Primary Strengths and Advantages of Doing Business in Downtown Chanhassen....................................................................................................22 Negatives Related to Doing Business in Downtown Chanhassen........................23 What Impact Do You Think the Completion of TH-312 Will Have on Your Business?..............................................................................................23 What Impact Do You Think the Completion of TH-312 Will Have on Chanhassen?..................................................................................................24 What Has Been Your Sales Growth the Past Couple of Years?...........................25 Do You Have Any Plans for Changes to Your Business in the Next Three Years?...........................................................................................................25 ii TABLE OF CONTENTS (cont.) Chapter Subject Page V RESIDENTIAL GROWTH TRENDS ...............................................................27 Building Permits................................................................................................28 Future Trade Area Households...........................................................................29 VI CHANHASSEN TRADE AREA.......................................................................31 Population and Households................................................................................31 Household Income.............................................................................................35 Demographic Characteristics .............................................................................37 Purchasing Power..............................................................................................41 VII RETAIL DEVELOPMENT POTENTIAL.........................................................43 Retail Sales........................................................................................................43 Market Share .....................................................................................................45 Sales Potential ...................................................................................................47 Downtown Chanhassen......................................................................................48 Lifestyle Trade Area..........................................................................................49 Convenience Trade Area....................................................................................50 Land Demand ....................................................................................................52 APPENDIX A ...................................................................................................82 Demographic Characteristics APPENDICES.......................................................................under separate cover Appendix B – Downtown Trade Area Appendix C – Lifestyle Trade Area Appendix D – Convenience Trade Area iii LIST OF TABLES Table Title Page 1 Chanhassen Retail Areas......................................................................................5 2 Downtown Area Traffic Counts; 2000 to 2004 .....................................................7 3 TH-5 and Century Traffic Counts; 2002 to 2004 ..................................................7 4 TH-5 and Galpin Traffic Counts; 2000 to 2004 ....................................................8 5 TH-7 and TH-41 Area Traffic Counts; 2002 to 2004............................................8 6 Chanhassen Customer Spotting Survey..............................................................18 7 Downtown Chanhassen Trade Area Survey Respondents by City.......................19 8 Downtown Chanhassen Trade Area Survey Respondents by Zip Code...............19 9 Downtown Chanhassen Trade Area Reason for Stopping...................................20 10 Downtown Chanhassen Customer Survey “Why Did You Stop Today?” by Home Zip Code – All Respondents................................................................21 11 Chanhassen Customer Survey Spotting Survey Participants...............................21 12 List of Merchant Survey Participants .................................................................22 13 Chanhassen Trade Area Communities Southwest Growth Corridor Population; 1970 to 2004..................................................................................................27 14 Chanhassen Trade Area Communities Southwest Growth Corridor Households; 1970 to 2004..................................................................................................28 15 Trade Area Communities, Southwest Growth Corridor, Hennepin County, Metropolitan Area, MSA and Minnesota Household Growth; 1970 to 2004..................................................................................................28 16 Southwest Growth Corridor Residential Building Permits; 1990 to 2005............29 17 Chanhassen Trade Area Household Projections; 2005 to 2025 Metro Area and Trade Area..............................................................................................30 18 Chanhassen Convenience, Downtown and Lifestyle Trade Areas Population and Households: 1990 and 2000 Census; 2005 and 2010 Estimated...............33 19 Chanhassen Convenience, Downtown and Lifestyle Trade Areas Average and Median Household Income: 1990 and 2000 Census; 2005 and 2010 Estimated.......................................................................................................35 20 Chanhassen Convenience, Downtown and Lifestyle Trade Areas Household Income Distribution: 1990 and 2000 Census; 2005 and 201 Estimated...........37 21 Downtown Chanhassen Trade Area Demographic and Income Snapshot............38 22 Chanhassen Convenience Trade Area Demographic and Income Snapshot.........39 iv LIST OF TABLES (cont.) Table Title Page 23 Chanhassen Lifestyle Trade Area Demographic and Income Snapshot...............40 24 Chanhassen Trade Areas Retail Purchasing Power; 2005 to 2025.......................42 25 City of Chanhassen Retail Sales; 1997 and 2002 ................................................44 26 Chanhassen Purchasing Power, Retail Sales and Market Share; 2002 .................45 27 Chanhassen Market Share and Trade Area Sales................................................46 28 Chanhassen Downtown Trade Area Retail Purchasing Power, Market Share and Sales Potential; 2010 by Merchandise Category......................................47 29 Chanhassen Downtown Trade Area Retail Sales Potential and Supportable Space; 2010 by Merchandise Category ..........................................................48 30 Downtown Chanhassen Trade Area Supportable Space by Merchandise Category........................................................................................................49 31 Lifestyle Trade Area Supportable Space by Merchandise Category ....................50 32 Convenience Trade Area Supportable Space by Merchandise Category .............51 32A Chanhassen Convenience Trade Area Supportable Space by Merchandise Category........................................................................................................53 32B Chanhassen Convenience Trade Area Supportable Space by Services Category........................................................................................................54 33 Chanhassen Supportable Land Area ...................................................................52 v LIST OF MAPS Map Title Page 1 Chanhassen Existing Shopping Areas ..................................................................4 2 Chanhassen Future Development Areas...............................................................9 3 Chanhassen Competitive Shopping Areas..........................................................13 4 Chanhassen Convenience, Downtown and Lifestyle Trade Areas.......................32 5 Chanhassen Convenience, Downtown and Lifestyle Trade Areas 2010 Household Density........................................................................................34 6 Chanhassen Convenience, Downtown and Lifestyle Trade Areas 2010 Household Income: % Above $100,000.........................................................36 1 INTRODUCTION McComb Group, Ltd. was engaged by the City of Chanhassen to conduct a market analysis to determine future demand for retail space in Chanhassen. Work tasks conducted during this engagement are summarized below. ♦ Existing shopping areas and potential retail areas in Chanhassen were evaluated to determine their suitability for development. Factors that were evaluated include, but were not limited to: location, ingress and egress, access, visibility, relationship to adjacent uses, current and future traffic counts, as well as estimated impacts of traffic volume changes, congestion and other factors that may result from the new TH-312/212 that would affect the Chanhassen area. ♦ Shopping areas competitive with Chanhassen commercial areas were identified and evaluated to determine competitive impacts on future retail development. Principal competitors were identified and evaluated for tenant mix, retail GLA, and anchor stores. Future developments and redevelopments in the study area were identified to the extent possible. ♦ Owners and managers of businesses in Chanhassen were interviewed to obtain their observations on retail trends, competitive pressures, where their customers live, and other information pertinent to the study, including their opinion about Downtown Chanhassen strengths and weaknesses, and ideas concerning possible impacts of the new TH-312 on the Downtown Chanhassen area. ♦ Businesses in Downtown Chanhassen were asked to participate in a survey of their customers to determine where they live and work, and why they shop at that business. This information was used to help identify the primary trade area for the Downtown Chanhassen commercial area and the amount of inflow patronage. ♦ The primary trade area for Downtown Chanhassen and other Chanhassen commercial areas were delineated based on arterial road patterns, drive times, and McComb Group experience. Trade areas were analyzed to identify and quantify those factors that generate support for retail and service establishments. Factors evaluated include, but were not limited to: population, households, building permits, and household income. Comprehensive plans for adjacent communities were evaluated to determine residential and commercial development potential. Past growth trends in the southwest growth corridor were evaluated to determine trade area share of Metropolitan Area residential growth. This analysis was used to prepare market driven estimates of future household growth. Trade area growth trends were evaluated to determine residential growth potential for target years of 2010, 2015, 2020 and 2025. Retail and service purchasing power of trade area households was estimated. ♦ Future retail development potential for Downtown Chanhassen and two interchanges with TH-312 at Powers Boulevard and Great Plains Boulevard was estimated taking into consideration competitive impacts, trade area demographics, and trade area purchasing 2 power and estimated market share. Future retail and service sales potential for Chanhassen was estimated by business type based on purchasing power, competitive shopping centers, and current retail trends. Estimates of retail, service and office service space supportable by sales potential was prepared for target years of 2010, 2015, 2020 and 2025. The type of shopping center environments suitable for each area was identified. ♦ Developers, brokers, and retailers interested in retail locations in the Chanhassen area were interviewed to determine their development plans and their ideas on the type of businesses or development that is suitable for the area. ♦ The estimated future demand for retail uses in Chanhassen was compared with the available supply of developable land and its location. Developable sites were evaluated for retail use. Retail development potential estimates were prepared for Downtown Chanhassen and the two TH-312 locations. This report contains the primary information needed to support the principal conclusions. However, in a report of this nature, it is not possible to include all of the information that was developed and evaluated. Any additional information will be furnished upon request. Report Purpose This report was prepared in accordance with our proposal dated November 4, 2005. This report was prepared with the understanding that the results of our work will be used by the client to evaluate retail development potential in Chanhassen. Our report was prepared for that purpose and is subject to the following qualifications: • Our analysis did not ascertain the legal and regulatory requirements applicable to this project including zoning, other state and local government regulations, permits and licenses. No effort was made to determine the possible effect on the proposed project of present or future federal, state or local legislation, or any environmental or ecological matters. • Our report and analysis was based on estimates, assumptions and other information developed from research of the market, knowledge of the industry and discussions with the client. Some assumptions inevitably will not materialize and unanticipated events and circumstances may occur; therefore, actual results achieved will vary from the analysis. • Our analysis did not evaluate management’s effectiveness nor are we responsible for future marketing efforts and other management actions upon which actual results are dependent. Our report is intended solely for the purpose described above and should not be used for any other purpose without our prior written permission. Permission for other use of the report will be granted only upon meeting company standards for the proposed use. 3 Chapter I CHANHASSEN SHOPPING AREAS Chanhassen is a growing suburban community in the southwestern Twin Cities Metropolitan Area. The city is experiencing residential development and commercial development. Past retail development has been concentrated in Downtown Chanhassen, the community’s primary retail and service area. Recently, new shopping areas have begun to emerge as the number of available sites in the downtown area has dwindled and residential growth has generated opportunity areas for new development. Retail Areas Chanhassen has five retail areas, as shown on Map 1, which offer a variety of goods and services as shown in Table 1. ♦ Downtown is the area generally located north of TH-5, east of Powers Boulevard and west of Great Plains Boulevard. This area includes Market Square Shopping Center (anchored by Cub Foods), West Village Center (anchored by Byerly’s), Market Street Station, Town Square Center, and 19th Street Center, as well as freestanding stores such as Target and Walgreens. Downtown has the largest concentration of retail and service establishments in Chanhassen with 69 retail stores and 69 services. Downtown’s primary function is as a community shopping area with a wide variety of retail stores, food services, and personal and business services. The fourteen convenience retail stores in downtown include two supermarkets, three drug stores, four liquor stores, and a hardware store. Food service is represented by 23 establishments: 11 full service restaurants and 12 limited service food establishments. Shopping goods is represented by 14 specialty stores, five furniture and home furnishings stores, and four electronics retailers. Target is the largest shopping goods retailer. Service establishments include 12 financial services, 11 personal care services, 11 other personal services, the Chanhassen Dinner Theater, Chanhassen Cinema, and a variety of professional and other services including nine medical and dental offices. ♦ South Downtown is a developing retail area located along TH-5 south of Downtown Chanhassen. The area extends east from Market Boulevard to Dakota Avenue, and presently has 40 retail and service establishments. The 13 retail stores include Lake Winds Natural Foods, three shopping goods stores, and five food service establishments. Medical/dental services dominate the service offerings in this area, representing eleven of the 27 service establishments. This area still has sites with good visibility and relatively convenient accessibility. ♦ TH-5 and Century is a smaller retail area in Chanhassen, with 25 retail and service businesses. This area is also situated along TH-5, between Century Boulevard and TH-41 (Hazeltine Boulevard) about 2.5 miles west of downtown. Area businesses include Lifetime Fitness Center, Holiday Inn Express Hotel, two gas and convenience ChaskaChanhassenVictoriaShorewoodTonka BayExcelsiorGreenwoodEden PrairieGuernsey AveTH-5TH-7TH-41Powers BlvdGalpin BlvdW 78th StTH-7Co Hwy 101Flying Cloud Dr/US-212Pioneer TrlTH-101Excelsior BlvdI -4 9 4 TH-7 & TH-41TH-5 & GalpinTH-5 & CenturyDowntownShopping Areas00.511.52Scale: 1" = 1.38 milesMap produced with Scan/US 04/19/06 5 Table 1 CHANHASSEN RETAIL AREAS Downtown South TH-5 & TH-5 & TH-7 & Other Chanhassen Downtown Century Galpin TH-41 TH-5 CONVENIENCE RETAIL Food 2 2 Drug Store 3 1 Liquor 4 1 Hardware 1 Floral 3 Video 1 1 FOOD SERVICE Full Service 11 1 2 1 Limited Service 12 4 2 2 CONVENIENCE/GASOLINE Convenience/Gasoline 3 3 2 1 1 SHOPPING GOODS General Merchandise 1 Variety/Dollar 1 Apparel/Accessories 2 Furniture & Home Furnishings 5 1 6 1 1 Electronics 4 1 Other Shopping Goods 14 2 1 Pre-Owned Merchandise 1 HOME IMPROVEMENT Home Improvement Lawn & Garden 1 1 AUTOMOTIVE Auto/RV Sales Auto Parts 1 Subtotal 69 13 13 2 8 3 SERVICES Auto Services 4 4 1 1 Personal Care 11 3 2 3 Personal Services 11 2 1 1 2 Laundry/Dry Cleaning 5 1 1 Financial 12 2 2 5 Real Estate 2 1 1 Insurance 3 1 1 5 Medical/Dental 9 11 1 5 Entertainment/Recreation 5 1 2 Professional Services 4 6 Lodging 2 1 1 Other Services 1 1 1 Fraternal 1 Subtotal 69 27 12 0 6 26 Total 138 40 25 2 14 29 Source: McComb Group, Ltd. 6 stores, four food service establishments, six furniture and home furnishings stores, and a variety of personal and professional services. ♦ TH-5 and Galpin, two miles west of Downtown Chanhassen, presently has only a Kwik Trip gas/convenience store and CVS Pharmacy in the northeast quadrant of the intersection. The northwest quadrant has 15 acres that is undeveloped. This area may attract future commercial development. ♦ TH-7 and TH-41 is along Chanhassen’s northern boundary with Shorewood. This neighborhood shopping area is comprised of both Chanhassen and Shorewood businesses. The fourteen Chanhassen businesses are located in the southwest quadrant of the intersection and include a SuperAmerica gas-convenience store, 2nd Wind Exercise Equipment, Hollywood Video, plus a small, retail strip with Tuesday Morning. The Shorewood businesses are part of a neighborhood strip center anchored by Cub Foods. Other TH-5 businesses consist of 29 retail and service establishments that are located along TH-5 but are not part of any retail or service node. These businesses include remnants of the old, TH-5 retail strip area, as well as newer, freestanding establishments located along TH-5 or other establishments that are located with the business parks scattered along TH-5 in Chanhassen. Service establishments represent 26 of the 29 establishments, and include six professional services, five medical/dental offices, five insurance offices, and five financial establishments. Clearly Downtown Chanhassen is the dominant retail and service center for the community, with 61 percent of the community’s retail stores and 50 percent of the area’s services. Much of the downtown area is newer construction (10 years old or less) including Target, the West Village Centres, Walgreens, and many of the restaurants such as Applebee’s, Chipotle, and Buffalo Wild Wings. Future growth in downtown will be limited. The area is almost fully developed and lacks additional developable sites. The other retail nodes are for the most part fairly recent developments. These areas have developed more recently after Downtown Chanhassen was almost fully developed. These smaller areas have limited capacity to absorb additional commercial demand. Traffic Counts Downtown and South Downtown have the highest traffic counts of any of the existing retail areas in Chanhassen, as shown in Table 2. Traffic counts on TH-5 were 48,000 east of Great Plains and declined to 30,000 west of Powers Boulevard indicating that about 18,000 trips turn north or south in downtown. Traffic on TH-5 increased three to four percent annually between 2002 and 2004. Traffic counts on roads south of TH-5 increased dramatically between 2000 and 2003: 28 percent on Powers Boulevard, 26 percent on Market Boulevard, and 10 percent on Great Plains Boulevard (TH-101). 7 Table 2 DOWNTOWN AREA TRAFFIC COUNTS; 2000 TO 2004 Growth Location 2000/02 2003/04 Rate TH-5 East of Great Plains 45,000 * 48,000 ** 3.3 % West of Great Plains to Powers Blvd. 35,000 * 38,000 ** 4.2 West of Powers Blvd. 28,000 * 30,000 ** 3.5 Powers Blvd. North of TH-5 13,600 15,400 4.2 % South of TH-5 6,800 14,200 27.8 Market Blvd. North of TH-5 11,000 11,300 0.9 % South of TH-5 4,800 9,700 26.4 Great Plains Blvd. North of TH-5 8,800 8,800 0.0 % South of TH-5-North of Lyman 5,900 7,800 9.8 * 2002 traffic counts. ** 2004 traffic counts. Source: Minnesota Department of Transportation and McComb Group, Ltd. Traffic counts on TH-5 in the vicinity of the Century Boulevard retail area increased at an annual rate of 3.5 percent between 2002 and 2004, as shown in Table 3. Traffic counts on TH-41 are about half of TH-5 and increased at an 8.6 annual growth rate between 2002 and 2004. Table 3 TH-5 AND CENTURY TRAFFIC COUNTS; 2002 TO 2004 Growth Location 2002 2004 Rate TH-5 West of Powers Blvd.28,000 30,000 3.5 % East of TH-41 28,000 30,000 3.5 TH-41 North of TH-5-South of TH-7 14,000 16,500 8.6 % South of TH-5 5 18,000 18,000 0.0 Source: Minnesota Department of Transportation and McComb Group, Ltd. Traffic in the area of TH-5 and Galpin Boulevard is predominately along TH-5, with an average of 30,000 cars per day in 2004, as shown in Table 4. Traffic counts on Galpin Boulevard, north of TH-5 increased at an annual rate of nine percent between 2000 and 2003 in response to 8 increased residential development in that area. Traffic counts on Galpin Boulevard declined moderately during this same period. Table 4 TH-5 AND GALPIN TRAFFIC COUNTS; 2000 TO 2004 Growth Location 2000/02 2003/04 Rate TH-5 West of Powers Blvd. 28,000 * 30,000 ** 3.5 % East of TH-41 28,000 * 30,000 ** 3.5 Galpin Blvd. North of TH-5 3,850 5,000 9.1 % South of TH-5 4,800 4,450 (2.5) * 2002 traffic counts. ** 2004 traffic counts. Source: Minnesota Department of Transportation and McComb Group, Ltd. Traffic counts on TH-7 at TH-41 are slightly higher than at TH-41 and TH-5, as shown in Table 5. TH-7 runs through Shorewood and Excelsior north of Chanhassen. Traffic counts on TH-7 increased at an annual rate of about seven percent between 2002 and 2004. Traffic counts on TH-41 increased at an annual rate of 8.6 percent. Table 5 TH-7 AND TH-41 AREA TRAFFIC COUNTS; 2002 TO 2004 Growth Location 2002 2004 Rate TH-7 East of TH-41 23,500 27,000 7.2 % West of TH-41 19,000 21,500 6.4 TH-41 South of TH-7 to TH-5 14,000 16,500 8.6 % Source: Minnesota Department of Transportation and McComb Group, Ltd. Future Development Areas Chanhassen has three areas that may be targeted for additional retail development, as shown on Map 2. Two of these areas are located along the new TH-312 and the third is an infill location along TH-5. The Fox-Dorsey properties, in the northwest quadrant of the TH-312 and Powers Boulevard interchange is the largest of the three with about 110 acres. This area has been considered for mixed-use development, but would also be appropriate for a large shopping center or a lifestyle center. Located west of Powers Boulevard and south of Lyman Boulevard (CSAH 18), the area ChaskaChanhassenVictoriaShorewoodTonka BayExcelsiorGreenwoodEden PrairieCo Rd 10 NArboretum Blvd/SR-5TH-7TH-41Powers BlvdW 78th St/TH-5Flying Cloud Dr/US-212Pioneer TrlEden P rai rie R d Chanhassen Rd/SR-101I-4 9 4 rTH-7 & TH-41TH-5 & GalpinTH-5 & CenturyDowntownTH-312 & POWERSTH-312 & GREAT PLAINSFuture Development AreasExisting Retail00.511.52Scale: 1" = 1.37 milesMap produced with Scan/US 05/01/06 10 will have excellent accessibility to the new TH-312 and to residents throughout the area. This area is about two miles south of Downtown Chanhassen. Currently, property south of Lyman is generally undeveloped, and north of Lyman is mostly residential. Other quadrants of this intersection may also attract retail interests. The area west of the interchange of TH-312 and Great Plains Boulevard is under consideration for possible commercial development. This area is about 1.5 miles south of Downtown Chanhassen. The area will likely be a mixed-use area with residential and commercial developments planned. The northeast and southwest quadrants of the interchange have commercial sites of about eight to ten acres each. Site preparation is underway in this area. Residential developments are planned for the other areas. Both commercial sites will have convenient access to adjacent residential areas and TH-312. The southwest quadrant site will have access from Lyman Boulevard on the south and Great Plains Boulevard on the east. The Great Plains interchange with TH-312 may limit this quadrant’s visibility to westbound traffic on TH-312, and visibility to eastbound traffic may be restricted by the Lyman overpass. An 80,000 to 90,000 square foot neighborhood retail center is planned for the southwest quadrant. The northeast quadrant site would likely have access from Great Plains Boulevard and West 86th Street. This site would have limited visibility from TH-312, with the Great Plains interchange and noise walls along the highway obstructing views to the site. Presently, there are residential developments immediately beyond the TH-312/Great Plains interchange area to the north, west and southeast. Only the area to the south of Lyman and west of Great Plains is predominantly undeveloped. The area of TH-5 and Galpin presently has very little commercial development. Only two retail establishments: a CVS Pharmacy and a Kwik Trip gas-convenience store. There is, however, approximately 15 acres of undeveloped property in the northwest quadrant of TH-5 and Galpin Boulevard that could be developed for either commercial or residential uses, depending upon what is deemed most appropriate. West 78th Street bisects this parcel, creating two development sites, a southerly parcel along TH-5 and another to the north of West 78th Street. A highline electric power line runs along TH-5 on the property’s south boundary. The topography of the site and the topography of the TH-5 & Galpin intersection, as well as the CVS limit the south site’s visibility from westbound TH-5 traffic. The north site is well back from TH-5 and lacks visibility to the highway. Ingress and egress to both sites appears somewhat limited, with likely access from West 78th Street. Accessibility Chanhassen is served by three highway corridors that are primary routes to and from west metro area communities. TH-7 runs along Chanhassen’s northern boundary with Shorewood and provides access to communities St. Bonifacius, Mayer and Watertown to the west. TH-5 is the highest volume carrier through Chanhassen and also provides access for communities Victoria and Waconia. With 45,000 to 50,000 cars per day, traffic on TH-5 gets very congested at peak 11 travel times. TH-212, which presently skirts extreme southern Chanhassen, continues west through Chaska and provides area access to Carver, Cologne, and Norwood-Young America. Construction for TH-312 is presently underway in Eden Prairie, Chanhassen and Chaska. The alignment of TH-312 extends diagonally from TH-5 in Chanhassen to TH-212 in Chaska. When completed in 2008, TH-312 will be a four-lane freeway with two interchanges in Chanhassen: one at Great Plains Boulevard, and one at Powers Boulevard; and two interchanges in Chaska: at TH-41 and at Engler Boulevard. The new roadway is initially expected to carry 45,000 to 50,000 vehicles per day, and will hopefully relieve some of the pressure on TH-5. Other primary east-west routes through Chanhassen are Pioneer Trail and Lyman Boulevard. The primary north-south routes are TH-101 (Great Plains Boulevard, Dakota Road, and Chanhassen Road), Powers Boulevard, Audubon Road, and TH-41. 12 Chapter II COMPETITIVE SHOPPING AREAS Chanhassen retail and service establishments are competitive with a wide variety of shopping areas in Carver and Hennepin Counties. Convenience retail and services are competitive with other convenience retailers in Chaska, Shorewood, Excelsior, Eden Prairie, and Minnetonka. Shopping goods retailers will be competitive with stores in the vicinity of Eden Prairie Center, Southdale/France Avenue in Edina, and Ridgedale Mall in Minnetonka. These shopping areas provide various levels of convenience and shopping goods to Chanhassen. Competitive shopping areas are shown on Map 3. Competitive shopping areas include neighborhood, community and regional shopping areas, as well as commercial areas in outlying communities. SUPER REGIONAL SHOPPING AREAS Three super regional shopping areas influence shopping center potential in Chanhassen as summarized below. Eden Prairie Center Area Eden Prairie Center and its adjacent shopping centers and retail stores are the nearest super regional shopping concentration, but not necessarily the most competitive. Eden Prairie Center is located about five miles east of Downtown Chanhassen at the intersection of I-494, TH-212 and TH-5. Eden Prairie Center (1,125,000 square feet) is anchored by Sears, Target, Von Maur, and Kohl’s. J.C. Penney is scheduled to open in early 2007 in the former Mervyns department store. Originally opened in 1976, Eden Prairie Center is the focal point of a major shopping node. Nearby shopping venues include Prairie View Center (anchored by Rainbow Foods), Tower Square, RDA Center, and a number of small strip centers. In addition, Costco, Home Depot, Cub Foods, Menards and Wal-Mart occupy freestanding stores. These stores and shopping centers are generally located west of I-494 along Prairie Center Drive, TH-5, TH-212, and Valley View Road. Increasing traffic congestion in the area makes shopping far less convenient than in the past. Southdale Area Southdale Center (1,400,000 square feet) in Edina is anchored by Marshall Field’s and J.C. Penney department stores; and a 16-screen cinema is located on France Avenue between I-494 and County Highway 62. Southdale Center opened in 1956 and became the focal point for a major retail node that extended south along France Avenue, known for its quality shopping experiences that include the Galleria (featuring Gabberts, Barnes & Noble, Williams Sonoma, Pottery Barn), Leisure Lane, Yorkdale Shoppes, Yorktown Plaza, Centennial Lakes Plaza, Southdale Square, and Brandon Square Mall, as well as freestanding stores like Target Greatland, Cub Foods and Marshall Field’s Home Store. The Southdale area also has a wide CologneCarverChaskaChanhassenShakopeeWaconiaWatertownMinnetristaSt. BonifaciusVictoriaMoundShorewoodOronoSpring ParkTonka BayMinnetonka BeachExcelsiorGreenwoodDeephavenLong LakeWayzataPrior LakeEden PrairieSavageBloomingtonBurnsvilleMinnetonkaEdinaHopkinsSt. Louis ParkWoodlandGolden ValleyMedicine LakeRichfieldMinneapolCo Rd 50Hwy 212 EHwy 284Hwy 7Co Rd 10 NCo Rd 15TH-41TH-5TH-7140th St NWTown Line Ave/US-169Flying Cloud Dr/US-212I-4 9 4 Hill RdBURNSVILLE CENEDEN PRAIRIE CENTERRIDGEDALE CENTERSOUTHDALE CENTERTH-7 & Old MarketDowntownSouthbridge CrossingsTH-7 & TH-41TH-5 & GalpinAudubon & Hwy 212East 101North Marshall RdTH-5 & CenturyTH169 & TH83DowntownDowntownTH169 & Marschall RoadTH-7 & CSAH 101DowntownCBDTH-5 & E.P. RoadNorth TH-41TH-5 CorridorDowntownCompetitive RetailRegional Shopping Areas01234Scale: 1" = 3.08 milesMap produced with Scan/US 04/19/06 14 range of restaurant dining opportunities such as Cheesecake Factory, P.F. Changs, Maggiano’s Little Italy, and the Original Pancake House, to name a few. Ridgedale Area Ridgedale Center (1,044,000 square feet) opened in 1974 and is anchored by Marshall Fields, Sears, and J.C. Penney department stores. Located in Minnetonka near the intersection of Interstate 494 and Interstate 394, the Ridgedale area includes a number of shopping centers such as Bonaventure Mall (With Barnes & Noble, JoAnn Fabrics), Ridgehaven Mall (anchored by Target Greatland, Byerly’s Supermarket and Barnes & Noble), Ridgehaven Center, and Ridgedale Festival Center (with Office Max, Toys ‘R Us). COMPETITIVE SHOPPING AREAS Shopping areas located in Eden Prairie, Chaska, Shorewood, Minnetonka, and Shakopee, as well in Victoria and Waconia provide competition for Chanhassen area businesses. Locations of competitive shopping areas are shown on Map 3. Characteristics of these shopping areas are summarized below. Eden Prairie In addition to the Eden Prairie Center regional shopping area, the retail node at TH-5 and Eden Prairie Road is also competitive with Chanhassen area businesses. This neighborhood shopping area features two retail centers, plus a freestanding Walgreens. ♦ Prairie Village Mall, an older, albeit renovated, retail strip, is approximately 75,000 square feet and is anchored by Kowalski’s Supermarket, a quality and service oriented conventional supermarket. Other tenants include Snyder Drug, Eden Prairie Liquor, Caribou Coffee, and Blockbuster Video, along with hair and nail salons, fitness center, financial services businesses, dental, eye care and chiropractic offices, and a variety of other retail and service stores. ♦ Prairie Court Center is a small retail strip with about 15 stores featuring Timber Lodge Steakhouse, Erik’s Bike Shop, three other restaurants, plus hair salons, a dry cleaner, and other retail shops. Chaska Chaska has three principal retail nodes: North TH-41, Downtown and Audubon at TH-212. The North TH-41 area is located at Pioneer Trail and is closest to residents in Chanhassen. This area includes SuperTarget and two retail centers, Ridgeview Chaska Medical Plaza and Chaska Health Care Center along with: ♦ Chaska Commons opened in 1997 and is the home to Rainbow Foods and Home Depot. This community center is about 280,000 square feet and includes a variety of retail and service establishments including Great Clips, Aurora Wines & Spirits, GNC, 15 Planet Beach Tanning, Klein Bank, plus a number of sit down and limited service restaurants. ♦ Jonathan Square Center is an older, convenience center that includes a gas- convenience store, liquor store, hair and tanning salons, a fitness center, a florist, a specialty furniture store, a few small restaurants and a day care center. The other Chaska shopping nodes, Downtown Chaska and the Audubon and TH-212 area are located along TH-212 southwest of Chanhassen, and are less convenient to Chanhassen area residents. Downtown Chaska, at TH-212 and TH-41, has the largest concentration of retail and service establishments in Chaska with over 120 businesses. These include Cooper’s County Market, Walgreens and Snyder Drug, 12 shopping goods stores, and 20 restaurants, along with a number of financial and professional service businesses, personal care services, medical and dental offices, and other retail and service businesses. Audubon and TH-212 is a small convenience shopping node with about 20 businesses, including a number of auto-related retail and service businesses, a gas-convenience store, and a hair salon, laundry, take-out pizza, and a few others. Shorewood – Excelsior The Shorewood-Excelsior area has three neighborhood shopping areas that may serve as convenient shopping alternatives for some Chanhassen residents. The TH-7 and TH-41 retail node includes a number of Chanhassen businesses (described in the Retail Areas of Chapter I) located on the south side of TH-7. The 22 Shorewood businesses north of TH-7 are part of a neighborhood strip center anchored by Cub Foods that has tenants including True Value Hardware, Great Clips, a liquor store, fitness center, and others. Downtown Excelsior lies between TH-7 and the south shore of Lake Minnetonka. The area features over 100 retail and service businesses, including 36 shopping goods and specialty shops, 14 restaurants, convenience retail stores, along with 20 personal care and other personal service businesses, medical/dental offices, and other financial and professional offices, and service businesses. TH-7 at Old Market shopping area in Shorewood is comprised of the Waterford Plaza, (a small convenience strip with nine tenants, including a Holiday gas-convenience store, liquor store, dry cleaner, fitness center and more) along with Park Nicollet Health Clinic, Beacon Bank, a day care center and nine other freestanding retail and service stores along TH-7. 16 Minnetonka In addition to the Ridgedale Center regional shopping area, the retail node at TH-7 and CSAH 101 is also competitive with Chanhassen area businesses. This community shopping area includes: ♦ 7-Hi Shopping Center with Super Target, Gander Mountain, Discount Tire, Blockbuster Video, MGM Liquor, Bremer Bank, US Bank, Old Chicago restaurant, and others. ♦ West Wind Plaza (55,000 square feet) is anchored by Cub Foods and includes Walgreens, Northern Tool & Equipment, GNC, Checker Auto Parts, five food service establishments such as Bruegger's Bagels, and Caribou Coffee, as well as a number of other convenience retail and service businesses. This area also has Big Kmart, Frattalone’s Ace Hardware, Starbuck’s, Big Buck Roadhouse Grill, Park Nicollet Clinic and a variety of professional service businesses including legal, financial, medical, and dental offices. Shakopee Shakopee is a growing residential area that lies south of Chanhassen on the south side of the Minnesota River. Access from Chanhassen to the Shakopee area is limited to two primary river crossings, TH-41 through Downtown Chaska and CSAH 101 to Downtown Shakopee. There are five primary retail and service areas in Shakopee. Downtown Shakopee is most convenient to Chanhassen and in the past was the central business district. Downtown Shakopee still has a large concentration of shopping goods stores and service businesses along with a number of full service and fast food restaurants. TH-101 East area is the older, highway shopping area along CSAH 101 east of the downtown area. This area has over 70 different establishments including 16 auto retail and service stores, 15 restaurants, 10 shopping goods stores, 5 gas-convenience stores, as well as a drug store, hardware store, and a variety of personal care, financial and other services. Shakopee has developed three major commercial areas recently in response to its residential growth that occurred following the opening of the Bloomington Ferry Bridge and the TH-169 Bypass. These three major retail concentrations areas (Marschall Rd & TH-169, TH-169 & TH- 83, and South Bridge Crossings) are located on or near TH-169 on the south side of Shakopee and are not readily accessible to Chanhassen residents. These areas, however, include a large group of major retail stores including Target, Wal-Mart and Kohl’s, Sam’s Club, Home Depot and Lowe’s home improvement centers, Cub Foods and Rainbow Foods. Victoria Victoria is a small, but rapidly growing community about five miles west of Downtown Chanhassen. It has a small commercial area with 34 establishments, most of which are located along or just north of TH-5. Businesses include six restaurants (three fast food and three with service), two gas-convenience stores, two liquor stores, a lumberyard, cabinet shop and 17 landscape business, two floral-gift stores, along with 16 service businesses. Services include five financial services businesses, three insurance offices, three medical/dental offices, and five others. Waconia Waconia is a community with a population of about 7,000 located twelve miles west of Downtown Chanhassen on TH-5. Waconia has 141 retail and service businesses located in two primary retail commercial areas, the older, downtown central business district, and the more recently developing retail area along TH-5 south of downtown. Waconia CBD has 35 retail stores and 54 service establishments. These include Duebber’s Department Store, Waconia Theatre (six screens), 8 restaurants, 19 shopping goods stores including two apparel stores and four furniture and home furnishings stores, 12 financial services providers, 17 personal care and personal service businesses, and 7 medical/dental offices. TH-5 retail area in Waconia has 37 retail businesses and 15 service establishments, including Mackenthun’s County Market Supermarket, Snyder Drug, Waconia Farm Supply, two hardware stores, and three new car auto dealerships, along with seven other auto-oriented businesses, a number of restaurants, and others. The Ridgeview Medical Center and Lakeview Clinic are also located in this area of TH-5. SUMMARY Competition for Chanhassen retail and service establishments ranges from small convenience clusters to super regional shopping areas. The regional shopping center competition and its proximity to Chanhassen are most important for reasons that will be discussed in the trade area and development potential sections. Ridgedale and Southdale, the preeminent super regional shopping centers, are each about ten miles from Downtown Chanhassen. The other super regional malls, excluding Mall of America, are about eight to nine miles apart, indicating that Chanhassen is further from its competitive regional malls than the existing malls are from each other. Community shopping areas in Eden Prairie, Chaska and Minnetonka provide the most significant competition to Chanhassen merchants and services. These community shopping areas are anchored by discount stores and supermarkets whose drawing power attracts many other retailers, restaurants and services. With the larger anchor stores and greater numbers of retail and service stores, these areas provide more diversity and selection, and have greater appeal than convenience shopping areas. 18 Chapter III CHANHASSEN CUSTOMER SURVEY Retail and service businesses in Downtown Chanhassen were asked to conduct a brief survey of their customers as part of this study. Six businesses participated in this survey to determine home zip code, work zip code, and trip purpose of their customers. Three businesses, Byerly’s, Chanhassen Fitness Center and Spalon Montage, chose to provide customer visit information for their businesses. Customer visit information for Spalon Montage, contained in Table 6 indicates that they have a broader draw than other businesses in the survey. With over 30 percent of the customers from outside the trade area, they have more of a destination profile. Chanhassen Fitness and Byerly’s, with about 90 percent of their customers from the trade area, have a convenience goods customer profile. Table 6 CHANHASSEN CUSTOMER SPOTTING SURVEY Total Business Name Number Percent Number Percent Respondents Spalon Montage 309 68.7 % 141 31.3 % 450 Chanhassen Fitness Center 279 92.7 22 7.3 301 Byerly's 271 90.9 27 9.1 298 Total 859 81.9 % 5 0.5 % 1,049 Source: McComb Group, Ltd. Inside Trade Area Outside Trade Area Businesses that participated in the survey are listed in Table 11 at the end of this chapter. These participants collected surveys from 495 respondents and provide important information on the Downtown Chanhassen customer base. Results from the Chanhassen customer survey were used to determine the trade area of Downtown Chanhassen. About 80 percent (82.2 percent) of survey respondents lived within Downtown’s trade area. Survey respondents by city, as shown in Table 7, show that 37.2 percent of the respondents live in Chanhassen. Chaska and Eden Prairie also contribute to the trade area draw at 14.3 percent and 12.5 percent, respectively. The ability of Chanhassen to pull 45 percent of its trade area customers from surrounding communities indicates that downtown is serving its trade area well. 19 Table 7 DOWNTOWN CHANHASSEN TRADE AREA SURVEY RESPONDENTS BY CITY Residence City Number Percent Trade Area Chanhassen 184 37.2 % Chaska 71 14.3 Eden Prairie 62 12.5 Excelsior 23 4.6 Victoria 18 3.6 Shakopee 17 3.4 Minnetonka 13 2.6 Waconia 11 2.2 Minnetrista 4 0.8 St. Bonifacius 4 0.8 Trade Area Total 407 82.2 % Other Cities 88 17.8 % Total 495 100.0 % Source: McComb Group, Ltd. Home zip codes of survey respondents were evaluated to help determine the draw of Downtown Chanhassen, in the event retailers choose to market to specific zip codes. The specific zip codes, along with Downtown Chanhassen customer penetration are shown in Table 8. Table 8 DOWNTOWN CHANHASSEN TRADE AREA SURVEY RESPONDENTS BY ZIP CODE Residence Zip Code Number Percent Trade area 55317 Chanhassen 179 36.2 % 55318 Chaska 64 12.9 55346 Eden Prairie 40 8.1 55331 Excelsior 39 7.9 55347 Eden Prairie 17 3.4 55379 Shakopee 17 3.4 55386 Victoria 17 3.4 55345 Minnetonka 11 2.2 55387 Waconia 11 2.2 55364 Minnetrista 9 1.8 55375 St. Bonifacius 5 1.0 55372 Shakopee 5 1.0 55343 Eden Prairie 3 0.6 55344 Eden Prairie 2 0.4 55388 Minnetrista 2 0.4 Trade Area Total 421 85.1 % Other Zip Codes 64 12.9 % No Zip Code Given 10 2.0 % Total 495 100.0 % Source: McComb Group, Ltd. 20 Survey responses to the question: “Why did you stop here today?” are contained in Table 9. “Regular customer” was the most frequent response (56.0 percent), followed by “close to home” (52.3 percent) and “close to work” (19.8 percent). Patrons that consider themselves “regular customers” tend to be shoppers that also consider downtown to be “close to home” or “close to work”. Twenty percent of respondents shopped because it was close to work, demonstrating that Downtown Chanhassen draws customers from the area’s businesses. Responses for “running errands”, “driving by”, and “other” are typical of response levels in other surveys. Table 9 DOWNTOWN CHANHASSEN TRADE AREA REASON FOR STOPPING Reason for Stopping Number Percent Close to Home 259 52.3 % Close to Work 98 19.8 Driving By 35 7.1 Running Errands 70 14.1 Regular Customer 277 56.0 Other 71 14.3 Total 810 100.0 % Source: McComb Group, Ltd. Analysis of reasons for stopping by city, it is interesting to note responses to “close to home” are fairly high for communities that are some distance from Downtown Chanhassen. This includes Excelsior (71.8 percent), Eden Prairie (66.1 percent), Minnetonka (45.5 percent), Chaska (42.2 percent), and Victoria (41.2 percent). These respondents also rank high in regular customer responses. Proximity to the consumers’ place of work is also a reason the respondents stopped to shop. Chaska (23.4 percent), Eden Prairie (24.2 percent) and Shakopee (22.7 percent) residents were more likely to say that they stopped because Downtown Chanhassen is “close to work”. Downtown Chanhassen also benefits from residents of Shakopee and Victoria that consider themselves to be “regular customers” of Downtown Chanhassen retailers. This is indicated by very high percentages of respondents offering “regular customer” as a reason for stopping (59.1 percent of Shakopee resident respondents and 64.7 percent of Victoria resident respondents). The distribution of responses between trade area and inflow (other zip codes) markets reinforces the convenience nature of shopping in Chanhassen. People shopping in Chanhassen, do so, generally because it is convenient and the commercial area is located either close to home, close to work or a place that they pass in the course of routine travel. 21 Table 10 DOWNTOWN CHANHASSEN CUSTOMER SURVEY "WHY DID YOU STOP TODAY?" BY HOME ZIP CODE ALL RESPONDENTS Close Close to to Driving Running Regular Zip Code/City Home Work By Errands Customer Other Total Trade Area Chanhassen 74.9 % 18.4 % 7.3 % 17.9 % 67.0 % 8.4 % 100.0 % Chaska 42.2 23.4 10.9 9.4 51.6 18.8 100.0 Excelsior 71.8 12.8 2.6 7.7 41.0 2.6 100.0 Eden Prairie 66.1 24.2 3.2 14.5 50.0 14.5 100.0 Minnetonka 45.5 - 9.1 - 27.3 9.1 100.0 Minnetrista 27.3 9.1 - - 27.3 36.4 100.0 St. Bonifacius 20.0 20.0 20.0 20.0 40.0 20.0 100.0 Shakopee 4.5 22.7 13.6 27.3 59.1 18.2 100.0 Victoria 41.2 11.8 5.9 5.9 64.7 11.8 100.0 Waconia - 18.2 27.3 27.3 36.4 36.4 100.0 Trade Area Total 58.7 % 18.8 % 7.6 % 14.5 % 56.1 % 12.6 % 100.0 % Other Zip Codes 12.5 % 28.1 % 4.7 % 14.1 % 57.8 % 25.0 % 100.0 % Total all Respondents 52.3 % 19.8 % 7.1 % 14.1 % 56.0 % 14.3 % 100.0 % Source: McComb Group, Ltd. Summary Survey results indicate that businesses in Downtown Chanhassen tend to serve residents within the City of Chanhassen, north to Excelsior, west to Waconia, east into Eden Prairie and south to Chaska. This demonstrates the strength of Downtown Chanhassen’s convenience and service retail establishments. These establishments draw customers from outside the immediate area and serve the needs of trade area residents. These businesses collectively are important to other businesses because customers have the potential to conveniently cross-shop on the same trip, tending to make Downtown Chanhassen more of a destination. Table 11 CHANHASSEN CUSTOMER SPOTTING SURVEY PARTICIPANTS Center Drug Community Bank Chanhassen Chadwick & Mertz Law Firm Ridgeview Chanhassen Clinic Chanhassen Cinema State Farm Insurance Source: McComb Group, Ltd. 22 Chapter IV CHANHASSEN MERCHANT INTERVIEWS SUMMARY Interviews were conducted with nine Chanhassen area business owners and business managers. A list of the interview participants is included in Table 12. The primary purpose of the interviews was to determine opinions related to the strengths and weaknesses of the Downtown Chanhassen area and to solicit their opinions on how the completion of TH-312 will impact the City of Chanhassen and their business. Table 12 LIST OF MERCHANT SURVEY PARTICIPANTS Chadwick & Mertz Law Firm Chanhassen Cinema Chanhassen Fitness Center Community Bank of Chanhassen Byerly's Center Drug Westermann's Art & Frame Chanhassen Floral Skyline Café & Bakery Source: McComb Group, Ltd. Primary Strengths and Advantages of Doing Business in Downtown Chanhassen When asked to describe the primary strengths or advantages of doing business in Downtown Chanhassen, downtown merchants focused on high income, sense of community, small town feel, and highly educated consumers. The most frequent response, offered by four of the nine participants, related to high trade area household income and the fact that this consumer base continues to grow. There were three comments relating to the sense of community for both business and residential. These respondents felt that there is still a small town feel within the city, even with the recent growth. One respondent referred to it as a “homey-warm feeling”. Another positive attribute was the presence of highly educated consumers. Business owners feel that this attributed to a higher quality of living. Other advantages of doing business in Downtown Chanhassen are indicated in verbatim responses by business owners: • Growing community. • Entertainment venues are helpful, city events such as 4th of July parade. • Chanhassen’s proximity to the Twin Cities. • Traffic – both local and business. • The structure of the city. The fact that the city has partnered with the Chamber is encouraging. They have done a good job of managing growth over the years. • Good school district. • TH-5 traffic flow. • Business opportunities. • Chanhassen has just about everything in the retail core. 23 In general, these comments and opinions suggest that the primary advantage of having a Downtown Chanhassen business location relates to Chanhassen being a thriving, growing community that is conveniently positioned to the general population, to area businesses, and in the heart of day to day activities of the community. Negatives Related to Doing Business in Downtown Chanhassen Business owners that were interviewed seemed to have an ongoing concern about visual continuity of downtown retail establishments. Respondents mentioned that there is no theme or consistency with local businesses. They also mentioned that the City has not been allowing “mom & pop” businesses to open up in Chanhassen, “they only want the franchises”. There were comments related to TH-5, citing a number of issues. First of all, they believe the signage on TH-5 is not adequate. One respondent called the sign by Amoco “a joke”. Secondly, they believe the growth in traffic counts to be detrimental. Lastly, there seems to be a belief that TH-5 was poorly planned/developed as related to the Chanhassen Central Business District. One respondent felt that it “looks like a corridor, not a community”. Another states the city is “disconnected by a highway going through it”. Another area of concern is city cooperation. Business owners expressed the following concerns: • City Council members were hard to deal with – resistance. • The city as a whole does not do “squat” – they aren’t helpful. • No partnership interests with businesses. • Lack of protection – there is no official police department. • The city doesn’t pay attention to the businesses west of town. Other areas of concern related to doing business in downtown included: • Not enough customer traffic. • Consumers shop outside of the area. • The buildings are off the wall. • Too many banks in town. • The recent sprawl of retail is taking away from the homey feel. • Growth issues – we grew too fast. • Need for mixed retail to bring back the small town feel. • We need a funeral home, hospital and a license center. Obviously, there are a wide variety of issues and concerns from many businesses in Downtown Chanhassen. The most frequently noted concerns seem to relate to the look and feel of Downtown Chanhassen. This relates to the city’s rapid growth and also the TH-5 corridor. What Impact Do You Think the Completion of TH-312 Will Have on Your Business? Surprisingly, the most frequently quoted response to this question was “don’t know”. The second most common response was that they didn’t feel it would affect them much or at all. Other business owners felt that it would bring new customers and create new opportunities. 24 On the negative side of this, there are some business owners that feel it will hurt them if TH-312 includes more retail. They are also concerned about the traffic flow although it seems like the business owners have mixed feelings on this. Some say more traffic flow, less business because people will not want to mess with the traffic, others feel that it will appeal to shoppers and increase customer counts. Other specific comments relating to the impacts of TH-312 on their businesses: • I don’t rely on TH-5 traffic. • It’s all about convenience, that’s why they shop here. • It’s going to bring more townhomes and lower income homes. • We will lose Lakeville Hills. • I pray it doesn’t. • Fairly significant – in a positive manner. In the eyes of most CBD business owners, the impact that TH-312 will have is uncertain. The business owners tend to be optimistic that TH-312 will not harm their businesses. What Impact Do You Think the Completion of TH-312 Will Have on Chanhassen? Once again, this question was met with uncertainty. The common response was that they didn’t think it would impact Chanhassen. The second common response was “don’t know”. There are concerns that completion of TH-312 may cause the City of Chanhassen to be bypassed; the belief that TH-312 will draw traffic away from TH-5. One business owner felt that the completion of TH-312 will “take a lot away from retail and not just from convenience shopping”. On the other hand, there are business owners that are positive about the change. These retailers feel that if the growth is properly managed, the city will grow, both in population and number of employment options. They also believe that the tax base will increase, bringing more dollars to the city. Other responses to the impact of the completion of TH-312 on the City of Chanhassen include: • We will be competing more with Chaska. • There is no loyalty, so if they build retail, they (the consumers) will go. • The city needs to be more open to building more homes for low to middle income families. With the exception of a few retailers, most Chanhassen business owners seem fairly upbeat about their future and the future of Chanhassen. None of the business owners interviewed felt that the change in Chanhassen business character caused by the completion of TH-312 was significant enough to make major changes. In fact, business owners seem to be planning to grow their business over the next three years; and watch to see what happens in regards to the TH-312 completion. 25 What Has Been Your Sales Growth the Past Couple of Years? There was no commonality between businesses when analyzing retail sales growth of the responding merchants over the last two years. The business owners' responses are listed below: • Too new to tell – just opened. • Last two years have had increases of about 10 percent. • Increases of 10 percent up until this year then competition came to town. • Great increases going into 2004 – then competition came in and there was a slight decrease. • 1999 was the best year; sales have dropped 10-15 percent since then. • Had a negative impact in 2002, lost 40 percent of visitors, have not recouped. There were decreases nationally in the industry and competitors also came in the area. • Dramatic increases. • Slight decreases 5-10 percent. • Increased a little in the past couple of years 3-8 percent. Most Downtown Chanhassen business owners seem fairly upbeat about their future and the future of Chanhassen. A few, however, are more pessimistic because they have already been affected by new competition. For the most part, business owners are enjoying the benefits of doing business in a fast growing community. Those that are more optimistic tend to be more proactive in trying to implement changes in their businesses that will embrace the positive attributes of the area and the ever-changing competition. Do You Have Any Plans for Changes to Your Business in the Next Three Years? Many of the business owners already have plans to change their current way of operating or have implemented changes. For example, two of the respondents said that they just completed a remodel of their store. Other respondents are planning the following: • Grow business. • Create word of mouth. • Remodel. • Change in operators and marketing. • Add staff and services. • Incorporate something for younger families. Most business owners seem to be embracing the need for change. Two respondents felt less certain and stated: • Rent is too high to go elsewhere. • We only hope we can stay here. As a final question, we asked the business owners for their comments and questions. Responses are listed below: 26 • Scottsdale, Arizona is a good example of development with a lot of growth. • We like the town, but all we have are chain restaurants and we have to leave town because there is no variety. • We would like our own space but there isn’t space available along TH-5 and we don’t want to go west. • We need a better pedestrian crossing for TH-5. • The park & ride option has poor visibility. If the dinner theater goes through, the park & ride will disappear and that would not be good. • Why is similar retail property by Houlihans flourishing and growing faster than downtown? • Need a dial-a-ride. The purpose of this survey was to determine the retail business owner’s opinion of the impact of the completion of TH-312. Responses show lack of knowledge as to what the project actually entails, but mostly that retailers are uncertain how it may affect their business. It is evident that there is a low-level of concern, but it’s not wide spread. Increased awareness in the construction process and land use plans may help retailers plan for their future. 27 Chapter V RESIDENTIAL GROWTH TRENDS Chanhassen and its trade areas are part of the southwest metropolitan growth corridor, which extends southwest from the Twin Cities, and includes portions of Hennepin, Carver and Scott Counties. This growth corridor is served by four major east/west highways, TH-5, TH-7, TH- 212 and TH-312 in the future. Table 13 CHANHASSEN TRADE AREA COMMUNITIES SOUTHWEST GROWTH CORRIDOR POPULATION; 1970 TO 2004 Community 1970 1980 1990 2000 2004 1970-80 1980-90 1990-00 2000-04 Trade Area Communities Chanhassen 4,879 6,359 11,732 20,321 22,042 2.68 % 6.32 % 5.65 % 0.82 % Chaska 4,352 8,346 11,339 17,449 21,478 6.73 3.11 4.40 2.10 Deephaven 3,853 3,716 3,653 3,853 3,900 (0.36) (0.17) 0.53 0.12 Eden Prairie 6,938 16,263 39,311 54,901 60,460 8.89 9.23 3.40 0.97 Excelsior 2,563 2,523 2,367 2,393 2,400 (0.16) (0.64) 0.11 0.03 Greenwood 587 653 698 729 800 1.07 0.67 0.44 0.93 Minnetonka partial (South)23,762 25,693 32,127 34,074 34,913 0.78 2.26 0.59 0.24 Shakopee 7,716 9,941 11,739 20,568 28,913 2.57 1.68 5.77 3.46 Shorewood 4,223 4,646 5,917 7,400 7,625 0.96 2.45 2.26 0.30 St. Bonifacius 685 857 1,180 1,873 2,290 2.27 3.25 4.73 2.03 Tonka Bay 1,397 1,354 1,472 1,547 1,600 (0.31) 0.84 0.50 0.34 Victoria 1,042 1,425 2,354 4,025 5,480 3.18 5.15 5.51 3.13 Waconia 2,465 2,638 3,498 6,814 8,622 0.68 2.86 6.90 2.38 Total 64,462 84,414 127,387 175,947 200,523 2.73 % 4.20 % 3.28 % 1.32 % Source: U.S. Census, State of Minnesota Administration Department and McComb Group, Ltd. Growth Rate The southwest corridor communities contained in the Chanhassen trade area experienced an annual population growth rate of 3.28 percent between 1990 and 2000, as shown in Table 13. This was a decline from a 4.20 percent annual growth rate in the previous decade. Since 2000, the growth rate has decreased to 1.32 percent. Overall, population in the southwest growth corridor trade area communities grew from 127,387 in 1990 to 220,523 in 2004, an increase of 73,136. Trade area communities with the largest population growth rates between 2000 and 2004 include Shakopee with a 3.46 percent growth rate, Victoria (3.13 percent), Waconia (2.38 percent) and Chaska (2.10 percent). Trade area communities of Chanhassen, Eden Prairie and Victoria have recorded high household growth rates over the last three decades, as shown in Table 14. During the eighties Chanhassen, Eden Prairie and Victoria experienced annual household growth rates of 6.83 percent, 10.38 percent and 5.88 percent, respectively. Over the following ten years, trade area communities’ household growth rate slowed from 5.21 percent from 1980 to 1990 to 3.41 percent for 1900 to 2000 and dropped to 1.51 percent for 2000 to 2004. While household growth rates have declined, households have continued to increase. Future growth is expected to accelerate as development moves southwest. 28 Table 14 CHANHASSEN TRADE AREA COMMUNITIES SOUTHWEST GROWTH CORRIDOR HOUSEHOLDS; 1970 TO 2004 Community 1970 1980 1990 2000 2004 1970-80 1980-90 1990-00 2000-04 Trade Area Communities Chanhassen 1,349 2,075 4,016 6,914 7,775 4.40 % 6.83 % 5.58 % 1.18 % Chaska 1,299 3,006 4,212 6,104 8,020 8.75 3.43 3.78 2.77 Deephaven 1,062 1,223 1,324 1,373 1,402 1.42 0.80 0.36 0.21 Eden Prairie 1,653 5,383 14,447 20,457 23,311 12.53 10.38 3.54 1.31 Excelsior 900 1,149 1,160 1,199 1,201 2.47 0.10 0.33 0.02 Greenwood 194 234 250 285 320 1.89 0.66 1.32 1.17 Minnetonka partial (South)5,908 8,235 12,148 13,908 14,222 3.38 3.96 1.36 0.22 Shakopee 2,109 3,226 4,163 7,540 10,525 4.34 2.58 6.12 3.39 Shorewood 1,112 1,484 2,026 2,529 2,636 2.93 3.16 2.24 0.42 St. Bonifacius 188 281 398 681 856 4.10 3.54 5.52 2.31 Tonka Bay 428 495 577 614 638 1.46 1.54 0.62 0.38 Victoria 215 427 756 1,367 1,900 7.10 5.88 6.10 3.35 Waconia 810 988 1,401 2,568 3,323 2.01 3.55 6.25 2.61 Total 17,227 28,206 46,878 65,539 76,129 5.05 % 5.21 % 3.41 % 1.51 % Source: U.S. Census, State of Minnesota Administration Department and McComb Group, Ltd. Growth Rate Household growth rates in the trade area communities have consistently been above the growth rates of Hennepin County, the Metropolitan Area, Minneapolis-St. Paul Metropolitan Statistical Average (MSA), and Minnesota as shown in Table 15. Table 15 TRADE AREA COMMUNITIES, SOUTHWEST GROWTH CORRIDOR, HENNEPIN COUNTY, METROPOLITAN AREA, MSA AND MINNESOTA HOUSEHOLD GROWTH; 1970 TO 2004 Growth Rate 1970 1980 1990 2000 2004 1970-80 1980-90 1990-00 2000-04 Trade Area Communities 17,227 28,206 46,878 65,539 76,129 5.05 % 5.21 % 3.41 % 1.51 % Southwest Growth Corridor 57,103 84,622 119,968 150,756 180,222 4.01 3.55 2.31 1.80 Hennepin County 356,907 365,536 419,060 456,129 469,801 0.24 1.38 0.85 0.30 Metropolitan Area 571,207 721,444 875,504 1,021,454 1,101,525 2.36 1.95 1.55 0.76 MSA 616,329 788,675 960,170 1,136,615 1,239,180 2.50 1.99 1.70 0.87 Minnesota 1,143,473 1,445,222 1,647,853 1,895,127 2,027,904 2.37 1.32 1.41 0.68 Source: Minnesota Department of Administration, U.S. Census, Scan/US and McComb Group, Ltd. Building Permits Building permits for the southwest growth corridor communities for the period 1990 to 2005 are compared to the seven-county metropolitan area in Table 16. A total of 251,842 new construction residential building permits were issued in the seven-county metro area between 1990 and 2005. Annual building permits ranged from a low of 12,060 in 1991 to a high of 20,973 in 2003. The average was 15,740 for the 16-year period. Southwest growth corridor market share of the seven-county metro area has averaged 21.37 percent and ranged from 15.21 percent in 1990 to 27.78 percent in 2005. During the last five years, building permit market share averaged 24.06 percent. Trade area communities captured 33,038 building permits or 61.4 percent of the southwest growth corridor growth during the past 16 years. 29 Table 16 SOUTHWEST GROWTH CORRIDOR RESIDENTIAL BUILDING PERMITS; 1990 TO 2005 Trade Area Communities Building Permits Market Share Southwest Metro Market Building Southwest Metro Year Corridor Area Share Permits Corridor Area 1990 2,029 13,340 15.21 % 928 45.74 % 6.96 % 1991 1,870 12,060 15.51 902 48.24 7.48 1992 2,628 15,632 16.81 1,522 57.91 9.74 1993 2,665 15,882 16.78 1,591 59.70 10.02 1994 3,025 14,205 21.30 1,980 65.45 13.94 1995 3,073 13,956 22.02 2,206 71.79 15.81 1996 2,973 14,098 21.09 2,031 68.31 14.41 1997 2,985 13,234 22.56 1,916 64.19 14.48 1998 3,673 15,817 23.22 2,420 65.89 15.30 1999 3,446 17,679 19.49 2,153 62.48 12.18 2000 4,353 17,050 25.53 2,698 61.98 15.82 2001 4,057 16,788 24.17 2,488 61.33 14.82 2002 5,173 19,782 26.15 3,181 61.49 16.08 2003 4,717 20,973 22.49 3,055 64.77 14.57 2004 3,942 19,832 19.88 2,213 56.14 11.16 2005*3,199 11,514 27.78 1,754 54.83 15.23 Total 53,808 251,842 21.37 % 33,038 61.40 % 13.12 % *Preliminary Data. Source: U.S. Census and McComb Group, Ltd. Trade area communities’ market share of southwest corridor permits increased from 45.7 percent in 1990 to 71.8 percent in 1995 and trended down reaching 61.3 percent in 2001. Trade area communities’ building permit market share rebounded to 64.8 percent by 2003, which was followed by another downward trend to 54.8 percent in 2005. Although the trade area communities’ market share of building permits has experienced 16 years of ups and downs, it has averaged 60.6 percent over the 16-year period. The average over the last five years was similar at 59.7 percent. Future Trade Area Households Household growth projections from 2005 to 2025 for Downtown Chanhassen trade area are based on estimated southwest growth corridor communities’ future residential market share of the seven-county metropolitan area contained in Table 17. Households in the seven-county metropolitan area are estimated to increase at 1.5 percent over the next 20 years, a growth rate similar to the past ten years. At this rate, the Metropolitan Area would add about 387,801 homes by 2025. Assuming that the southwest growth corridor will capture 22 percent of the increase, similar to the past, the estimated household growth would be about 85,316 households. Trade area communities are estimated to capture a declining 30 percentage of new households in the next 20 years. During this period, the percentage of new households in trade area communities is estimated to decline gradually from 54 percent in 2006 to 45 percent in 2025. In 2005, downtown trade area households were 64,282, the downtown trade area is expected to capture an average of 49.5 percent of the southwest growth corridor growth over the next 20 years, bringing the downtown trade area households to a total of 106,304 by 2025 assuming the urban services will be available to support that growth. Table 17 CHANHASSEN TRADE AREA HOUSEHOLD PROJECTIONS; 2005 TO 2025 METRO AREA AND TRADE AREA Market Share North Segment Trade Area Trade Area Year Households Increase @ 22.0% Percent Households Households 2005 1,118,048 - 64,282 2006 1,134,819 16,771 3,690 54.0 % 1,992 66,274 2007 1,151,841 17,022 3,745 54.0 2,022 68,297 2008 1,169,119 17,278 3,801 53.0 2,015 70,311 2009 1,186,655 17,537 3,858 53.0 2,045 72,356 2010 1,204,455 17,800 3,916 52.0 2,036 74,392 2011 1,222,522 18,067 3,975 52.0 2,067 76,459 2012 1,240,860 18,338 4,034 51.0 2,058 78,517 2013 1,259,473 18,613 4,095 51.0 2,088 80,605 2014 1,278,365 18,892 4,156 50.0 2,078 82,683 2015 1,297,540 19,175 4,219 50.0 2,109 84,792 2016 1,317,003 19,463 4,282 49.0 2,098 86,891 2017 1,336,759 19,755 4,346 49.0 2,130 89,020 2018 1,356,810 20,051 4,411 48.0 2,117 91,138 2019 1,377,162 20,352 4,477 48.0 2,149 93,287 2020 1,397,819 20,657 4,545 47.0 2,136 95,423 2021 1,418,787 20,967 4,613 47.0 2,168 97,591 2022 1,440,069 21,282 4,682 46.0 2,154 99,744 2023 1,461,670 21,601 4,752 46.0 2,186 101,930 2024 1,483,595 21,925 4,824 45.0 2,171 104,101 2025 1,505,849 22,254 4,896 45.0 % 2,203 106,304 Total 387,801 85,316 42,022 Source: McComb Group, Ltd. 7-County Metro Area 31 Chapter VI CHANHASSEN TRADE AREA Three trade areas, shown on Map 4, were delineated for retail locations in Chanhassen: downtown and two recently identified locations along TH-312. These trade areas were delineated by McComb Group based on the location of competitive shopping areas, arterial road network, natural boundaries, previous experience and also utilizing data from the Chanhassen customer survey. The Downtown Chanhassen primary trade area extends north to the Lake Minnetonka lake area, west to Waconia, south across the Minnesota River to include parts of Shakopee and Carver, and east to I-494 to include Eden Prairie and southern Minnetonka. The downtown trade area extends all directions and includes Victoria, Shorewood, Greenwood, Tonka Bay, St. Bonifacius, Chaska, Eden Prairie, Minnetrista, and Deephaven. The convenience trade area, the smallest of the three, is bounded by the Minnesota River to the south, TH-5 to the north, and natural population breaks to the east and west. This trade area consists of southern Chanhassen, southeast Chaska and the southwest corner of Eden Prairie. This trade area is related to the potential retail development at TH-312 and Great Plains Boulevard. The lifestyle trade area is the largest and extends east to TH-100 and south to include Prior Lake and western Savage. The lifestyle trade area extends all directions creating an outer ring around both the convenience and downtown trade areas. This ring includes the communities of: Cologne, Spring Park, Mound and Prior Lake; with portions of Shakopee, Savage, Bloomington, Edina, Hopkins, Eden Prairie, Minnetonka, Deephaven, Minnetonka Beach, and Waconia. This trade area relates to a potential development site at TH-312 and Powers Boulevard. Population and Households Population and household growth trends in Chanhassen’s three trade areas are shown in Table 18. The downtown trade area has been growing at a faster rate than Chanhassen’s lifestyle trade area. Population and household growth rates for the convenience trade area have grown at a faster rate than either of the other trade areas. Downtown trade area population increased at a rate of 3.5 percent from 105,579 people in 1990 to 148,966 in 2000, slowed slightly to 2.42 percent between 2000 and 2005, and is estimated to increase at a rate of 2.05 percent to 185,866 by 2010. Household growth has been more rapid than population, increasing at a rate of 3.64 percent between 1990 and 2000 and 3.48 percent in 2005. Households are estimated to increase from 64,282 in 2005 to 74,392 in 2010, an annual growth rate of 2.96 percent. Convenience trade area households are increasing at a rapid rate as a result of new housing development in its trade area. Between 2000 and 2005, households increased from 7,913 to an Young AmericaCologneJordanCarverChaskaChanhassenShakopeeMayerWaconiaWatertownMinnetristaSt. BonifaciusVictoriaMoundShorewoodOronoSpring ParkTonka BayMinnetonka BeachExcelsiorGreenwoodDeephavenWayzataPrior LakeEden PrairieLakeviSavageBloomingtonBurnsvilleMinnetonkaEdinaHopkinsSt. Louis ParkWoodlandRichfieldMinneapolisHwy 212 E/US-212150th St WHwy 5/SR-5Hwy 7Hwy 7/SR-7140th St NWCo Hwy 101I -4 9 4 Convenience Trade AreaDowntown Trade AreaLifestyle Trade Area 01234Scale: 1" = 3.55 milesMap produced with Scan/US 04/18/06 33 estimated 10,554 in 2005, a growth rate of 5.93 percent. Over the next five years, households are expected to increase at an annual growth rate of 4.04 percent and reach an estimated 12,864. Table 18 CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS POPULATION AND HOUSEHOLDS 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED Downtown Convenience Lifestyle Trade Trade Trade Area Area Area Population 1990 105,579 12,710 209,404 2000 148,966 23,730 270,980 2005 167,912 28,718 305,829 2010 185,866 32,627 337,625 Annual Growth Rate 1990-2000 3.50 % 6.44 % 2.61 % 2000-2005 2.42 3.89 2.45 2005-2010 2.05 2.59 2.00 Households 1990 37,892 4,578 77,895 2000 54,166 7,913 103,122 2005 64,282 10,554 120,020 2010 74,392 12,864 136,389 Annual Growth Rate 1990-2000 3.64 %5.62 % 2.85 % 2000-2005 3.48 5.93 3.08 2005-2010 2.96 4.04 2.59 Source: U.S. Census, Scan/US, Inc. and McComb Group, Ltd. Lifestyle trade area population increased at an annual growth rate of 2.45 percent between 2000 and 2005 growing to an estimated 305,829. Population is expected to increase to 337,625 in 2010, a growth rate of 2.00 percent. Household growth averaged 3.08 percent between 2000 and 2005 increasing trade area households to 120,020. Households are expected to increase to 136,389 by 2010, a growth rate of 2.59 percent. Household density for the Chanhassen trade areas is shown on Map 5. Household density is generally higher in the eastern half of the lifestyle trade area. Household density tends to drop west of Chanhassen with clusters of household density in the communities of Chaska, Victoria and Waconia. Young AmericaCologneJordanCarverChaskaChanhassenShakopeeMayerWaconiaWatertownMinnetristaSt. BonifaciusVictoriaMoundShorewoodOronoSpring ParkTonka BayMinnetonka BeachExcelsiorGreenwoodDeephavenWayzataPrior LakeEden PrairieLakeviSavageBloomingtonBurnsvilleMinnetonkaEdinaHopkinsSt. Louis ParkWoodlandRichfieldMinneapolisLake WakoniaLake MinnetonkaHwy 212 E/US-212Johnson Memorial Dr/US-169150th St WHwy 5/SR-5Hwy 7Hwy 7/SR-7140th St NWCo Hwy 101I -4 9 4 2010 Household DensityConvenience Trade AreaDowntown Trade AreaLifestyle Trade AreaDensity per Sq.Mi (thous.)0.001 - 0.499 0.499 - 0.999 0.999 - 1.50 1.50+ 01234Scale: 1" = 3.55 milesMap produced with Scan/US 04/14/06 35 Household Income Average household income in each of Chanhassen’s trade areas is remarkably similar, as shown in Table 19, ranging from $95,350 in the convenience trade area to $96,080 in the lifestyle trade area. A similar consistency exists with average household income in 2010. Average household income ranges from $106,146 to $106,380. Table 19 CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS AVERAGE AND MEDIAN HOUSEHOLD INCOME 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED Downtown Convenience Lifestyle Trade Trade Trade Area Area Area Average Household Income 1990 57,145$ 50,499$ 60,185$ 2000 97,674 96,745 95,816 2005 96,000 95,350 96,080 2010 106,259 106,146 106,380 Median Household Income 1990 47,644$ 42,252$ 49,178$ 2000 75,002 77,647 72,713 2005 81,485 85,250 79,397 2010 92,272 96,655 90,194 Source: McComb Group, Ltd. The Chanhassen trade areas have a high proportion of households with incomes above $75,000, $100,000 and $150,000 as shown in Table 20. In 2005, households with incomes above $75,000 ranged from 52.0 percent in the lifestyle trade area to 55.4 percent in the convenience trade area. Households with incomes above $100,000 in 2005 ranged from 34.5 percent in the lifestyle trade area to 38.2 percent in the convenience trade area. Households above $150,000 ranged from 15.0 to 16.0 percent. A similar pattern exists in 2010 when households with incomes above $100,000 range from 43.0 percent of households to 46.3 percent in the three trade areas. Distribution of households with incomes above $100,000 is shown on Map 6. This map demonstrates that affluent households are distributed throughout Chanhassen’s trade areas; however, the highest concentration is in the Minnetonka Lakes portion of the trade area. Young AmericaCologneJordanCarverChaskaChanhassenShakopeeMayerWaconiaWatertownMinnetristaSt. BonifaciusVictoriaMoundShorewoodOronoSpring ParkTonka BayMinnetonka BeachExcelsiorGreenwoodDeephavenWayzataPrior LakeEden PrairieLakeviSavageBloomingtonBurnsvilleMinnetonkaEdinaHopkinsSt. Louis ParkWoodlandRichfieldMinneapolisLake WakoniaLake MinnetonkaHwy 212 E/US-212Johnson Memorial Dr/US-169150th St WHwy 5/SR-5Hwy 7Hwy 7/SR-7140th St NWCo Hwy 101I -4 9 4 2010 HouseholdIncome: % Above$100,000Convenience Trade AreaDowntown Trade AreaLifestyle Center Trade AreaWhite: No Data Industrial/Park/Cemetery1 to 25% of HHs have Incomes Above $100,00025 to 50% of HHs have Incomes Above $100,00050 to 75% of HHs have Incomes Above $100,00075 to 100% of HHs have incomes Above $100,00001234Scale: 1" = 3.55 miles Map produced with Scan/US 04/14/06 37 Table 20 CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS HOUSEHOLD INCOME DISTRIBUTION 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED Downtown Convenience Lifestyle Trade Trade Trade Area Area Area Households above $75,000 1990 20.6 % 14.8 % 21.8 % 2000 47.3 48.5 45.5 2005 53.1 55.4 52.0 2010 58.8 60.7 58.4 Households above $100,000 1990 10.5 % 6.7 % 11.9 % 2000 30.2 31.4 28.7 2005 36.0 38.2 34.5 2010 44.1 46.3 43.0 Households above $150,000 1990 4.1 % 2.5 % 5.0 % 2000 12.8 12.5 12.7 2005 15.4 16.0 15.0 2010 20.2 21.8 19.4 Source: McComb Group, Ltd. Demographic Characteristics Demographic characteristics for Chanhassen’s convenience, downtown and lifestyle trade areas are summarized in the demographic snapshots contained in Tables 21, 22 and 23. These snapshots contain census data for 1990 and 2000, as well as estimates for 2005 and 2010. These estimates were provided by Scan/US, Inc., a source of demographic information. Significant characteristics of Chanhassen’s trade areas include the following: ♦ Convenience trade area average household size of 2.72 for 2005 and 2010 is much higher than the average household size of the downtown trade area and the lifestyle trade areas. ♦ The lifestyle trade area has a higher median age of 38 for 2005 and 39 for 2010 than both the downtown trade area and convenience trade areas. The 2005 median age for the downtown trade area was 36, expected to increase to 37 in 2010. The 2005 median age for the convenience trade area is much lower at 33 in 2005 and is expected to increase to 2010 by 34. ♦ Households with children under the age of 19 are more prevalent in the convenience trade area than the downtown or lifestyle trade areas. In 2005, 34.3 percent of the population of the convenience trade area was under 19, compared to 30.3 percent in the downtown trade area and 28.5 percent in the lifestyle trade area. These percentages are expected to drop slightly in 2010 in all trade areas. Table 21 DEMOGRAPHIC AND INCOME SNAPSHOT Downtown Chanhassen Trade Area 7/7/2006 SNAPSHOT 1990 Census 2000 Census 2005 Estimated 2010 Projected Population 105,579 148,966 167,912 185,866 Households 37,892 54,166 64,282 74,392 Families 28,626 39,943 47,173 54,532 Per Capita Income $ 20,639 $ 35,800 $ 37,303 $ 43,128 Median Household Income $ 47,644 $ 75,002 $ 81,485 $ 92,272 Average Household Income $ 57,145 $ 97,674 $ 96,000 $ 106,259 Average Household Size 2.74 2.72 2.58 2.50 Median Age 32 35 36 37 Annual Percent Change TRENDS 1990 - 2000 2000 - 2005 2005 - 2010 Population 3.50 %2.42 %2.05 % Households 3.64 3.48 2.96 Families 3.39 3.38 2.94 Median Household Income 4.64 1.67 2.52 Average Household Income 5.51 -0.35 2.05 1990 Census 2000 Census 2005 Estimated 2010 Projected HOUSEHOLDS BY INCOME Number Percent Number Percent Number Percent Number Percent Less than $15,000 3,491 9.2 % 2,852 5.3 % 3,025 4.7 % 3,256 4.4 % $15,000 - $24,999 3,970 10.5 3,255 6.0 3,508 5.5 3,511 4.7 $25,000 - $34,999 5,034 13.3 3,917 7.2 4,002 6.2 4,398 5.9 $35,000 - $49,999 8,356 22.1 6,693 12.4 7,496 11.7 7,060 9.5 $50,000 - $74,999 9,230 24.4 11,798 21.8 12,134 18.9 12,411 16.7 $75,000 - $99,999 3,813 10.1 9,259 17.1 10,965 17.1 10,923 14.7 $100,000 - $149,999 2,434 6.4 9,443 17.4 13,228 20.6 17,768 23.9 $150,000 + 1,534 4.1 6,948 12.8 9,924 15.4 15,064 20.2 POPULATION BY AGE Number Percent Number Percent Number Percent Number Percent <19 32,421 30.7 % 48,081 32.3 % 50,858 30.3 % 54,452 29.3 % 20-24 6,636 6.3 6,555 4.4 9,614 5.7 11,333 6.1 25-34 21,973 20.8 21,301 14.3 21,859 13.0 22,372 12.0 35-44 19,285 18.3 30,308 20.3 30,480 18.2 29,030 15.6 45-54 11,244 10.7 21,993 14.8 27,608 16.4 32,259 17.4 55-64 6,881 6.5 10,487 7.0 15,278 9.1 21,068 11.3 65-74 4,263 4.0 5,815 3.9 6,892 4.1 9,570 5.1 75-84 2,847 2.7 3,277 2.2 3,748 2.2 4,136 2.2 85+ NA NA 1,149 0.8 1,575 0.9 1,646 0.9 RACE AND ETHNICITY Number Percent Number Percent Number Percent Number Percent White 102,772 97.6 % 139,476 94.7 % 153,777 94.1 % 171,957 92.5 % Black 729 0.7 1,796 1.2 3,061 1.9 4,839 2.6 Native American 275 0.3 433 0.3 561 0.3 671 0.4 Asian/Pacific Islander 1,551 1.5 4,045 2.7 5,935 3.6 8,340 4.5 Other Races 3 0.0 1,549 1.1 50 0.0 59 0.0 Hispanic (Any Race) 779 0.7 3,815 2.6 5,765 3.5 8,021 4.3 Source: U.S. Census, Scan/US, Inc. and McComb Group, Ltd. Table 22 DEMOGRAPHIC AND INCOME SNAPSHOT Chanhassen Convenience Trade Area 7/7/2006 SNAPSHOT 1990 Census 2000 Census 2005 Estimated 2010 Projected Population 12,710 23,730 28,718 32,627 Households 4,578 7,913 10,554 12,864 Families 3,414 6,194 8,187 9,916 Per Capita Income $ 18,442 $ 32,414 $ 35,142 $ 41,966 Median Household Income $ 42,252 $ 77,647 $ 85,250 $ 96,655 Average Household Income $ 50,499 $ 96,745 $ 95,350 $ 106,146 Average Household Size 2.78 2.99 2.72 2.72 Median Age 29 32 33 34 Annual Percent Change TRENDS 1990 - 2000 2000 - 2005 2005 - 2010 Population 6.44 %3.89 %2.59 % Households 5.63 5.93 4.04 Families 6.14 5.74 3.91 Median Household Income 6.27 1.89 2.54 Average Household Income 6.72 -0.29 2.17 1990 Census 2000 Census 2005 Estimated 2010 Projected HOUSEHOLDS BY INCOME Number Percent Number Percent Number Percent Number Percent Less than $15,000 485 10.6 % 464 5.9 % 564 5.3 % 631 4.9 % $15,000 - $24,999 604 13.2 523 6.6 630 6.0 661 5.1 $25,000 - $34,999 762 16.7 526 6.6 649 6.2 809 6.3 $35,000 - $49,999 1,053 23.0 841 10.6 1,047 9.9 1,004 7.8 $50,000 - $74,999 988 21.6 1,719 21.7 1,825 17.3 1,952 15.2 $75,000 - $99,999 370 8.1 1,356 17.1 1,812 17.2 1,852 14.4 $100,000 - $149,999 194 4.2 1,494 18.9 2,339 22.2 3,153 24.5 $150,000 + 116 2.5 990 12.5 1,687 16.0 2,801 21.8 POPULATION BY AGE Number Percent Number Percent Number Percent Number Percent <19 4,148 32.6 % 8,934 37.6 % 9,840 34.3 % 10,641 32.6 % 20-24 872 6.9 941 4.0 1,698 5.9 2,092 6.4 25-34 3,090 24.3 3,343 14.1 3,640 12.7 4,054 12.4 35-44 2,212 17.4 5,500 23.2 5,700 19.8 5,316 16.3 45-54 1,158 9.1 3,018 12.7 4,486 15.6 5,572 17.1 55-64 663 5.2 1,126 4.7 2,015 7.0 3,072 9.4 65-74 360 2.8 533 2.2 806 2.8 1,228 3.8 75-84 206 1.6 262 1.1 390 1.4 484 1.5 85+ NA NA 73 0.3 143 0.5 169 0.5 RACE AND ETHNICITY Number Percent Number Percent Number Percent Number Percent White 12,429 98.0 % 22,184 94.6 % 26,518 95.0 % 29,610 93.9 % Black 52 0.4 218 0.9 357 1.3 566 1.8 Native American 30 0.2 56 0.2 76 0.3 95 0.3 Asian/Pacific Islander 169 1.3 646 2.8 950 3.4 1,243 3.9 Other Races 3 0.0 350 1.5 1 0.0 3 0.0 Hispanic (Any Race) 91 0.7 1,059 4.5 1,407 5.0 1,821 5.8 Source: U.S. Census, Scan/US, Inc. and McComb Group, Ltd. Table 23 DEMOGRAPHIC AND INCOME SNAPSHOT Chanhassen Lifestyle Trade Area 7/7/2006 SNAPSHOT 1990 Census 2000 Census 2005 Estimated 2010 Projected Population 209,404 270,980 305,829 337,625 Households 77,895 103,122 120,020 136,389 Families 56,879 73,012 85,293 97,562 Per Capita Income $ 22,453 $ 36,854 $ 38,379 $ 43,710 Median Household Income $ 49,178 $ 72,713 $ 79,397 $ 90,194 Average Household Income $ 60,185 $ 95,816 $ 96,080 $ 106,380 Average Household Size 2.66 2.60 2.52 2.52 Median Age 33 37 38 39 Annual Percent Change TRENDS 1990 - 2000 2000 - 2005 2005 - 2010 Population 2.61 %2.45 %2.00 % Households 2.85 3.08 2.59 Families 2.53 3.16 2.72 Median Household Income 3.99 1.77 2.58 Average Household Income 4.76 0.06 2.06 1990 Census 2000 Census 2005 Estimated 2010 Projected HOUSEHOLDS BY INCOME Number Percent Number Percent Number Percent Number Percent Less than $15,000 7,113 9.1 % 5,695 5.5 % 5,889 4.9 % 6,186 4.5 % $15,000 - $24,999 8,000 10.3 6,330 6.1 6,547 5.5 6,256 4.6 $25,000 - $34,999 10,298 13.2 8,116 7.9 7,891 6.6 8,161 6.0 $35,000 - $49,999 17,049 21.9 13,368 13.0 14,392 12.0 13,272 9.7 $50,000 - $74,999 18,398 23.6 22,680 22.0 22,969 19.1 22,953 16.8 $75,000 - $99,999 7,724 9.9 17,362 16.8 21,005 17.5 20,943 15.4 $100,000 - $149,999 5,379 6.9 16,482 16.0 23,364 19.5 32,124 23.6 $150,000 + 3,868 5.0 13,090 12.7 17,964 15.0 26,495 19.4 POPULATION BY AGE Number Percent Number Percent Number Percent Number Percent <19 60,822 29.0 % 81,023 29.9 % 87,098 28.5 % 94,340 27.9 % 20-24 13,126 6.3 11,978 4.4 16,280 5.3 18,972 5.6 25-34 41,770 20.0 38,124 14.1 39,549 12.9 39,610 11.7 35-44 38,311 18.3 52,320 19.3 53,716 17.6 52,212 15.5 45-54 24,076 11.5 41,627 15.4 51,253 16.8 59,149 17.5 55-64 15,149 7.2 22,248 8.2 31,481 10.3 41,772 12.4 65-74 9,674 4.6 12,796 4.7 14,445 4.7 19,376 5.7 75-84 6,445 3.1 7,837 2.9 8,247 2.7 8,512 2.5 85+ NA NA 3,025 1.1 3,759 1.2 3,682 1.1 RACE AND ETHNICITY Number Percent Number Percent Number Percent Number Percent White 203,246 97.3 % 252,757 94.4 % 278,266 93.5 % 300,250 91.8 % Black 1,575 0.8 3,744 1.4 6,386 2.1 9,645 2.9 Native American 671 0.3 969 0.4 1,315 0.4 1,530 0.5 Asian/Pacific Islander 3,462 1.7 7,711 2.9 11,481 3.9 15,624 4.8 Other Races 3 0.0 2,446 0.9 107 0.0 124 0.0 Hispanic (Any Race) 1,500 0.7 5,936 2.2 9,137 3.1 12,285 3.8 Source: U.S. Census, Scan/US, Inc. and McComb Group, Ltd. 41 ♦ The lifestyle trade area has an older population than the downtown and convenience trade areas. In 2005, 8.6 percent of the population in the lifestyle trade area was over the age of 65, while the downtown trade area had 7.2 percent of the population in this age category and the convenience trade area had 4.7 percent above age 65. It is expected that these percentages will increase slightly by 2010 for all trade areas. ♦ The presence of Hispanic residents is higher in the convenience trade area, where over five percent of the population is represented by this group. This is much higher than the downtown trade area at 3.5 percent Hispanic and the lifestyle trade area at 3.1 percent Hispanic. Additional demographic characteristics are contained in Appendix A. Purchasing Power Retail sales potential for Chanhassen trade areas is based on estimated purchasing power and market share that can be achieved from the trade areas. Retail sales from residents living outside the trade areas are inflow sales. Purchasing power estimates of trade area residents are derived from retail sales by store type as reported by the Census of Retail Trade in 1997 and 2002. Retail sales for 2003 through 2005 were estimated using information available from the U.S. Department of Commerce. Future purchasing power estimates are expressed in constant 2006 dollars and reflect projected household growth. Household growth is based on the analysis described earlier in this chapter. Purchasing power is based on the number of trade area households adjusted to reflect income characteristics. Purchasing power, for the purpose of this analysis, includes retail categories that are characteristics of tenants that could be located in Chanhassen. Estimated retail purchasing power summary tables for the Chanhassen trade areas for 2005, 2010, 2015, 2020 and 2025 are shown in Table 24. The purchasing power estimates used in this analysis are condensed from the full purchasing power tables, which are contained in a separate Appendix. These estimates represent the potential dollar sales for a broad range of retail stores generated by residents of each trade area. Total purchasing power for Chanhassen’s downtown trade area was estimated at $2.3 billion in 2005 and is expected to increase to $5.3 billion by 2025, an annual growth rate of 6.3 percent in constant 2006 dollars. Purchasing power for shopping goods in this trade area is expected to increase from $646.1 million in 2005 to $795.8 million in 2010, further increasing to almost $1.5 billion by 2025. Food service and drinking purchasing power for this trade area was $215.8 million in 2005, estimated to increase to $265.8 million in 2010 and potentially to $496.6 million by 2025. Chanhassen’s convenience trade area purchasing power is increasing at a 6.03 percent annual growth rate, increasing from a total purchasing power of $379.7 million in 2005 to $1.2 billion by 2025. Convenience goods purchasing power, estimated at $72.1 million in 2005, is anticipated to increase to over $96.7 million in 2010, expanding to over $232.6 million by 2025. Estimates indicate that food service and drinking purchasing power was $35.3 million in 2005 42 and is likely to increase to $47.3 million in 2010. By 2025, food service and drinking purchasing power will exceed $113.0 million. Table 24 CHANHASSEN TRADE AREAS RETAIL PURCHASING POWER; 2005 TO 2025 (In Thousands of Dollars) Merchandise Category 2005 2010 2015 2020 2025 Downtown Trade Area Shopping Goods 646,112$ 795,786$ 980,172$ 1,207,307$ 1,487,040$ Food Service & Drinking 215,784 265,771 327,350 403,207 496,632 Convenience Goods 441,294 543,520 669,454 824,585 1,015,645 Gasoline Service Stations & Convenience 191,578 235,959 290,630 357,977 440,923 Other Stores 827,756 1,019,515 1,255,735 1,546,724 1,905,107 Total 2,322,524$ 2,860,551$ 3,523,341$ 4,339,800$ 5,345,347$ Convenience Trade Area Shopping Goods 105,630$ 141,539$ 189,670$ 254,171$ 340,606$ Food Service & Drinking 35,277 47,268 63,345 84,887 113,754 Convenience Goods 72,144 96,670 129,543 173,597 232,637 Gasoline Service Stations & Convenience 31,320 41,967 56,239 75,364 100,995 Other Stores 135,324 181,330 242,995 325,630 436,368 Total 379,695$ 508,774$ 681,792$ 913,649$ 1,224,360$ Lifestyle Trade Area Shopping Goods 1,230,043$ 1,486,751$ 1,797,069$ 2,172,174$ 2,625,461$ Food Service & Drinking 410,802 496,536 600,175 725,448 876,835 Convenience Goods 840,118 1,015,449 1,227,393 1,483,587 1,793,184 Gasoline Service Stations & Convenience 364,720 440,837 532,849 644,070 778,476 Other Stores 1,575,857 1,904,738 2,302,299 2,782,855 3,363,585 Total 4,421,540$ 5,344,311$ 6,459,785$ 7,808,134$ 9,437,541$ Source: McComb Group, Ltd. Lifestyle trade area purchasing power for shopping goods is expected to increase from $1.2 billion in 2005 to over $1.4 billion in 2010, a growth rate of 3.86 percent, further increasing to $2.6 billion in 2025. Convenience goods purchasing power, estimated at $840 million in 2005, is anticipated to increase to over $1.0 billion in 2010, expanding to over $1.7 billion by 2025. Estimates indicate that food service drinking purchasing power was $410,802 million in 2005 and is likely to increase to $496,536 million in 2010. By 2025, food service and drinking purchasing power will exceed $876,000 million. Total purchasing power for the Chanhassen lifestyle trade area will increase from $4.4 billion in 2005 to over $9.4 billion by 2025. 43 Chapter VII RETAIL DEVELOPMENT POTENTIAL Chanhassen lies in the southwestern portion of the Twin Cities urbanized area, and its retail trade area includes agricultural areas to the west and south, and several freestanding communities. These agricultural areas will be developed with homes as the MUSA line is extended. Freestanding communities are also growing rapidly. Factors that support retail and service potential in Chanhassen include: • Rapid household growth within Chanhassen’s three trade areas. • TH-5 provides excellent access to downtown and other retail areas. • TH-312 creates opportunities for additional retail development to serve Chanhassen’s growing population and that of its trade areas. • Household income in each of Chanhassen’s trade areas exceeds $95,000 in 2005 compared to $73,879 for the metro area, and is expected to exceed $106,000 in 2010. • In 2010, 43 to 46 percent of the households in Chanhassen’s trade areas are expected to have incomes above $100,000. • Chanhassen’s trade area population is highly educated with 39.9 percent of the population having college degrees and 16.4 percent having graduate degrees in 2005. Chanhassen’s favorable trade area demographic characteristics and population growth rates will be attractive to retailers that can bring to Chanhassen retail stores that trade area residents are now visiting at Southdale, Ridgedale and other comparable shopping areas. Chanhassen’s retail areas along TH-5 and TH-312 have the opportunity to develop with stores and services that appeal to Chanhassen’s favorable demographics. Retail Sales Future sales potential is based on market share that can be achieved taking into consideration primary trade area households, future growth, and potential competitive developments. Market share estimates for Chanhassen are based on analysis conducted as part of this engagement, 1997 and 2002 retail and service sales in Chanhassen and McComb Group’s knowledge of the Twin Cities retail market. Retail sales in Chanhassen increased from $144.1 million in 1997 to $181.6 million in 2002 according to the U.S. Census of Retail Trade, as shown in Table 25. This represented an annual average increase of 4.7 percent. During the same period, the number of retail stores increased from 45 to 78. There were, however, significant differences in sales performance within individual categories. Retail sales of food and beverage stores increased at an annual rate of 5.7 percent. In the food service category, full service eating places increased at a rate of 9.9 percent, which was slightly less than limited service eating places, which increased at annual rate of 12.1 percent. Convenience stores with gasoline increased at 4.7 percent, a rate similar to that of all retail stores. Building materials and garden supplies increased from $6.8 million to $29.2 44 million, a growth rate of 34 percent. In the automotive category, motor vehicle and parts dealers declined from $27.4 million to $8.9 million, even though the number of stores increased from six to ten. Table 25 CITY OF CHANHASSEN RETAIL SALES; 1997 AND 2002 (In Thousands of Dollars) 1997 2002 Growth Store Type Number Dollars Number Dollars Rate RETAIL TRADE Convenience Retail Food & Beverage Stores 7 42,869$ 10 56,586$ 5.7 % Grocery Stores 3 2 Beer, Wine and Liquor 4 6 Health & Personal Care Stores 11,978 Food Service Food Services & Drinking Places 28 14,602$ 33 26,599$ 12.7 % Full Service Eating Places 9 6,249 11 10,031 9.9 Limited Service Eating Places 19 8,353 22 14,797 12.1 Convenience/Gasoline Convenience Stores/Gasoline 7 14,727$ 7 18,567$ 4.7 % Shopping Goods Clothing & Clothing Accessory Stores 1 4 Furniture & Home Furnishings 3 4 Electronics & Appliance Stores 2 Sporting Goods, Hobby, Book & Music Stores 4 5 2,960$ General Merchandise 1 1 Miscellaneous Store Retailers 48 Home Improvement Building Material & Garden Supplies 5 6,771$ 12 29,215$ 34.0 % Home Centers 1 Lawn & Garden Equipment & Supplies 3 4 4,160 Automotive Motor Vehicle & Parts Dealers 6 27,394$ 10 8,938$ (20.1) % Total Retail Trade 45 144,089$ 78 181,607$ 4.7 % Note: The U.S. Census does not disclose some sales information for competitive reasons. Source: U.S. Department of Commerce and McComb Group, Ltd. Retail and service sales for 2002 are contained in Table 26 for the City of Chanhassen. Purchasing power was calculated for 2002 by McComb Group. Retail sales derived from the trade area were estimated for each retail category to determine trade area sales and market share as a percent of purchasing power. Using food and beverage stores as an example, 2002 retail sales were about $56.6 million with 90 percent of those sales assumed to be from the primary trade area. This results in trade area sales of $50.9 million, which is 23 percent of estimated purchasing power of $221.5 million. 45 Table 26 CHANHASSEN PURCHASING POWER, RETAIL SALES AND MARKET SHARE; 2002 (In Thousands of Dollars) Purchasing Retail Trade Area Sales Market Business Type Power Sales Percent Dollars Share Convenience Retail Food & Beverage Stores 221,461$ 56,586$ 90 % 50,927$ 23.0 % Health and Personal Care Stores 71,885 11,978 90 % 10,780 15.0 % Food Service Food Service & Drinking Places 215,819$ 26,599$ 85 % 22,609$ 10.5 % Full Service Eating Places 106,263 11,802 85 10,032 9.4 Limited Service & Drinking Places 88,040 14,797 85 12,577 14.3 Convenience/Gasoline Gasoline Stations 174,324$ 18,567$ 70 % 12,997$ 7.5 % Shopping Goods Sporting Goods, Hobby, Book & Music Stores 11,663$ 2,960$ 85 % 2,516$ 21.6 % Home Improvement Building Materials, Lawn & Garden 205,061$ 25,055$ 85 % 21,297$ 10.4 % Lawn & Garden Equipment & Supplies 25,468 4,160 85 3,536 13.9 Automotive Motor Vehicle & Parts Dealers 63,231$ 8,938$ 90 % 8,044$ 12.7 % Health Care 84,975$ 17,193$ 85 % 14,614$ 17.2 % Source: U.S. Department of Commerce and McComb Group, Ltd. Market share in the health and personal care category was 15.0 percent compared to 10.5 percent for food service. Convenience stores/gasoline is estimated to have a 7.5 percent market share. In the shopping goods category, sporting goods, hobby, book and music stores have a 21.6 percent market share. Home improvement has a 10.4 percent market share, while lawn and garden equipment and supplies captured 13.9 percent. Motor vehicle and parts dealers achieved a 12.7 percent market share. Health care market share was 17.2 percent. With a few exceptions, market share ranges from 10 to 15 percent with 85 to 90 percent of retail sales potential flowing to competitive retail establishments. Retail sales in the shopping goods category are limited indicating that most purchases in that category are made at retailers located outside Chanhassen. Downtown Chanhassen has only 13 shopping goods stores excluding Target. Downtown Chanhassen serves as a convenience shopping area within its trade area. In 2002, convenience retail sales totaled $113.7 million or 63 percent of the $181.6 million of retail sales. Market Share Retail and service sales potential for Downtown Chanhassen and the two potential retail locations is based on market share that can be achieved taking into consideration past market share trends in Chanhassen, trade area households, future growth, and potential competitive developments. Market share estimates are based on analysis conducted as part of this engagement, McComb Group’s knowledge of the Twin Cities area retail market, and analysis contained in Table 27. Sales potential was estimated for four target years: 2010, 2015, 2020 and 2025 to identify growth in retail and service sales as trade area households and purchasing power increase. 46 Table 27 CHANHASSEN MARKET SHARE AND TRADE AREA SALES Downtown Lifestyle Convenience Trade Trade Trade Market Area Market Area Market Area Store Type Share Sales Share Sales Share Sales Convenience Goods Supermarkets 25.0 % 90 % 5.0 % 95 % 25.0 % 85 % Other Food Stores 20.0 90 10.0 95 20.0 85 Drug & Proprietary Stores 20.0 90 5.0 95 25.0 85 Liquor 20.0 90 5.0 95 25.0 85 Hardware Stores 20.0 90 - 95 25.0 85 Other Convenience Stores 20.0 90 5.0 95 25.0 85 Food Service 20.0 % 85 % 10.0 % 70 % 15.0 % 70 % Gasoline/Convenience Stores 10.0 % 70 % 1.0 % 70 % 5.0 % 70 % Shopping Goods General Merchandise Discount Stores 20.0 % 85 % - % - % - % - % Conventional 20.0 85 25.0 70 - - National Chain 20.0 85 25.0 70 - - Variety Stores 25.0 85 20.0 70 20.0 85 Apparel & Accessories 15.0 85 20.0 70 15.0 85 Furniture & Home Furnishings 20.0 85 20.0 70 20.0 85 Electronics & Appliances Stores 20.0 85 20.0 70 15.0 85 Other Shopping Goods 15.0 85 20.0 70 15.0 85 Other Retail Stores Building Materials 35.0 % 70 % - % - % - % - % Auto Parts & Accessories 15.0 85 - - 10.0 85 Auto Dealers 15.0 70 - - - Services 15.0-20.0 %85 % 10.0 % 95 % 25.0 % 85 % Health Care 10.0-20.0 %85 % 5.0-10.0 %95 % 20.0 % 85 % Source: McComb Group, Ltd. Resident purchasing power is derived from Table 24 in Chapter VI. Market share was estimated for each retail and service category taking into consideration past market share performance, trade area size, competitive store locations and industry experience. Trade area market share by store type is shown in Table 27 for each trade area: downtown, lifestyle and convenience. Using Downtown Chanhassen as an example, in the convenience goods category market share is estimated at 20 to 25 percent with 90 percent of the sales being derived from the primary trade area. Food service market share is estimated at 20 percent with 85 percent of the sales derived from the primary trade area. In the shopping goods category, market share ranges from 15 percent to 25 percent depending on store category. In the shopping goods category, most stores are estimated to receive 85 percent of their sales from the primary trade area with 15 percent represented by inflow sales. Market share in the services and health care categories are estimated at 10 to 20 percent with 85 percent of the sales being derived from the primary trade area. 47 In the lifestyle trade area, the emphasis is on shopping goods, a category that is limited in downtown. Shopping goods market share ranges from 20 to 25 percent depending on store type with 70 percent of the sales derived from the trade area. Food service market share is estimated at ten percent and most convenience goods market share ranges from five to ten percent. Convenience trade area market share ranges from 20 to 25 percent in the convenience categories with 85 percent of the sales being derived from the trade area. Food service market share is estimated at 15 percent with 70 percent from the trade area. Shopping goods market share is estimated at 15 to 20 percent; however, the small trade area size will limit the number of stores in this category. Services market share is 25 percent and health care is 20 percent. Sales Potential Estimated retail and service space demand is a two-step process. Sales potential for each retail or service category is estimated first to determine if retail sales are sufficient to support a store. Next, store size is determined based on sales productivity and typical store size for each category. This methodology is illustrated for 2010 in Tables 28 and 29. These tables use the downtown trade area and the convenience goods stores as an example to illustrate how supportable square footage of retail stores and services is determined. Using grocery stores as an example, resident purchasing power in 2010 is estimated at $346.8 million as shown in Table 28. Market share of 25 percent results in $86.7 million in trade area sales. Adding inflow sales of $9.6, results in total estimated sales of about $96.3 million. Estimated sales potential is about $19.2 million for drug stores and $10.9 million for liquor stores. The same approach is used for other retail and service categories. Sales potential for other retail stores and services is contained in the Appendices (under separate cover). Table 28 CHANHASSEN DOWNTOWN TRADE AREA RETAIL PURCHASING POWER, MARKET SHARE AND SALES POTENTIAL; 2010 BY MERCHANDISE CATEGORY (In Thousands of Dollars) Resident Estimated Trade Trade Estimated Purchasing Market Area Area Other Total Merchandise Category Power Share Sales Percent Shoppers Sales CONVENIENCE GOODS Grocery stores 346,803$ 25.0 % 86,701$90 % 9,633$ 96,334$ Drug & proprietary stores 81,541 20.0 16,308 85 2,878 19,186 Hardware 19,111 20.0 3,822 85 675 4,497 Liquor 46,376 20.0 9,275 85 1,637 10,912 Florist 10,193 20.0 2,039 85 360 2,398 Food/health supplement stores 2,548 20.0 510 85 90 600 Source: McComb Group, Ltd. Primary Trade Area 48 Supportable GLA for grocery stores is based on sales potential of $96.3 million divided by $490 per square foot, resulting in supportable square footage of 196,600 square feet, as shown in Table 29. The last column in this table contains the median store size from Dollars & Cents of Shopping Centers, published by the Urban Land Institute, for each store type. Median store size indicates a typical size for a store in each retail category. To the extent that supportable square footage is about the same as the median store size or larger, sales potential exists to support that store type. Complete tables showing supportable square footage by retail and service category for each target year are contained in the Appendices. Table 29 CHANHASSEN DOWNTOWN TRADE AREA RETAIL SALES POTENTIAL AND SUPPORTABLE SPACE; 2010 BY MERCHANDISE CATEGORY Estimated Sales Sales Supportable Median Category Potential Per Sq. Ft. Square Feet Store Size CONVENIENCE GOODS Grocery stores 96,334,000$ 490$ 196,600 42,228 Drug & proprietary stores 19,186,000 360 53,294 11,153 Hardware 4,496,000 185 24,303 7,857 Liquor 10,912,000 375 29,099 3,850 Florist 2,399,000 225 10,662 1,700 Food/health supplement stores 600,000 275 2,182 1,400 Source: McComb Group, Ltd. Store types and median store sizes used in this analysis are based on current retail formats and store size. Since this study extends over a 20-year period, store types and concepts may change during this period. Recent trends have been for many store types to increase in size to accommodate a larger selection of merchandise and increase customer attraction. Retail gross leasable area (GLA) supported by estimated sales potential for each retail store category is based on estimated sales per square foot (in 2005 dollars) by store type. Sales per square foot estimates are derived from median store sales per square foot for each tenant type contained in Dollars & Cents of Shopping Centers, and have been increased to reflect sales per square foot in 2006. Supportable GLA is calculated by dividing sales potential by sales per square foot. This analysis was used to provide an estimate of the supportable square footage in each retail store category. Downtown Chanhassen Downtown Chanhassen development potential for retail stores, food service, and services is closely related to trade area household growth. Trade area households are shown at the top of Table 30 and illustrate how trade area residential development is projected to increase. Households are estimated to increase from 64,282 in 2005 to 106,304 in 2025, an annual growth rate of 2.5 percent. 49 Table 30 DOWNTOWN CHANHASSEN TRADE AREA SUPPORTABLE SPACE BY MERCHANDISE CATEGORY (Gross Leasable Area) Merchandise Category 2005 2010 2015 2020 2025 Trade Area Households 64,282 74,392 84,792 95,423 106,304 Convenience Goods 214,000 220,000 225,000 231,000 246,000 Food Service 116,000 134,000 164,000 190,000 224,000 Shopping Goods 261,000 330,000 395,000 395,000 450,000 Building Materials 13,000 13,000 16,000 20,000 20,000 Auto Parts & Accessories 7,000 7,000 14,000 14,000 21,000 Services 38,700 43,900 58,400 69,400 84,400 Health Care 30,000 39,000 52,000 70,000 90,000 Other Services 20,000 25,000 35,000 40,000 50,000 Total 699,700 811,900 959,400 1,029,400 1,185,400 Source: McComb Group, Ltd. Downtown Chanhassen and South Downtown combined have an estimated 700,000 square feet of retail, food service, and service space. Supportable space is also estimated at about 700,000 square feet in 2005 increasing to 812,000 square feet in 2010, an increase of 112,000 square feet. Downtown currently, according to city records, has one vacant parcel about one acre in size that has fair access and visibility. South Downtown has four vacant parcels ranging in size from 1.3 acres to 2.7 acres for a total of about 7.3 acres. This indicates that Downtown and South Downtown do not have enough space to accommodate future retail demand. Utilizing traditional commercial development concepts, the downtown area would need an additional 12 ± acres to adequately accommodate the additional 112,000 square feet of supportable square footage anticipated by 2010. Projections of development potential in downtown are somewhat academic since downtown does not have developable land either north or south of TH-5 to accommodate this magnitude of growth. Downtown can continue to fill in with retail, food service and services as trade area population increases. The downtown area has a good representation of convenience goods stores and general merchandise (Target). To significantly expand retail stores comparable to trade area development potential would require addition of more big box stores to drive customer visits. This does not appear to be in the best interest of downtown or the community. Lifestyle Trade Area The lifestyle trade area, due to its larger number of households, has an estimated 873,000 square feet in 2010 increasing to 1,132,000 in 2025, as shown in Table 31. This trade area has development potential similar to that of Downtown Chanhassen. The potential lifestyle site, TH- 312 and Powers Boulevard, has 120 acres or more that could accommodate retail development. This location can accommodate some of the retail potential that can not be accommodated in Downtown Chanhassen. A retail development at this location should focus primarily on 50 shopping goods, which is under represented in Downtown Chanhassen. Lifestyle shopping center potential, shown in Table 31 for major merchandise categories, is estimated at about 873,000 square feet in 2010 increasing to 955,000 square feet in 2015. Shopping goods would be the major focus of this center and could represent up to 85 percent of the GLA. The next largest category is likely to be food service, with an emphasis on full service restaurants, which is also under represented in downtown. A shopping center of this type would complement Downtown Chanhassen’s current retail offerings. This area could accommodate over 1.1 million square feet of retail, services and health care by 2025. Table 31 LIFESTYLE TRADE AREA SUPPORTABLE SPACE BY MERCHANDISE CATEGORY (Gross Leasable Area) Merchandise Category 2010 2015 2020 2025 Trade Area Households 136,389 149,389 162,146 175,203 Convenience Goods 23,000 25,000 28,000 32,000 Food Service 80,000 84,000 90,000 96,000 Shopping Goods 730,000 800,000 870,000 940,000 Services 15,000 17,000 20,000 24,000 Health Care 15,000 17,000 20,000 24,000 Other Services 10,000 12,000 14,000 16,000 Total 873,000 955,000 1,042,000 1,132,000 Source: McComb Group, Ltd. Convenience Trade Area The convenience trade area, due to its smaller number of households, can support an estimated 151,100 square feet of retail in 2010 increasing to 227,000 square feet in 2025, as shown in Table 32. The convenience trade area is located surrounding the interchange of Great Plains Boulevard with TH-312. This shopping area would be grocery store anchored and would include primarily convenience goods stores, food service, a limited representation of shopping good stores, services and health care. Potential business types for the convenience center are contained in Tables 32A and 32B at the end of this chapter. The convenience shopping area will serve residents that live within or near its primary trade area. Rapid household growth in southern Chanhassen will support a supermarket in this area without diminishing long term sales potential of supermarkets located in Downtown Chanhassen. Sales potential of the downtown area would support 155,000 square feet of supermarket space in 2010 growing to 190,000 square feet in 2015, an increase of 35,000 square feet. It is unlikely that a fourth supermarket would want to locate downtown due to competitive supermarkets. Even if a supermarket wanted to location downtown, there is not enough vacant land of the proper size. 51 Table 32 CONVENIENCE TRADE AREA SUPPORTABLE SPACE BY MERCHANDISE CATEGORY (Gross Leasable Area) Merchandise Category 2010 2015 2020 2025 Trade Area Households 12,864 15,471 18,093 20,802 Convenience Goods 66,500 80,500 98,000 98,000 Food Service 22,700 30,300 30,300 32,200 Shopping Goods 18,700 22,900 29,100 31,100 Auto Parts & Accessories 7,000 7,000 7,000 7,000 Services 14,700 17,700 22,700 24,200 Health Care 6,500 6,500 8,500 10,500 Other Services 15,000 18,000 21,000 24,000 Total 151,100 182,900 216,600 227,000 Source: McComb Group, Ltd. The trade area could support a grocery store of about 40,000 square feet in 2010 increasing to 50,000 square feet in 2015. The actual size of the grocery store would depend on the operator chosen and their typical store format. The opportunity for this store is to serve a market segment that is different than Cub and Byerly’s located in downtown. Downtown has surplus grocery store potential at the present time. Market potential exists for other convenience goods stores including drug, hardware, liquor and florist. Of the above stores, the hardware store may be the least likely to locate in the area. Food service is represented by full service and limited service restaurants. Market potential indicates possibly two full service restaurants, three limited service establishments and one snack or beverage place initially such as coffee or bagels, etc. Due to its interchange location, it is likely that two convenience stores with gasoline would choose to locate in the area. Shopping goods potential is limited to the home furnishings area, a cell phone/electronics type store and other shopping goods stores. Potential for services is estimated at 14,700 square feet in 2010, increasing to 24,200 in 2005. Health care is a relatively small category estimated at up to 6,500 square feet in 2010 increasing to 10,500 square feet in 2025. The categories contained in Tables 32A and 32B represent sales potential. It is unlikely that all of these types of tenants would choose to locate in the area. Also, other stores that have not been identified might find the location attractive. As a result, it is expected that the amount of retail development would be somewhat below the sales potential. Land area required to support the indicated supportable square footage is about 16 acres in 2010 increasing to about 23 acres in 2025, excluding areas for ponding and water retention. 52 Land Demand Land necessary to support the estimated retail development potential in Chanhassen is shown in Table 33. Downtown Chanhassen and its trade area have sales potential to support an additional 12 acres of retail development by 2010 increasing to 49 acres in 2025. Downtown, however, is almost completely developed and has only about seven acres available for development. A significant increase in retail space would require two to four big box retailers to attract additional customers. The potential lifestyle site at TH-312 and Powers Boulevard has the potential to support 88 acres in 2010 increasing to 113 acres in 2025. This creates the opportunity to develop a large lifestyle center of 650,000 to 800,000 square feet that could include one or two department stores. The exact form this shopping center will take will depend on the desires of the developer. Table 33 CHANHASSEN SUPPORTABLE LAND AREA Acres Shopping Area 2010 2015 2020 2025 Downtown Chanhassen 12 26 33 49 TH-312 and Powers Blvd. 88 96 104 113 TH-312 and Great Plains Blvd. 16 19 22 23 Source: McComb Group, Ltd. The potential convenience retail location at TH-312 and Great Plains Boulevard could support about 16 acres of retail development in 2010 increasing to about 23 acres in 2025. This development would be located north and south of TH-312. Retail development at the two retail locations west of downtown along TH-5 are likely to fill in with either convenience or destination retail and services that cannot be accommodated in Downtown Chanhassen. The development opportunities in these two areas are limited by available land for retail or service uses. 53 Table 32A CHANHASSEN CONVENIENCE TRADE AREA SUPPORTABLE SPACE BY MERCHANDISE CATEGORY (Gross Leasable Area) Median Merchandise Category Store Size 2010 2015 2020 2025 CONVENIENCE GOODS Grocery stores 42,228 40,000 50,000 65,000 65,000 Drug & proprietary stores 11,153 13,000 15,000 15,000 15,000 Hardware 7,857 5,500 7,500 10,000 10,000 Liquor 3,850 6,000 6,000 6,000 6,000 Florist 1,700 2,000 2,000 2,000 2,000 Food Service Full-service restaurants 4,950 11,000 15,000 15,000 15,000 Limited service restaurants 3,700 10,000 13,000 13,000 13,000 Snack & beverage places 1,500 1,700 2,300 2,300 4,200 Specialized food places Drinking Places Gasoline Svs Stations/Conv. Gas/Convenience food stores 2,250 5,000 5,000 5,000 5,000 SHOPPING GOODS Furniture & Home Furnishings Floor coverings 2,750 2,800 3,400 3,400 3,400 All other home furnishings stores 3,500 2,000 2,900 3,800 3,800 Electronics & Appliances Stores Radio, tv & electronics stores 3,013 3,500 3,500 7,000 7,000 Other Shopping Goods Sporting goods 5,100 6,000 7,000 8,000 10,000 Jewelry stores 1,350 1,200 1,600 1,600 1,600 Gift, novelty & souvenirs 3,000 2,000 3,000 3,800 3,800 Optical goods stores 1,500 1,200 1,500 1,500 1,500 OTHER RETAIL STORES Motor Vehicles & Parts Dealers Automotive dealers New and used car dealers Used car dealers Misc. auto dealers Boat dealers Recreational vehicle dealers Motorcycle dealers Automotive dealers, nec Auto parts & accessories stores 6,500 7,000 7,000 7,000 7,000 TOTAL RETAIL 119,900 145,700 169,400 173,300 Source: McComb Group, Ltd. 54 Table 32B CHANHASSEN CONVENIENCE TRADE AREA SUPPORTABLE SPACE BY SERVICES CATEGORY (Gross Leasable Area) Median Category Store Size 2010 2015 2020 2025 SERVICES Beauty Shops/nail salons 1,400 3,000 4,500 6,000 6,000 Drycleaning & laundry services (except coin-op.)1,699 1,700 1,700 1,700 1,700 Personal services 1,500 2,000 2,000 4,000 4,000 Other Services 7,400 3,000 4,500 6,000 7,500 Physical fitness facilities 11,100 5,000 5,000 5,000 5,000 Total Services 14,700 17,700 22,700 24,200 Health Care - For Profit Offices of physicians 1,800 2,500 2,500 2,500 2,500 Offices of dentists 1,800 2,000 2,000 4,000 4,000 Offices of other health practitioners Offices of chiropractors 1,600 2,000 2,000 2,000 4,000 Total Medical 6,500 6,500 8,500 10,500 TOTAL SERVICES 21,200 24,200 31,200 34,700 Source: McComb Group, Ltd. APPENDIX A DEMOGRAPHIC CHARACTERISTICS Table A-1 Chanhassen Convenience, Downtown and Lifestyle Trade Areas; Population and Households: 1990 and 2000 Census; 2005 and 2010 Estimated Table A-2 Chanhassen Convenience, Downtown and Lifestyle Trade Areas; Average and Median Household Incomes: 1990 and 2000 Census; 2005 and 2010 Estimated Table A-3 Chanhassen Convenience, Downtown and Lifestyle Trade Areas; Household Income: 1990 and 2000 Census; 2005 and 2010 Estimated Table A-4 Chanhassen Convenience, Downtown and Lifestyle Trade Areas; Households, Families and Household Size: 1990 and 2000 Census; 2005 and 2010 Estimated Table A-5 Chanhassen Convenience, Downtown and Lifestyle Secondary Trade Areas; Educational Attainment: 1990 and 2000 Census; 2005 and 2010 Estimated Table A-6 Chanhassen Convenience, Downtown and Lifestyle Trade Areas; Gender and Marital Status: 1990 and 2000 Census; 2005 and 2010 Estimated Table A-7 Chanhassen Convenience, Downtown and Lifestyle Trade Areas; Age Distribution: 1990 and 2000 Census; 2005 and 2010 Estimated Table A-8 Chanhassen Convenience, Downtown and Lifestyle Trade Areas; Ethnicity: 1990 and 2000 Census; 2005 and 2010 Estimated Table A-1 CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS POPULATION AND HOUSEHOLDS: 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED Population Households Rate of Rate of Trade Area / Year Number Change Number Change CONVENIENCE TRADE AREA 1990 12,710 N/A 4,578 N/A 2000 23,730 6.44 % 7,913 5.63 % 2005 E 28,718 3.89 10,554 5.93 2010 E 32,627 2.59 12,864 4.04 DOWNTOWN TRADE AREA 1990 105,579 N/A 37,892 N/A 2000 148,966 3.50 % 54,166 3.64 % 2005 E 167,912 2.42 64,282 3.48 2010 E 185,866 2.05 74,392 2.96 LIFESTYLE TRADE AREA 1990 209,404 N/A 77,895 N/A 2000 270,980 2.61 % 103,122 2.85 % 2005 E 305,829 2.45 120,020 3.08 2010 E 337,625 2.00 136,389 2.59 N/A: Not Available. E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. Table A-2 CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS AVERAGE AND MEDIAN HOUSEHOLD INCOMES 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED CONVENIENCE DOWNTOWN LIFESTYLE TRADE TRADE TRADE Income Type / Year AREA AREA AREA Average Household Income 1990 50,499$ 57,145$ 60,185$ 2000 96,745 97,674 95,816 2005 E 95,350 96,000 96,080 2010 E 106,146 106,259 106,380 Median Household Income 1990 42,252$ 47,644$ 49,178$ 2000 77,647 75,002 72,713 2005 E 85,250 81,485 79,397 2010 E 96,655 92,272 90,194 E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. Table A-3 CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS HOUSEHOLD INCOME: 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED 1990 2000 2005 E 2010 E Number Percent Number Percent Number Percent Number Percent CONVENIENCE TRADE AREA Households 4,578 N/A 7,913 N/A 10,554 N/A 12,864 N/A Average Size 2.78 N/A 2.99 N/A 2.72 N/A 2.53 N/A Household Income Median 42,252$ N/A 77,647$ N/A 85,250$ N/A 96,655$ N/A Average 50,499$ N/A 96,745$ N/A 95,350$ N/A 106,146$ N/A Households Above $50,000 1,668 36.5 % 5,559 70.3 % 7,664 72.6 % 9,758 75.9 % Households Above $75,000 680 14.9 3,840 48.5 5,839 55.3 7,806 60.7 Income Distribution Less than $15,000 485 10.6 % 464 5.9 % 564 5.3 % 631 4.9 % $15,000 - $24,999 604 13.2 523 6.6 630 6.0 661 5.1 $25,000 - $34,999 762 16.7 526 6.6 649 6.2 809 6.3 $35,000 - $49,999 1,053 23.0 841 10.6 1,047 9.9 1,004 7.8 $50,000 - $74,999 988 21.6 1,719 21.7 1,825 17.3 1,952 15.2 $75,000 - $99,999 370 8.1 1,356 17.1 1,812 17.2 1,852 14.4 $100,000 - $149,999 194 4.2 1,494 18.9 2,339 22.2 3,153 24.5 $150,000 +116 2.5 990 12.5 1,687 16.0 2,801 21.8 DOWNTOWN TRADE AREA Households 37,892 N/A 54,166 N/A 64,282 N/A 74,392 N/A Average Size 2.74 N/A 2.72 N/A 2.58 N/A 2.50 N/A Household Income Median 47,644$ N/A 75,002$ N/A 81,485$ N/A 92,272$ N/A Average 57,145$ N/A 97,674$ N/A 96,000$ N/A 106,259$ N/A Households Above $50,000 17,011 44.9 % 37,448 69.1 % 46,251 72.0 % 56,166 75.5 % Households Above $75,000 7,781 20.6 25,650 47.4 34,117 53.1 43,755 58.8 Income Distribution Less than $15,000 3,491 9.2 % 2,852 5.3 % 3,025 4.7 % 3,256 4.4 % $15,000 - $24,999 3,970 10.5 3,255 6.0 3,508 5.5 3,511 4.7 $25,000 - $34,999 5,034 13.3 3,917 7.2 4,002 6.2 4,398 5.9 $35,000 - $49,999 8,356 22.1 6,693 12.4 7,496 11.7 7,060 9.5 $50,000 - $74,999 9,230 24.4 11,798 21.8 12,134 18.9 12,411 16.7 $75,000 - $99,999 3,813 10.1 9,259 17.1 10,965 17.1 10,923 14.7 $100,000 - $149,999 2,434 6.4 9,443 17.4 13,228 20.6 17,768 23.9 $150,000 +1,534 4.1 6,948 12.8 9,924 15.4 15,064 20.2 LIFESTYLE TRADE AREA Households 77,895 N/A 103,122 N/A 120,020 N/A 136,389 N/A Average Size 2.66 N/A 2.60 N/A 2.52 N/A 2.45 N/A Household Income Median 49,178$ N/A 72,713$ N/A 79,397$ N/A 90,194$ N/A Average 60,185$ N/A 95,816$ N/A 96,080$ N/A 106,380$ N/A Households Above $50,000 35,370 45.4 % 69,613 67.5 % 85,301 71.1 % 102,514 75.2 % Households Above $75,000 16,971 21.8 46,934 45.5 62,332 51.9 79,562 58.3 Income Distribution Less than $15,000 7,113 9.1 % 5,695 5.5 % 5,889 4.9 % 6,186 4.5 % $15,000 - $24,999 8,000 10.3 6,330 6.1 6,547 5.5 6,256 4.6 $25,000 - $34,999 10,298 13.2 8,116 7.9 7,891 6.6 8,161 6.0 $35,000 - $49,999 17,049 21.9 13,368 13.0 14,392 12.0 13,272 9.7 $50,000 - $74,999 18,398 23.6 22,680 22.0 22,969 19.1 22,953 16.8 $75,000 - $99,999 7,724 9.9 17,362 16.8 21,005 17.5 20,943 15.4 $100,000 - $149,999 5,379 6.9 16,482 16.0 23,364 19.5 32,124 23.6 $150,000 +3,868 5.0 13,090 12.7 17,964 15.0 26,495 19.4 N/A: Not Available or Not Applicable E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. Table A-4 CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS HOUSEHOLDS, FAMILIES AND HOUSEHOLD SIZE; 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED 1990 2000 2005 E 2010 E Number Percent Number Percent Number Percent Number Percent CONVENIENCE TRADE AREA Households 4,578 7,913 10,554 12,864 Families 3,414 6,194 8,187 9,916 As Percent of Households 74.6 %78.3 %77.6 %77.1 % Household Size 1 Person N/A N/A % 1,343 17.0 % 1,886 17.9 % 2,413 18.8 % 2 Persons N/A N/A 2,090 26.4 3,839 36.4 6,615 51.4 3-4 Persons N/A N/A 3,310 41.8 3,567 33.8 2,623 20.4 5+ Persons N/A N/A 1,170 14.8 1,263 12.0 1,214 9.4 Average Household Size 2.78 2.99 2.72 2.53 DOWNTOWN TRADE AREA Households 37,892 54,166 64,282 74,392 Families 28,626 39,943 47,173 54,532 As Percent of Households 75.5 %73.7 %73.4 %73.3 % Household Size 1 Person N/A N/A % 11,050 20.4 % 13,821 21.5 % 16,441 22.1 % 2 Persons N/A N/A 17,496 32.3 23,270 36.2 35,634 47.9 3-4 Persons N/A N/A 19,716 36.4 21,020 32.7 16,664 22.4 5 + Persons N/A N/A 5,904 10.9 6,171 9.6 5,654 7.6 Average Household Size 2.74 2.72 2.58 2.50 LIFESTYLE TRADE AREA Households 77,895 103,122 120,020 136,389 Families 56,879 73,012 85,293 97,562 As Percent of Households 73.0 %70.8 %71.1 %71.5 % Household Size 1 Person N/A N/A % 23,629 22.9 % 28,126 23.4 % 32,373 23.7 % 2 Persons N/A N/A 35,297 34.2 43,112 35.9 63,437 46.5 3-4 Persons N/A N/A 34,533 33.5 38,156 31.8 31,280 22.9 5 + Persons N/A N/A 9,664 9.4 10,626 8.9 9,298 6.8 Average Household Size 2.66 2.60 2.52 2.45 N/A: Not Available or Not Applicable. E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. Table A-4a CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS HOUSEHOLDS, FAMILIES AND HOUSEHOLD SIZE: 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED CONVENIENCE DOWNTOWN LIFESTYLE TRADE TRADE TRADE AREA AREA AREA 1990 Families As Percent of Households 74.6 %75.5 %73.0 % Household Size 1 Person N/A %N/A %N/A % 2 Persons N/A N/A N/A 3-4 Persons N/A N/A N/A 5+ Persons N/A N/A N/A 2000 Families As Percent of Households 78.3 %73.7 %70.8 % Household Size 1 Person 17.0 %20.4 %22.9 % 2 Persons 26.4 32.3 34.2 3-4 Persons 41.8 36.4 33.5 5+ Persons 14.8 10.9 9.4 2005 E Families As Percent of Households 77.6 %73.4 %71.1 % Household Size 1 Person 17.9 %21.5 %23.4 % 2 Persons 36.4 36.2 35.9 3-4 Persons 33.8 32.7 31.8 5+ Persons 12.0 9.6 8.9 2010 E Families As Percent of Households 77.1 %73.3 %71.5 % Household Size 1 Person 18.8 %22.1 %23.7 % 2 Persons 51.4 47.9 46.5 3-4 Persons 20.4 22.4 22.9 5+ Persons 9.4 7.6 6.8 N/A: Not Available or Not Applicable. E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. Table A-5 CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS EDUCATIONAL ATTAINMENT: 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED 1990 2000 2005 E 2010 E Attainment Number Percent Number Percent Number Percent Number Percent CONVENIENCE TRADE AREA No College 2,276 32.5 % 2,812 23.3 % 3,509 23.1 % 4,104 23.2 % Some College/2 yr. Degree 2,571 36.7 2,984 24.8 3,288 21.7 3,437 19.4 College Graduate 1,677 23.9 4,500 37.3 5,846 38.5 7,021 39.6 Graduate School 485 6.9 1,752 14.5 2,527 16.7 3,161 17.8 DOWNTOWN TRADE AREA No College 17,170 28.3 % 17,304 21.2 % 20,456 21.7 % 23,157 21.8 % Some College/2 yr. Degree 20,500 33.8 20,825 25.6 20,788 22.0 20,342 19.2 College Graduate 17,466 28.8 31,525 38.7 37,734 39.9 43,694 41.2 Graduate School 5,514 9.1 11,805 14.5 15,495 16.4 18,951 17.9 LIFESTYLE TRADE AREA No College 33,231 26.6 % 33,771 21.7 % 39,556 22.1 % 44,303 22.1 % Some College/2 yr. Degree 42,513 34.0 41,545 26.7 40,655 22.7 39,103 19.5 College Graduate 36,693 29.4 57,092 36.7 68,877 38.4 80,121 40.0 Graduate School 12,472 10.0 23,035 14.8 30,129 16.8 36,800 18.4 N/A: Not Available or Not Applicable. E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. Table A-5a CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS EDUCATIONAL ATTAINMENT: 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED CONVENIENCE DOWNTOWN LIFESTYLE TRADE TRADE TRADE Year / Attainment AREA AREA AREA 1990 No College 32.5 % 28.3 % 26.6 % Some College/2 yr. Degree 36.7 33.8 34.0 College Graduate 23.9 28.8 29.4 Graduate School 6.9 9.1 10.0 2000 No College 23.3 % 21.2 % 21.7 % Some College/2 yr. Degree 24.8 25.6 26.7 College Graduate 37.3 38.7 36.7 Graduate School 14.5 14.5 14.8 2005 E No College 23.1 % 21.7 % 22.1 % Some College/2 yr. Degree 21.7 22.0 22.7 College Graduate 38.5 39.9 38.4 Graduate School 16.7 16.4 16.8 2010 E No College 23.2 %21.8 %22.1 % Some College/2 yr. Degree 19.4 19.2 19.5 College Graduate 39.6 41.2 40.0 Graduate School 17.8 17.9 18.4 N/A: Not Available or Not Applicable. E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. Table A-6 CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS GENDER AND MARITAL STATUS: 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED 1990 2000 2005 E 2010 E Ethnicity Number Percent Number Percent Number Percent Number Percent CONVENIENCE TRADE AREA Gender Male 6,297 49.5 % 11,930 50.3 % 14,460 50.4 % 16,438 50.4 % Female 6,414 50.5 11,800 49.7 14,258 49.6 16,189 49.6 Marital Status Single 3,515 37.4 % 214 3.5 % 304 3.7 % 381 3.8 % Single With Children N/A N/A 715 11.5 1,002 12.2 1,329 13.4 Married 5,882 62.6 5,271 85.0 6,880 84.0 8,207 82.8 DOWNTOWN TRADE AREA Gender Male 52,339 49.6 7,702 49.7 83,165 49.6 91,757 49.7 Female 53,165 50.4 7,784 50.3 84,668 50.4 93,015 50.3 Marital Status Single 28,873 36.3 % 1,652 4.1 % 1,975 4.2 % 2,221 4.1 % Single With Children N/A N/A 3,945 9.9 5,313 11.3 6,708 12.4 Married 50,686 63.7 34,294 86.0 39,859 84.5 45,276 83.5 LIFESTYLE TRADE AREA Gender Male 103,071 49.2 % 133,090 49.1 % 150,969 49.4 % 167,260 49.5 % Female 106,334 50.8 137,890 50.9 154,861 50.6 170,366 50.5 Marital Status Single 60,755 37.7 % 3,354 4.6 % 3,715 4.4 % 3,998 4.1 % Single With Children N/A N/A 7,121 9.8 9,448 11.1 11,904 12.2 Married 100,418 62.3 62,534 85.7 72,129 84.6 81,660 83.7 1990 Marital Status data represents population numbers, while 2000 through 2010 respresents households N/A: Not Available or Not Applicable. E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. Table A-6a CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS GENDER AND MARITAL STATUS: 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED CONVENIENCE DOWNTOWN LIFESTYLE TRADE TRADE TRADE Ethnicity AREA AREA AREA 1990 Gender Male 49.5 % 49.6 % 49.2 % Female 50.5 50.4 50.8 Marital Status Single 37.4 % 36.3 % 37.7 % Single With Children N/A N/A N/A Married 62.6 63.7 62.3 2000 Gender Male 50.3 % 49.7 % 49.1 % Female 49.7 50.3 50.9 Marital Status Single 3.5 %4.1 %4.6 % Single With Children 11.5 9.9 9.8 Married 85.0 86.0 85.7 2005 E Gender Male 50.4 % 49.6 % 49.4 % Female 49.6 50.4 50.6 Marital Status Single 3.7 %4.2 %4.4 % Single With Children 12.2 11.3 11.1 Married 84.0 84.5 84.6 2010 E Gender Male 50.4 % 49.7 % 49.5 % Female 49.6 50.3 50.5 Marital Status Single 3.8 %4.1 %4.1 % Single With Children 13.4 12.4 12.2 Married 82.8 83.5 83.7 N/A: Not Available or Not Applicable. E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. Table A-7 CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS AGE DISTRIBUTION: 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED 1990 2000 2005 E 2010 E Age Distribution Number Percent Number Percent Number Percent Number Percent CONVENIENCE TRADE AREA Under 5 1,339 10.5 % 2,491 10.5 % 2,610 9.1 % 2,828 8.7 % 5 - 9 1,098 8.6 2,563 10.8 2,601 9.1 2,709 8.3 10 - 14 932 7.3 2,265 9.5 2,539 8.8 2,669 8.2 15 - 19 782 6.2 1,614 6.8 2,090 7.3 2,435 7.5 20 - 24 872 6.9 941 4.0 1,698 5.9 2,092 6.4 25 - 34 3,090 24.3 3,343 14.1 3,640 12.7 4,054 12.4 35 - 44 2,212 17.4 5,500 23.2 5,700 19.8 5,316 16.3 45 - 54 1,158 9.1 3,018 12.7 4,486 15.6 5,572 17.1 55 - 64 663 5.2 1,126 4.7 2,015 7.0 3,072 9.4 65 - 74 360 2.8 533 2.2 806 2.8 1,228 3.8 75 +206 1.6 334 1.4 533 1.9 653 2.0 25 - 64 7,121 56.0 % 12,988 54.7 % 15,841 55.2 % 18,014 55.2 % 65 and Over 566 4.5 867 3.7 1,339 4.7 1,881 5.8 DOWNTOWN TRADE AREA Under 5 9,708 9.2 % 12,364 8.3 % 13,056 7.8 % 13,986 7.5 % 5 - 9 8,718 8.3 13,332 8.9 13,261 7.9 14,071 7.6 10 - 14 7,524 7.1 12,663 8.5 13,270 7.9 13,799 7.4 15 - 19 6,450 6.1 9,721 6.5 11,270 6.7 12,596 6.8 20 - 24 6,632 6.3 6,556 4.4 9,616 5.7 11,331 6.1 25 - 34 21,959 20.8 21,305 14.3 21,864 13.0 22,376 12.0 35 - 44 19,272 18.3 30,306 20.3 30,481 18.2 29,032 15.6 45 - 54 11,235 10.7 21,993 14.8 27,608 16.4 32,258 17.4 55 - 64 6,875 6.5 10,487 7.0 15,277 9.1 21,069 11.3 65 - 74 4,259 4.0 5,811 3.9 6,886 4.1 9,565 5.1 75 +2,845 2.7 4,428 3.0 5,324 3.2 5,782 3.1 25 - 64 59,341 56.3 % 84,091 56.4 % 95,229 56.7 % 104,734 56.3 % 65 and Over 7,104 6.7 10,239 6.9 12,210 7.3 15,348 8.3 LIFESTYLE TRADE AREA Under 5 17,343 8.3 % 20,339 7.5 % 22,273 7.3 % 24,286 7.2 % 5 - 9 16,389 7.8 21,846 8.1 22,186 7.3 24,054 7.1 10 - 14 14,439 6.9 21,523 7.9 22,739 7.4 23,819 7.1 15 - 19 12,673 6.1 17,318 6.4 19,902 6.5 22,182 6.6 20 - 24 13,126 6.3 11,978 4.4 16,280 5.3 18,972 5.6 25 - 34 41,776 19.9 38,124 14.1 39,549 12.9 39,610 11.7 35 - 44 38,311 18.3 52,320 19.3 53,716 17.6 52,212 15.5 45 - 54 24,076 11.5 41,627 15.4 51,253 16.8 59,149 17.5 55 - 64 15,149 7.2 22,248 8.2 31,481 10.3 41,772 12.4 65 - 74 9,674 4.6 12,796 4.7 14,445 4.7 19,376 5.7 75 +6,447 3.1 10,862 4.0 12,006 3.9 12,194 3.6 25 - 64 119,312 57.0 % 154,320 56.9 % 175,999 57.5 % 192,743 57.1 % 65 and Over 16,121 7.7 23,657 8.7 26,451 8.6 31,570 9.4 E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. Table A-7a CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS AGE DISTRIBUTION: 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED CONVENIENCE DOWNTOWN LIFESTYLE TRADE TRADE TRADE Age Distribution AREA AREA AREA 1990 Under 5 10.5 % 9.2 % 8.3 % 5 - 9 8.6 8.3 7.8 10 - 14 7.3 7.1 6.9 15 - 19 6.2 6.1 6.1 20 - 24 6.9 6.3 6.3 25 - 34 24.3 20.8 19.9 35 - 44 17.4 18.3 18.3 45 - 54 9.1 10.7 11.5 55 - 64 5.2 6.5 7.2 65 - 74 2.8 4.0 4.6 75 +1.6 2.7 3.1 25 - 64 56.0 % 56.3 % 57.0 % 65 and Over 4.5 6.7 7.7 2000 Under 5 10.5 % 8.3 % 7.5 % 5 - 9 10.8 8.9 8.1 10 - 14 9.5 8.5 7.9 15 - 19 6.8 6.5 6.4 20 - 24 4.0 4.4 4.4 25 - 34 14.1 14.3 14.1 35 - 44 23.2 20.3 19.3 45 - 54 12.7 14.8 15.4 55 - 64 4.7 7.0 8.2 65 - 74 2.2 3.9 4.7 75 +1.4 3.0 4.0 25 - 64 54.7 % 56.4 % 56.9 % 65 and Over 3.7 6.9 8.7 2005 E Under 5 9.1 % 7.8 % 7.3 % 5 - 9 9.1 7.9 7.3 10 - 14 8.8 7.9 7.4 15 - 19 7.3 6.7 6.5 20 - 24 5.9 5.7 5.3 25 - 34 12.7 13.0 12.9 35 - 44 19.8 18.2 17.6 45 - 54 15.6 16.4 16.8 55 - 64 7.0 9.1 10.3 65 - 74 2.8 4.1 4.7 75 +1.9 3.2 3.9 25 - 64 55.2 % 56.7 % 57.5 % 65 and Over 4.7 7.3 8.6 2010 E Under 5 8.7 % 7.5 % 7.2 % 5 - 9 8.3 7.6 7.1 10 - 14 8.2 7.4 7.1 15 - 19 7.5 6.8 6.6 20 - 24 6.4 6.1 5.6 25 - 34 12.4 12.0 11.7 35 - 44 16.3 15.6 15.5 45 - 54 17.1 17.4 17.5 55 - 64 9.4 11.3 12.4 65 - 74 3.8 5.1 5.7 75 +2.0 3.1 3.6 25 - 64 55.2 % 56.3 % 57.1 % 65 and Over 5.8 8.3 9.4 E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. Table A-8 CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS ETHNICITY: 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED 1990 2000 2005 E 2010 E Ethnicity Number Percent Number Percent Number Percent Number Percent CONVENIENCE TRADE AREA Caucasian 12,429 97.8 % 22,184 94.6 % 26,518 95.0 % 29,610 93.9 % African-American 52 0.4 218 0.9 357 1.3 566 1.8 Native American 30 0.2 56 0.2 76 0.3 95 0.3 Asian/Pacific Islander 169 1.3 646 2.8 950 3.4 1,243 3.9 Other 31 0.2 350 1.5 1 0.0 3 0.0 Hispanic (any race)91 0.7 % 1,059 4.5 % 1,407 5.0 % 1,821 5.8 % DOWNTOWN TRADE AREA Caucasian 102,772 97.6 % 139,476 94.7 % 153,777 94.1 % 171,957 92.5 % African-American 729 0.7 1,796 1.2 3,061 1.9 4,839 2.6 Native American 275 0.3 433 0.3 561 0.3 671 0.4 Asian/Pacific Islander 1,551 1.5 4,045 2.7 5,935 3.6 8,340 4.5 Other 3 0.0 1,549 1.1 50 0.0 59 0.0 Hispanic (any race)778 0.7 % 3,815 2.6 % 5,765 3.5 % 8,021 4.3 % LIFESTYLE TRADE AREA Caucasian 203,246 97.1 % 252,757 94.4 % 278,266 93.5 % 300,250 91.8 % African-American 1,575 0.8 3,744 1.4 6,386 2.1 9,645 2.9 Native American 671 0.3 969 0.4 1,315 0.4 1,530 0.5 Asian/Pacific Islander 3,462 1.7 7,711 2.9 11,481 3.9 15,624 4.8 Other 451 0.2 2,446 0.9 107 0.0 124 0.0 Hispanic (any race)1,500 0.7 % 5,936 2.2 % 9,137 3.1 % 12,285 3.8 % E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. Table A-8a CHANHASSEN CONVENIENCE, DOWNTOWN AND LIFESTYLE TRADE AREAS ETHNICITY: 1990 AND 2000 CENSUS; 2005 AND 2010 ESTIMATED CONVENIENCE DOWNTOWN LIFESTYLE TRADE TRADE TRADE Year / Ethnicity AREA AREA AREA 1990 Caucasian 97.8 % 97.6 % 97.1 % African-American 0.4 0.7 0.8 Native American 0.2 0.3 0.3 Asian/Pacific Islander 1.3 1.5 1.7 Other 0.2 0.0 0.2 Hispanic (any race)0.7 % 0.7 %0.7 % 2000 Caucasian 94.6 % 94.7 % 94.4 % African-American 0.9 1.2 1.4 Native American 0.2 0.3 0.4 Asian/Pacific Islander 2.8 2.7 2.9 Other 1.5 1.1 0.9 Hispanic (any race)4.5 % 2.6 %2.2 % 2005 E Caucasian 95.0 % 94.1 % 93.5 % African-American 1.3 1.9 2.1 Native American 0.3 0.3 0.4 Asian/Pacific Islander 3.4 3.6 3.9 Other 0.0 0.0 0.0 Hispanic (any race)5.0 % 3.5 %3.1 % 2010 E Caucasian 93.9 % 92.5 % 91.8 % African-American 1.8 2.6 2.9 Native American 0.3 0.4 0.5 Asian/Pacific Islander 3.9 4.5 4.8 Other 0.0 0.0 0.0 Hispanic (any race)5.8 % 4.3 %3.8 % E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. CHAN-212 TRADE AREA DEMOGRAPHIC CHARACTERISTICS AND SALES POTENTIAL Prepared for Carlston Commercial RE, LLC June 2014 CHAN-212 TRADE AREA DEMOGRAPHIC CHARACTERISTICS AND SALES POTENTIAL Prepared for Carlston Commercial RE, LLC Prepared by McComb Group, Ltd. June 2014 © Copyright 2014 McComb Group, Ltd. TABLE OF CONTENTS Chapter Subject Page EXECUTIVE SUMMARY ................................................................. vi Chan-212 Location.................................................................................................. vii Educational Attainment ............................................................................................x Chan-212 Sales Potential ......................................................................................... xi INTRODUCTION ................................................................................1 Report Purpose ..........................................................................................................2 I CHAN-212 LOCATION ......................................................................3 Regional Access ........................................................................................................4 Traffic Counts ...........................................................................................................5 II COMPETITIVE SHOPPING AREAS ...............................................6 Chanhassen Shopping Areas .....................................................................................7 Super Regional Shopping Areas ...............................................................................8 Eden Prairie Center Area ......................................................................................8 Southdale Area ....................................................................................................10 Ridgedale Area ....................................................................................................12 Competitive Community Shopping Areas ...............................................................13 Shakopee .............................................................................................................14 Chaska .................................................................................................................16 Victoria ................................................................................................................16 Waconia ...............................................................................................................16 Summary ..................................................................................................................18 Competitive Changes ...............................................................................................18 III RESIDENTIAL GROWTH PROJECTIONS ..................................19 Convenience Goods Trade Area ..............................................................................19 Shopping Goods Trade Area ....................................................................................21 IV CHAN-212 TRADE AREAS ..............................................................24 Population and Households......................................................................................25 Household Income ...................................................................................................26 Educational Attainment ...........................................................................................28 Employment .............................................................................................................29 Demographic Characteristics ...................................................................................30 Purchasing Power.....................................................................................................31 i TABLE OF CONTENTS (continued) Chapter Subject Page V RETAIL SALES TRENDS .................................................................36 Market Share ............................................................................................................37 Sales Potential ..........................................................................................................39 Supportable Space ....................................................................................................40 VI SALES POTENTIAL AND SUPPORTABLE GLA ........................42 Supportable GLA .....................................................................................................42 Shopping Center Size ...............................................................................................44 Sales Potential ..........................................................................................................46 APPENDICES Appendix A: Demographic Characteristics ............................................................49 Appendix B: Retail and Services Purchasing Power .................... under separate cover Appendix C: Retail and Services Purchasing Power, Market Share, and Sales Potential ............................................. under separate cover Appendix D: Retail and Services Sales Potential and Supportable Space ..................................................................... under separate cover ii LIST OF TABLES Table Subject Page i Chan-212 Convenience Goods and Shopping Goods Trade Areas, and Minneapolis-St. Paul MSA: Population and Household Growth Trends 2000 and 2010 Census; 2014 and 2019 Estimated ............................................. viii ii Chan-212 Convenience Goods and Shopping Goods Trade Areas, and Minneapolis-St. Paul MSA: Average and Median Household Income 2000 and 2010 Census; 2014 and 2019 Estimated .............................................. ix iii Chan-212 Convenience Goods and Shopping Goods Trade Areas and Minneapolis-St. Paul MSA: Household Income Distribution: 2000 and 2010 Census; 2014 and 2019 Estimated ...............................................................x iv Chan-212 Convenience Goods and Shopping Goods Trade Areas and Minneapolis-St. Paul MSA: Educational Attainment: 2000 and 2010 Census; 2014 and 2019 Estimated ........................................................................x v Chan-212 Sales Potential by Merchandise Category ................................................x 1 Highway 212 and Powers Boulevard Average Daily Traffic Counts; 2008, 2010, and 2012 .....................................................................................................5 2 Summary of Chanhassen Retail Tenant Mix by Area ..............................................8 3 Summary of Eden Prairie Center Area Retail Tenant Mix by Area .........................9 4 Summary of Southdale Area Retail Tenant Mix by Area ........................................11 5 Summary of Ridgedale Area Retail Tenant Mix by Area........................................13 6 Summary of Shakopee Retail Tenant Mix by Area .................................................15 7 Summary of Chaska, Victoria, and Waconia Retail Tenant Mix by Area ...............17 8 Metro Area, Southwest Growth Corridor, Chan-212 Convenience Goods Trade Area Communities, and City of Chanhassen Residential Building Permits; 1990 to 2013 ..........................................................................................20 9 Metro Area, Southwest Growth Corridor, Chan-212 Convenience Goods Trade Area, and Chan-212 Convenience Goods Trade Area Communities Household Projections; 2014 to 2025 .................................................................21 10 Metro Area, Southwest Growth Corridor, Chan-212 Shopping Goods Trade Area Communities, and City of Chanhassen Residential Building Permits; 1996 to 2013 ..........................................................................................22 11 Metro Area, Southwest Growth Corridor, Chan-212 Shopping Goods Trade Area, and Chan-212 Shopping Goods Trade Area Communities Household Projections; 2014 to 2025 .................................................................22 12 Chan-212 Convenience Goods and Shopping Goods Trade Areas and Minneapolis-St. Paul MSA: Population and Household Growth Trends 2000 and 2010 Census; 2014 and 2019 Estimated ..............................................26 iii LIST OF TABLES (continued) Table Subject Page 13 Chan-212 Convenience Goods and Shopping Goods Trade Areas and Minneapolis-St. Paul MSA: Average and Median Household Income 2000 and 2010 Census; 2014 and 2019 Estimated ..............................................27 14 Chan-212 Convenience Goods and Shopping Goods Trade Areas and Minneapolis-St. Paul MSA: Household Income Distribution 2000 and 2010 Census; 2014 and 2019 Estimated ..............................................................27 15 Chan-212 Convenience Goods and Shopping Goods Trade Areas and Minneapolis-St. Paul MSA: Educational Attainment 2000 and 2010 Census; 2014 and 2019 Estimated ....................................................................................29 16 Chan-212 Convenience Goods and Shopping Goods Trade Areas and Minneapolis-St. Paul MSA: 2014 Employment by Industry ..............................30 17 Chan-212 Convenience Goods and Shopping Goods Trade Areas and Minneapolis-St. Paul MSA: 2014 Employment by Occupation .........................30 18 Chan-212 Convenience Goods Trade Area Demographic and Income Snapshot ...33 19 Chan-212 Shopping Goods Trade Area Demographic and Income Snapshot .........34 20 Minneapolis-St. Paul MSA Demographic and Income Snapshot ............................35 21 Chan-212 Convenience Goods and Shopping Goods Trade Areas Retail Purchasing Power: 2012, 2015, 2020, and 2025 .................................................32 22 Chanhassen Retail and Services Sales: 2002, 2007, and 2012 Estimated ...............36 23 Chanhassen Market Share; 2012 ..............................................................................37 24 Chan-212 Trade Areas Market Share and Trade Area Sales ...................................39 25 Chan-212 Shopping Center Retail Purchasing Power, Market Share, and Sales Potential; 2015 by Merchandise Category ..........................................................40 26 Chan-212 Shopping Center Retail Sales Potential and Supportable Space; 2015 ...41 27 Chan-212 Shopping Goods Supportable GLA by Merchandise Category ..............42 28 Chan-212 Potential Gross Leasable Area ................................................................45 29 Chan-212 Sales Potential by Merchandise Category ...............................................46 iv LIST OF MAPS Map Subject Page i Chan-212 Site.......................................................................................................... vii ii Chan-212 Shopping Goods Trade Area .................................................................. viii iii Chan-212 Shopping Goods Trade Area Estimated 2019 Household Income: Percent Above $100,000 ..................................................................................... ix 1 Chan-212 Site............................................................................................................3 2 Chan-212 Site and Southwest Growth Corridor .......................................................4 3 Competitive Shopping Areas ....................................................................................6 4 Chanhassen Retail Nodes ..........................................................................................7 5 Chan-212 Convenience Goods Trade Area .............................................................24 6 Chan-212 Shopping Goods Trade Area ...................................................................25 7 Chan-212 Convenience Goods and Shopping Goods Trade Areas 2019 Estimated Household Income: Percent above $100,000 .....................................28 v EXECUTIVE SUMMARY Chan-212 is strategically located at an interchange on Highway 212, a new freeway in the southwest Minneapolis-St. Paul Metropolitan Area. Factors that support retail development of this 92-acre site include: ♦ Chan-212 trade area population of 407,361 in 2014, which is expected to increase to 438,533 in 2019, an annual growth rate of 1.49 percent. ♦ Chan-212 trade area households grew at an annual rate of 1.94 percent between 2000 and 2010. During a slow growth period caused by the great recession, household growth averaged 1.0 percent annually. ♦ Households are expected to increase at an annual growth rate of 1.5 percent from 157,810 in 2014 to 169,997 in 2019. ♦ The Chan-212 trade area includes Carver and Scott counties, the two fastest growing counties in Minnesota. Between 2010 and 2013, population in Carver and Scott counties grew at annual rates of 1.6 and 1.8 percent, respectively. ♦ Chan-212 trade area average household income of $103,006 in 2014 is 20 percent above the Minneapolis-St. Paul MSA average household income of $85,611 and 41 percent above the United States average of $72,869. ♦ Chan-212 trade area median household income of $83,841 in 2014 is 55 percent above the national median household income of $53,958. ♦ Chan-212 trade area average household income is expected to increase to $110,603 in 2019, while median household income is expected to rise to $91,761. ♦ In 2014, 60,100 households (38.1 percent) are estimated to have household income above $100,000 and is expected to increase to 71,000 (41.8 percent) in 2019. One-quarter of the households (42,113) are expected to have incomes above $150,000 in 2019. ♦ Families comprise 70 percent of all households in 2014 compared to 64.7 percent in the Minneapolis-St. Paul MSA and 66.6 percent in the United States. ♦ Chan-212 trade area population age 25 plus is well educated with 30.4 and 13.1 percent that hold college and graduate degrees, respectively. This is well above the United States rates of 20.8 and 12.2 percent, respectively. ♦ Chan-212 trade area population in 2014 is 89.9 percent Caucasian followed by Asian/Pacific Islander (4.0 percent), African American (2.3 percent), Native American (0.4 percent), and Other (3.4 percent). Hispanic (any race) is 4.3 percent. Chan-212 trade area’s many economic attributes, population, and upper income households provide support for retail stores, restaurants, and services. Key trade area demographics are contained on the following pages. Demographic comparisons are also provided for the Minneapolis-St. Paul MSA. vi Chan-212 Location Chan-212 is centrally located in Chanhassen, Minnesota, one of the fastest growing cities in the Minneapolis-St. Paul Metropolitan Area. The 92-acre site, shown on Map i, occupies the northwest quadrant of the interchange of Highway 212 and Powers Boulevard. The westbound exit ramp connects to the site’s main entrance street. The eastbound exit ramp is a short distance to the south. Highway 212 is a new freeway connecting southwest Minnesota with the metro area. Highway 212 traffic counts were 41,500 in 2012, a 14 percent increase from 36,500 in 2010. Map i CHAN-212 SITE Source: Google and McComb Group, Ltd. Chanhassen is an ideal location for a major retail development. The city’s average household income is $131,021 in 2014, which is projected to increase to $141,957 in 2019. Median household income of $107,251 is double the United States median household income of $53,958. Two-thirds of Chanhassen households have incomes above $75,000 and 54.2 percent have incomes above $100,000. One-third of the households have incomes above $150,000. Chanhassen’s adult population is well educated with 59.0 percent having a college or graduate degree. Money Magazine ranked Chanhassen 4th in its Best Place to Live list in 2013. vii Map ii CHAN-212 SHOPPING GOODS TRADE AREA Source: Scan/US, Inc. and McComb Group, Ltd. Chan-212 retailers are expected to attract most of their sales from the Shopping Goods trade area. Population is expected to increase from 407,361 in 2014 to 438,533 in 2019. Trade area households are expected to increase from 157,810 in 2014 to 169,997 in 2019, an annual growth rate of 1.5 percent. Table i CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS, AND MINNEAPOLIS-ST. PAUL MSA: POPULATION AND HOUSEHOLD GROWTH TRENDS Convenience Shopping Minneapolis- Year Goods Goods St. Paul MSA POPULATION 2000 108,340 333,532 2,968,808 2010 134,614 394,528 3,279,833 2014E 139,366 407,361 3,361,394 2019E 156,825 438,533 3,510,623 Annual Growth Rate 2000-10 2.20 % 1.69 % 1.00 % 2010-14 0.87 0.80 0.62 2014-19 2.39 1.49 0.87 HOUSEHOLDS 2000 38,921 125,159 1,136,615 2010 50,156 151,732 1,272,677 2014E 52,373 157,810 1,316,673 2019E 59,190 169,997 1,380,185 Annual Growth Rate 2000-10 2.57 % 1.94 % 1.14 % 2010-14 1.09 0.99 0.85 2014-19 2.48 1.50 0.95 E: Estimated. Source: Scan/US and McComb Group, Ltd. Trade Areas 2000 AND 2010 CENSUS; 2014 AND 2019 ESTIMATED viii Map iii CHAN-212 SHOPPING GOODS TRADE AREA ESTIMATED 2019 HOUSEHOLD INCOME: PERCENT ABOVE $100,000 Source: Scan/US, Inc. and McComb Group, Ltd. Average 2014 household income is $103,006 and is expected to increase to $110,603 in 2019. Households with incomes above $100,000 in 2019 are distributed throughout the trade area with higher concentrations in the northeast portion. Table ii CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS AND MINNEAPOLIS-ST. PAUL MSA: AVERAGE AND MEDIAN HOUSEHOLD INCOME 2000 AND 2010 CENSUS; 2014 AND 2019 ESTIMATED Convenience Shopping Minneapolis- Goods Goods St. Paul MSA Average Household Income 2000 92,335$ 82,151$ 67,906$ 2010 106,700 96,786 80,346 2014E 113,852 103,006 85,611 2019E 123,093 110,603 91,814 Median Household Income 2000 74,242$ 65,325$ 54,202$ 2010 84,104 76,146 62,518 2014E 93,092 83,841 66,941 2019E 102,347 91,761 71,838 E: Estimated. Source: McComb Group, Ltd. Trade Area ix Households with incomes above $100,000 in 2014 were 43.7 percent for the Convenience Goods trade area and 38.1 percent for the Shopping Goods trade area. Estimates show these proportions increasing through 2019 when it is estimated that over 47 percent of the Convenience Goods trade area households will have incomes above $100,000. Table iii 2000 AND 2010 CENSUS; 2014 AND 2019 ESTIMATED Goods Goods Number Percent Number Percent Number Percent Households above $75,000 2000 18,534 47.6 % 48,497 38.7 % 357,430 31.4 % 2010 27,187 54.2 73,789 48.6 524,039 41.2 2014E 29,925 57.1 81,683 81.8 580,354 44.1 2019E 36,387 61.5 96,362 56.7 673,744 48.8 Households above $100,000 2000 11,614 29.8 % 28,848 23.0 % 191,856 16.9 % 2010 19,360 38.6 50,234 23.1 337,204 26.5 2014E 22,872 43.7 60,102 38.1 405,039 30.8 2019E 28,033 47.4 71,104 41.8 472,714 34.3 Households above $150,000 2000 4,766 12.2 % 12,257 9.8 % 66,951 5.9 % 2010 9,633 19.2 23,046 15.2 137,166 10.8 2014E 13,061 24.9 31,857 20.2 194,563 14.8 2019E 17,672 29.9 42,113 24.8 258,648 18.7 E: Estimated. Source: McComb Group, Ltd. St. Paul MSA CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS AND MINNEAPOLIS-ST. PAUL MSA: HOUSEHOLD INCOME DISTRIBUTION Trade Area Convenience Shopping Minneapolis- Educational Attainment Adult residents of the Chan-212 Convenience Goods trade area are highly educated with 52.7 percent holding either a college or graduate degree in 2014. This educated pattern extends to the Shopping Goods trade area where 43.5 percent held college or graduate degrees. Table iv CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS AND MINNEAPOLIS-ST. PAUL MSA EDUCATIONAL ATTAINMENT: 2000 AND 2010 CENSUS; 2014 AND 2019 ESTIMATED 2000 2010 2014 E 2019 E Attainment Number Percent Number Percent Number Percent Number Percent CONVENIENCE GOODS TRADE AREA No College 12,236 19.2 %14,538 17.5 %15,046 17.4 %16,898 17.4 % Some College/2 yr. Degree 20,308 31.9 24,734 29.7 25,840 29.9 28,904 29.8 College Graduate 22,875 35.9 30,371 36.5 31,280 36.2 35,278 36.4 Graduate School 8,237 12.9 13,620 16.4 14,233 16.5 15,924 16.4 SHOPPING GOODS TRADE AREA No College 53,206 26.9 %59,311 23.8 %60,948 23.6 %63,627 23.6 % Some College/2 yr. Degree 65,983 33.3 81,035 32.6 84,534 32.8 88,245 32.7 College Graduate 57,206 28.9 76,167 30.6 78,417 30.4 82,462 30.6 Graduate School 21,689 10.9 32,293 13.0 33,832 13.1 35,283 13.1 MINNEAPOLIS-ST. PAUL MSA No College 483,289 28.1 %507,695 25.3 %518,016 25.3 %546,728 25.2 % Some College/2 yr. Degree 606,358 35.2 679,794 33.9 694,199 33.9 733,140 33.8 College Graduate 440,341 25.6 550,877 27.5 563,878 27.5 596,216 27.5 Graduate School 192,249 11.2 268,265 13.4 274,608 13.4 290,351 13.4 N/A: Not Available or Not Applicable. E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. x Chan-212 Sales Potential The Chan-212 Convenience Goods and Shopping Goods trade areas have the potential to support more gross leasable area (GLA) than can be accommodated at the proposed development. This creates the enviable situation where the developer can focus the center’s retail stores on its core customer. Estimated sales potential by retail store type are contained in the following tables. These estimates of sales potential are likely to be understated due to the high trade area household income. Also, there are likely to be a large proportion of high income and high asset households where there are few constraints on discretionary spending. Table v CHAN-212 SALES POTENTIAL BY MERCHANDISE CATEGORY (In Thousands of Dollars) Merchandise Category 2015 2020 2025 CONVENIENCE GOODS Food Stores Grocery Stores 43,280$ 52,073$ 62,220$ Supermarkets 42,407 51,021 60,963 Convenience Food 874 1,052 1,257 Specialty Food Stores 1,530 1,841 2,200 Meat Markets 569 683 817 Baked Goods 131 158 189 Confectionery and Nut Stores 131 158 189 All Other Specialty Food Stores 219 263 314 Other Convenience Goods Drug & Proprietary Stores 9,421$ 11,336$ 13,544$ Hardware 1,442 1,736 2,074 Liquor 7,432 8,942 10,684 Florist 547 658 786 Food/Health Supplement Stores 350 421 503 Food Service Full-Service Restaurants 26,134$ 31,795$ 38,333$ Limited Service Restaurants 16,575 20,166 24,313 Cafeterias 829 1,009 1,215 Snack & Beverage Places 4,420 5,378 6,484 Ice Cream & Soft Serve 553 673 810 Frozen Yogurt 55 68 81 Doughnut Shops 774 941 1,135 Bagel Shops 221 269 324 Coffee Shops 1,879 2,285 2,755 Cookie Shops 55 68 81 Other Snack Shops 884 1,075 1,296 Gasoline Svs Stations/Conv. Gas/Convenience Food Stores 9,266$ 11,273$ 13,591$ xi Table v (continued) CHAN-212 SALES POTENTIAL BY MERCHANDISE CATEGORY (In Thousands of Dollars) Merchandise Category 2015 2020 2025 SHOPPING GOODS General Merchandise Department Stores (Incl. leased depts.) Discount Stores 54,121$ 65,844$ 79,384$ Department Stores 35,360 43,020 51,867 Other General Merchandise Stores Warehouse Clubs and Supercenters 121,601$ 147,941$ 178,363$ Dollar Stores 5,108 6,215 7,492 Miscellaneous General Merchandise 11,787 14,340 17,289 Apparel & Accessories Clothing Stores Mens and Boys 2,211$ 2,689$ 3,241$ Womens Clothing 9,823 11,951 14,408 Children's & Infant 4,543 5,527 6,664 Family Clothing 22,837 27,784 33,497 Clothing Accessories Stores 1,351 1,643 1,981 Other Clothing Stores 3,684 4,481 5,403 Shoe Stores Men's 267$ 324$ 391$ Women's 475 577 695 Children's & Infant 123 149 180 Family Shoe Stores 4,911 5,975 7,204 Athletic Footwear 2,088 2,540 3,061 Furniture & Home Furnishings Furniture 19,399$ 23,601$ 28,455$ Floor Coverings 7,367 8,963 10,805 Window Treatment Stores 737 896 1,080 All Other Home Furnishings Stores 8,595 10,456 12,607 Electronics & Appliances Stores Household Appliance Stores 7,220$ 8,783$ 10,589$ Radio, TV & Electronics Stores 29,761 36,208 43,655 Computers, Software, Music, & Other Electronics 8,840 10,755 12,967 Other Shopping Goods Sporting Goods 16,207$ 19,717$ 23,772$ General Line Sporting Goods 6,631 8,067 9,725 Specialty Line Sporting Goods 9,577 11,652 14,047 Book Stores & Newsdealers 4,543 5,527 6,664 Stationery Stores and Office Supply 6,016 7,320 8,824 Musical Instrument & Supplies 2,701 3,287 3,963 Jewelry Stores 9,208 11,203 13,507 Hobby, Toy & Game 4,420 5,377 6,484 Camera & Photographic Supply 1,841 2,241 2,701 Gift, Novelty & Souvenirs 5,035 6,124 7,384 Luggage & Leather Goods 613 747 900 Sewing, Needlework & Piece Goods 2,333 2,839 3,421 Pet Stores 4,420 5,377 6,484 Art Dealers 737 896 1,080 Optical Goods Stores 3,684 4,481 5,403 Pre-Recorded Tapes, Compact Discs 701 853 1,028 Cosmetics, Beauty Supplies & Perfume 3,011 3,663 4,416 All Other Health & Personal Care 5,157 6,273 7,564 xii Table v (continued) CHAN-212 SALES POTENTIAL BY MERCHANDISE CATEGORY (In Thousands of Dollars) Merchandise Category 2015 2020 2025 OTHER RETAIL STORES Building Materials & Garden Supplies Building Materials & Supplies Stores Home Centers 31,871$ 38,775$ 46,748$ Paint, Glass & Wallpaper 2,152 2,618 3,157 Lawn & Garden Equipment Outdoor Power Equipment 2,559 3,114 3,754 Retail Nurseries, Lawn & Garden 7,289 8,868 10,692 Motor Vehicles & Parts Dealers Auto Parts & Accessories Stores 5,002$ 6,085$ 7,337$ Tire Dealers 3,780 4,599 5,545 SERVICES Personal Care Services Beauty Shops 3,056$ 1,731$ 2,067$ Nail Salons 223 126 151 Diet & Weight Reducing Services 198 112 134 Other Personal Care Services 439 248 296 Drycleaning & Laundry Services Drycleaning & Laundry Services 655$ 1,482$ 1,771$ Other Personal Services Child Day Care Services 1,475$ 1,671$ 1,996$ Photographic Studios 593 671 802 Veteranarian Services 2,216 2,509 2,999 Pet Care 254 287 342 Rental and Leasing Formalwear and Costume Rental 176$ 266$ 318$ Home Health Equipment Rental 416 629 752 Recreation Physical Fitness Facilites 5,420$ 6,138$ 7,333$ Health Care Offices of Physicians Offices of Physicians 24,884$ 29,939$ 35,772$ Offices of Dentists 11,108 6,682 7,985 Offices of Chiropractors 1,604 965 1,153 Offices of Optometrists 732 1,321 1,579 Offices of Mental Health Practitioners 825 1,489 1,779 Physical & Occupational Therapists 1,382 2,495 2,981 Source: McComb Group, Ltd. xiii INTRODUCTION McComb Group, Ltd. was engaged by Carlston Commercial RE, LLC to conduct market analysis for the proposed Chan-212 regional shopping center in the vicinity of Highway 212 and Powers Boulevard in Chanhassen. The objective of this engagement was to identify the demand for shopping center space at the proposed site. Work tasks conducted as part of this engagement are summarized below. ♦ The location of the proposed Chan-212 shopping center site was evaluated to determine its suitability for a shopping center for convenience goods and/or shopping goods retailers. Factors that were evaluated include, but were not limited to: ingress and egress, access, visibility, traffic counts, and relationship to adjacent uses. ♦ Shopping areas that would be competitive with the Chan-212 shopping center were identified and evaluated. Principal competitors were identified and evaluated including anchor stores, inline tenants, and market orientation. Future commercial developments that could affect development of the proposed center or its trade area were identified. ♦ Residential building permit trends from 1990 to 2013 in Chanhassen and other trade area communities were evaluated to determine historic residential development trends. Recent building permit trends were compared with historic trends in the Southwest Growth Corridor to identify changes in building activity and market share. Future estimates of household growth were prepared for the period 2014 to 2025. This analysis determined if the housing slump affected the trade area share of Metropolitan Area housing development. The results of this analysis were incorporated in the trade area analysis. ♦ Trade areas for both convenience goods and shopping goods stores were delineated based on arterial road patterns, competitive shopping areas, and McComb Group experience. The economy of the trade area was analyzed to identify and quantify those factors that generate support for retail, food service, and service establishments. Factors that were evaluated include, but were not limited to: employment, population, households, building permits, and household income. Demographic characteristics and growth were evaluated for 2000, 2010, 2014, and 2019. Trade area growth trends were evaluated to determine residential growth potential for target years of 2015, 2020, and 2025. Retail, food service, and service purchasing power for trade area households were estimated using McComb Group’s proprietary purchasing power model. ♦ Market demand for retail, food service, and services at the proposed Chan-212 shopping center were identified based on estimated trade area population and household growth taking into consideration competitive impacts, trade area demographics, and trade area purchasing power. Based on analysis of purchasing power, estimated market share, and current retail trends, future sales potential for stores to be located at the proposed center were estimated by business type. Estimates of retail, food service, and services supportable by sales potential were prepared for target years of 2015, 2020, and 2025. Sales potential was converted to square feet of gross leasable area (GLA) by type of business establishment, including supportable GLA by specific store types. 1 This report contains the primary information needed to support the principal conclusions. However, in a report of this nature, it is not possible to include all of the information that was developed and evaluated. Any additional information will be furnished upon request. Report Purpose This report was prepared in accordance with our proposal dated February 7, 2014. This report was prepared with the understanding that the results of our work will be used by the client to evaluate retail potential for the proposed Chan-212 shopping center at the intersection of Highway 212 and Powers Boulevard in Chanhassen. Our report was prepared for that purpose and is subject to the following qualifications: • Our analysis did not ascertain the legal and regulatory requirements applicable to this project including zoning, other state, and local government regulations, permits, and licenses. No effort was made to determine the possible effect on the proposed project of present or future federal, state, or local legislation, or any environmental or ecological matters. • Our report and analysis was based on estimates, assumptions and other information developed from research of the market, knowledge of the industry and discussions with the client. Some assumptions inevitably will not materialize and unanticipated events and circumstances may occur; therefore, actual results achieved will vary from the analysis. • Our analysis did not evaluate management’s effectiveness nor are we responsible for future marketing efforts and other management actions upon which actual results are dependent. Our report is intended solely for the purpose described above and should not be used for any other purpose without our prior written permission. Permission for other use of the report will be granted only upon meeting company standards for the proposed use. 2 Chapter I CHAN-212 LOCATION Chan-212 is a proposed mixed-use development with the potential for a significant retail component located in Chanhassen, Minnesota. The 92-acre site, shown on Map 1, occupies the northwest quadrant of the interchange of Highway 212 and Powers Boulevard. The westbound exit ramp connects to the site’s main entrance street. The eastbound exit ramp is a short distance to the south. Highway 212 is a new freeway connecting southwest Minnesota with the Minneapolis-St. Paul Metropolitan Area. Highway 212 traffic counts were 41,500 in 2012, a 14 percent increase from 36,500 in 2010. Map 1 CHAN-212 SITE Source: Google and McComb Group, Ltd. Residential development is located north of Lyman Boulevard and west of the site. Adjoining land to the south is vacant, as is the land east of Powers Boulevard. Chanhassen High School and several business parks are located northwest of the site. There is potential for additional residential development in the immediate vicinity of the Chan-212 site. Chanhassen is located in the southwest portion of the Minneapolis-St. Paul Metropolitan Area, as shown on Map 2 on the next page. Over the past 20 years, the southwest area has captured over 3 22 percent of the Metropolitan Area residential growth. This growth is generally funneled in the area between Lake Minnetonka, a large lake that creates a physical barrier on the north, and the Minnesota River on the south. The portion of the southwest corridor north of the Minnesota River is served by four trunk highways that all pass through Chanhassen. North/south routes connect these trunk highways to the Chan-212 location. Map 2 CHAN-212 SITE AND SOUTHWEST GROWTH CORRIDOR Regional Access Located at the interchange of Highway 212 and Powers Boulevard, Chan-212 has excellent regional access. Highway 212 is a new freeway that was completed in 2008 providing access from the east and west that did not previously exist. The major southwest area freeways (I-494, Crosstown, and Highway 169) all intersect with Highway 212 providing convenient routes to the shopping center site, which is only seven minutes from the intersection of I-494 and Highway 212. Trade area residents to the west have convenient access by way of several highways that serve major routes to the Twin Cities. Highway 7 serving the northwest portion of the trade area intersects with Powers Boulevard just north of Chanhassen. Highway 5 connects the western suburbs of Victoria, Waconia, and surrounding areas to Chanhassen and also intersect with Powers Boulevard approximately two miles north of the Chan-212 site. Highway 212, a major route to western Minnesota, is augmented by Highway 5/22, a diagonal route from the southwest portion of the trade area. Residents south of the Minnesota River will have convenient access by way of 4 Highway 169, which connects to Highway 101 in Shakopee and Highway 41 in Chaska, which both intersect with Highway 212. The Highway 101 river crossing is being expanded to four lanes this year and improvements to Highway 41 are planned for the future. Traffic Counts Traffic counts on Highway 212 between 2008 and 2012 (the latest available) have been gradually increasing, as shown in Table 1. Traffic counts east and west of Powers Boulevard have been increasing. Traffic counts east of Powers Boulevard were 34,000 in 2008, and increased at a 5.1 percent annual growth rate to 41,500 average daily trips in 2012. Traffic counts west of Powers Boulevard were 29,000 in 2008, increasing to 34,000 in 2012, representing a 4.1 percent annual growth rate. Location 2008 2010 2012 Highway 212 West of Powers Blvd.29,000 30,000 34,000 East of Powers Blvd.34,000 36,500 41,500 West of Dell Road 36,500 46,000 46,000 East of Dell Road 39,500 49,000 51,000 Powers Blvd. South of Highway 212 N/A 5,800 6,500 North of Highway 212 N/A 7,400 8,600 Source: Minnesota Department of Transportation and McComb Group, Ltd. Table 1 HIGHWAY 212 AND POWERS BOULEVARD AVERAGE DAILY TRAFFIC COUNTS; 2008, 2010, AND 2012 Traffic counts for Powers Boulevard south of Highway 212 show a significant increase south of Highway 212. Powers Boulevard south of Highway 212 had average daily traffic counts of 5,800 in 2010 and increased to 6,500 in 2012, an annual growth rate of 5.9 percent. Traffic counts on Powers Boulevard, north of Highway 212 were 7,400 in 2010 and increased to 8,600 in 2012, an annual growth rate of 7.8 percent. 5 Chapter II COMPETITIVE SHOPPING AREAS Shopping areas in the southwest Metropolitan Area include a variety of establishments offering convenience goods and shopping goods. Competitive shopping areas include community and regional shopping areas, as well as commercial areas in outlying communities. Community shopping areas are typically anchored by a supermarket and/or a shopping center. Regional shopping areas are anchored by a regional mall with additional supporting retail. Competitive shopping areas are shown on Map 3. Competition for convenience retail and services at Chan-212 will come from other convenience retailers in Chanhassen, Chaska, Victoria, Waconia, and Shakopee. Shopping goods retailers will be competitive with stores in the vicinity of Eden Prairie Center, Southdale/France Avenue in Edina, and Ridgedale Mall in Minnetonka. Map 3 COMPETITIVE SHOPPING AREAS Source: Scan/US, Inc. and McComb Group, Ltd. 6 CHANHASSEN SHOPPING AREAS Downtown Chanhassen, the city’s largest shopping area, is located about one mile north of the Chan-212 site, as shown on Map 4. Chanhassen has five other smaller, convenience-oriented shopping areas that serve nearby neighborhoods and are not competitive with Chan-212, as shown in Table 2 on the next page. Map 4 CHANHASSEN RETAIL NODES Source: Scan/US, Inc. and McComb Group, Ltd. ♦ Downtown Chanhassen is the city’s dominant retail area with over 69 retail stores and 65 services. Downtown’s tenant mix is oriented to food service (32 establishments) and convenience goods (14 stores). The convenience goods category is anchored by two supermarkets, Cub Foods and Byerly’s, and a Walgreens. The food service category includes 11 full service restaurants and 16 limited service establishments. Target anchors the shopping goods category, which includes only two clothing stores. The other shopping goods category is dominated by locally-owned stores with OfficeMax being the only national retailer. Services in Downtown represent almost 50 percent of all Downtown Chanhassen establishments. Of the approximately 65 service establishments, the largest categories are medical, financial, personal care, and personal services. 7 Table 2 SUMMARY OF CHANHASSEN RETAIL TENANT MIX BY AREA Downtown Hwy 41/Hwy 5/ Hwy 5/ Hwy 5/Hwy 212 Merchandise Category Chanhassen Hwy 7 Galpin Rd Century Hwy 101 Hwy 101 CONVENIENCE GOODS Food Stores 3 1 0 0 0 0 Specialty Food Stores 1 0 0 0 0 0 Other Convenience Goods 10 4 1 1 1 1 Subtotal 14 5 1 1 1 1 FOOD SERVICE Full Service 11 1 0 0 0 0 Limited Service 16 4 0 4 1 2 Snacks & Beverage Places 4 1 0 0 0 0 Cafeterias 0 0 0 0 0 0 Drinking Places 1 0 0 0 0 0 Subtotal 32 6 0 4 1 2 CONVENIENCE/GAS 3 1 1 1 1 1 SHOPPING GOODS General Merchandise 1 2 0 0 0 0 Clothing and Accessories 2 0 1 0 0 0 Shoes 0 0 0 0 0 0 Home Furnishings 1 0 0 0 0 0 Home Appliances/Music 2 1 0 0 0 0 Other Shopping Goods 12 3 0 0 1 0 Subtotal 18 6 1 0 1 0 OTHER STORES Building Materials/Garden 0 0 0 0 1 0 Motor Vehicles & Parts 2 0 0 0 0 0 Subtotal 2 0 0 0 1 0 Total Retail 69 18 3 6 5 4 SERVICES Personal Care 12 5 0 3 0 0 Dry Cleaning/Laundry 5 2 0 0 0 0 Personal Services 11 4 0 1 0 0 Recreation/Entertainment 6 1 0 1 0 0 Financial 15 1 14 5 0 0 Medical 16 5 7 3 0 0 Total Services 65 18 21 13 0 0 TOTAL 134 36 24 19 5 4 Source: McComb Group, Ltd. Other Retail Areas SUPER REGIONAL SHOPPING AREAS Three super regional shopping areas will be the primary competition for Chan-212 including Eden Prairie Center, Southdale, and Ridgedale. Each of these shopping centers have attracted other retail stores and services. Eden Prairie Center Area Eden Prairie Center and its adjacent shopping centers and retail stores are the nearest super regional shopping concentration, but not necessarily the most competitive. Eden Prairie Center has the 8 largest number of retail stores (86) with 69 in the shopping goods category including 27 clothing and accessories stores and 26 other shopping goods stores, as shown in Table 3. Three nearby shopping areas contain large retail concentrations. These areas include the Eden Prairie periphery area, the area north of I-494, and the area south along Flying Cloud Drive. Table 3 SUMMARY OF EDEN PRAIRIE CENTER AREA RETAIL TENANT MIX BY AREA Eden Prairie Eden Prairie North of South Merchandise Category Center Periphery I-494 Flying Cloud CONVENIENCE GOODS Food Stores 0 1 1 0 Specialty Food Stores 0 1 0 2 Other Convenience Goods 1 7 1 0 Subtotal 1 9 2 2 FOOD SERVICE Full Service 3 15 4 2 Limited Service 9 15 3 10 Snacks & Beverage Places 4 5 1 0 Cafeterias 0 0 0 0 Drinking Places 0 0 0 0 Subtotal 16 35 8 12 CONVENIENCE/GAS 0 2 1 2 SHOPPING GOODS General Merchandise 5 3 0 0 Clothing and Accessories 27 4 0 0 Shoes 5 0 0 1 Home Furnishings 0 2 2 2 Home Appliances/Music 6 3 1 0 Other Shopping Goods 26 13 7 7 Subtotal 69 25 10 10 OTHER STORES Building Materials/Garden 0 3 4 0 Motor Vehicles & Parts 0 2 4 1 Subtotal 0 5 8 1 Total Retail 86 76 29 27 SERVICES Personal Care 5 14 4 5 Dry Cleaning/Laundry 0 3 1 0 Personal Services 5 9 4 1 Recreation/Entertainment 1 6 1 2 Financial 1 18 2 2 Medical 0 18 1 3 Total Services 12 68 13 13 TOTAL 98 144 42 40 Source: McComb Group, Ltd. ♦ Eden Prairie Center is located about six miles east of Chan-212 at the intersection of I- 494, Highway 212 and Highway 5. Eden Prairie Center (1,125,000 square feet) is anchored by JCPenney, Sears, Target, Von Maur, Kohl’s, and an AMC Theater with 18 screens. Originally opened in 1976, Eden Prairie Center is the focal point of a major shopping node. 9 ♦ Eden Prairie Center Periphery area contains 76 retail stores of all sizes, including Cub Foods, Costco, Walmart, Best Buy, and Office Depot, along with a number of smaller retail establishments. Food service, with 35 establishments, represents almost half of the retail stores. The shopping goods category includes only four apparel stores and is dominated primarily by hard goods stores. This area included 26 personal care/person services establishments and 18 financial institutions and 18 medical offices. ♦ North of I-494 area contains over 29 retail stores including Rainbow Foods, Eden Prairie Liquor, two automobile showrooms, Home Depot, and Menards, along with a number of auto-oriented retailers. ♦ South Flying Cloud Drive retail and service establishments are located south of Eden Prairie Center. There are approximately 27 retail stores along this route including Sports Authority, Home Goods, OfficeMax, and Michael’s Arts & Crafts. The largest category is food service with 12 businesses including 10 limited service restaurants. Southdale Area Southdale Center opened in 1956 and became the focal point for a major retail node that extends south along France Avenue. The Southdale area is known for its quality shopping experiences, as well as freestanding stores. Southdale area tenant mix by area is shown in Table 4 and summarized below. ♦ Southdale Center (1,318,545 square feet) in Edina is anchored by Herberger’s, Macy’s, JCPenney, and an AMC 16-screen cinema. In total, there are 102 retail and service establishments, including 89 retail and 13 service providers. Shopping goods is the largest retail category with 70 stores including 34 clothing and accessories and 20 other shopping goods stores. Food service included 16 establishments. Personal care and personal services are the largest service categories accounting for 12 businesses. ♦ Galleria, located south of Southdale, is a 417,000 square foot enclosed center that features upscale retail and service tenants. There are 39 establishments in the Galleria, which includes 36 retail stores and three service establishments. Shopping goods is the largest retail category with 28 retail merchants including 11 clothing and accessories stores, eight home furnishing stores, seven other shopping goods, and two shoe stores. There are three service providers included in the Galleria, including a personal care, personal service, and financial service. ♦ Centennial Lakes shopping center is located three-quarters of a mile south of Southdale Center on France Avenue. This power center contains 27 retail and service establishments (17 retail and 10 service) and is anchored by Whole Foods, Joseph A. Banks, Old Navy, Home Goods, and OfficeMax. Shopping goods and food services are the largest retail categories and personal services is the largest service category. ♦ Other Southdale retail includes over 216 retail and service establishments located in the greater Southdale area encompassing an area around France Avenue from West 66th Street on the north to I-494 on the south. There are approximately 85 retail establishments located in this area including such major retailers as SuperTarget, Byerly’s, Cub Foods, Trader 10 Joe’s, The Container Store, Cost Plus World Market, and Pier One, as well as numerous smaller retail establishments. Shopping goods is the largest category with 39 stores including 15 home furnishings and 16 other shopping goods offering primarily hard goods. Food service is a major category with 25 establishments. Personal care and personal services are represented by 23 businesses. Fairview Hospital, located north of Southdale, anchors a medical concentration that includes 82 providers. Table 4 SUMMARY OF SOUTHDALE AREA RETAIL TENANT MIX BY AREA Southdale Centennial Other Merchandise Category Center Galleria Lakes Southdale CONVENIENCE GOODS Food Stores 0 0 1 3 Specialty Food Stores 2 0 0 3 Other Convenience Goods 1 0 0 7 Subtotal 3 0 1 13 FOOD SERVICE Full Service 5 5 1 7 Limited Service 7 0 3 14 Snacks & Beverage Places 4 1 3 4 Cafeterias 0 0 0 0 Drinking Places 0 0 0 0 Subtotal 16 6 7 25 CONVENIENCE/GAS 0 0 0 4 SHOPPING GOODS General Merchandise 4 0 0 2 Clothing and Accessories 34 11 2 4 Shoes 5 2 0 0 Home Furnishings 2 8 1 15 Home Appliances/Music 5 0 2 2 Other Shopping Goods 20 7 4 16 Subtotal 70 28 9 39 OTHER STORES Building Materials/Garden 0 2 0 3 Motor Vehicles & Parts 0 0 0 1 Subtotal 0 2 0 4 Total Retail 89 36 17 85 SERVICES Personal Care 7 1 2 12 Dry Cleaning/Laundry 0 0 0 2 Personal Services 5 1 5 9 Recreation/Entertainment 1 0 3 2 Financial 0 1 0 24 Medical 0 0 0 82 Total Services 13 3 10 131 TOTAL 102 39 27 216 Source: McComb Group, Ltd. 11 Ridgedale Area Ridgedale Center, located in Minnetonka near the intersection of I-494 and I-394, opened in 1974. The Ridgedale shopping area includes a number of shopping areas including the area West of Plymouth Road, I-394 North Frontage Road, West Ridge Market, Ridgedale Periphery, and Bonaventure Mall. These retail areas have developed due to the regional draw of Ridgedale Center. Each of these competitive retail areas is summarized in Table 5 and described below: ♦ Ridgedale Center (1,044,000 square feet) is anchored by Macy’s, Sears, and JCPenney department stores. In total, it contains over 116 retail and service establishments, with 106 (91 percent) of those establishments being retail orientated. Shopping goods is the largest category for Ridgedale Center with 90 stores including 45 clothing and accessories stores and 23 other shopping goods stores, followed by food services with 13 establishments. Services at Ridgedale Center include nine personal care/personal services. Ridgedale Center recently announced renovation plans that include two phases. The first phase is currently under construction and includes an 80,000-square-foot addition to the Macy’s store on the north side of the mall. The second phase, which was recently approved, includes a new 142,000 square foot Nordstrom department store in the old Macy’s Men’s and Home space, as well as a two-story, 87,765 square foot addition to the mall, which will provide a connection to Nordstrom’s. Completion of both phases of renovation are expected by fall of 2015. A third phase, which hasn’t been finalized yet, envisions additional pads for food service establishments. ♦ West of Plymouth Road retail and service concentrations includes Ridgehaven Mall and various other retail facilities south of I-394. In total, this area has approximately 42 retail stores and 33 service establishments for a total of 75. Shopping goods is the largest retail category with 26 establishments. Major retailers in this area include Byerly’s, Best Buy, SuperTarget, Slumberland Furniture, and Petco. The largest service categories include medical, personal services, and personal care, which together represent over 80 percent of the service establishments in this area. ♦ I-394 North Frontage Road retail area is located north of Ridgedale Center and north of I-394. In total, there are 45 retail and service establishments in this area: 33 retail and 12 service. Shopping goods (15 stores) and motor vehicles and parts (10 stores) are the largest retail categories and represent primarily hard goods retailers. Personal care, personal services, and medical represent over 80 percent of the services. Major retailers include Whole Foods, Pier One, Sports Authority, Office Depot, and Toys R Us/Babies R Us. ♦ West Ridge Market is located about one-half mile east of Ridgedale Center in the northwest quadrant of I-394 and Hopkins Crossroads. This power center has 16 retail establishments and four services. The largest retail category is shopping goods with 11 stores including Lands End, Bed Bath & Beyond, Dick’s Sporting Goods, Michael’s Arts & Crafts, Staples, Schmidt Music, and Shane Company. There are also two personal care services, one financial service provider, and a medical service provider in this area. 12 ♦ Ridgedale Periphery development includes businesses adjacent to the shopping center and along Ridgedale Drive. This area includes the YMCA, three banks, Hennepin County Library, Redstone Restaurant, Firestone tire dealer, and Sears Auto Center. ♦ Bonaventure Mall, located on an out lot of Ridgedale Center contains six retail establishments: two restaurants, Marshall’s, DXL Menswear, JoAnn Fabrics, and Pearle Vision. Table 5 SUMMARY OF RIDGEDALE AREA RETAIL TENANT MIX BY AREA Ridgedale West of I-394 North West Ridge Ridgedale Bonaventure Merchandise Category Center Plymouth Rd Frontage Rd Market Periphery Mall CONVENIENCE GOODS Food Stores 0 1 1 1 0 0 Specialty Food Stores 2 2 0 0 0 0 Other Convenience Goods 1 3 1 0 0 0 Subtotal 3 6 2 1 0 0 FOOD SERVICE Full Service 4 1 0 2 1 2 Limited Service 5 3 3 1 0 0 Snacks & Beverage Places 4 3 0 1 0 0 Cafeterias 0 0 0 0 0 0 Drinking Places 0 0 0 0 0 0 Subtotal 13 7 3 4 1 2 CONVENIENCE/GAS 0 0 0 0 0 0 SHOPPING GOODS General Merchandise 3 1 0 0 0 1 Clothing and Accessories 45 2 1 1 0 1 Shoes 7 3 0 0 0 0 Home Furnishings 4 3 2 1 0 0 Home Appliances/Music 8 5 2 1 0 0 Other Shopping Goods 23 12 10 8 0 2 Subtotal 90 26 15 11 0 4 OTHER STORES Building Materials/Garden 0 3 3 0 0 0 Motor Vehicles & Parts 0 0 10 0 1 0 Subtotal 0 3 13 0 1 0 Total Retail 106 42 33 16 2 6 SERVICES Personal Care 4 8 3 2 0 0 Dry Cleaning/Laundry 0 1 0 0 0 0 Personal Services 5 9 3 0 0 0 Recreation/Entertainment 0 1 0 0 1 0 Financial 0 5 1 1 3 0 Medical 1 9 5 1 0 0 Total Services 10 33 12 4 4 0 TOTAL 116 75 45 20 6 6 Source: McComb Group, Ltd. COMPETITIVE COMMUNITY SHOPPING AREAS Shopping areas located in Shakopee, Chaska, Waconia and Victoria provide a lower level of competition for Chan-212. Locations of competitive community shopping areas are shown on Map 3. Characteristics of these shopping areas are described below. 13 Shakopee Shakopee is a rapidly growing Scott County community that lies south of the Chan-212 site south of the Minnesota River. Access to Chan-212 from the Shakopee area is provided by two primary river crossings: Highway 41 through Downtown Chaska and Highway 101 from Downtown Shakopee. There are several retail areas in Shakopee scattered along the various highways, as shown in Table 6. ♦ Downtown Shakopee is the city’s central business district and has 34 retail stores and 44 services. Downtown Shakopee has a large concentration of shopping goods stores (15) including the city’s only clothing stores. Other shopping goods is the largest retail category followed by food service (eight) and convenience goods (six). Downtown Shakopee is service-oriented with approximately 44 service establishments with the largest categories being medical services (14), financial services (13), and personal care/personal services (10). Downtown Shakopee’s retail and service establishments are primarily locally-owned and characteristic of an older city. ♦ Highway 101 is an older, highway shopping area extending east from the downtown area with 21 retail stores and two service establishments. These businesses are primarily auto-oriented. The largest categories are food service with 11 establishments and motor vehicles and parts with five establishments. ♦ Highway 169 retail areas have developed recently in response to residential growth that occurred in Scott County following opening of the Bloomington Ferry Bridge and Highway 169 Bypass. There are two major retail concentration areas along Highway 169--Marschall Rd and CSAH 83. These two retail concentrations are located on the south side of Shakopee and include a large group of major retail stores including Target, Cub Foods, Kohl’s, and Lowe’s. In total, there are approximately 59 retail stores and 43 service establishments, making it the largest retail concentration in Shakopee. Dominant retail categories include 21 food services including 14 limited service, shopping goods with 18 stores, and nine convenience goods retailers. Significant service categories include 13 financial services, 12 personal care/personal services, and nine medical offices. ♦ Marschall Road, a north/south connector route between Highway 101 and Highway 169, contains a number of convenience retail and service establishments. Services represent almost 75 percent of all establishments in this area with approximately 40 service establishments. Major categories include financial services (15), personal care/personal services (13), and 10 medical offices. There are 14 retail stores with the largest category being food service. ♦ South Bridge Crossing is a 500,000 square foot, open-air, power center located south of Highway 169 at CSAH 18. This retail node is anchored by Sam’s Club, Walmart, Home Depot, Best Buy, Michael’s Arts & Crafts, Pier One, and PetSmart. This retail area has 30 retail establishments. The one dozen food service establishments include 11 limited service outlets. There are also 11 service establishments within this area with medical and personal care being the largest service categories. 14 ♦ Town Square, located southeast of Downtown, is Shakopee’s oldest shopping center. This center, anchored by Marcus Cinema, has struggled to maintain its retail presence. Nine retail and service establishments include GNC, Anytime Fitness, Goodwill, and Dollar General, along with various other retail and service establishments. Shakopee’s retail areas are anchored by supermarkets, discount stores, home centers, and a limited number of category killers. Table 6 SUMMARY OF SHAKOPEE RETAIL TENANT MIX BY AREA Downtown 0 0 Marschall Southbridge Town Merchandise Category Shakopee Hwy 101 Hwy 169 Road Crossing Square CONVENIENCE GOODS Food Stores 0 0 1 0 0 0 Specialty Food Stores 2 0 3 1 0 0 Other Convenience Goods 4 1 5 2 2 1 Subtotal 6 1 9 3 2 1 FOOD SERVICE Full Service 3 4 5 1 1 0 Limited Service 2 6 14 4 8 0 Snacks & Beverage Places 0 1 2 0 3 1 Cafeterias 0 0 0 0 0 0 Drinking Places 3 0 0 0 0 0 Subtotal 8 11 21 5 12 1 CONVENIENCE/GAS 2 2 5 1 2 0 SHOPPING GOODS General Merchandise 0 0 2 0 2 1 Clothing and Accessories 2 0 0 0 0 0 Shoes 0 0 1 0 0 0 Home Furnishings 1 1 4 0 1 0 Home Appliances/Music 2 0 2 0 2 0 Other Shopping Goods 10 1 9 1 6 2 Subtotal 15 2 18 1 11 3 OTHER STORES Building Materials/Garden 1 0 2 1 1 0 Motor Vehicles & Parts 2 5 4 3 2 0 Subtotal 3 5 6 4 3 0 Total Retail 34 21 59 14 30 5 SERVICES Personal Care 3 0 9 6 3 1 Dry Cleaning/Laundry 2 0 1 1 1 0 Personal Services 5 0 2 6 0 1 Recreation/Entertainment 0 0 3 1 0 2 Automotive Services 7 2 6 1 0 0 Financial 13 0 13 15 3 0 Medical 14 0 9 10 4 0 Total Services 44 2 43 40 11 4 TOTAL 78 23 102 54 41 9 Source: McComb Group, Ltd. 15 Chaska Chaska, located west of Chanhassen, has two principal retail nodes--Downtown Chaska and Highway 41/Pioneer Trail. Each of these areas is summarized in Table 7 and described below. ♦ Downtown Chaska has 36 retail stores and 42 service establishments. The eight convenience goods stores include Cooper’s County Market, Walgreens, and Ace Hardware. Shopping goods are represented by 14 stores. Food service contains 13 establishments, nine of which are limited service. Major service categories include 18 financial services, 14 personal care/personal services, and nine medical practices. Downtown consists primarily of locally owned business establishments. ♦ Highway 41/Pioneer Trail retail area is located about three miles west of the Chan-212 site. This area is located about one mile north of the interchange of Highway 212 and Highway 41 and includes Chaska Commons and Jonathan Square Center. Major tenants include SuperTarget, Kohl’s, Rainbow Foods, Home Depot, Petco, and Hazeltine Plaza. SuperValu recently announced that it was purchasing the Rainbow store and converting it to Cub Foods. The area’s 28 retail stores include 13 food services and four convenience goods retailers. The relatively small group of services include nine personal care/personal services and seven medical practices including Lakeview Clinic and Chaska Health Care Center. Chaska retail areas contain a limited number of establishments that would be competitive with Chan-212. Victoria Victoria is a small, but rapidly growing community about five miles northwest of the Chan-212 site. It has a small commercial area with approximately 45 establishments, most of which are located along or just north of Highway 5. Victoria has 22 retail establishments that include two liquor stores, eight food services, two convenience/gasoline stores, along with 10 other retail establishments. The town’s only supermarket closed recently. There are 23 service establishments, with financial services and medical services being the largest categories. Waconia Waconia is a community with a population of about 11,000 located 12 miles west of the Chan-212 site on Highway 5. Waconia has 61 retail stores and 68 service businesses located in two primary retail commercial areas--the older Downtown central business district and the more recently developed retail area along Highway 5 south of Downtown. ♦ Downtown Waconia has 22 retail stores and 38 service establishments. These include Waconia Theatre (six screens), 10 food services, nine shopping goods stores, 12 medical offices, 11 financial services, and 13 personal care/personal service establishments. ♦ Highway 5 retail area in Waconia has 39 retail stores including Target, Mackenthun’s County Market, Walgreens, and Waconia Farm Supply, and 30 service establishments. Additional tenants include two hardware stores, two new car auto dealerships along with 16 five other auto-oriented businesses, and 11 food services. Ridgeview Medical Center and Lakeview Clinic are also located in this area. These community shopping areas will be competitive primarily with convenience goods retailers at Chan-212. Table 7 SUMMARY OF CHASKA, VICTORIA, AND WACONIA RETAIL TENANT MIX BY AREA Downtown Hwy 41/Downtown Merchandise Category Chaska Pioneer Tr Victoria Waconia Hwy 5 CONVENIENCE GOODS Food Stores 1 1 0 0 1 Specialty Food Stores 3 0 0 1 0 Other Convenience Goods 4 3 4 1 6 Subtotal 8 4 4 2 7 FOOD SERVICE Full Service 4 5 4 5 5 Limited Service 8 7 3 3 4 Snacks & Beverage Places 1 1 0 2 2 Cafeterias 0 0 0 0 0 Drinking Places 0 0 1 0 0 Subtotal 13 13 8 10 11 CONVENIENCE/GAS 1 1 2 0 4 SHOPPING GOODS General Merchandise 0 2 0 0 1 Clothing and Accessories 0 0 1 1 2 Shoes 0 0 0 0 0 Home Furnishings 1 0 0 2 1 Home Appliances/Music 0 2 0 0 1 Other Shopping Goods 13 5 2 6 5 Subtotal 14 9 3 9 10 OTHER STORES Building Materials/Garden 0 1 3 1 0 Motor Vehicles & Parts 0 0 2 0 7 Subtotal 0 1 5 1 7 Total Retail 36 28 22 22 39 SERVICES Personal Care 8 5 3 6 6 Dry Cleaning/Laundry 1 1 1 1 0 Personal Services 5 3 3 6 5 Recreation/Entertainment 1 2 3 2 1 Financial 18 3 8 11 10 Medical 9 7 5 12 8 Total Services 42 21 23 38 30 TOTAL 78 49 45 60 69 Source: McComb Group, Ltd. Chaska Waconia 17 SUMMARY Competition for Chan-212 ranges from community retail clusters to super regional shopping areas. The super regional shopping center competition and its proximity to Chan-212 are important. Ridgedale and Southdale, the preeminent super regional shopping centers, are 13 and 15 driving miles, respectively, from Chan-212. Eden Prairie Center is about seven driving miles from Chan- 212. The other super regional malls, excluding Mall of America, are about eight to nine miles apart, indicating that Chan-212 is further from its competitive regional malls than the existing malls are from each other. Community shopping areas in Chaska, Waconia, Victoria, and Shakopee will be competitive with convenience goods retailers at Chan-212. These community shopping areas are generally anchored by discount stores and supermarkets with less drawing power than the regional shopping areas. COMPETITIVE CHANGES Recently, SuperValu and three franchise holders announced plans to purchase 12 Rainbow Foods stores in the Metropolitan Area. Two of these Rainbow stores (Eden Prairie and Chaska) that are competitive with Chan-212 will be converted to Cub Foods. This acquisition may affect plans for a Cub Foods anchored neighborhood shopping center at CSAH 10 and Highway 212, about two miles from the Chaska Rainbow. 18 Chapter III RESIDENTIAL GROWTH PROJECTIONS Demand for retail space at Chan-212 is dependent on future residential growth in each of the trade areas. McComb Group maintains a historical database of Seven-County Metropolitan Area (Metro Area) growth trends since 1970. This database demonstrates that the Metro Area has eight growth corridors that tend to capture roughly the same percent of household growth each year unless altered by a new freeway, river crossing, or similar event. These relationships provide a basis for estimating how household growth may occur in the future. This database was used to estimate future household growth from 2014 to 2025. Future household growth projections were prepared for two trade areas: Convenience Goods and Shopping Goods. Convenience goods are generally purchased close to home. Shopping goods include stores where comparison shopping between stores is common. Comparison shopping draws customers from a greater distance and trade areas are larger. Convenience Goods Trade Area The Chan-212 site is located in the Southwest Growth Corridor. Building permits for the Southwest Growth Corridor communities, Chanhassen’s Convenience Goods trade area communities, and the City of Chanhassen were compared with Metro Area building permits for the period 1990 through 2013, as shown in Table 8. Annual Metro Area building permits ranged from 12,060 to 17,679 between 1991 and 1999. As the housing boom unfolded, building permits increased from 17,679 in 1999, peaked at 20,973 in 2003, which was followed by a decline to 4,028 in 2009 and a slight recovery to 5,014 units in 2010. Metro Area building permits increased to 10,260 in 2013. Southwest Growth Corridor market share of the Metro Area building permits has averaged 21.42 percent between 1990 and 2013. During the period 1990 to 1993, market share averaged 16.53 percent and increased to an average of 21.58 percent in the next six-year period. During the nine- year period 2000 through 2008, the Southwest Growth Corridor maintained an average market share of 23.68 percent. In 2009, market share rose to 32.08 percent in the Southwest Growth Corridor; however, market share has averaged 20.32 percent since 2009. Even though building permits have declined, the Southwest Growth Corridor has maintained a relatively consistent market share of Metro Area growth. Chan-212 Convenience Goods trade area communities include Chanhassen, Eden Prairie, Shorewood, Chaska, Carver, Victoria, and Shakopee. Building permits in these communities fluctuated between 1990 and 2013 with a low of 444 building permits in 2008 and a high of 2,888 building permits in 2003. Building permits increased significantly from 932 in 1991 to 1,450 in 1992, and gradually increased to a high of 2,888 in 2003. Between 2004 and 2006, trade area communities building permits began to decline. In 2007 building permits fell to 701, the lowest number of building permits since 1991. Since 2008, building permits have averaged 596 permits, with 2013 permits at 873. 19 CHAN-212 CONVENIENCE GOODS TRADE AREA COMMUNITIES, AND CITY OF CHANHASSEN Metro Building Market Building Market Building Market Year Area Permits Share Permits Share Permits Share 1990 13,340 1,654 12.40 % 954 57.68 % 197 20.65 % 1991 12,060 2,057 17.06 932 45.31 191 20.49 1992 15,632 2,852 18.24 1,450 50.84 230 15.86 1993 15,882 2,927 18.43 1,633 55.79 267 16.35 1994 14,205 3,014 21.22 1,658 55.01 379 22.86 1995 13,956 3,072 22.01 1,875 61.04 478 25.49 1996 14,098 2,969 21.06 1,635 55.07 207 12.66 1997 13,234 2,982 22.53 1,663 55.77 274 16.48 1998 15,817 3,669 23.20 2,166 59.04 425 19.62 1999 17,679 3,436 19.44 2,001 58.24 275 13.74 2000 17,050 4,293 25.18 2,414 56.23 320 13.26 2001 16,788 3,998 23.81 2,226 55.68 229 10.29 2002 19,782 5,170 26.13 2,842 54.97 300 10.56 2003 20,973 4,689 22.36 2,888 61.59 396 13.71 2004 19,832 3,932 19.83 1,952 49.64 92 4.71 2005 11,514 3,335 28.96 1,618 48.52 84 5.19 2006 12,109 2,439 20.14 1,058 43.38 179 16.92 2007 8,039 1,712 21.30 701 40.95 169 24.11 2008 4,711 1,198 25.43 444 37.06 66 14.86 2009 4,028 1,292 32.08 738 57.12 99 13.41 2010 5,014 996 19.86 468 46.99 101 21.58 2011 3,875 919 23.72 475 51.69 148 31.16 2012 6,749 1,525 22.60 576 37.77 169 29.34 2013 10,260 1,550 15.11 873 56.32 175 20.05 Total 306,627 65,680 21.42 % 35,240 53.65 % 5,450 15.47 % Source: U.S. Census and McComb Group, Ltd. Trade Area Communities Chanhassen Table 8 METRO AREA, SOUTHWEST GROWTH CORRIDOR, RESIDENTIAL BUILDING PERMITS; 1990 TO 2013 Convenience Goods SW Growth Corridor Chan-212 Convenience Goods trade area communities’ market share of building permits have averaged 53.65 percent between 1990 and 2013, with a low of 37.06 percent in 2008 and a high of 61.59 percent in 2003. During the housing boom 2000-2006, trade area communities’ market share averaged 52.86 percent. Since 2006, market share has averaged 46.84 percent. Market share rebounded to 56.32 percent. City of Chanhassen housing development was strong during the 1990-1995 period when market share averaged 20.28 percent. During the period 1996-2005, market share fluctuated in a downward trend and averaged 12.02 percent. Since then, market share has recovered to an average of 21.43 percent, slightly above the 20.28 percent market share of the early 1990s. This indicates a resurgence in residential development in Chanhassen. Future household growth projections from 2014 to 2025 for the Chan-212 Convenience Goods trade area are based on estimated future Southwest Growth Corridor communities’ residential market share of Metro Area growth contained in Table 9. Future Metro Area households are shown in the first column for 2014 through 2025. These estimates reflect a slowing growth rate that is anticipated by the State Demographer. Assuming that the Southwest Growth Corridor will capture 20 24.0 percent of the projected growth, similar to the past, the estimated annual household growth in 2015 would be 3,220 and 3,385 households in 2020. Household growth is expected to slow in each of the successive five-year periods. It is estimated that Chan-212 Convenience Goods trade area communities will capture 50 percent of the Southwest Growth Corridor residential growth in the initial seven-year period and then decline slightly to 49 percent in the later five-year period 2021-2025 as the trade area becomes more fully developed. Table 9 METRO AREA, SOUTHWEST GROWTH CORRIDOR, CHAN-212 CONVENIENCE GOODS TRADE AREA AND CHAN-212 CONVENIENCE GOODS TRADE AREA COMMUNITIES HOUSEHOLD PROJECTIONS; 2014 TO 2025 Total Southwest Trade Area Year Households Increase @ 24.0%Percent Households Percent Households Household 2014 1,169,911 13,264 3,183 50.0 1,592 83.2 1,324 52,373 2015 1,183,326 13,415 3,220 50.0 1,610 83.2 1,339 53,712 2016 1,196,811 13,485 3,236 50.0 1,618 83.2 1,346 55,059 2017 1,210,447 13,636 3,273 50.0 1,636 83.2 1,361 56,420 2018 1,224,239 13,792 3,310 50.0 1,655 83.2 1,377 57,797 2019 1,238,188 13,949 3,348 50.0 1,674 83.2 1,393 59,190 2020 1,252,292 14,104 3,385 50.0 1,692 83.2 1,408 60,598 2021 1,264,213 11,921 2,861 49.0 1,402 81.0 1,136 61,733 2022 1,276,243 12,030 2,887 49.0 1,415 81.0 1,146 62,879 2023 1,288,388 12,145 2,915 49.0 1,428 81.0 1,157 64,036 2024 1,300,648 12,260 2,942 49.0 1,442 81.0 1,168 65,204 2025 1,313,020 12,372 2,969 49.0 1,455 81.0 1,179 66,383 156,373 18,619 15,334 Source: McComb Group, Ltd. Market Share Metro Area Trade Area Communities Trade Area The Chan-212 Convenience Goods trade area encompasses about 83 percent of the households living in the trade area communities. In the future, the Chan-212 Convenience Goods trade area is estimated to capture 83.2 percent of the trade area household growth over the seven-year period, declining to 81 percent in 2021. This results in an estimated increase of 1,339 households in 2015 for a total of 53,712. Households are estimated to increase to 60,598 in 2020 and 66,383 in 2025. Shopping Goods Trade Area Shopping Goods trade area communities include Chanhassen and over 40 other communities including, Eden Prairie, Shakopee, Chaska, Prior Lake, Hutchinson, and Waconia. Building permits in these communities are summarized in Table 10. Because the trade area includes a number of communities outside of the Metro Area, building permit information for 1990 through 1995 was incomplete. The table begins with 1996. Shopping Goods trade area communities’ building permits increased from 2,706 in 1996 to 3,556 in 2000. During this period, market share averaged 86.96 percent. Between 2000 and 2007, building permits peaked at 4,989 in 2002 and declined to 1,288 in 2007, when the great recession began. Market share averaged 88.46 percent during this period. Since 2007, market share has averaged 74.03 percent. Trade area households increased by 26,573 between 2000 and 2010, which was 88.3 percent of the 30,107 household increase in the trade area communities. Since 2010, trade area households have represented 86.3 percent of household increase in the trade area communities. 21 Metro Building Market Building Market Year Area Permits Share Permits Share 1996 14,098 2,969 21.06 % 2,706 91.14 % 1997 13,234 2,982 22.53 2,565 86.02 1998 15,817 3,669 23.20 3,165 86.26 1999 17,679 3,436 19.44 3,043 88.56 2000 17,050 4,293 25.18 3,556 82.83 2001 16,788 3,998 23.81 3,704 92.65 2002 19,782 5,170 26.13 4,989 96.50 2003 20,973 4,689 22.36 4,395 93.73 2004 19,832 3,932 19.83 3,617 91.99 2005 11,514 3,335 28.96 3,000 89.96 2006 12,109 2,439 20.14 1,931 79.17 2007 8,039 1,712 21.30 1,288 75.23 2008 4,711 1,198 25.43 715 59.68 2009 4,028 1,292 32.08 968 74.92 2010 5,014 996 19.86 847 85.04 2011 3,875 919 23.72 693 75.41 2012 6,749 1,525 22.60 982 64.39 2013 10,260 1,550 15.11 1,313 84.71 Total 221,552 50,104 22.62 % 43,477 86.77 % Source: U.S. Census and McComb Group, Ltd. Table 10 AND CHAN-212 SHOPPING GOODS TRADE AREA RESIDENTIAL BUILDING PERMITS; 1996 TO 2013 Trade Area Communities Shopping Goods METRO AREA, SOUTHWEST GROWTH CORRIDOR, SW Growth Corridor Future household growth projections from 2014 to 2025 for the Chan-212 Shopping Goods trade area are based on estimated future Southwest Growth Corridor residential market share of Metro Area growth contained in Table 11. Table 11 METRO AREA, SOUTHWEST GROWTH CORRIDOR, CHAN-212 SHOPPING GOODS TRADE AREA COMMUNITIES, AND CHAN-212 SHOPPING GOODS TRADE AREA HOUSEHOLD PROJECTIONS; 2014 TO 2025 Total Trade Area Year Households Increase Percent Households Percent Households Percent Households Household 2014 1,169,911 13,264 24.0 % 3,183 85.5 % 2,722 87.0 % 2,368 157,810 2015 1,183,326 13,415 24.0 3,220 85.5 2,753 87.0 2,395 160,205 2016 1,196,811 13,485 24.0 3,236 85.5 2,767 87.0 2,407 162,612 2017 1,210,447 13,636 24.0 3,273 85.5 2,798 87.0 2,434 165,047 2018 1,224,239 13,792 24.0 3,310 85.5 2,830 87.0 2,462 167,509 2019 1,238,188 13,949 24.0 3,348 85.5 2,862 87.0 2,488 169,997 2020 1,252,292 14,104 24.0 3,385 85.5 2,894 87.0 2,520 172,517 2021 1,264,213 11,921 24.0 2,861 85.5 2,446 87.0 2,128 174,645 2022 1,276,243 12,030 24.0 2,887 85.5 2,469 87.0 2,148 176,793 2023 1,288,388 12,145 24.0 2,915 85.5 2,492 87.0 2,168 178,961 2024 1,300,648 12,260 24.0 2,942 85.5 2,516 87.0 2,189 181,150 2025 1,313,020 12,372 24.0 2,969 85.5 2,539 87.0 2,209 183,358 Total 156,373 37,530 32,088 27,916 Source: McComb Group, Ltd. Shopping Goods Metro Area Trade Area Communities Trade Area Southwest Growth Corridor 22 Future Metro Area households are shown in the first column for 2014 through 2025. These estimates reflect a slowing growth rate that is anticipated by the State Demographer. Assuming that the Southwest Growth Corridor will capture 24.0 percent of the projected growth, similar to the past, the estimated annual household growth in 2015 would be 3,220 and 3,385 households in 2020. Household growth is expected to slow in the next five-year period. It is estimated that Chan-212 Shopping Goods trade area communities will capture 85.5 percent of the Southwest Growth Corridor area residential growth over the next 10 years. The Chan-212 Shopping Goods trade area captures about 87 percent of the increased household growth in the trade area communities. In the future, the Chas-212 Shopping Goods trade area is estimated to capture 87.0 percent of the trade area household growth over the 10-year period. This results in an estimated increase of 2,395 households in 2015 for a total of 160,205. Households are estimated to increase to 172,517 in 2020 and 183,358 in 2025. 23 Chapter IV CHAN-212 TRADE AREAS Two trade areas were delineated for Chan-212. The Convenience Goods trade area reflects the area that convenience goods retailers, such as a supermarket, would draw most of their customers. The Shopping Goods trade area represents the area a regional shopping center or lifestyle center would draw most of their customers. These trade areas were delineated by McComb Group based on the location of competitive retail areas, arterial road networks, natural boundaries, and previous experience. The Convenience Goods trade area, shown on Map 5, includes Chanhassen, Chaska, and portions of Eden Prairie, Shakopee, Carver, Victoria, Shorewood, Minnetonka, and Excelsior, along with portions of Jackson, Louisville, Dahlgren, and Laketown Townships. This trade area extends north to Lake Minnetonka, east to Highway 212 and I-494, south to Highway 41 in Shakopee, and west to Laketown Road in Laketown Township. The Convenience Goods trade area covers approximately 88 square miles centered on Chanhassen. Map 5 CHAN-212 CONVENIENCE GOODS TRADE AREA Source: Scan/US, Inc. and McComb Group, Ltd. 24 The Shopping Goods trade area covers the southwest Metropolitan Area, as shown on Map 6, extending 60 miles west and encompassing over 2,100 square miles. General boundaries are six miles north of Highway 7, east to Highway 100 in Bloomington/Edina, south to Highway 22 just south of LeSueur, and west five miles from Highway 4 in Hector. Map 6 CHAN-212 SHOPPING GOODS TRADE AREA Source: Scan/US, Inc. and McComb Group, Ltd. Population and Households Population and household growth trends in Chan-212’s trade areas and the Minneapolis-St. Paul MSA (MSA) are shown in Table 12. Since 2000, Chan-212 Convenience Goods trade area has been growing at a faster rate than both the Shopping Goods trade area and the MSA. Chan-212 Convenience Goods trade area population increased at an annual rate of 2.20 percent from 108,340 people in 2000 to 134,614 people in 2010. Convenience Goods trade area population growth rate dropped to less than one percent between 2010 and 2014 as a result of the recession and slower residential development. The growth rate is expected to increase to 2.39 percent by 2019, increasing trade area population to an estimated 156,825 people. Household growth for this trade area has been higher, with an annual growth rate of 2.57 percent annually from 2000 to 2010, increasing trade area households from 38,921 in 2000 to over 50,000 households by 2010. Estimates indicate an increase of 1.09 percent annually through 2014, increasing households to 52,373, with estimates for 2019 at 59,190 households for an annual growth rate of 2.48 percent. 25 Table 12 CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS, AND MINNEAPOLIS-ST. PAUL MSA: POPULATION AND HOUSEHOLD GROWTH TRENDS Convenience Shopping Minneapolis- Year Goods Goods St. Paul MSA POPULATION 2000 108,340 333,532 2,968,808 2010 134,614 394,528 3,279,833 2014E 139,366 407,361 3,361,394 2019E 156,825 438,533 3,510,623 Annual Growth Rate 2000-10 2.20 % 1.69 % 1.00 % 2010-14 0.87 0.80 0.62 2014-19 2.39 1.49 0.87 HOUSEHOLDS 2000 38,921 125,159 1,136,615 2010 50,156 151,732 1,272,677 2014E 52,373 157,810 1,316,673 2019E 59,190 169,997 1,380,185 Annual Growth Rate 2000-10 2.57 % 1.94 % 1.14 % 2010-14 1.09 0.99 0.85 2014-19 2.48 1.50 0.95 E: Estimated. Source: Scan/US and McComb Group, Ltd. Trade Areas 2000 AND 2010 CENSUS; 2014 AND 2019 ESTIMATED Chan-212 Shopping Goods trade area population and households, contained in Table 12, also includes the Convenience Goods trade area. Shopping Goods trade area population and households have been growing at a slower rate than the Convenience Goods trade area, but at a higher rate than the MSA. Shopping Goods trade area population for 2000 was 333,532 and increased to 394,528 by 2010, an annual growth rate of 1.69 percent. Trade area population rose to 407,361 by 2014, an increase of less than one percent from 2010 due to the recession and is expected to increase to 438,533 by 2019, an annual growth rate of 1.49 percent. Chan-212 Shopping Goods trade area households have been growing at faster rates. In 2000, Shopping Goods trade area households were 125,159 and increased to 151,732 by 2010, an annual increase of 1.94 percent. Estimates for 2014 indicate an increase to 157,810 households, further increasing to 169,997 by 2019, an annual increase of 1.50 percent. Household Income Average household income in Chan-212 Convenience Goods and Shopping Goods trade areas and the MSA is shown in Table 13. Average household income in the Convenience Goods trade area was $106,700 in 2010, compared to $96,786 in the Shopping Goods trade area and $80,346 in the MSA. It is estimated that average household incomes for these three areas will continue to increase through 2014, increasing Convenience Good trade area average household income to $113,852 and Shopping Goods trade area to $103,006. Further estimates show average household income increasing further to $123,093 in 2019 for the Convenience Goods trade area and $110,603 for the Shopping Goods trade area. 26 Table 13 CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS AND MINNEAPOLIS-ST. PAUL MSA: AVERAGE AND MEDIAN HOUSEHOLD INCOME 2000 AND 2010 CENSUS; 2014 AND 2019 ESTIMATED Convenience Shopping Minneapolis- Goods Goods St. Paul MSA Average Household Income 2000 92,335$ 82,151$ 67,906$ 2010 106,700 96,786 80,346 2014E 113,852 103,006 85,611 2019E 123,093 110,603 91,814 Median Household Income 2000 74,242$ 65,325$ 54,202$ 2010 84,104 76,146 62,518 2014E 93,092 83,841 66,941 2019E 102,347 91,761 71,838 E: Estimated. Source: McComb Group, Ltd. Trade Area The proportion of Chan-212 Convenience Goods and Shopping Goods trade areas households with incomes above $75,000, $100,000 and $150,000 are shown in Table 14. Table 14 2000 AND 2010 CENSUS; 2014 AND 2019 ESTIMATED Goods Goods Number Percent Number Percent Number Percent Households above $75,000 2000 18,534 47.6 % 48,497 38.7 % 357,430 31.4 % 2010 27,187 54.2 73,789 48.6 524,039 41.2 2014E 29,925 57.1 81,683 81.8 580,354 44.1 2019E 36,387 61.5 96,362 56.7 673,744 48.8 Households above $100,000 2000 11,614 29.8 % 28,848 23.0 % 191,856 16.9 % 2010 19,360 38.6 50,234 23.1 337,204 26.5 2014E 22,872 43.7 60,102 38.1 405,039 30.8 2019E 28,033 47.4 71,104 41.8 472,714 34.3 Households above $150,000 2000 4,766 12.2 % 12,257 9.8 % 66,951 5.9 % 2010 9,633 19.2 23,046 15.2 137,166 10.8 2014E 13,061 24.9 31,857 20.2 194,563 14.8 2019E 17,672 29.9 42,113 24.8 258,648 18.7 E: Estimated. Source: McComb Group, Ltd. St. Paul MSA CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS AND MINNEAPOLIS-ST. PAUL MSA: HOUSEHOLD INCOME DISTRIBUTION Trade Area Convenience Shopping Minneapolis- 27 In 2010, households with incomes above $75,000 represented 54.2 percent for the Convenience Goods trade area and 48.6 percent for the Shopping Goods trade area. Households with incomes above $100,000 in 2010 were 38.6 percent for the Convenience Goods trade area and 23.1 percent for the Shopping Goods trade area. Estimates show these proportions increasing through 2019 when it is estimated that over 47 percent of the Convenience Goods trade area households will have incomes above $100,000 and 41.8 percent of Shopping Goods trade area households will have incomes over $100,000. Distribution of households with incomes above $100,000, shown on Map 7, demonstrates that the more affluent households are distributed throughout the area, with the highest concentrations in the northern and eastern portions of the trade areas. Map 7 CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS 2019 ESTIMATED HOUSEHOLD INCOME: PERCENT ABOVE $100,000 Source: Scan/US, Inc. and McComb Group, Ltd. Educational Attainment Adult residents of the Chan-212 Convenience Goods trade area are highly educated with 52.7 percent holding either a college or graduate degree in 2014, as shown in Table 15. This group includes 31,280 college graduates (36.2 percent) and 14,233 graduate degrees (16.5 percent). This educated pattern extends to the Shopping Goods trade area where 78,417 residents held college degrees and 33,832 have graduate degrees. 28 Table 15 CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS AND MINNEAPOLIS-ST. PAUL MSA EDUCATIONAL ATTAINMENT: 2000 AND 2010 CENSUS; 2014 AND 2019 ESTIMATED 2000 2010 2014 E 2019 E Attainment Number Percent Number Percent Number Percent Number Percent CONVENIENCE GOODS TRADE AREA No College 12,236 19.2 %14,538 17.5 %15,046 17.4 %16,898 17.4 % Some College/2 yr. Degree 20,308 31.9 24,734 29.7 25,840 29.9 28,904 29.8 College Graduate 22,875 35.9 30,371 36.5 31,280 36.2 35,278 36.4 Graduate School 8,237 12.9 13,620 16.4 14,233 16.5 15,924 16.4 SHOPPING GOODS TRADE AREA No College 53,206 26.9 %59,311 23.8 %60,948 23.6 %63,627 23.6 % Some College/2 yr. Degree 65,983 33.3 81,035 32.6 84,534 32.8 88,245 32.7 College Graduate 57,206 28.9 76,167 30.6 78,417 30.4 82,462 30.6 Graduate School 21,689 10.9 32,293 13.0 33,832 13.1 35,283 13.1 MINNEAPOLIS-ST. PAUL MSA No College 483,289 28.1 %507,695 25.3 %518,016 25.3 %546,728 25.2 % Some College/2 yr. Degree 606,358 35.2 679,794 33.9 694,199 33.9 733,140 33.8 College Graduate 440,341 25.6 550,877 27.5 563,878 27.5 596,216 27.5 Graduate School 192,249 11.2 268,265 13.4 274,608 13.4 290,351 13.4 N/A: Not Available or Not Applicable. E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. Employment Employment by industry and employment by occupation in 2014 for the Chan-212 trade areas and MSA are shown in Tables 16 and 17. This data is compiled by Scan/US, Inc. a provider of demographic data and is drawn from a comprehensive industry-standard business list of over 13 million establishments covering 148 million employees. Employment by industry, as shown on Table 16, demonstrates that services, retail trade, and manufacturing are the leading employment industries for both trade areas, as well as the MSA. Chan-212 Convenience Goods trade area has an estimated 87,214 employees working at over 6,000 establishments. Services represent over 38 percent of the Convenience Goods trade area employment; retail trade represents over 20 percent; and manufacturing represents almost 17 percent. Employment by industry for the Shopping Goods trade area indicates that over 40 percent of the over 247,000 employees are employed in the service industry, 18.3 percent in retail trade, and 15.5 percent in manufacturing. Employment by industry for the MSA indicates that service employees represent over 42 percent of employees, retail trade employees represent 20 percent, and manufacturing represents over 11 percent of MSA employees. 29 Number Percent Number Percent Number Percent Establishments 6,088 18,344 154,292 Average employees per establishment 14 13 14 Total Employees 87,214 247,470 2,148,822 Agriculture/forestry/fishing 993 1.1 %3,279 1.3 %19,422 0.9 % Mining 14 0.0 42 0.0 758 0.0 Construction 2,976 3.4 9,735 3.9 80,739 3.8 Manufacturing 14,404 16.5 38,315 15.5 243,954 11.4 Transport/comm/utilities 2,351 2.7 6,940 2.8 85,583 4.0 Wholesale trade 4,864 5.6 12,744 5.1 93,079 4.3 Retail trade 17,610 20.2 45,348 18.3 428,740 20.0 Finance/insurance/real estate 4,039 4.6 15,575 6.3 170,552 7.9 Services 33,838 38.8 103,345 41.8 908,957 42.3 Government/other 6,126 7.0 12,147 4.9 117,038 5.4 Source: Scan/US and McComb Group, Ltd. Trade Areas MSA Table 16 CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS AND MINNEAPOLIS-ST. PAUL MSA: 2014 EMPLOYMENT BY INDUSTRY Shopping GoodsConvenience Goods Employment by occupation for Chan-212 trade areas and the MSA are shown in Table 17. Management and professionals and sales and office occupations rank the highest for all three areas. Management and professionals occupations represent one third of all employment for both trade areas and MSA, while sales and office employment represents one quarter of all employment for all three areas. Number Percent Number Percent Number Percent Establishments 6,088 18,344 154,292 Average employees per establishment 14 13 14 Total Employees 87,214 247,470 2,148,822 Management and Professionals 29,401 33.7 %83,940 33.9 %751,180 35.0 % Service 13,775 15.8 38,490 15.6 351,213 16.3 Sales and Office 21,739 24.9 62,662 25.3 552,844 25.7 Natural Resources/Construction/Maintenance 6,652 7.6 19,902 8.0 166,400 7.7 Production/Transportation 15,162 17.4 40,906 16.5 311,116 14.5 Unclassified 485 0.6 1,570 0.6 16,069 0.7 Source: Scan/US and McComb Group, Ltd. Table 17 CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS AND MINNEAPOLIS-ST. PAUL MSA: 2014 EMPLOYMENT BY OCCUPATION Convenience Goods Shopping Goods MSA Trade Areas Demographic Characteristics Demographic characteristics for Chan-212 Convenience Goods and Shopping Goods trade areas and the MSA are summarized in the demographic snapshots contained in Tables 18, 19, and 20 at the end of this chapter. These snapshots contain census data for 2000 and 2010, as well as estimates for 2014 and 2019. These estimates were provided by Scan/US, Inc., a source of Census 30 comparable demographic information. Significant characteristics of Chan-212 trade areas include the following: ♦ Chan-212 Shopping Goods trade area population is older than the Convenience Trade area and MSA population with a median age of 41, compared to the Convenience Trade area median age of 39 and MSA median age of 37. ♦ Chan-212 Convenience Goods and Shopping Goods trade areas population is estimated to increase at 2.39 percent and 1.49 percent, respectively, through 2019, which is above the MSA’s annual population growth rate of 0.87 percent. ♦ In 2014, approximately 9.1 percent of the population in the Convenience Goods trade area was over the age of 65, which is expected to increase to about 12.0 percent by 2019. The Shopping Goods trade area and the MSA had about 12.0 percent of the population over the age of 65 in 2014, with expectations of an increase to over 15.0 percent by 2019. ♦ By 2019, almost 48 percent of the households within the Convenience Goods trade area and 42 percent in the Shopping Goods trade area will have incomes above $100,000, compared to only 34.3 percent in the MSA. ♦ Over 85 percent of the population within the Convenience Goods trade area is Caucasian, and about 90 percent in the Shopping Goods trade area are Caucasian. This is expected to remain constant through 2019. Additional demographic characteristics for Chan-212 Convenience Goods and Shopping Goods trade areas are contained in Appendix A at the end of this report. Purchasing Power Retail sales potential for the Chan-212 Convenience Goods and Shopping Goods trade areas is based on estimated purchasing power and market share that can be achieved from the trade areas. Retail sales from residents living outside the trade areas are inflow sales. Purchasing power estimates of trade area residents are derived from retail sales by store type as reported by the Census of Retail Trade in 2002 and 2007. Retail sales for 2007 through 2012 were estimated using information available from the U.S. Department of Commerce. Future purchasing power estimates are expressed in constant 2014 dollars and reflect projected household growth. Purchasing power is based on the number of trade area households adjusted to reflect income characteristics. Purchasing power, for the purpose of this analysis, includes retail categories that are characteristic of tenants that could be located at Chan-212. The estimated retail purchasing power summary table for the Chan-212 Convenience Goods and Shopping Goods trade areas for 2012, 2015, 2020 and 2025 is shown in Table 21. The purchasing power estimates used in this analysis are condensed from the full purchasing power tables, which are contained in a separate Appendix. These estimates represent the potential dollar sales for a broad range of retail stores generated by residents of each trade area. The Chan-212 Convenience Goods trade area purchasing power is estimated at $2.4 billion in 2012 and is expected to increase to about $2.7 billion by 2015, an annual growth rate of 3.7 percent in constant 2014 dollars. Purchasing power for shopping goods in this trade area is expected to 31 increase from $715.9 million in 2012 to $807.6 million in 2015. Convenience goods purchasing power for this trade area was estimated at $407.6 million in 2012, and is estimated to increase to $459.8 million by 2015. Table 21 CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS RETAIL PURCHASING POWER; 2012, 2015, 2020, AND 2025 (In Thousands of Constant 2014 Dollars) Merchandise Category 2012 2015 2020 2025 Convenience Goods Trade Area Shopping Goods 715,933$ 807,573$ 1,019,140$ 1,217,730$ Food Service & Drinking 269,449 303,942 383,567 458,309 Convenience Goods 407,591 459,763 580,209 693,267 Gasoline Service Stations & Convenience 296,279 334,203 421,756 503,940 Other Stores 710,456 801,398 1,011,344 1,208,415 Total 2,399,708$ 2,706,879$ 3,416,016$ 4,081,661$ Shopping Goods Trade Area Shopping Goods 2,009,920$ 2,241,164$ 2,726,633$ 3,287,310$ Food Service & Drinking 756,465 843,496 1,026,209 1,237,228 Convenience Goods 1,144,274 1,275,926 1,552,307 1,871,508 Gasoline Service Stations & Convenience 831,780 927,476 1,128,380 1,360,410 Other Stores 1,994,552 2,224,028 2,705,782 3,262,174 Total 6,736,991$ 7,512,090$ 9,139,311$ 11,018,630$ Source: McComb Group, Ltd. Total purchasing power for the Shopping Goods trade area is estimated at $6.7 billion in 2012 and is expected to increase to about $7.5 billion by 2015, an annual growth rate of 3.7 percent in constant 2014 dollars. Purchasing power for shopping goods in this trade area is expected to increase from $2.0 billion in 2012 to $2.2 billion in 2015. Convenience goods purchasing power for this trade area was estimated at $1.1 billion in 2012, estimated to increase to almost $1.3 billion by 2015. 32 DEMOGRAPHIC AND INCOME SNAPSHOT Chan-212 Convenience Goods Trade Area 6/19/2014 SNAPSHOT 2000 Census 2010 Census 2014 Estimated 2019 Projected Population 108,340 134,614 139,366 156,825 Households 38,921 50,156 52,373 59,190 Families 28,742 35,828 37,454 42,375 Per Capita Income $33,228 $39,829 $42,874 $46,546 Median Household Income $74,242 $84,104 $93,092 $102,347 Average Household Income $92,335 $106,700 $113,852 $123,093 Average Household Size 2.77 2.67 2.64 2.63 Median Age 33 37 39 40 Annual Percent Change TRENDS 2000 - 2010 2010 - 2014 2014 - 2019 Population 2.20 %0.87 %2.39 % Households 2.57 1.09 2.48 Families 2.23 1.12 2.50 Median Household Income 1.26 2.57 1.91 Average Household Income 1.46 1.64 1.57 2000 Census 2010 Census 2014 Estimated 2019 Projected HOUSEHOLDS BY INCOME Number Percent Number Percent Number Percent Number Percent Less than $15,000 1,809 4.6 %2,402 4.8 %2,075 4.0 %2,097 3.5 % $15,000 - $24,999 2,173 5.6 3,174 6.3 2,655 5.1 2,177 3.7 $25,000 - $34,999 2,758 7.1 3,427 6.8 3,187 6.1 3,084 5.2 $35,000 - $49,999 4,789 12.3 4,877 9.7 5,706 10.9 6,995 11.8 $50,000 - $74,999 8,857 22.8 9,089 18.1 8,826 16.9 8,450 14.3 $75,000 - $99,999 6,920 17.8 7,827 15.6 7,053 13.5 8,354 14.1 $100,000 - $149,999 6,847 17.6 9,728 19.4 9,811 18.7 10,360 17.5 $150,000 +4,766 12.2 9,633 19.2 13,061 24.9 17,672 29.9 POPULATION BY AGE Number Percent Number Percent Number Percent Number Percent <19 36,122 33.3 %41,291 30.7 %41,810 30.0 %43,848 28.0 % 20-24 4,939 4.6 6,005 4.5 6,861 4.9 11,176 7.1 25-34 16,874 15.6 18,501 13.7 17,960 12.9 16,240 10.4 35-44 23,040 21.3 20,724 15.4 20,107 14.4 20,597 13.1 45-54 15,172 14.0 23,481 17.4 23,337 16.7 23,752 15.1 55-64 6,642 6.1 14,277 10.6 16,732 12.0 22,390 14.3 65-74 3,350 3.1 5,941 4.4 7,626 5.5 11,792 7.5 75-84 1,643 1.5 3,030 2.3 3,280 2.4 4,750 3.0 85+558 0.5 1,364 1.0 1,652 1.2 2,280 1.5 RACE AND ETHNICITY Number Percent Number Percent Number Percent Number Percent White 100,228 92.5 %114,494 85.1 %118,727 85.2 %133,898 85.4 % Black 1,580 1.5 4,778 3.5 4,888 3.5 5,398 3.4 Native American 338 0.3 519 0.4 531 0.4 613 0.4 Asian/Pacific Islander 3,600 3.3 8,682 6.4 8,852 6.4 9,777 6.2 Other Races 2,594 2.4 6,141 4.6 6,368 4.6 7,139 4.6 Hispanic (Any Race)3,241 3.0 7,083 5.3 7,873 5.6 9,570 6.1 Source: U.S. Census, Scan/US, Inc. and McComb Group, Ltd. Table 18 McComb Group, Ltd. 33 DEMOGRAPHIC AND INCOME SNAPSHOT Chan-212 Shopping Goods Trade Area 6/19/2014 SNAPSHOT 2000 Census 2010 Census 2014 Estimated 2019 Projected Population 333,532 394,528 407,361 438,533 Households 125,159 151,732 157,810 169,997 Families 89,673 106,108 110,591 119,378 Per Capita Income $30,926 $37,307 $40,007 $42,977 Median Household Income $65,325 $76,146 $83,841 $91,761 Average Household Income $82,151 $96,786 $103,006 $110,603 Average Household Size 2.63 2.57 2.56 2.56 Median Age 36 39 41 42 Annual Percent Change TRENDS 2000 - 2010 2010 - 2014 2014 - 2019 Population 1.69 %0.80 %1.49 % Households 1.94 0.99 1.50 Families 1.70 1.04 1.54 Median Household Income 1.54 2.44 1.82 Average Household Income 1.65 1.57 1.43 2000 Census 2010 Census 2014 Estimated 2019 Projected HOUSEHOLDS BY INCOME Number Percent Number Percent Number Percent Number Percent Less than $15,000 8,705 7.0 %9,926 6.5 %8,667 5.5 %8,064 4.7 % $15,000 - $24,999 9,251 7.4 10,774 7.1 9,014 5.7 7,550 4.4 $25,000 - $34,999 11,083 8.9 11,516 7.6 10,453 6.6 9,746 5.7 $35,000 - $49,999 18,092 14.5 16,996 11.2 20,097 12.7 22,775 13.4 $50,000 - $74,999 29,531 23.6 28,731 18.9 27,896 17.7 25,501 15.0 $75,000 - $99,999 19,649 15.7 23,556 15.5 21,582 13.7 25,257 14.9 $100,000 - $149,999 16,591 13.3 27,187 17.9 28,245 17.9 28,992 17.1 $150,000 +12,257 9.8 23,046 15.2 31,857 20.2 42,113 24.8 POPULATION BY AGE Number Percent Number Percent Number Percent Number Percent <19 101,866 30.5 %113,893 28.9 %114,906 28.2 %117,819 26.9 % 20-24 15,400 4.6 17,376 4.4 19,440 4.8 29,103 6.6 25-34 45,711 13.7 49,407 12.5 48,104 11.8 42,969 9.8 35-44 62,970 18.9 57,511 14.6 55,737 13.7 54,456 12.4 45-54 48,983 14.7 66,218 16.8 65,174 16.0 62,914 14.3 55-64 26,765 8.0 46,357 11.7 52,901 13.0 63,099 14.4 65-74 16,557 5.0 23,530 6.0 28,898 7.1 39,878 9.1 75-84 11,021 3.3 13,492 3.4 14,190 3.5 18,546 4.2 85+4,259 1.3 6,745 1.7 8,012 2.0 9,748 2.2 RACE AND ETHNICITY Number Percent Number Percent Number Percent Number Percent White 315,363 94.6 %354,313 89.8 %366,114 89.9 %394,565 90.0 % Black 3,092 0.9 9,014 2.3 9,229 2.3 9,778 2.2 Native American 1,047 0.3 1,568 0.4 1,617 0.4 1,764 0.4 Asian/Pacific Islander 6,849 2.1 15,978 4.0 16,350 4.0 17,394 4.0 Other Races 7,181 2.2 13,655 3.5 14,051 3.4 15,032 3.4 Hispanic (Any Race)8,380 2.5 15,824 4.0 17,424 4.3 20,291 4.6 Source: U.S. Census, Scan/US, Inc. and McComb Group, Ltd. Table 19 McComb Group, Ltd. 34 DEMOGRAPHIC AND INCOME SNAPSHOT Minneapolis-St. Paul MSA 6/26/2014 SNAPSHOT 2000 Census 2010 Census 2014 Estimated 2019 Projected Population 2,968,808 3,279,833 3,361,394 3,510,623 Households 1,136,615 1,272,677 1,316,673 1,380,185 Families 744,303 821,127 851,800 895,465 Per Capita Income $26,170 $31,330 $33,716 $36,282 Median Household Income $54,202 $62,518 $66,941 $71,838 Average Household Income $67,906 $80,346 $85,611 $91,814 Average Household Size 2.56 2.53 2.50 2.50 Median Age 34 36 37 39 Annual Percent Change TRENDS 2000 - 2010 2010 - 2014 2014 - 2019 Population 1.00 %0.62 %0.87 % Households 1.14 0.85 0.95 Families 0.99 0.92 1.00 Median Household Income 1.44 1.72 1.42 Average Household Income 1.70 1.60 1.41 2000 Census 2010 Census 2014 Estimated 2019 Projected HOUSEHOLDS BY INCOME Number Percent Number Percent Number Percent Number Percent Less than $15,000 104,773 9.2 %119,486 9.4 %106,379 8.1 %98,748 7.2 % $15,000 - $24,999 104,775 9.2 107,508 8.4 91,764 7.0 77,172 5.6 $25,000 - $34,999 125,167 11.0 113,166 8.9 102,976 7.8 92,979 6.7 $35,000 - $49,999 179,244 15.8 163,267 12.8 190,292 14.5 212,213 15.4 $50,000 - $74,999 265,227 23.3 245,211 19.3 244,908 18.6 225,329 16.3 $75,000 - $99,999 165,574 14.6 186,835 14.7 175,315 13.3 201,030 14.6 $100,000 - $149,999 124,905 11.0 200,038 15.7 210,476 16.0 214,066 15.5 $150,000 +66,951 5.9 137,166 10.8 194,563 14.8 258,648 18.7 POPULATION BY AGE Number Percent Number Percent Number Percent Number Percent <19 873,681 29.4 %903,970 27.6 %903,080 26.9 %914,622 26.1 % 20-24 193,790 6.5 214,482 6.5 213,991 6.4 227,166 6.5 25-34 457,105 15.4 477,668 14.6 478,978 14.2 439,417 12.5 35-44 528,024 17.8 455,201 13.9 447,282 13.3 467,452 13.3 45-54 405,724 13.7 508,014 15.5 489,532 14.6 463,291 13.2 55-64 225,541 7.6 370,829 11.3 416,363 12.4 468,166 13.3 65-74 145,808 4.9 187,685 5.7 234,287 7.0 311,635 8.9 75-84 100,485 3.4 110,341 3.4 117,048 3.5 145,051 4.1 85+38,650 1.3 51,643 1.6 60,833 1.8 73,823 2.1 RACE AND ETHNICITY Number Percent Number Percent Number Percent Number Percent White 2,556,853 86.1 %2,656,553 81.0 %2,727,284 81.1 %2,857,513 81.4 % Black 157,963 5.3 243,414 7.4 246,995 7.3 253,180 7.2 Native American 21,590 0.7 22,726 0.7 23,410 0.7 24,550 0.7 Asian/Pacific Islander 124,025 4.2 189,401 5.8 192,381 5.7 197,766 5.6 Other Races 108,377 3.7 167,739 5.1 171,324 5.1 177,614 5.1 Hispanic (Any Race)99,121 3.3 176,283 5.4 190,243 5.7 212,333 6.0 Source: U.S. Census, Scan/US, Inc. and McComb Group, Ltd. Table 20 McComb Group, Ltd. 35 Chapter V RETAIL SALES TRENDS Future sales potential at Chan-212 shopping center are based on market share that can be achieved taking into consideration trade area households, future growth, and potential competitive developments. Market share estimates for Chanhassen are based on estimated 2012 retail and service sales in Chanhassen. Retail sales estimates for 2012 were prepared for Chanhassen utilizing retail sales information from the Minnesota Department of Revenue and McComb Group’s knowledge of the Twin Cities retail market. Retail sales for 2002, 2007, and 2012 are contained in Table 22. Retail sales in Chanhassen increased from $181.6 million in 2002 to $390.9 million in 2007, according to the U.S. Census of Retail Trade. This represents an average annual increase of 16.6 percent. Comparable sales for 2012 are not available. Table 22 CHANHASSEN RETAIL AND SERVICES SALES: 2002, 2007 AND 2012 ESTIMATED (Thousands of Dollars) 2002 2007 2012 Estimated Store Type Number Dollars Number Dollars Number Dollars RETAIL TRADE 78 181,607$ 76 390,924$ N/A N/A Convenience Retail Food Stores 4 48,861$ 4 53,650$ 4 67,650$ Liquor Stores 6 7,725 5 8,475 7 11,250 Pharmacies and Drug Stores 6 11,978 6 13,141 3 16,938 Food Service Full-Service Food Service 11 11,802$ 12 19,364$ 12 18,795$ Limited Service Food Service 22 14,797 21 21,956 30 21,347 Convenience/Gasoline 7 18,567$ 8 48,077$ 8 39,977$ Shopping Goods Clothing and Clothing Accessories Stores 1 2 3 1,154$ Furniture and Home Furnishings 4 10 4 3,364 Electronics 1 2 3 2,976 Sporting Goods, Hobby, Book, and Music Stores 5 2,960 6 3,553 1,877 Home Improvement Building Material/Garden Equipment/Supplies Dealers 12 29,215$ 13 42,455$ 12 84,807$ Motor Vehicle & Parts Automotive Parts and Accessories 10 8,938 5 6,224 2 2,829 SERVICES Personal Services Personal and Laundry Services 15 35 36 28,388$ Hair, Nail, and Skin Care Services 6 24 7,049 16 23,586 Beauty Salons 6 20 12 6,710 Nail Salons 4 1,120 Repair Services Repair and Maintenance Automotive Repair and Maintenance 22 60,835 25 33,901 25 N/A HEALTH CARE Ambulatory Health Care Services 16 17,193$ 26 47,993$ 30 60,305$ Offices of Dentists 5 3,622 10 7,524 9 9,589 D: Suppressed by U.S. Census Bureau. Source: U.S. Census Bureau and McComb Group, Ltd. Estimates indicate large increases in home improvement sales increased from $42.5 million to $84.8 million between 2007 and 2012. Sales estimates for personal services are $28.4 million for 2012 and health care is estimated at $60.3 million. 36 Market Share Chanhassen’s retail and service sales for 2012 are compared with purchasing power in Table 23to determine market share. Purchasing power for 2012 was calculated by McComb Group’s sales potential model for both the Convenience Goods and Shopping Goods trade areas. Market share estimates are based on convenience goods purchasing power for categories where customers typically shop close to home. Shopping goods purchasing power is used for comparison shopping and destination categories. Retail sales derived from Chan-212 trade areas were estimated for each retail category to determine trade area sales and market share as a percent of purchasing power. Table 23 CHANHASSEN MARKET SHARE; 2012 (In Thousands of Dollars) Trade Trade Purchasing Retail Area Area Market Store Type Power Sales Percent Sales Share RETAIL TRADE Convenience Retail Grocery Stores 232,976$ 67,650$ 85% 57,503$ 24.68 % Liquor Stores 40,006 11,250 85% 9,563 23.90 Drug Stores 101,427 16,938 85% 14,397 14.19 Food Service Full Service Food Service 111,310$ * 18,795$ 80% 15,036$ 13.51 % Limited Service Food Service 84,718 * 17,078 80% 13,662 16.13 Convenience/Gasoline 266,392$ 39,977$ 70% 27,984$ 10.50 % Shopping Goods Clothing & Accessories Stores 281,464$ * 1,154$ 70% 808$ 0.29 % Furniture & Home Furnishings 194,236 * 3,364 70% 2,355 1.21 Electronics and Appliances Stores 205,468 * 2,976 70% 2,083 1.01 Sporting Goods, Hobby, Book & Music Stores 135,436 * 1,877 70% 1,314 0.97 Home Improvement Building Material/Garden Equip./Supplies Dealers 617,063$ * 84,807$ 90% 76,326$ 12.37 % Lawn and Garden Equpiment and Supplies Stores 76,638 * 4,366 90% 3,929 5.13 Motor Vehicles & Parts Automotive Parts Dealers 20,238$ 2,829$ 90% 2,546$ 12.58 % Tire Dealers 15,296 2,366 90% 2,129 13.92 SERVICES Personal Services Drycleaning and Laundry Services 14,391$ 3,682$ 90% 3,314$ 23.03 % Beauty Salons 21,852 6,710 85% 5,704 26.10 HEALTH CARE Ambulatory Health Care Servcies 376,045$ 60,305$ 80% 48,244$ 12.83 % Offices of Dentists 84,404 9,589 80% 7,671 9.09 * Shopping goods purchasing power. Source: U.S. Census Bureau and McComb Group, Ltd. Using grocery stores as an example, purchasing power in 2012 was estimated at $233.0 million. Retail sales were estimated at $67.6 million with 85 percent of those sales assumed to be derived from the trade area. This results in trade area sales of $57.5 million, which is 24.68 percent of estimated trade area purchasing power or market share. Liquor store sales of $11.2 million results 37 in market share of 23.90 percent, similar to grocery stores. Drug store market share was estimated at 14.19 percent. The food service category is divided into two segments: full service and limited service. Full service restaurants retail sales of $18.8 million results in a market share of 13.51 percent of convenience goods purchasing power with 80 percent of sales derived from the trade area. Limited service establishments had a 16.13 percent market share. Market share in convenience retail categories ranges from 14.19 percent to 24.68 percent. Market share for shopping goods categories ranges from a low of 0.29 percent for clothing and accessories to 1.21 percent for furniture based on Shopping Goods trade area purchasing power. This low market share reflects sales of the limited number of shopping goods stores and their limited drawing power. Market share for individual service categories ranges from 23.03 percent for dry cleaning and laundry services to 26.10 percent for beauty salons. These market share calculations were used to estimate future market share for Chan-212 and determine the amount of retail space that can be supported at Chan-212. Retail and service sales potential for Chan-212 is based on market share that can be achieved taking into consideration past market share trends, trade area households, future growth, and potential competitive developments. Market share estimates are based on analysis conducted as part of this engagement and McComb Group’s knowledge of the Minneapolis-St. Paul MSA retail market. Sales potential was estimated for target years 2015, 2020, and 2025 to identify growth in retail and service sales as trade area households and purchasing power increase. Purchasing power is derived from Chapter IV. Market share was estimated for each retail and service category taking into consideration past market share performance, trade area size, competitive store locations, and industry experience. Trade area market share for Chan-212 by store type is shown in Table 24. Using apparel and accessories stores in the shopping goods category as an example, market share is 12.5 percent with an estimated 75 percent of the sales being derived from the Shopping Goods trade area. Full service restaurant market share is estimated at 6.0 percent with 80 percent of the sales being derived from the Shopping Goods trade area. Grocery store market share is 15.0 percent with 90 percent of the sales being derived from the Shopping Goods trade area. Convenience/gasoline is a possibility for the proposed location, either freestanding or as a component of a grocery store site. Market share is 1.0 percent with 90 percent of sales from the trade area. Services market share ranges from 10.0 to 20.0 percent with 80 percent of the sales being derived from the Convenience Goods trade area. The above market share estimates reflect the fact that the proposed Chan-212 shopping center will draw customers from a large area, and will capture, in general, 5.0 to 20.0 percent of trade area spending potential. 38 Table 24 CHAN-212 TRADE AREAS MARKET SHARE AND TRADE AREA SALES Market Percent Store Type Share Sales Shopping Goods General Merchandise 10.0-20.0 %75 % Apparel & Accessories 12.5 75 Furniture & Home Furnishings 12.5 75 Electronics & Appliances Stores 15.0 75 Other Shopping Goods*12.5 75 Food Service Full Service Restaurants 6.0 %80 % Limited Service Restaurants 5.0 80 Snack & Beverage Places 5.0 80 Convenience Goods Grocery Stores 15.0 %90 % Drug & Proprietary Stores 7.5 90 Liquor Stores 15.0 90 Hardware Stores 7.5 90 Convenience/Gasoline Stores 1.0 %90 % Other Retail Stores Building Materials 15.0 %95 % Auto Parts & Accessories 7.5 95 Services*10.0-20.0 %80 % Health Care*10.0 %85 % * Convenience Goods trade area purchasing power. Source: McComb Group, Ltd. Sales Potential Estimating retail and service space demand is a two-step process. Sales potential for each retail or service category is estimated first to determine if retail sales are sufficient to support a store. Next, store size is determined based on store productivity and typical store size for each category. This methodology is illustrated for 2015 in Tables 25 and 26. These tables use selected convenience goods and shopping goods stores as an example to illustrate how sales potential and supportable square footage of retail stores and services is determined. Grocery store resident purchasing power in 2015 is estimated at $254.4 million in constant 2014 dollars, as shown in Table 25. Market share of 15.0 percent results in $38.2 million of trade area sales. Due to the large trade area, 90 percent of sales are estimated to be derived from the trade area. Inflow sales are estimated at $4.3 million or 5.0 percent of sales resulting in total sales of $42.5 million. Department store sales potential is estimated at $35.4 million assuming a 20.0 percent market share with 75 percent of sales derived from the trade area. Apparel and accessories market share is estimated at 12.5 percent with 75 percent of sales derived from the trade area. Sales potential for women’s clothing and family clothing is $9.8 million and $22.8 million, respectively. 39 Table 25 CHAN-212 SHOPPING CENTER RETAIL PURCHASING POWER, MARKET SHARE, AND SALES POTENTIAL; 2015 BY MERCHANDISE CATEGORY (In Thousands of 2014 Constant Dollars) Resident Estimated Trade Trade Estimated Purchasing Market Area Area Other Total Merchandise Category Power Share Sales Percent Shoppers Sales CONVENIENCE GOODS Grocery Stores 254,437$ 15.0 % 38,166$ 90 % 4,328$ 42,494$ Drug & Proprietary Stores 113,054 7.5 8,479 90 942 9,421 Liquor 44,592 15.0 6,689 90 743 7,432 SHOPPING GOODS Department Stores 132,602$ 20.0 %26,520$ 75 %8,840$ 35,360$ Apparel & Accessories Stores Men's and Boy's 13,260$ 12.5 % 1,658$ 75 % 553$ 2,211$ Women's Clothing 58,934 12.5 7,367 75 2,456 9,823 Children's & Infants 27,257 12.5 3,407 75 1,136 4,543 Family Clothing 137,022 12.5 17,128 75 5,709 22,837 Clothing Accessories Stores 8,103 12.5 1,013 75 338 1,351 Other Clothing Stores 22,100 12.5 2,763 75 921 3,684 Source: McComb Group, Ltd. Supportable Space Retail gross leasable area (GLA) supported by estimated sales potential for each retail store category is based on estimated sales per square foot (in 2014 dollars) by store type. Sales per square foot estimates are derived from median store sales per square foot for each tenant type contained in Dollars & Cents of Shopping Centers, published by the Urban Land Institute, and have been increased to reflect sales per square foot in 2014. Supportable GLA is calculated by dividing sales potential by sales per square foot. This analysis was used to provide an estimate of the supportable square footage in each retail store category. Supportable square feet of GLA is based on estimated sales divided by typical sales per square foot for each retail store type, as shown in Table 26. Using grocery stores as an example, supportable GLA is based on sales potential of $43.3 million divided by $460 per square foot resulting in supportable GLA of about 94,087 square feet. Drug store supportable square footage is about 20,480 square feet. Supportable square footage of liquor stores is about 19,800 square feet. Supportable GLA is determined for other stores in the manner described above. The last three columns in this table contain the low, median, and high store size for each store type from Dollars & Cents of Shopping Centers. Median store size indicates a typical size for a store in each retail category. To the extent that supportable square footage is about the same as the median store size or larger, sales potential exists to support that store type. Supportable square footage by retail and service category for each target year are contained in Table 27 in Chapter VI. 40 Table 26 CHAN-212 SHOPPING CENTER RETAIL SALES POTENITAL AND SUPPORTABLE SPACE; 2015 BY MERCHANDISE CATEGORY Estimated Sales Sales Supportable Store Size Category Potential Sq. Ft. Sq. Ft.Low Median High CONVENIENCE GOODS Grocery Stores 43,280,000$ 460$ 94,087 31,676 52,500 65,888 Drug & Proprietary Stores 9,421,000 460 20,480 8,280 11,700 23,714 Liquor 7,432,000 375 19,819 1,305 2,856 7,210 SHOPPING GOODS Department Stores 35,360,000$ 225$ 157,156 89,641 148,796 243,167 Apparel & Accessories Stores Men's and Boy's 2,211,000$ 220$ 10,050 2,002 4,000 5,635 Women's Clothing 9,823,000 200 49,115 2,074 4,200 8,740 Children's & Infants 4,543,000 240 18,929 1,490 3,912 6,000 Family Clothing 22,837,000 260 87,835 2,374 8,000 28,228 Clothing Accessories Stores 1,351,000 290 4,659 918 1,400 2,001 Other Clothing Stores 3,684,000 265 13,902 1,060 2,300 8,234 Source: McComb Group, Ltd. Store types and median store sizes used in this analysis are based on current retail formats and store size. Since this study extends over a 10-year period, store types and concepts may change during this period. Recent trends have been for many store types to increase in size to accommodate a larger selection of merchandise and increase customer attraction. 41 Chapter VI SALES POTENTIAL AND SUPPORTABLE GLA The Chan-212 Convenience Goods and Shopping Goods trade areas have the potential to support more GLA than can be accommodated at the proposed development. This creates the enviable situation where the developer can choose from a wide variety of retail stores to establish its market position. Supportable GLA Estimated Chan-212 supportable GLA by retail store type is contained in Table 27. In almost every category, supportable space exceeds the median store size. These estimates of supportable square feet are likely to be understated due to the high trade area household income. Also, there are likely to be a large proportion of high income and high asset households where there are few constraints on discretionary spending. Table 27 CHAN-212 SHOPPING GOODS SUPPORTABLE GLA BY MERCHANDISE CATEGORY (Gross Leasable Area) Store Size Merchandise Category 2015 2020 2025 Low Median High CONVENIENCE GOODS Food Stores Grocery Stores 94,087 113,202 135,261 31,676 52,500 65,888 Supermarkets 92,189 110,915 132,528 31,245 52,419 69,462 Convenience Food 2,913 3,507 4,190 1,349 2,085 5,323 Specialty Food Stores 7,650 9,205 11,000 1,188 2,400 6,000 Meat Markets 2,529 3,036 3,631 1,130 2,215 18,080 Baked Goods 524 632 756 1,191 1,834 3,285 Confectionery and Nut Stores 409 494 591 702 1,240 2,047 All Other Specialty Food Stores 1,095 1,315 1,570 1,069 2,200 8,007 Other Convenience Goods Drug & Proprietary Stores 20,480 24,643 29,443 8,280 11,700 23,714 Hardware 7,795 9,384 11,211 5,638 13,831 27,743 Liquor 19,819 23,845 28,491 1,305 2,856 7,210 Florist 2,879 3,463 4,137 766 1,600 5,396 Food/Health Supplement Stores 1,400 1,684 2,012 1,200 1,234 1,968 Food Service Full-Service Restaurants 72,594 88,319 106,481 2,000 4,500 9,775 Limited Service Restaurants 41,438 50,415 60,783 1,335 3,000 3,400 Cafeterias 3,528 4,294 5,170 517 1,073 10,049 Snack & Beverage Places 14,733 17,927 21,613 850 1,500 2,495 Ice Cream & Soft Serve 1,702 2,071 2,492 902 1,148 1,570 Frozen Yogurt 275 340 405 1,031 1,282 1,700 Doughnut Shops 3,518 4,277 5,159 744 1,200 2,153 Bagel Shops 804 978 1,178 2,000 2,388 3,400 Coffee Shops 4,698 5,713 6,888 881 1,500 2,000 Cookie Shops 138 170 203 220 602 797 Other Snack Shops 2,456 2,986 3,600 850 1,578 2,495 Gasoline Svs Stations/Conv. Gas/Convenience Food Stores 6,619 8,052 9,708 1,500 2,933 6,121 42 Table 27 (continued) CHAN-212 SHOPPING GOODS SUPPORTABLE GLA BY MERCHANDISE CATEGORY (Gross Leasable Area) Store Size Merchandise Category 2015 2020 2025 Low Median High SHOPPING GOODS General Merchandise Department Stores (Incl. leased depts.) Discount Stores 216,484 263,376 317,536 57,720 94,788 141,986 Department Stores 157,156 191,200 230,520 89,641 148,796 243,167 Other General Merchandise Stores Warehouse Clubs and Supercenters 270,224 328,758 396,362 90,134 151,980 217,447 Dollar Stores 23,218 28,250 34,055 2,726 8,000 13,788 Miscellaneous General Merchandise 47,148 57,360 69,156 3,200 8,400 11,212 Apparel & Accessories Clothing Stores Mens and Boys 10,050 12,223 14,732 2,002 4,000 5,635 Womens Clothing 49,115 59,755 72,040 2,074 4,200 8,740 Children's & Infant 18,929 23,029 27,767 1,490 3,912 6,000 Family Clothing 87,835 106,862 128,835 2,374 8,000 28,228 Clothing Accessories Stores 4,659 5,666 6,831 918 1,400 2,001 Other Clothing Stores 13,902 16,909 20,389 1,060 2,300 8,234 Shoe Stores Men's 921 1,117 1,348 903 1,640 2,186 Women's 1,759 2,137 2,574 1,309 2,384 3,158 Children's & Infant 424 514 621 1,490 3,912 6,000 Family Shoe Stores 28,063 34,143 41,166 2,021 3,388 10,234 Athletic Footwear 11,931 14,514 17,491 1,535 3,284 11,314 Furniture & Home Furnishings Furniture 74,612 90,773 109,442 3,108 7,927 36,712 Floor Coverings 32,742 39,836 48,022 1,229 3,593 7,819 Window Treatment Stores 3,510 4,267 5,143 1,489 4,905 9,934 All Other Home Furnishings Stores 49,114 59,749 72,040 2,868 3,570 6,500 Electronics & Appliances Stores Household Appliance Stores 26,255 31,938 38,505 2,349 4,000 7,563 Radio, TV & Electronics Stores 99,203 120,693 145,517 1,208 3,406 10,451 Computers, Software, Music, & Other Electronics 15,241 18,543 22,357 997 3,388 25,600 Other Shopping Goods Sporting Goods 81,035 98,585 118,860 2,238 7,500 44,116 General Line Sporting Goods 33,155 40,335 48,625 3,765 5,850 28,128 Specialty Line Sporting Goods 42,564 51,787 62,431 1,097 2,449 4,356 Book Stores & Newsdealers 28,394 34,544 41,650 2,428 4,542 29,974 Stationery Stores and Office Supply 16,043 19,520 23,531 585 1,033 2,247 Musical Instrument & Supplies 11,254 13,696 16,513 2,432 7,324 26,094 Jewelry Stores 28,332 34,471 41,560 790 1,450 3,410 Hobby, Toy & Game 25,257 30,726 37,051 1,604 4,050 25,861 Camera & Photographic Supply 6,695 8,149 9,822 816 2,200 5,965 Gift, Novelty & Souvenirs 33,567 40,827 49,227 2,369 4,422 7,015 Luggage & Leather Goods 3,065 3,735 4,500 1,193 2,300 3,102 Sewing, Needlework & Piece Goods 23,330 28,390 34,210 2,678 12,202 19,299 Pet Stores 22,100 26,885 32,420 1,847 3,200 12,398 Art Dealers 3,276 3,982 4,800 675 1,434 2,401 Optical Goods Stores 12,703 15,452 18,631 885 1,561 4,068 Pre-Recorded Tapes, Compact Discs 3,048 3,709 4,470 1,308 3,426 12,753 Cosmetics, Beauty Supplies & Perfume 9,409 11,447 13,800 1,102 1,953 6,235 All Other Health & Personal Care 18,753 22,811 27,505 697 1,786 3,084 43 Table 27 (continued) CHAN-212 SHOPPING GOODS SUPPORTABLE GLA BY MERCHANDISE CATEGORY (Gross Leasable Area) Store Size Merchandise Category 2015 2020 2025 Low Median High OTHER RETAIL STORES Building Materials & Garden Supplies Building Materials & Supplies Stores Home Centers 91,060 110,786 133,566 8,981 95,173 135,833 Paint, Glass & Wallpaper 9,564 11,636 14,031 2,348 3,533 5,028 Lawn & Garden Equipment Outdoor Power Equipment 25,590 31,140 37,540 N/A N/A N/A Retail Nurseries, Lawn & Garden 72,890 88,680 106,920 N/A 15,000 N/A Motor Vehicles & Parts Dealers Auto Parts & Accessories Stores 25,010 30,425 36,685 2,232 6,500 13,000 Tire Dealers 18,900 22,995 27,725 3,514 6,944 12,014 SERVICES Personal Care Services Beauty Shops 16,084 9,111 10,879 900 1,400 3,480 Nail Salons 2,027 1,145 1,373 773 1,200 1,807 Diet & Weight Reducing Services 1,320 747 893 1,223 1,856 3,130 Other Personal Care Services 2,509 1,417 1,691 703 1,488 4,128 Drycleaning & Laundry Services Drycleaning & Laundry Services (except coin-op.)4,367 9,880 11,807 1,038 1,608 2,731 Other Personal Services Child Day Care Services 14,750 16,710 19,960 3,059 5,050 7,495 Photographic Studios 2,156 2,440 2,916 990 1,866 2,550 Veteranarian Services 9,849 11,151 13,329 1,346 2,122 2,701 Pet Care 3,387 3,827 4,560 900 1,200 1,500 Rental and Leasing Formalwear and Costume Rental 482 729 871 763 1,046 1,773 Home Health Equipment Rental 1,664 2,516 3,008 1,200 1,600 3,480 Recreation Physical Fitness Facilites 67,750 76,725 91,663 1,433 6,448 32,170 Health Care Offices of Physicians Offices of Physicians 69,703 83,863 100,202 969 1,652 4,008 Offices of Dentists 32,197 19,368 23,145 1,090 1,700 3,970 Offices of Chiropractors 4,649 2,797 3,342 1,090 1,600 3,970 Offices of Optometrists 1,764 3,183 3,805 1,074 1,620 4,347 Offices of Mental Health Practitioners 2,391 4,316 5,157 1,090 1,800 3,970 Physical & Occupational Therapists 4,006 7,232 8,641 1,090 1,600 3,970 Source: McComb Group, Ltd. Shopping Center Size Sales potential and supportable square feet provide an indication of shopping center potential. Shopping center size will depend on tenant interest and the number of anchor stores. The potential GLA by store category ranges from 825,000 square feet to 1,120,000 square feet, as shown in Table 28. Convenience goods ranges from 105,000 square feet to 135,000 square feet depending on supermarket size and number of other retailers. Convenience goods includes stores where 44 convenience is a primary consideration as they are visited on a regular basis. Examples include supermarkets, drug, liquor, hardware, and other stores and services. Table 28 CHAN-212 POTENTIAL GROSS LEASABLE AREA Store Category Low High Convenience Goods 105,000 135,000 Shopping Goods Anchor Stores 120,000 220,000 Junior Anchors 220,000 315,000 Inline Stores 110,000 180,000 Subtotal 450,000 715,000 Food Service Restaurants 20,000 30,000 Fast Food 15,000 20,000 Subtotal 35,000 50,000 Services 20,000 30,000 Destination Stores Health Club 50,000 60,000 Home Center 115,000 115,000 Cinema 50,000 60,000 Subtotal 215,000 235,000 Total 825,000 1,165,000 Source: McComb Group, Ltd. Gross Leasable Area Shopping goods retailers are stores where comparison shopping is a common part of the shopping trip. Department stores typically anchor these shopping centers. Potential anchor store GLA ranges from 120,000 square feet to 220,000 square feet. Junior anchor retailers are various size stores, ranging in size from 10,000 square feet to 50,000 square feet, also adding the center’s drawing power. Junior anchor GLA could range from 220,000 square feet to 315,000 square feet. Inline, small store tenants could range from 110,000 square feet to 180,000 square feet. Total shopping goods stores could range from 450,000 square feet to 715,000 square feet. Food service establishments are expected to range from 35,000 square feet to 50,000 square feet. Services of various types could range from 20,000 square feet to 30,000 square feet. Destination retailers like health clubs, home centers, and cinemas, could total 215,000 square feet to 235,000 square feet if all three located at Chan-212. It is possible that not all the anticipated potential tenants will located at Chan-212 indicating that the shopping center is likely to be between 800,000 square feet and 1,000,000 square feet. 45 Sales Potential Estimated sales potential by retail store type is contained in Table 29. These estimates of sales potential are likely to be understated due to the high trade area household income. Table 29 CHAN-212 SALES POTENTIAL BY MERCHANDISE CATEGORY (In Thousands of Dollars) Merchandise Category 2015 2020 2025 CONVENIENCE GOODS Food Stores Grocery Stores 43,280$ 52,073$ 62,220$ Supermarkets 42,407 51,021 60,963 Convenience Food 874 1,052 1,257 Specialty Food Stores 1,530 1,841 2,200 Meat Markets 569 683 817 Baked Goods 131 158 189 Confectionery and Nut Stores 131 158 189 All Other Specialty Food Stores 219 263 314 Other Convenience Goods Drug & Proprietary Stores 9,421$ 11,336$ 13,544$ Hardware 1,442 1,736 2,074 Liquor 7,432 8,942 10,684 Florist 547 658 786 Food/Health Supplement Stores 350 421 503 Food Service Full-Service Restaurants 26,134$ 31,795$ 38,333$ Limited Service Restaurants 16,575 20,166 24,313 Cafeterias 829 1,009 1,215 Snack & Beverage Places 4,420 5,378 6,484 Ice Cream & Soft Serve 553 673 810 Frozen Yogurt 55 68 81 Doughnut Shops 774 941 1,135 Bagel Shops 221 269 324 Coffee Shops 1,879 2,285 2,755 Cookie Shops 55 68 81 Other Snack Shops 884 1,075 1,296 Gasoline Svs Stations/Conv. Gas/Convenience Food Stores 9,266$ 11,273$ 13,591$ 46 Table 29 (continued) CHAN-212 SALES POTENTIAL BY MERCHANDISE CATEGORY (In Thousands of Dollars) Merchandise Category 2015 2020 2025 SHOPPING GOODS General Merchandise Department Stores (Incl. leased depts.) Discount Stores 54,121$ 65,844$ 79,384$ Department Stores 35,360 43,020 51,867 Other General Merchandise Stores Warehouse Clubs and Supercenters 121,601$ 147,941$ 178,363$ Dollar Stores 5,108 6,215 7,492 Miscellaneous General Merchandise 11,787 14,340 17,289 Apparel & Accessories Clothing Stores Mens and Boys 2,211$ 2,689$ 3,241$ Womens Clothing 9,823 11,951 14,408 Children's & Infant 4,543 5,527 6,664 Family Clothing 22,837 27,784 33,497 Clothing Accessories Stores 1,351 1,643 1,981 Other Clothing Stores 3,684 4,481 5,403 Shoe Stores Men's 267$ 324$ 391$ Women's 475 577 695 Children's & Infant 123 149 180 Family Shoe Stores 4,911 5,975 7,204 Athletic Footwear 2,088 2,540 3,061 Furniture & Home Furnishings Furniture 19,399$ 23,601$ 28,455$ Floor Coverings 7,367 8,963 10,805 Window Treatment Stores 737 896 1,080 All Other Home Furnishings Stores 8,595 10,456 12,607 Electronics & Appliances Stores Household Appliance Stores 7,220$ 8,783$ 10,589$ Radio, TV & Electronics Stores 29,761 36,208 43,655 Computers, Software, Music, & Other Electronics 8,840 10,755 12,967 Other Shopping Goods Sporting Goods 16,207$ 19,717$ 23,772$ General Line Sporting Goods 6,631 8,067 9,725 Specialty Line Sporting Goods 9,577 11,652 14,047 Book Stores & Newsdealers 4,543 5,527 6,664 Stationery Stores and Office Supply 6,016 7,320 8,824 Musical Instrument & Supplies 2,701 3,287 3,963 Jewelry Stores 9,208 11,203 13,507 Hobby, Toy & Game 4,420 5,377 6,484 Camera & Photographic Supply 1,841 2,241 2,701 Gift, Novelty & Souvenirs 5,035 6,124 7,384 Luggage & Leather Goods 613 747 900 Sewing, Needlework & Piece Goods 2,333 2,839 3,421 Pet Stores 4,420 5,377 6,484 Art Dealers 737 896 1,080 Optical Goods Stores 3,684 4,481 5,403 Pre-Recorded Tapes, Compact Discs 701 853 1,028 Cosmetics, Beauty Supplies & Perfume 3,011 3,663 4,416 All Other Health & Personal Care 5,157 6,273 7,564 47 Table 29 (continued) CHAN-212 SALES POTENTIAL BY MERCHANDISE CATEGORY (In Thousands of Dollars) Merchandise Category 2015 2020 2025 OTHER RETAIL STORES Building Materials & Garden Supplies Building Materials & Supplies Stores Home Centers 31,871$ 38,775$ 46,748$ Paint, Glass & Wallpaper 2,152 2,618 3,157 Lawn & Garden Equipment Outdoor Power Equipment 2,559 3,114 3,754 Retail Nurseries, Lawn & Garden 7,289 8,868 10,692 Motor Vehicles & Parts Dealers Auto Parts & Accessories Stores 5,002$ 6,085$ 7,337$ Tire Dealers 3,780 4,599 5,545 SERVICES Personal Care Services Beauty Shops 3,056$ 1,731$ 2,067$ Nail Salons 223 126 151 Diet & Weight Reducing Services 198 112 134 Other Personal Care Services 439 248 296 Drycleaning & Laundry Services Drycleaning & Laundry Services (except coin-op.)655$ 1,482$ 1,771$ Other Personal Services Child Day Care Services 1,475$ 1,671$ 1,996$ Photographic Studios 593 671 802 Veteranarian Services 2,216 2,509 2,999 Pet Care 254 287 342 Rental and Leasing Formalwear and Costume Rental 176$ 266$ 318$ Home Health Equipment Rental 416 629 752 Recreation Physical Fitness Facilites 5,420$ 6,138$ 7,333$ Health Care Offices of Physicians Offices of Physicians 24,884$ 29,939$ 35,772$ Offices of Dentists 11,108 6,682 7,985 Offices of Chiropractors 1,604 965 1,153 Offices of Optometrists 732 1,321 1,579 Offices of Mental Health Practitioners 825 1,489 1,779 Physical & Occupational Therapists 1,382 2,495 2,981 Source: McComb Group, Ltd. 48 Appendix A DEMOGRAPHIC CHARACTERISTICS Table A-1 Chan-212 Convenience Goods and Shopping Goods Trade Areas and Minneapolis-St. Paul MSA: Population and Households; 2000 and 2010 Census; 2014 and 2019 Estimated Table A-2 Chan-212 Convenience Goods and Shopping Goods Trade Areas and Minneapolis-St. Paul MSA: Average and Median Household Incomes; 2000 and 2010 Census; 2014 and 2019 Estimated Table A-3 Chan-212 Convenience Goods and Shopping Goods Trade Areas and Minneapolis-St. Paul MSA: Household Income; 2000 and 2010 Census; 2014 and 2019 Estimated Table A-4 Chan-212 Convenience Goods and Shopping Goods Trade Areas and Minneapolis-St. Paul MSA: Households, Families and Household Size; 2000 and 2010 Census; 2014 and 2019 Estimated Table A-5 Chan-212 Convenience Goods and Shopping Goods Trade Areas and Minneapolis-St. Paul MSA: Educational Attainment; 2000 and 2010 Census; 2014 and 2019 Estimated Table A-6 Chan-212 Convenience Goods and Shopping Goods Trade Areas and Minneapolis-St. Paul MSA: Age Distribution; 2000 and 2010 Census; 2014 and 2019 Estimated Table A-7 Chan-212 Convenience Goods and Shopping Goods Trade Areas and Minneapolis-St. Paul MSA: Ethnicity; 2000 and 2010 Census; 2014 and 2019 Estimated 49 Table A-1 CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS, AND MINNEAPOLIS-ST. PAUL MSA POPULATION AND HOUSEHOLDS: 2000 AND 2010 CENSUS; 2014 AND 2019 ESTIMATED Population Households Rate of Rate of Trade Area / Year Number Change Number Change CONVENIENCE GOODS TRADE AREA 2000 108,340 N/A 38,921 N/A 2010 134,614 2.20 %50,156 2.57 % 2014 E 139,366 0.32 52,373 0.39 2019 E 156,825 2.39 59,190 2.48 SHOPPING GOODS TRADE AREA 2000 333,532 N/A 125,159 N/A 2010 394,528 1.69 %151,732 1.94 % 2014 E 407,361 0.29 157,810 0.36 2019 E 438,533 1.49 169,997 1.50 MINNEAPOLIS-ST. PAUL MSA 2000 2,968,808 N/A 1,136,615 N/A 2010 3,279,833 1.00 %1,272,677 1.14 % 2014 E 3,361,394 0.22 1,316,673 0.31 2019 E 3,510,623 0.87 1,380,185 0.95 N/A: Not Available. E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. 50 Table A-2 CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS, AND MINNEAPOLIS-ST. PAUL MSA AVERAGE AND MEDIAN HOUSEHOLD INCOMES 2000 AND 2010 CENSUS; 2014 AND 2019 ESTIMATED Convenience Shopping Minneapolis- Goods Goods St. Paul Income Type / Year Trade Area Trade Area MSA Average Household Income 2000 92,335$ 82,151$ 67,906$ 2010 106,700 96,786 80,346 2014 E 113,852 103,006 85,611 2019 E 123,093 110,603 91,814 Median Household Income 2000 74,242$ 65,325$ 54,202$ 2010 84,104 76,146 62,518 2014 E 93,092 83,841 66,941 2019 E 102,347 91,761 71,838 E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. 51 Table A-3 CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS, AND MINNEAPOLIS-ST. PAUL MSA HOUSEHOLD INCOME: 2000 AND 2010 CENSUS; 2014 AND 2019 ESTIMATED 2000 2010 2014 E 2019 E Number Percent Number Percent Number Percent Number Percent CONVENIENCE GOODS TRADE AREA Households 38,921 50,156 52,373 59,190 Average Size 2.77 2.67 2.64 2.63 Household Income Median 74,242$ 84,104$ 93,092$ 102,347$ Average 92,335$ 106,700$ 113,852$ 123,093$ Households Above $50,000 27,391 70.4 %36,276 72.3 %38,751 74.0 %44,837 75.8 % Households Above $75,000 18,534 47.6 27,187 54.2 29,925 57.1 36,387 61.5 Income Distribution Less than $15,000 1,809 4.6 %2,402 4.8 %2,075 4.0 %2,097 3.5 % $15,000 - $24,999 2,173 5.6 3,174 6.3 2,655 5.1 2,177 3.7 $25,000 - $34,999 2,758 7.1 3,427 6.8 3,187 6.1 3,084 5.2 $35,000 - $49,999 4,789 12.3 4,877 9.7 5,706 10.9 6,995 11.8 $50,000 - $74,999 8,857 22.8 9,089 18.1 8,826 16.9 8,450 14.3 $75,000 - $99,999 6,920 17.8 7,827 15.6 7,053 13.5 8,354 14.1 $100,000 - $149,999 6,847 17.6 9,728 19.4 9,811 18.7 10,361 17.5 $150,000 +4,766 12.2 9,633 19.2 13,061 24.9 17,672 29.9 SHOPPING GOODS TRADE AREA Households 125,159 151,732 157,810 169,997 Average Size 2.63 2.57 2.56 2.56 Household Income Median 65,325$ 76,146$ 83,841$ 91,761$ Average 82,151$ 96,786$ 103,006$ 110,603$ Households Above $50,000 78,028 62.3 %102,521 67.6 %109,580 69.4 %121,863 71.7 % Households Above $75,000 48,497 38.7 73,789 48.6 81,683 51.8 96,362 56.7 Income Distribution Less than $15,000 8,705 7.0 %9,926 6.5 %8,667 5.5 %8,064 4.7 % $15,000 - $24,999 9,251 7.4 10,774 7.1 9,014 5.7 7,550 4.4 $25,000 - $34,999 11,083 8.9 11,516 7.6 10,453 6.6 9,746 5.7 $35,000 - $49,999 18,092 14.5 16,996 11.2 20,097 12.7 22,775 13.4 $50,000 - $74,999 29,531 23.6 28,731 18.9 27,896 17.7 25,501 15.0 $75,000 - $99,999 19,649 15.7 23,556 15.5 21,582 13.7 25,257 14.9 $100,000 - $149,999 16,591 13.3 27,187 17.9 28,245 17.9 28,992 17.1 $150,000 +12,257 9.8 23,046 15.2 31,857 20.2 42,113 24.8 MINNEAPOLIS-ST. PAUL MSA Households 1,136,615 1,272,677 1,316,673 1,380,185 Average Size 2.56 2.53 2.50 2.50 Household Income Median 54,202$ 62,518$ 66,941$ 71,838$ Average 67,906$ 80,346$ 85,611$ 91,814$ Households Above $50,000 622,657 54.8 %769,250 60.4 %825,262 62.7 %899,073 65.1 % Households Above $75,000 357,430 31.4 524,039 41.2 580,354 44.1 673,744 48.8 Income Distribution Less than $15,000 104,773 9.2 %119,486 9.4 %106,379 8.1 %98,748 7.2 % $15,000 - $24,999 104,775 9.2 107,508 8.4 91,764 7.0 77,172 5.6 $25,000 - $34,999 125,167 11.0 113,166 8.9 102,976 7.8 92,979 6.7 $35,000 - $49,999 179,244 15.8 163,267 12.8 190,292 14.5 212,213 15.4 $50,000 - $74,999 265,227 23.3 245,211 19.3 244,908 18.6 225,329 16.3 $75,000 - $99,999 165,574 14.6 186,835 14.7 175,315 13.3 201,030 14.6 $100,000 - $149,999 124,905 11.0 200,038 15.7 210,476 16.0 214,066 15.5 $150,000 +66,951 5.9 137,166 10.8 194,563 14.8 258,648 18.7 N/A: Not Available or Not Applicable. E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. 52 Table A-4 CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS, AND MINNEAPOLIS-ST. PAUL MSA HOUSEHOLDS, FAMILIES AND HOUSEHOLD SIZE; 2000 AND 2010 CENSUS; 2014 AND 2019 ESTIMATED 2000 2010 2014 E 2019 E Number Percent Number Percent Number Percent Number Percent CONVENIENCE GOODS TRADE AREA Households 38,921 50,156 52,373 59,190 Families 28,742 35,828 37,454 42,375 As Percent of Households 73.8 %71.4 %71.5 %71.6 % Household Size 1 Person 7,762 19.9 %11,450 22.8 %11,962 22.8 %13,506 22.8 % 2 Persons 11,996 30.8 15,905 31.7 16,619 31.7 18,755 31.7 3-4 Persons 14,735 37.9 17,515 34.9 18,317 35.0 20,717 35.0 5+ Persons 4,428 11.4 5,286 10.5 5,475 10.5 6,212 10.5 Average Household Size 2.77 2.67 2.64 2.63 SHOPPING GOODS TRADE AREA Households 125,159 151,732 157,810 169,997 Families 89,673 106,108 110,591 119,378 As Percent of Households 71.6 %69.9 %70.1 %70.2 % Household Size 1 Person 28,252 22.6 %37,146 24.5 %38,682 24.5 %41,562 24.4 % 2 Persons 42,228 33.7 51,556 34.0 53,694 34.0 57,759 34.0 3-4 Persons 41,747 33.4 48,152 31.7 50,170 31.8 54,146 31.9 5 + Persons 12,932 10.3 14,879 9.8 15,263 9.7 16,530 9.7 Average Household Size 2.63 2.57 2.56 2.56 MINNEAPOLIS-ST. PAUL MSA Households 1,136,615 1,272,677 1,316,673 1,380,185 Families 744,303 821,127 851,800 895,465 As Percent of Households 65.5 %64.5 %64.7 %64.9 % Household Size 1 Person 303,050 26.7 %350,440 27.5 %362,455 27.5 %379,457 27.5 % 2 Persons 370,926 32.6 420,693 33.1 435,230 33.1 456,238 33.1 3-4 Persons 348,717 30.7 376,082 29.6 389,184 29.6 408,342 29.6 5 + Persons 113,922 10.0 125,462 9.9 129,804 9.9 136,148 9.9 Average Household Size N/A: Not Available or Not Applicable. E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. 53 Table A-5 CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS, AND MINNEAPOLIS-ST. PAUL MSA EDUCATIONAL ATTAINMENT: 2000 AND 2010 CENSUS; 2014 AND 2019 ESTIMATED 2000 2010 2014 E 2019 E Attainment Number Percent Number Percent Number Percent Number Percent CONVENIENCE GOODS TRADE AREA No College 12,236 19.2 %14,538 17.5 %15,046 17.4 %16,898 17.4 % Some College/2 yr. Degree 20,308 31.9 24,734 29.7 25,840 29.9 28,904 29.8 College Graduate 22,875 35.9 30,371 36.5 31,280 36.2 35,278 36.4 Graduate School 8,237 12.9 13,620 16.4 14,233 16.5 15,924 16.4 SHOPPING GOODS TRADE AREA No College 53,206 26.9 %59,311 23.8 %60,948 23.6 %63,627 23.6 % Some College/2 yr. Degree 65,983 33.3 81,035 32.6 84,534 32.8 88,245 32.7 College Graduate 57,206 28.9 76,167 30.6 78,417 30.4 82,462 30.6 Graduate School 21,689 10.9 32,293 13.0 33,832 13.1 35,283 13.1 MINNEAPOLIS-ST. PAUL MSA No College 483,289 28.1 %507,695 25.3 %518,016 25.3 %546,728 25.2 % Some College/2 yr. Degree 606,358 35.2 679,794 33.9 694,199 33.9 733,140 33.8 College Graduate 440,341 25.6 550,877 27.5 563,878 27.5 596,216 27.5 Graduate School 192,249 11.2 268,265 13.4 274,608 13.4 290,351 13.4 N/A: Not Available or Not Applicable. E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. 54 Table A-6 CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS, AND MINNEAPOLIS-ST. PAUL MSA AGE DISTRIBUTION: 2000 AND 2010 CENSUS; 2014 AND 2019 ESTIMATED 2000 2010 2011 E 2016 E Age Distribution Number Percent Number Percent Number Percent Number Percent CONVENIENCE GOODS TRADE AREA Under 5 9,682 8.9 %9,901 7.4 %9,490 6.8 %9,918 6.3 % 5 - 9 10,131 9.4 10,821 8.0 10,627 7.6 10,093 6.4 10 - 14 9,403 8.7 11,134 8.3 11,418 8.2 11,515 7.3 15 - 19 6,905 6.4 9,435 7.0 10,275 7.4 12,322 7.9 20 - 24 4,939 4.6 6,005 4.5 6,861 4.9 11,176 7.1 25 - 34 16,874 15.6 18,501 13.7 17,960 12.9 16,240 10.4 35 - 44 23,040 21.3 20,724 15.4 20,107 14.4 20,597 13.1 45 - 54 15,172 14.0 23,481 17.4 23,337 16.7 23,752 15.1 55 - 64 6,642 6.1 14,277 10.6 16,732 12.0 22,390 14.3 65 - 74 3,350 3.1 5,941 4.4 7,626 5.5 11,792 7.5 75 +2,200 2.0 4,394 3.3 4,933 3.5 7,030 4.5 25 - 64 61,729 57.0 %76,983 57.2 %78,136 56.1 %82,979 52.9 % 65 and Over 5,551 5.1 10,335 7.7 12,559 9.0 18,822 12.0 SHOPPING GOODS TRADE AREA Under 5 24,710 7.4 %27,356 6.9 %26,255 6.4 %26,304 6.1 % 5 - 9 26,992 8.1 30,299 7.7 29,708 7.3 26,635 6.2 10 - 14 27,460 8.2 30,351 7.7 31,075 7.6 30,404 7.1 15 - 19 22,704 6.8 25,887 6.6 27,868 6.8 32,093 7.5 20 - 24 15,400 4.6 17,376 4.4 19,440 4.8 28,515 6.6 25 - 34 45,711 13.7 49,407 12.5 48,104 11.8 42,101 9.8 35 - 44 62,970 18.9 57,511 14.6 55,737 13.7 53,355 12.4 45 - 54 48,983 14.7 66,218 16.8 65,174 16.0 61,642 14.3 55 - 64 26,765 8.0 46,357 11.7 52,901 13.0 61,824 14.4 65 - 74 16,557 5.0 23,530 6.0 28,898 7.1 39,072 9.1 75 +15,281 4.6 20,237 5.1 22,201 5.4 27,722 6.5 25 - 64 184,429 55.3 %219,493 55.6 %221,916 54.5 %218,922 51.0 % 65 and Over 31,837 9.5 43,767 11.1 51,099 12.5 66,794 15.5 MINNEAPOLIS-ST. PAUL MSA Under 5 212,810 7.2 %226,483 6.9 %222,212 6.6 %221,399 6.3 % 5 - 9 225,355 7.6 228,363 7.0 227,598 6.8 222,130 6.3 10 - 14 225,652 7.6 225,476 6.9 226,605 6.7 229,336 6.5 15 - 19 209,864 7.1 223,648 6.8 226,665 6.7 241,757 6.9 20 - 24 193,790 6.5 214,482 6.5 213,991 6.4 227,166 6.5 25 - 34 457,105 15.4 477,668 14.6 478,978 14.2 439,417 12.5 35 - 44 528,024 17.8 455,201 13.9 447,282 13.3 467,452 13.3 45 - 54 405,724 13.7 508,014 15.5 489,532 14.6 463,291 13.2 55 - 64 225,541 7.6 370,829 11.3 416,363 12.4 468,166 13.3 65 - 74 145,808 4.9 187,685 5.7 234,287 7.0 311,635 8.9 75 +139,135 4.7 161,984 4.9 177,881 5.3 218,874 6.2 25 - 64 1,616,394 54.4 %1,811,712 55.2 %1,832,155 54.5 %1,838,326 52.4 % 65 and Over 284,943 9.6 349,669 10.7 412,168 12.3 530,509 15.1 E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. 55 Table A-7 CHAN-212 CONVENIENCE GOODS AND SHOPPING GOODS TRADE AREAS, AND MINNEAPOLIS-ST. PAUL MSA ETHNICITY: 2000 AND 2010 CENSUS; 2014 AND 2019 ESTIMATED 2000 2010 2014 E 2019 E Ethnicity Number Percent Number Percent Number Percent Number Percent CONVENIENCE GOODS TRADE AREA Caucasian 100,228 92.5 %114,494 85.1 %118,727 85.2 %133,898 85.4 % African-American 1,580 1.5 4,778 3.5 4,888 3.5 5,398 3.4 Native American 338 0.3 519 0.4 531 0.4 613 0.4 Asian/Pacific Islander 3,600 3.3 8,682 6.4 8,852 6.4 9,777 6.2 Other 2,594 2.4 6,141 4.6 6,368 4.6 7,139 4.6 Hispanic (any race)3,241 3.0 %7,083 5.3 %7,873 5.6 %9,570 6.1 % SHOPPING GOODS TRADE AREA Caucasian 315,363 94.6 %354,313 89.8 %366,114 89.9 %386,588 90.0 % African-American 3,092 0.9 9,014 2.3 9,229 2.3 9,581 2.2 Native American 1,047 0.3 1,568 0.4 1,617 0.4 1,728 0.4 Asian/Pacific Islander 6,849 2.1 15,978 4.0 16,350 4.0 17,042 4.0 Other 7,181 2.2 13,655 3.5 14,051 3.4 14,728 3.4 Hispanic (any race)8,373 2.5 %15,817 4.0 %17,416 4.3 %19,871 4.6 % MINNEAPOLIS-ST. PAUL MSA Caucasian 2,556,853 86.1 %2,656,553 81.0 %2,727,284 81.1 %2,857,513 81.4 % African-American 157,963 5.3 243,414 7.4 246,995 7.3 253,180 7.2 Native American 21,590 0.7 22,726 0.7 23,410 0.7 24,550 0.7 Asian/Pacific Islander 124,025 4.2 189,401 5.8 192,381 5.7 197,766 5.6 Other 108,377 3.7 167,739 5.1 171,324 5.1 177,614 5.1 Hispanic (any race)99,121 3.3 %176,283 5.4 %190,243 5.7 %212,333 6.0 % E: Estimated. Source: U.S. Census, Scan/US and McComb Group, Ltd. 56 AVIENDA, CHANHASSEN Response to USACE letter dated May 3, 2017 Attachment H – Regional Commercial Site Metrics Spreadsheet Development Area Computation ‐ Regional/Lifestyle CenterUse Footprint UnitsReq parking (surface)Parking And Drive Aisles (sf)Other Impervious (sf) (walks, loading docks, circulation)Total Impervious (sf)Parking Landscape Area (sf)Other Pervious (sf)Total Pervious (sf)Total Site (sf)Total Site (ac)Efficiency Factor (amenities, aesthetic, grades)Gross Site Area (ac)NotesRetail407,000 N/A 2,035 567,765 113,553 1,088,318 75,702 116,354 192,056 1,280,374 29.39 80% 36.74 5:1K Parks/ 85% ImperviousRest37,000 N/A 617 172,084 34,417 243,501 22,945 20,026 42,971 286,472 6.58 75% 8.77 16.67:1K Parks/85% ImperviousOffice (two story) 75,000 N/A 750 209,250 41,850 326,100 27,900 29,647 57,547 383,647 8.81 75% 11.74 5:1K Parks/ 85% ImperviousHotel 13,000 100 150 41,850 8,370 63,220 5,580 5,576 11,156 74,376 1.71 80% 2.13 1.5:1 key surface parksHousing (multi) 175,000 250 125 34,875 6,975 216,850 4,650 33,618 38,268 255,118 5.86 75% 7.81 0.5:1 unit surface parksHousing (senior)61,000 225 113 31,388 6,278 98,665 4,185 13,226 17,411 116,076 2.66 75% 3.55 0.5:1 unit surface parksHousing (sf)38,000 38 76 21,204 4,241 63,445 ‐ 350,375 350,375 413,820 9.50 100% 9.50 4 units/ac required minPublic Roadway (R/W)‐ ‐ ‐ ‐ ‐ 309,049 ‐ ‐ 195,082 504,131 11.57 100% 11.57 91.82 80.25 Total req site ‐ R/WRegional Commercial Site Metrics Spreadsheet. Avienda, Chanhassen ‐ Response to USACE letter dated May 3, 2017 .Total Req Site (ac)Required Net Developable Area (ac) AVIENDA, CHANHASSEN Response to USACE letter dated May 3, 2017 Attachment I – Retail Hub Spatial Effect Figures Figure 1 - US Bank Stadium (2016 MnGeo Photo) Avienda Mixed Use Regional/Lifestyle CenterChanhassen, Minnesota Note: Boundaries indicatedon this figure are approximate and do not constitute an official survey product. ¯0 350 Feet US Bank StadiumFootprint = 30 Acres Legend Bluff Creek Boulevard Housing BCOD Hypothetical Footprint Figure 2- Hypothetical Stadium Example (2016 MnGeo Photo) Avienda Mixed Use Regional/Lifestyle CenterChanhassen, Minnesota Note: Boundaries indicatedon this figure are approximate and do not constitute an official survey product. ¯0 350 Feet US Bank StadiumFootprint = 30 Acres Legend Proposed Site Bluff Creek Boulevard Housing BCOD Hypothetical FootprintSite ConstraintSite ConstraintSite ConstraintSite Constraint