G-1. Article from SW News MediaCommentary: Here's why that restaurant you like hasn't opened in t... http://www.swnewsmedia.com/chaska_herald/news/opinion/columni...
+4--1—
http://www.swnewsmed ia.com/chaska_he ra Id/news/opinion/col u m n ists/com mentary-here-s-why-that-
restaura nt-you-li ke-hasn-t/a rticle_02150599-ffd7-5361-8351-Oe5311 aOec7d.html
Commentary: Here's why that restaurant you like hasn't opened
in town
By Mike Huang Mar 23, 2018
Mike Huang
There's always a lot of talk around town regarding new retail
developments.
But as much as there is speculation, there's also plenty of
misinformation. So, here's the scoop on what happens for a
new shop or restaurant to appear in your local shopping
center.
Master planning: Long ago, in a office not too far away ... well
maybe every 10 years or so, anyway ... city planners work with
the city council to establish the city's comprehensive plan. This
is the long-term plan for what type of building uses go where.
For example, the basic types of uses include residential,
commercial (warehouses, factories, offices) and retail
(shopping, restaurants). There are of course other types, such
as parks, educational and rural.
Zoning: Some communities zone for more specific uses closer
to, or during, the master planning process, while others (such
as Chaska) determine zoning when developers approach the
city with prospective opportunities. Zoning would entail
allocating a specific piece of land for particular use consistent
with the master plan. So, if a parcel of land was planned for
residential, it could be zoned for either high density (such as
apartments or condos), medium density (townhouses) or low
density (single family homes).
Pre -development activities: A landowner may go out looking
to sell or lease the land that they own. Likewise, a business
1 of 4 3/29/2018, 1:57 PM
Commentary: Here's why that restaurant you like hasn't opened in t... http://www.swnewsmedia.com/chaska_herald/news/opinion/columni...
may approach a land owner seeking to purchase or lease a
property for a specific use. An agreement may be made, or a
property owner may simply choose to use an asset (land or
building) that they have in their possession. During this
process, they would decide what they want to do. This is where
decisions get made about which businesses may use a
location.
Concept plan: At this phase, the proposed land use (not the
details of the building design, traffic or specific placement —
that's the next step) is reviewed by planning commission, with
recommendation added, followed by an official approval or
rejection by the city council. This phase ensures that the
proposed use is consistent with the master plan (or zoning if
already in place) and is consistent with the intent for the
"neighborhood" as it is intended to mature.
Sometimes, a landowner may obtain a concept approval from
the city council before marketing a property to businesses —
this provides confidence to the business investing in the
property that the proposed use will actually be permitted by
the city, ensuring that they will not be wasting their time and
money.
Preliminary plan: As the plan develops further, this is a
validation step to ensure that the details of the plan such as
building design, traffic, landscape and building placement are
consistent with the neighborhood. The planning commission
reviews, providing feedback and makes a recommendation
which is approved by council.
Final plan/platting: This is the final chance for the planning
commission to provide recommended changes, which will then
go to the city council for final approval. Once this has been
completed, construction can begin in earnest.
Pre -development: This is where the vast majority of
misconceptions appears to exist. In this realm, the city does
not choose which businesses get developed. A business
2 of 4 3/29/2018, 1:57 PM
Commentary: Here's why that restaurant you like hasn't opened in t... http://www.swnewsmedia.com/chaska_heraid/news/opinion/columni...
owner, whether an individual, family, franchise owner or
corporate entity will perform their market assessment. Based
on their business model (cost of goods sold, employees, real
estate, utility, insurance, and other operating costs, compared
to the minimum revenue), they will determine if the location
can support their business.
Panera Bread, for example, requires an annual franchise fee of
$35,000 and a capital investment of $945,000-$1.6 million (per
Panera's franchise website) that needs to be repaid. In order to
pay off this, they've got to sell a lot of bread and bagels.
Panera's corporate market research would determine if a
community of 23,000 (and neighboring areas) is able support a
single location before allowing the franchisee to invest in a
location — after all, its bad for business for a location to open
and then fail shortly afterwards.
Likewise Trader Joe's typically leases about 8,000- to 12,000 -
square -feet locations and averages $1,750 in revenue per
square foot, meaning that they need to move about $14
million in product each year for a small location to cover costs
such as lease, employees (including health care for full-time
ones), utilities, other expenses and their goods sold. If you
want to request that Trader Joe's opens a location near you,
here's a form to fill out: www.traderjoes.com/contact-
us/location-request. But ultimately, they need to be convinced
that there's enough of a market in the area before opening
one there.
In short, who chooses which retail stores and restaurants open
in our city? The stores and restaurants do. They open based on
whether they believe our market can support them. They close
because we can't. The free market determines if we get the
businesses we want.
Mike Huang is chair of the Chaska Planning Commission and Herald
columnist. He can be reached at huangmike@comcast.net.
3 of 4 3/29/2018, 1:57 PM