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10/03/2005 eRA Agenda Date: 10/03/2005 Location: Council Chambers - City Hall Call to Order Approval of Minutes: 09-12-2005 CRA Item 1. Presentation of Initial Recommendations of the Downtown Clearwater Market Study by Lambert Advisory, LLC Executive Director (Assistant City Manager) verbal reports Other Business Adjourn eRA Agenda 10/3/2005 Page 1 of 1 f :~. CRA Cover Memorandum Trackinq Number: 1,523 Actual Date: 10/03/2005 Subiect / Recommendation: Presentation of Initial Recommendations of the Downtown Clearwater Market Study by Lambert Advisory, LLC Summary: As a joint effort between the CRA and the Downtown Development Board (DDB), a Downtown Market Study was identified as a critical first part in a multi-part analysis of downtown to guide future redevelopment/recruitment efforts. With funds from the DDB, the CRA selected Lambert Advisory to conduct the study on April 18, 2005. The goals for the study are: 1. Identify Downtown Clearwater's existing economic base. 2. Identify the market potential for future redevelopment within Downtown Clearwater. 3. Identify opportunities for projects that would draw visitors and users from throughout the Tampa Bay region to Downtown Clearwater. 4. Identify potential residential supporting uses for downtown. 5. Identify recommendations and next steps based upon the baseline data collected. The study will also address: 1. Short and long-term economic climate. 2. Demographic and Economic trends. 3. Development patterns. 4. Existing retail and office space supply and trends. 5. Economic development strengths and weaknesses. 6. Existing and potential trade area including drive times. 7. Spending patterns. 8. Markets for special events and promotions in Downtown. 9. Over-all market opportunities. During the past 60 days, Lambert Advisory has met with staff to clarify the study, interviewed key downtown business and civic leaders, and completed their data collection and analysis. Based upon their analysis, they have concluded: 1. Market and economic trends indicate that downtown retail and office could be performing better than is actually the case. 2. Given land prices and market trends, downtown will primarily be a for-sale as opposed to for-rent luxury housing market for the foreseeable future. The first few developments are now in the planning/development stage serving as a bellwether of how deep the market is for downtown luxury condos. 3. Significant opportunity to attract restaurants/retailers downtown with the f :~. CRA Cover Memorandum right mixed-use space, improved self/valet parking, improved street scene and the potential to support the anchor restaurant users. 4. Consistently strong competition from Safety Harbor and Dunedin requires downtown Clearwater to differentiate itself from the downtown "quaint" village feel. 5. First wave of new retail investment will need to be strong local and regional stores, restaurants, and entertainment venues willing to take a risk in downtown. National retailers will be part of the next evolution. 6. Focus on downtown corporate retention and attraction leverages off of relatively strong county and region wide office employment trends. 7. City can better market its infrastructure capacity and high regulatory development capacity to i nvesto rs. Following the CRA presentation, Lambert will present their findings to the DDB on September 5, 2005. The initial draft will be completed by the end of August. The final report should be concluded by the end of September. Once the final report is received, the Economic Development and Housing Department in conjunction with the CRA and DDB will review and implement next steps. Oriqinatinq: Economic Development and Housing Cateqorv: Other Public Hearinq: No Financial Information: ~ Other Bid Required? No Bid Exceptions: Other Other Contract? Presentation and Update--no cost Review Approval Geraldine Camoos 08-08-2005 17:00:08 Garrv Brumback 08-22-2005 11:43:54 Geraldine Camoos 08-08-2005 17:00:46 Bill Horne 09-01-2005 11 : 11 : 04 Cyndie Goudeau 09-01-2005 15:46: 58 Executive Summary Lambert Advisory has completed a Market Study for the City of Clearwater, with the following stated goals: 1. Identify Downtown Clearwater's existing economic base; 2. Identify the market potential for future redevelopment within Downtown Clearwater; 3. Further, identify development projects that could become catalysts for further development in Downtown Clearwater; and 4. Make recommendations and delineate next steps based on the baseline data collected. The report that follows this executive summary corresponds to the goals above. Demographic and Economic Profile and Real Estate Market Analysis identify and characterize Downtown Clearwater's existing economic base. Market Potentials assesses the current and future demand for key real estate uses, including retail, office, and hotel. Site Analysis links sites with opportunity programs to further revitalize Downtown and to attract a broad range of users. Other Recommendations highlights key initiatives that the City can undertake in the near-term to best position Downtown for further investment. Demographic and Economic Profile . Based on Pinellas County projections and current development trends in Downtown Clearwater over the next five years, the rate of population growth Downtown is expected to far outpace the growth rates of both the City and County, with Downtown growing by nearly 4 percent annually, adding nearly 1,400 new residents. This addition of over 600 new households has a number of positive implications for Downtown, including enhanced demand for new retail. In fact, Downtown growth will represent nearly ten percent of the County's growth. . The 2000 median household income in Downtown was just over $25,500. This represents approximately 70 percent of both the City ($36,500) and County ($37,000) medians. Since planned and marketed Downtown units are priced at points that are generally affordable to households with annual incomes of at least $100,000, we expect to see household incomes rise significantly as these units come on-line. . Pinellas County is projected to gain nearly 80,000 new jobs over the next five years, a steady annual growth rate of four percent. Over that period, the Information sector will see the highest growth rate. In terms of sheer numbers, Professional Business Services (33,000 new jobs) and Education and Health Services (11,500 new jobs) rank highest. All of these are major office employment categories and will drive additional demand for office space in the market. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 1 . Lambert estimates current Downtown employment at 8,200. This figure includes employment in all industry classifications, including office, retail, and industrial employment. Real Estate Market Analysis Residential . The average price of a new single family home is significantly higher in Pinellas ($364,000), than in Pasco ($224,000) or Hillsborough ($246,000) counties. The average closing price of new town homes and condominiums is also highest in Pinellas County at $257,000, compared to $170,000 in Hillsborough and $143,000 in Pasco. . The average price of an existing single family home in Clearwater increased by over 24 percent (to $233,000) between the second quarter of 2004 and the second quarter of 2005. For the zip codes that include and surround Downtown Clearwater the growth has exceeded 26 percent over the same period. . As of August 2005, six significant residential projects are planned for Downtown Clearwater, for a total of over a thousand new units. Average pricing for two bedroom units in Downtown projects already in marketing ranges from $360,000 to $480,000. . The Clearwater rental apartment market has an occupancy level of more than 97 percent for all projects, and more than 98 percent for Class B+ projects or better. The average rent was $764 ($O.79jSF) for an average size unit of 972 square feet. . While demand for rental product will likely remain strong, the number of new units delivered to the market in the foreseeable future will be limited due to lack of appropriately zoned and priced land. This, in combination with high numbers of condo conversions, will continue to limit rental supply and put upward pressure on rents. Retail . Rents for retail space in Clearwater generally range from $12 to $25 per square foot (average $13), with add-ons or pass-throughs (common area maintenance, taxes, and insurance) that range from $2 to $7. Including anchor store space, the market is roughly 94 percent occupied. In the Downtown core (Cleveland Street), current asking rents are between $10 and $15 per square feet. Estimated occupancy is less than 70 percent. . Market-wide rents and occupancy, as well as the retail demand estimates in Section 4 of this report, indicate that the Downtown core retail market's underperformance appears to be more related to a lack of quality, modern, and well positioned retail space and associated close-in amenities (e.g., parking) than it is to either unfavorable commercial real estate market conditions or lack of demand. Indeed, Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 2 demand for retail will only strengthen as new residential units come online, but the orientation and mix of current space will have difficulty accommodating this demand. Office . The Clearwater office market comprises 5.4 million square feet of office space, 1.2 million of which is in Downtown. The Downtown space is 89 percent occupied. Class A space commands rents in the range of $16 to $19 per square foot; Class B, $10 to $17 per square foot; Class C, $8 to $13 per square foot. These rents represent an average increase of approximately 5 percent over 2003 rates. Hotel . The greater Clearwater hotel market comprises nearly 7,000 rooms in a total of 94 properties. . Based on a review of secondary sources of information including Smith Travel Research, occupancy rates in the Beach market dropped from 79 and 80 percent in 1999 and 2000, respectively, to as low as 67 percent in 2002. Rates in 2003 and 2004 showed some recovery, with occupancy rising closer to 70 percent. The average daily rate fluctuated between $102 and $118 over the 1999-2004 period. . Occupancy rates for the non-Beach properties have been consistently lower than that of beach properties - by as much as 15 percentage points in 2001, and by 13 percentage points prior to 2001 and since, in 2003. That gap narrowed in 2004, with the non-Beach properties' average occupancy at 65 percent. The average daily rate fluctuated between $64 and $69 over the 1999-2004 period. Market Potential Retail . Utilizing a variety of data sources, Lambert has built a series of models that estimates current and future expenditure potential by three principal groups (residents, visitors, and office employees) and translates this expenditure into square feet of retail space. We have estimated demand for the current year, and projected it for 2010. Demand for retail space, by category, is estimated as follows, with the significant growth in retail demand between 2005 and 2010 being driven by new residential units coming on line and assumed further investment in the Downtown retail infrastructure that will help attract a strong mix of retailers and, in turn, more patrons. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 3 Food & Beverage Shoppers Goods Convenience Goods Total, Supportable SF 61,190 71,898 16,848 149,936 163,172 121,500 47,914 332,586 Office . Based on employment and office development trends for both the City and County, Lambert has estimated net new office space demand for Downtown over the next five years at between 125,000 and 200,000 square feet. Hotel . Given visitation trends, Downtown should be able to support a mid-size (125- 175 rooms), limited service (branded) product that is strategically located. Such a Downtown hotel would be priced above the hotels along US-19 and US-60 and below Beach product, and will principally serve business and institutional visitors. Specific Site Development Recommendations . The site analysis considers the sites the City/CRA identified as prime redevelopment parcels as well as additional parcels that Lambert has identified as having strategic importance to redevelopment efforts. We focused on the Downtown core, in order to capitalize on the critical mass that has been established by large-scale planned and under-construction developments in the core. We recommend: o A mixed-use condominium or office development on the 400 Block of Cleveland Street (south side). o The development of a quality limited service hotel with 125 to 150 rooms on the Harborview Convention Center parcel. Planning for such a project should also incorporate a meeting/convention component (within the hotel), reconfigured space for the Steinmart department store, and adequate parking for all of these uses and the library. o A targeted fa<;ade improvements program for the west side of the unit block of North Fort Harrison Avenue (20-42 N. Fort Harrison and 432 Cleveland). Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 4 Other Recommendations . Lambert believes that the City of Clearwater could best help position Downtown for further investment by focusing its efforts on the following additional, specific initiatives. Specific components to and recommendations for these initiatives appear in Section 5. o Creatinq and implementinq a tarqeted parkinq strateqy - One of the key factors that drive both Downtown retailers and office users to locate Downtown is adequate, proximate parking. For many of the principal office and retail nodes in Downtown, our interview with stakeholders indicates that a prime limitation to attracting tenants has been a lack of adjacent affordable parking. Given the relative high cost of developing parking, the City and DDS will likely need to playa role in filling this need. The strategy in the early stages should also explore how the DDS and City can utilize a variety of parking strategies to attract specific restaurant and entertainment establishments Downtown. o Oraanizina and undertakina a retailer attraction proaram - We have identified gaps in retail supply and demand. The next steps are to identify specific merchandise categories in which there are gaps in supply; identify specific retailers to target; establish working strategies; and work with Downtown property owners to identify and position through investment appropriate space for those retailers. While the City and DDS may need to participate in direct space investment and improvements, our experience is that the directed attraction of specific restaurants and retailers is best left in the hands of groups principally made up of building owners, brokers, and other merchants. The report that follows further defines and details the above recommendations and findings. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 5 Section 1: Introduction Lambert Advisory has completed a Market Study for the City of Clearwater, to achieve the following goals: 1. Identify Downtown Clearwater's existing economic base; 2. Identify the market potential for future redevelopment within Downtown Clearwater; 3. Further, identify development projects that could become catalysts for further development in Downtown Clearwater; and 4. Make recommendations and delineate next steps based on the baseline data collected. The organization of this draft report corresponds to the goals above. Section 2 (Demographic and Economic Profile) and Section 3 (Real Estate Market Analysis) identify and characterize Downtown Clearwater's existing economic base. Section 4 (Market Potentials) assesses the current and future demand for key real estate uses, including retail, office, and hotel. Section 5A (Site Analysis) links sites with opportunity programs to further revitalize Downtown and to attract a broad range of users. Section 58 (Other Recommendations) highlights key initiatives that the City can undertake in the near-term to best help position Downtown for further investment. Each component of this analysis considers broader regional trends, inherent market strengths and weakness of Downtown, and competitive implications for commercial real estate activity in and around Clearwater. Section 2: Demographic & Economic Profile 2A - Introduction As the basis for evaluating market potentials and opportunities for investment in Downtown Clearwater, Lambert Advisory (Lambert) examined population, household, and economic trends and forecasts for several geographic areas - Pinellas County, City of Clearwater, and Downtown. This profile focuses on those variables that "drive" demand for housing, retail, and office uses (estimates of which are found in Section 3 of this report), including population and household growth trends, household income growth, and employment trends and forecasts. Lambert has defined Downtown by Census geography, as shown in the map below. The area is comprised of four Census block groups and encompasses approximately three quarters of a square mile of land in the core of Clearwater. Also shown in the map below is the CRA boundary, in blue. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 6 Figure 1: Downtown Census Block Groups and CRA Boundary Source: us Census, City of Clearwater Planning Department The figures for 2000 reflect the U.S. decennial Census data; 2005 and 2010 figures are based on estimates and projections prepared by the Pinellas County Department of Planning. 2B - PODulation & Households As illustrated in Figure 2, the population of the downtown Census block groups is currently 4,500 - or roughly 4 percent of the entire City - in just over 2,000 households. Unlike past years, which have been characterized by slow Downtown housing demand, over the next five years, the rate of population growth downtown is expected to far outpace the rates of both the City and County, at nearly 4 percent annually, adding nearly 1,400 new residents. This addition of over 600 new households has a number of positive implications for Downtown, including enhanced demand for new retail. By comparison, the City of Clearwater is projected to grow at a much slower rate (0.2% annually), adding only 1,348 residents. It should be noted that the 2004 Census population estimates showed a net loss (of fewer than 300 residents, or less than 0.1% annually) in the City population from 2000 to 2004. Lambert Advisory has opted to use local information - in this case, the Pinellas County Department of Planning estimates and forecasts - rather than national Census projections, as the basis for our analysis. Pinellas County- which has 923,229 residents today - is forecast to add nearly 16,000 residents in just over 7,000 households. The new residents forecast for Downtown will represent nearly ten percent of the County's growth. Aside from the growth Downtown, the County will see the highest growth rates in communities to the north and northeast, including Palm Harbor, Tarpon Springs, and East Lake. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 7 Figure 2: Population and Households, 1990-2010 Sources: Pinellas County Department of Planning, Lambert Advisory Clearwater 1990 2000 2005 2010 98,784 108,787 110,826 112,174 Rate 90-00 Rate 00-1 0 1.0% 0.2% Households 1990 2000 2005 2010 44,138 48,449 49,357 49,957 R~e9~00 0.9% R~eO~10 0.2% Note: Downtown is defined as Census tract 259.01 and Census block groups 259.02 (block group 1), and 264 (block groups 1 and 2). 2C - Miaration In addition to natural increase (birth rate outpacing death rate), migration is a key driver of population growth. Migration is defined as population movement between Pinellas County and other locations within the United States. There are two components: in- migrants that move into Pinellas and out-migrants who move to other counties and/or states. More people make short-distance moves than long-distance ones, so it is not surprising that the highest numbers of in-migrants to Pinellas County came from Hillsborough, Pasco, Manatee, and Orange Counties (over 6,000 total, or approximately one quarter of total in-migration). Migration from South Florida also represented a substantial influx; Miami-Dade, Broward, and Palm Beach Counties represented 4 percent of total in- migration. Florida has historically attracted large numbers of migrants, particularly retirees, from Northeastern states. While this trend is not yet as pronounced in Pinellas County as it is in South Florida, the table below shows that C1earwater/Pinellas has captured considerable demand from Northeastern migrants. The 4,179 migrants that moved to Pinellas County from the Northeast in 2003 represented a full 16 percent of total in-migration. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 8 Figure 3: Migration from Northeastern States, 2003 Sources: IRS County-to-County Migration, Lambert Advisory CT DC DE MA MD NJ NY PA RI Total Pinellas 308 34 31 625 356 631 1,425 648 121 Palm Beach 1,275 77 85 1,570 823 2,272 7,282 1,341 302 Broward 911 108 124 1,641 838 3,242 8,275 1,375 203 Miami-Dade 448 183 50 1,005 529 2,272 5,173 568 150 4,179 15,027 16,717 10,378 2D - Aae, Gender, and Race Lambert examined population by age cohort, which is a key barometer of demand for various retail uses and housing products. At all three geographic levels, there are high concentrations in the "19 and Under" category. Growth in this group, along with the 20- 24 cohort (currently 4 to 10% at all three levels) may indicate future demand for housing product (e.g., rental) and retail/entertainment geared toward newly created households. Another age group with high percentages at all three levels is that of 45 to 64 year-aids, the group in its peak earning years. The size and growth of this group may indicate future demand for differentiated retail and housing products. Research by groups like the American Association of Retired Persons (AARP) and commercial real estate firms like Jones Lang LaSalle have identified a number of characteristics of "baby boomers," including that many place a high priority on "experience" while shopping; value the time savings associated with one-stop and on-line shopping; and will downsize their housing into mixed-use developments, in large numbers. Such findings may have implications for the strategic redevelopment of Downtown - for example, a retailer attraction effort may have as one of its goals to cluster similar or symbiotic tenants together to achieve a notion of one-stop or leisure "experience" shopping. Lambert also compared median ages at the different geography levels. The current median age of the Downtown Census block groups (29 years) is significantly lower than both the City and County medians, 42 and 43, respectively. The population of the Clearwater area encompasses a range of racial and ethnic groups. The racial composition of Downtown varies from that of the City and County. Downtown has fewer White residents than either the City or the County, and approximately the same proportion of Black! African-American residents (in the single race classification categories). The proportion of the Hispanic/Latino population, Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 9 meanwhile, is more than triple that of Clearwater and six times that of broader Pinellas County. The preceding demographic characteristics are summarized in Figure 4. Figure 4: Demographic Snapshot, 2000 Source: US Census, Lambert Advisory Clearwater Age 19 and under 20-24 25-34 35-44 45-64 Over 65 21% 6% 13% 15% 24% 21% Median Age 41.8 Population by Single Race Classification White Alone Black or African American Alone American Indian & Alaska Native Alone Asian Alone Native Hawaiian & Other Pacific Islander Some Other Race Alone Two or More Races 84% 10% 0% 2% 0% 2% 2% Hispanic or Latino, of any race 9% Median Income Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 10 2E - Household Incomes As part of our demographic and economic profile, Lambert researched household incomes, which represent a critical element of market demand analysis as they indicate the amount and nature of expenditure potential in a given market. The 2000 median household income in Downtown was just over $25,500. This represents approximately 70 percent of both the City ($36,500) and County ($37,000) medians. The median household incomes of the Downtown, the City, and the County represented 66 percent, 94 percent, and 96 percent, respectively, of the 2000 statewide median household income level of $38,819. Using U.S. Bureau of Economic Analysis figures published in the monthly Survey of Current Business, Lambert has estimated current income figures as follows. Figure 5: Household Income, 1999 and 2005 Source: US Census, Bureau of Economic Analysis, Lambert Advisory Clearwater Household Income, 1999 Less than $15,000 $15,000 to $24,999 $25,000 to $34,999 $35,0000-$49,999 $50,000-$74,999 $75,000-$99,999 $100,000-$149,999 $150,000 or more 17% 15% 15% 18% 18% 8% 6% 4% Median household income, 1999 Annual growth $36,494 1% 2005 Estimated median income $38,654 One caveat to these figures is that, as the planned new units come on-line Downtown, the household incomes should significantly rise. As detailed in the real estate analysis in Section 3, Downtown units are selling at price points that are generally affordable to households with annual incomes of at least $100,000. However, to the extent that these are second home buyers, they will not be captured in future statistical profiles, although they will make significant expenditures in the area when in occupancy. According to Pinellas County population estimates and projections, Clearwater's seasonal residents are estimated to represent 4.5 percent of total City population, or approximately 5,000 people, from 2005 to 2010. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 11 2F - EmDlovment and Waaes Employment growth is a major driver of demand for real estate, including office, industrial, and residential uses. As illustrated in Figure 6, Pinellas County has added over 23,000 jobs in the last three years. The total workforce is nearly 450,000 persons, 86 percent of whom are employed in services-providing (versus goods-producing) industries. The proportion of services-providing jobs has gradually increased each of the last several years, from 85 percent in 2001. Pinellas County is projected to gain nearly 80,000 new jobs over the next five years, a steady annual growth rate of four percent. The strongest growth has occurred in the Leisure and Hospitality and Education and Health Services sectors. Over the 2005-2010 period, the highest growth rate is projected in the Information sector. However, in terms of sheer numbers, Professional Business Services (33,000 new jobs); Education and Health Services (11,500 new jobs) and Other Services (6,000 new jobs) - which includes industrial and household repair and maintenance services, personal care services, and laundry and dry cleaning services - rank highest. Employment by industry is shown in Figure 6. Detailed employment data appears in the appendices to this report. Figure 6: Pinellas County Employment by Industry, 2001-2010 Source: Florida Agency for Workforce Innovation, Occupational Employment Projections Unit, Lambert Advisory 100,000 Professional and Business Services D Education and Health Services 600,000 500,000 . Trade, Trans portation and utilities 400,000 D Leisure and Hospitality 300,000 . Manufacturing . Financial Activities 200,000 Public Administration D Construction o D Other Services 2001 2002 2003 2004 2005 2010 Information The location of large employers also has an impact on market demand, due to employees living, shopping, and eating near their place of work. In the county as a whole, Boca Ground Cover, Modern Business Associates, Southeast Personnel Services, and Pinellas County are the organizations employing the largest numbers of people. Within downtown, Pinellas County, City of Clearwater, the Church of Scientology, and ANECO Electrical Construction account for the largest numbers of employees. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 12 Using 2004 Florida ES-202 data as a basis, Lambert Advisory has estimated the number of downtown employees. ES-202 data does not capture Church of Scientology employees, and because the information is reported to the state by address, overstates government employment (i.e., all of the 3,700 Pinellas County employees and 2,000 City of Clearwater employees are reported at downtown addresses, although not all of them work downtown). Adjusting for these factors (i.e., adding Church employment and reducing government employment), Lambert estimates downtown employment at 8,200. This figure includes employment in all industry classifications, including retail and industrial employment. Based on ES-202 industry classification data and an inventory of office space downtown, Lambert has estimated downtown office employment at 5,900 (including Church and government employees). This figure is the basis for estimates of retail demand in Section 4 (Market Potential). The most recent wage data available (charted in Figure 7) shows the average across all industries at $36,800. The highest paying industries in Pinellas County are Finance ($50,900), Manufacturing ($44,900), and Government ($42,400), which, with the exception of Manufacturing, are likely to be attracted to a Downtown location. Detailed wage data appears in the appendices to this report. Figure 7: Pinellas County Wages by Industry, Fourth Quarter 2004 Source: Florida Agency for Workforce Innovation, ES-202 Data, Lambert Advisory E] Financial Activities $60,000 E] Manufacturing $50,000 E] Public Administration E] Information $40,000 E] Education and Health Services $30,000 II Construction $20,000 II Professional and Business Services E] Trade, Trans portation and utilities $10,000 $0 II Natural Resources and Mining E] Leisure and Hospitality Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 13 Section 3: Real Estate Market Analysis 3A: Residential Rental and For-Sale Markets The residential real estate market in the Tampa Bay Region is at an all-time high in terms of sales activity and pricing. Lambert has compiled and analyzed data on residential permits, new home closings, re-sales, new and recent condominium and townhome developments, proposed residential developments, and the rental apartment market. Detailed data appear in the appendices to this report; key findings are highlighted below. Residential Permits The total number of residential units permitted in the Tampa Bay Region reached a 15- year high in 2003, with permits issued for nearly 27,000 units. This number remained relatively stable in 2004. As of the first quarter of 2005, the region is again on record pace, with 7,300 residential permits issued, up 28 percent over the same period last year. The number of residential permits issued in Pinellas County registered a 15-year high of nearly 4,400 in 2001, before declining to 15-year low of 2,300 the following year. This decline can be attributed largely to the impact of 9/11 and the mini-recession that followed. Permits rebounded to just over 3,500 in 2003 and remained stable in 2004. Figure 8: Residential Building Permits, Pinellas County and Tampa Bay Region, 1995-2004 Source: University of Florida Bureau of Economic and Business Research, Lambert Advisory 25,000 5,000 IIT!I Pinellas IIT!I TB Region 20,000 15,000 10,000 o 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Pinellas County is essentially built out, as is the City Of Clearwater. Consequently, most recent residential development has been in-fill, with townhomes and condominiums Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 14 claiming an ever increasing share of new home construction in both the County and City; this trend is expected to continue in the near-term. New Home Closings The lack of developable land in Pinellas County is also reflected in the magnitude and pricing of new home construction. Annual builder closing trends by County in the Tampa Bay Region are shown in Figure 9. Detailed closing information for Pinellas County by submarket appears in the appendices to this report. Figure 9: Builder Closing and Average Price by County, 2004 Source: Rose Residential Reports, Lambert Advisory Units Closed Avg. Price $ Location Single Family Hillsborough Pasco Pine lias 7,419 5,750 603 13,772 Subtotal Multi-Family Hillsborough Pasco Pine lias 2,558 992 2,419 5,969 Subtotal Total Hillsborough Pasco Pine lias 9,977 6,742 3,022 19,741 Subtotal $246,167 223,896 363,997 $242,028 $169,640 143,263 257,394 $200,820 $226,546 212,032 278,665 $229,568 As seen in the appendices (Geographic Distribution of Pinellas County Builder Closings), the number of new home closings in Pinellas County more than doubled between 2003 and 2004. This increase was entirely attributable to new multi-family homes which more than tripled from 688 closings in 2003 to 2,419 closings in 2004. Due to the lack of available land and the influence of the beaches, the average price of a new single family home is significantly higher in Pinellas ($364,000), than in Pasco ($224,000) or Hillsborough ($246,000) counties. The average closing price of new townhomes and condominiums is also highest in Pinellas County at $257,000, compared to $170,000 in Hillsborough and $143,000 in Pasco. Note that the closing prices recorded in 2004 reflect the price of a unit sold six to twelve months earlier for a single family home and as much as 18 months earlier for a condominium. Consequently, they reflect prices that are lower than the current market. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 15 Figures 10 and 11 show closings by submarket for single family and multi-family dwellings. Figure 10: Single Family Closings in Pinellas County by Submarket, 1999- 2004 Source: Rose Residential Reports, Lambert Advisory 1,200 800 1,000 600 400 200 o 1999 2000 2001 2002 2003 2004 Figure 11: Multi-Family Closings in Pinellas County, by Submarket, 1999- 2004 Source: Rose Residential Reports, Lambert Advisory 3,000 500 2,500 2,000 1,500 1,000 o 1999 2000 2001 2002 2003 2004 Most multi-family development is concentrated in south central and south Pinellas County, which includes Clearwater. In 1999, nearly two-thirds of all new multi-family Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 16 closings were in south and south central Pinellas. By 2003, the share of new multi- family closings in south central and south Pinellas increased to 86 percent and to 88 percent in 2004. Closing prices for new single family homes in Pinellas County trended upward over the 1999-2004 period for all submarkets, while the closing prices for multi-family fluctuated, depending on the product and location. In 2003 and 2004, condominium conversions also impacted the average closing price of new multi-family homes. Condominium conversions have become the new "affordable" housing alternative, with over 3,000 units converted in Pinellas County alone in 2003 and 2004. Re-sales Over the 12-month period ending June 2005, there were approximately 1,975 sales of existing single family homes among the five zip codes that comprise the City of Clearwater. The zip code boundaries are shown in Figure 12; the summary data by zip code is shown in Figure 13. Figure 12: Clearwater Zip Codes Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 17 Figure 13: Summary of Clearwater Single Family Re-Sales by Zip Code, Year Ending Second Quarter 2004 and 2005 Source: Pinellas County MLS lipll~1 33755 33756 33759 33764 33765 Total Re-Sale Summary - 2004 Average Size Square Feet 1,371 1,751 1,680 1,724 1,627 1,588 Average Price - 2nd Q 2004 $145,808 $239,320 $189,390 $191,624 $175,410 $186,958 Average $/SF - 2nd Q 2004 $106 $137 $113 $111 $108 $118 Re-Sale Summary - 2005 Average Size Square Feet 1,493 1,712 1,723 1,717 1,696 1,703 Average Price - 2nd Q 2005 $187,599 $295,633 $235,628 $234,678 $213,289 $232,634 Average $/SF - 2nd Q 2005 $126 $173 $137 $137 $126 $137 Sale Price. % Chanqe '04.'05 28.7% 23.5% 24.4% 22.5% 21.6% 24.4% Sale $/SF. . % Change '04.'05 18.1% 26.4% 21.3% 23.0% 16.6% 16.0% The greatest number of re-sales were in the two zip codes that encompass downtown Clearwater: 33755, covering the area north of SR-60, with 574 sales; and 33756, covering the area south of SR-60, with 623 sales. These two zip codes also have the lowest and highest prices among the five zip codes analyzed, ranging from an average of $186,000 in zip code 33755 to a high of $288,000 in zip code 33756, which includes Harbor Oaks and Belleair. The average price of an existing family home in Clearwater increased by over 21 percent between the second quarter of 2004 and the second quarter of 2005. New and Recent Residential Developments While Downtown Clearwater has not yet experienced the level of urban redevelopment that has take place in the sister cities of St. Petersburg and Tampa, Clearwater is clearly beginning to see its own Downtown renaissance. Several projects have been developed in the Downtown and several more are in the planning stages. Figure 14 provides a summary of several new and recent condominium and townhome projects that have been developed in the downtown market, with comparison for projects in surrounding neighborhoods and the beaches. A map showing the project locations appears in Figure 15. Detailed data by project is available for the City's review upon request. All of the product types have been successful to date. Particularly noteworthy is the absorption pace among condo conversion projects. As noted previously, there have been over 3,000 condominium conversions (units) in Pinellas County in the past year. Demand for these projects has been astounding, with investors/speculators contributing in large part to theses absorption levels. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 18 Figure 14: New and Recent Condominium and Townhome Developments Source: Lambert Advisory Mid- and high-rise condos Downtown 1,600-4,000 $670,000-$1,600,000 $300-$500 1-10 units Island Mid- and high-rise condos Key/I ntracoastal 1,400-4,600 $600,000-$1,750,000 $300-$600 6 units Mid- and high-rise condos Gulf Front 1,400-5,200 $600,000-$4,400,000 $400-$800 N/A Condo conversions Downtown 500-1,100 $100,000-$190,000 $120-$200 16-33 units Townhomes Downtown 1,100-2,400 $175,000-$350,000 $150-$200 1-6 units Townhomes Suburban 1,200-1,600 $130,000-$200,000 $100-$130 7 units Figure 15: New and Planned Condominium and Townhome Developments . Planned . New and Recent Condo Projects Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 19 Proposed Projects Six significant residential projects are planned for downtown Clearwater as of August 2005. The project locations are shown above in Figure 15; project basics appear below in Figure 16. Figure 16: Planned Condominium and Townhome Developments Source: Lambert Advisory Water's Edge (OPUS Phase 1) 331 Cleveland Street High-rise condos 157 Approved Harrison Village/Island View 488 N Fort Harrison Mid--rise condos 324 Approved Acqua 400 Cleveland Street High-rise condos 245 Processing Station Square 628 Cleveland Street High-rise condos 126 Approved Under Mediterranean Village 909 Cleveland Street Townhomes 100 construction Clearwater Centre 1100 Cleveland Street High-rise condos 71 Processing 1023 Rental Apartment Market As shown in Figure 17 below, the rental apartment market in Pinellas County is very tight. As of the first quarter of 2005, the overall occupancy level for the county was over 97 percent and the average rent was at $766 ($0.82jSF), for an average size unit of 927 square feet. Among commercial grade Class B+ or better projects the occupancy level is at more than 96 percent with an average of $953 ($0.90jSF), for an average size unit of 1,060 square feet. Figure 17: Pinellas County Rental Apartment Market Summary, Q1 2005 Source: Bay Area Apartment Association, Lambert Advisory Number Percent Average Average Average UnitType Units Vacant Occupied Size (SF) Rent $/SF Studio 799 14 98.2% 484 $512 $1 .06 1-bedroom 18,800 517 97.3% 724 $652 $0.90 2-bedrooms 19,764 667 96.6% 1 ,070 $850 $0.79 3-bedrooms 3,423 148 95.7% 1 ,320 $1 ,000 $0.76 4-bedrooms 129 5 96.1% 1 ,479 $1 ,230 $0.83 All units 42,915 1,351 96.9% 937 $766 $0.82 As shown in Figure 18, the rental apartment market in the Clearwater submarket is equally as strong with an occupancy level of more than 97 percent for all projects, and more than 98 percent for Class B+ projects or better. The average rent for all projects in the Clearwater submarket was $764 ($O.79jSF), for an average size unit of 972 Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 20 square feet, and $920 ($0.86/SF), for an average size unit with 1,069 square feet for Class B+ or better projects. Figure 18: Clearwater Submarket Rental Apartment Market Summary, Ql 2005 Source: Bay Area Apartment Association, Lambert Advisory Number Percent Average Average Average UnitType Units Vacant Occupied Size(SF) Rent $/SF Studio 260 5 98.1% 519 $552 $1 .06 1-bedroom 5,589 128 97.7% 728 $640 $0.88 2-bderooms 6,41 1 206 96.8% 1 ,070 $820 $0.77 3-bedrooms 1 ,035 26 97.5% 1 ,340 $970 $0.72 4-bedrooms 34 0 100.0% 1 ,595 $1 ,340 $0.84 All units 13,329 365 97.3% 972 $764 $0.79 There have been only four new significant rental apartment projects, for a total of 947 units, delivered to Pinellas County in the past two years. While demand will likely remain strong, the number of new units delivered to the market in the foreseeable future will be limited due to lack of appropriately (for rental development) zoned and priced land. This, in combination with high numbers of condo conversions, will continue to limit rental supply and put upward pressure on rents. Residential Market Conclusions The current housing market in Pinellas County is characterized by rapidly increasing supply of for-sale multi-family product, rapidly increasing prices, and uncertain depth of end-user due to heavy investor/speculator participation. The County has a long history of healthy demand for for-sale multi-family housing (condominiums and townhomes). The end-user appeal of these units is proven and supply is limited due to lack of available land. Clearwater Beach has a proven track record of strong demand for new townhomes and condominiums, while downtown Clearwater is in the midst of establishing one. Potential strengths for the downtown market include its proximity to the beach, the attractive waterfront, its position as a government and employment center, strong visitor trends, and the presence of the headquarters of the Church of Scientology, which draws parishioners from around the world. Potential weaknesses include its relative distance to other major employment nodes in the county and region compared to downtown Tampa and St. Petersburg, perception of higher crime areas to the north of Downtown, and investor concerns that the future of Downtown will be driven by the interests of a small number of major Downtown land owners. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 21 38: Retail Market Clearwater's retail market comprises an estimated 5.5 million square feet of space. The mix of retail inventory is broad, with properties ranging from smaller community "strip" centers to a power center (Clearwater Mall) and major regional mall (Westfield Shoppingtown Countryside). The two malls combined represent nearly 2 million square feet of retail space, or slightly less than 40 percent of the area's total inventory. From the "local" retail service perspective, the Clearwater area is well supplied by both anchored (grocery) and non-anchored shopping centers, as well as "big box" retailers including Babies 'R' Us, Best Buy, Super Target, and Linens 'n' Things. Most of the City's retail complexes have gross leaseable area between 10,000 square feet to 200,000 square feet. In an effort to gauge retail market conditions among shopping centers, we profiled selected complexes totaling nearly 2 million square feet of space. We limited this survey to centers over 15,000 square feet, within a 5-mile radius of Downtown. The property survey is included in the appendices to this report; key findings follow. Based on the retail survey, rents for space generally range from $12 to $25 per square foot, with add-ons or pass-throughs (common area maintenance, taxes, and insurance) that range from $2 to $7. The estimated average rental rate is $12.60, net of add-ons. Including anchor store space, the market is roughly 94 percent occupied. The International Council of Shopping Centers breaks down retail centers by center type, defined by typical anchors and square footage. Characteristics in the Clearwater market, by center category, include: · Power Centers (category-dominant anchors, 250,000 SF+, e.g., Clearwater Mall): triple net rents at $20/SF, $4.73/SF pass-throughs, 98% occupied. . Community Centers (general merchandise and grocery/convenience, 100,000-300,000 SF, e.g., Clearwater Plaza on Missouri Avenue): triple net rents at $12-14/SF, average of $3.70/SF pass-throughs, 97% occupied. · Neighborhood Centers (convenience, 30,000-100,000 SF, e.g., Harbor Oaks Shopping Center on South Ft. Harrison): triple net rents at $12-25/SF, average of $3.40/SF pass-throughs, 84% occupied. Downtown retail is currently concentrated in a few neighborhood centers, and in the Downtown core along Cleveland Street. Based on data from the Pinellas County Property Appraiser and interviews with property and business owners, we have estimated non-centerdowntown retail space in the Downtown core at approximately 280,000 square feet. Current asking rents are between $10 and $15 per square feet. Estimated occupancy is less than 70 percent. These Downtown core figures contrast unfavorably with Downtown retail space in shopping centers - Cleveland Plaza (1235 Cleveland Street) is asking similar rental rates ($14/SF gross), but is 93 percent occupied. The new Publix-anchored Harbor Oaks Shopping Center is commanding $32/SF gross rents (inclusive of pass-throughs) and is 100 percent occupied. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 22 Market-wide rents and occupancy, as well as the retail demand estimates for in Section 4, indicate that the Downtown retail markets underperformance appears to be more related to a lack of quality retail space and associated close-in amenities (e.g., parking) than it is to either unfavorable commercial real estate market conditions or lack of demand. This was further confirmed by stakeholder interviews over the course of the downtown market study. These same factors will also directly affect Downtown's ability to attract retailers going forward. 3C: Office Market Clearwater is the county seat for Pinellas County and as such, hosts the offices of City and County government agencies, Downtown. The market for commercial office space Downtown is growing, but is still modest relative to the broader Pinellas County and Tampa Bay region. Clearly, continued growth of the Downtown office market will provide support to any redevelopment initiative. Following are highlights of regional and Downtown office conditions that will influence prospective office development in Downtown. From a regional perspective, the Tampa Bay Metropolitan Area office market is comprised of more than 67 million square feet of office space. The office development is scattered among six sub-markets; the North Pinellas sub-market, which includes the northern part of Clearwater (not including Downtown), is the second smallest sub- market with 4.4 million square feet of total space, or only 7 percent of the region's total inventory - in comparison, the largest sub-market is Westshore, with nearly 14 million square feet, 20 percent of regional inventory. Overall, the region is experiencing 89 percent occupancy, with full-service lease rates for quality Class NB+ properties generally averaging $20.40 per square foot. There is reportedly more than 100,000 square feet of office space under construction in North Pinellas, none of which is Downtown. The City of Clearwater comprises approximately 1 million square feet of Class A product, with occupancy at 87 percent. The balance of the City's office inventory is comprised of approximately 2.2 million square feet of Class B office space, with occupancy of 90 percent, and another 2.2 million square feet of Class C space at an occupancy of 93 percent. Generally, full-service lease rates for Class A and B office space are between $16 and $20 per square foot, while Class C space ranges from $10 to $16 per square foot. An inventory and profile of Downtown office space appears in the appendices to this report. During the past five years, approximately 140,000 square feet of office space has been delivered to the Downtown market, the bulk of which is owner-occupied (CRUM building). Approximately one-quarter of the City office inventory (1.2 million square feet) is Downtown. A third (369,003 SF) of that space is Class A space, 82 percent of which is occupied. Forty percent (474,015 SF) is Class B space, 80 percent of which is occupied. The balance (30%) of the Downtown inventory is Class C space, with occupancy of 89 percent. Full-service lease rates for Class A space range from $16 to $19 per square foot; Class B space from $10 to 17 per square foot; and Class C space from $8 to $13 per square foot. These rents represent an average increase of approximately 5 percent over 2003 rates. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 23 Tampa's 1-75 Corridor is currently capturing the bulk of new construction in the broader market - as of the first quarter of 2005, approximately 400,000 square feet of space was under construction. This trend is likely to continue in this and other suburban sub- markets, absent any major changes in Downtown Clearwater, due to the following. . Accommodating large block users (+10,000 square feet) Downtown is growing increasingly difficult. . Parking constraints in the downtown area impact new development, as well as the ability to attract and maintain large tenants. Notably, Wakely and Associates, one of Downtown's five largest employers, recently announced its decision to relocate and cited parking constraints as a primary reason. . Current lease rates remain at levels below the minimum that would support new, large-scale development, particularly for more costly high-rise product. The Downtown Clearwater office market has remained stable during the past several years. However, the region is experiencing continued employment growth, a portion of which the Downtown may be positioned to capture as redevelopment proceeds. Although demand for new, large-scale office may not be warranted immediately, the possibility to support to office supply could occur within a five-year window. 3D: Hotel Market Overview Clearwater and the Beaches continue to emerge as a premier vacation destination in the US. Nearly 925,000 overnight visitors came to Clearwater in 2004, and the area has seen a steady 1.5 percent annual visitation growth since 2000. Additionally, tourism expenditures reached almost $600 million last year, an increase of more than 9 percent over 2003. Visitation to Clearwater and the Beaches recovered quickly from the tourism impacts caused by the events of September 11th, resuming pre-2001levels by 2003, and overnight visitation is projected to exceed 1 million annually by 2010. As shown in Figure 19, the greater Clearwater hotel market comprises nearly 7,000 rooms in a total of 94 properties. Approximately 40 percent is on the Beaches and 30 percent is concentrated just outside the City boundary, near the St. Petersburg- Clearwater Airport. The remaining market inventory (2,000 rooms) is concentrated along US-19 and Gulf-to-Bay Boulevard. On Clearwater Beach, there are three full-service properties comprising a total 858 rooms. The remaining balance of beach hotel inventory, or nearly 2,000 rooms, consists of limited-service and extended stay product. The US-19 and Gulf-to-Bay inventory - the concentration of non-beach properties closest to downtown - consists entirely of limited-service and extended stay product, much of which is older and in "fair" condition. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 24 Figure 19: Clearwater Hotel Market Properties Source: Smith Travel Research, Lambert Advisory Figure 20 shows trends in occupancy, average daily rate (ADR), and revenue per available room (RevPAR) for selected Beach properties. Based on historical trends reported by Smith Travel Research, occupancies in the Beach market dropped from 79 and 80 percent in 1999 and 2000, respectively, to as low as 67 percent in 2002. Occupancy rates in 2003 and 2004 show some recovery, with rates rising closer to 70 percent. Figure 20: Clearwater Beach Hotels: Occupancy & Rate Trend (Selected Properties), 1999-2004 Source: Smith Travel Research, Lambert Advisory $130.00 $120.00 $110.00 $100.00 $90.00 $80.00 $70.00 $60.00 $50.00 $40.00 82.0% 80.0% 78.0% 76.0% 74.0% 72.0% 70.0% 68.0% 66.0% 64.0% 62.0% 60.0% c::::::J Rat e RevP AR Occupancy 1999 2000 2001 2002 2003 2004 Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 25 In terms of ADR, the market has fluctuated between $102 and $118 over the 1999-2004 period. The current level of ADR is reflective of a large portion of supply being older, limited service product. In our experience, newer full-service product commands ADRs of at least $130. Nonetheless, the Beach hotels command rates considerably higher than do the non-Beach hotels. Figure 21: Clearwater Beach Hotels: Annual Room Night Demand YS. Occupancy, 1999-2004 Source: Smith Travel Research, Lambert Advisory 300,000 82.0% 80.0% 78.0% 76.0% 74.0% 72.0% 70.0% 68.0% 66.0% 64.0% 62.0% 60.0% Room Nights Occupancy 250,000 200,000 150,000 1999 2000 2001 2002 2003 2004 Figure 22 shows trends in occupancy, average daily rate (ADR), and revenue per available room (RevPAR) for selected properties in the non-Beach market. Occupancy rates for the non-Beach properties have been consistently lower than that of beach properties - by as much as 15 percentage points in 2001, and by 13 percentage points prior to 2001 and since, in 2003. That gap narrowed in 2004, with the non-Beach properties' average occupancy at 65 percent (a 4 percentage point differential from Beach occupancy). Notably, occupancy rates among non-Beach properties have started to approach pre-9j11 levels faster than that of Beach properties. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 26 Figure 22: Clearwater Hotels: Occupancy & Rate Trend (Selected Properties), 1999-2004 Source: Smith Travel Research, Lambert Advisory $80.00 80.0% $70.00 70.0% $60.00 $50.00 60.0% c:::::::::J Rate RevP AR 50.0% Occupancy $40.00 $30.00 40.0% $20.00 30.0% 1999 2000 2001 2002 2003 2004 ADRs in the non-Beach market have remained moderate and steady over the past five years, ranging from $64 to $69. The current level of ADR is reflective of the predominance of limited-service product in "fair" condition, as well as less-than-optimal locations along the US-19 corridor. Figure 23: Clearwater Hotels: Annual Room Night Demand YS. Occupancy, 1999-2004 Source: Smith Travel Research, Lambert Advisory 180,000 80.0% 170,000 70.0% 160,000 60.0% 150,000 50.0% 140,000 40.0% Room Nights Occupancy 130,000 30.0% 120,000 20.0% 110,000 10.0% 100,000 0.0% 1999 2000 2001 2002 2003 2004 Overall, the Clearwater hotel market would be viewed as moderately stable. However, it is evident that a considerable amount of product (both on the beach and off) is older, 2- to 3-star quality product. As discussed in more detail in Section 4, with visitation projected to grow substantially over the next several years, Downtown Clearwater may be able to support a new, strategically located, limited service hotel. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 27 Section 4: Market Potentials 4A: Retail Demand Our retail demand analysis takes into account demand generated by three groups: 1. Downtown Residents - nearly 4,500 people who are in Downtown on a daily basis, year-round, and do a significant portion of their retail spending close to home. (Note that the residential model also incorporates a secondary market, which includes residents of surrounding areas and second home buyers.) 2. Downtown Office Workers - nearly 6,000 people who work Downtown. Office employees typically spend a portion of their income close to where they work. 3. Visitors to Downtown - nearly 1.5 million hotel visitors, day trippers, people visiting friends and relatives, business visitors, and visitors to particular Downtown institutions. Utilizing a variety of data sources, we have built a series of models that estimates expenditures by each of these groups and translates it into square feet of retail space. We have estimated demand for the current year, and projected it for 2010. A summary of implied demand for retail space, by category, from office workers, visitors, and residents appears below. Figure 24: Supportable Downtown Retail Space by Market Segment Source: Lambert Advisory 2005 2010 Food & Beverage 10,216 58,758 48,541 Shoppers Goods 42,216 64,652 22,437 Convenience Goods 6,766 34,959 28,193 Supportable Retail SF, Residents 59,198 158,369 99,171 Food & Beverage 29,813 77,225 Shoppers Goods 14,341 37,135 Supportable Retail SF, Visitors 44,154 114,360 70,206 Food & Beverage 21,161 27, 190 Shoppers Goods 15,341 19,712 Convenience Goods 10,082 12,955 Supportable Retail SF, Office Employees 46,585 59,857 13,273 Total, Food & Beverage 61,190 163,172 Total, Shoppers Goods 71,898 121,500 Total, Convenience Goods 16,848 47,914 Total, Supportable SF 149,936 332,586 182,650 Downtown Clearwater Market Study 28 DRAFT Final Report - For Discussion Purposes Only Note that the Food and Beverage category includes restaurants and bars. The Shoppers Goods category includes apparel, accessories, and general merchandise (e.g., sporting goods, books, toys, office supplies, art, fabric/sewing materials, and souvenirs). The Convenience category includes pharmacy and supermarket spending (e.g., groceries, cosmetics, prescription drugs, and optical goods). It is notable that the supportable square footage in 2005 is significantly (130,000 square feet) less than existing downtown inventory of retail space. Of the 333,000 square feet of supportable retail space projected for 2010, 130,000 square feet could be absorbed into existing inventory (given some building and/or fa<;ade improvements). Another 50,000 square feet of new downtown space is supportable in the short-term. The mix of retail categories (i.e., the proportion of food and beverage space, shoppers goods space, etc.) implied by these models should be taken into consideration as the City/CRA formulates and refines its strategic priorities for Downtown, which may include strengthening and/or expanding offerings in particular categories through targeted recruitment/retention efforts (see Section 5). The methodology and key findings for the residential, office worker, and visitor retail demand models follow. Retail Demand Generated by Residents For the purposes of our analysis, the residential trade area was defined as the four census block groups comprising the CRA, as previously shown in Figure 1. Local residents' expenditures are a key potential driver of demand for Downtown retailers in the study area, representing forty percent ofthe total square footage in 2005 and nearly half of the total square footage by 2010. Although it combines large amounts of information from a variety of sources, the way the retail trade model (the full detail of which is attached as an appendix to this report) derives the estimated space demand is actually quite simple. The methodology is described in detail below. . Total Personal Income - There are approximately 4,500 residents in the downtown area with per capita income of approximately $18,000 (See Section 2: Economic and Demographic Profile), which yields $83 million in total personal income. . Total Non-Auto Retail Expenditure - An estimate of non-automobile retail expenditure for the trade area is made by multiplying the Total Income by the percent of income that is spent on non-auto retail purchases in a given year. The percent of household income spent on non-auto retail purchases was derived from the Department of Commerce 2004 Consumer Expenditure Survey, which is both region- and income cohort-specific. . Expenditure by Store Type - Non-auto expenditure by store type for the market area is derived using the percentage of total non-auto store sales by store type for the State of Florida (as a proportion of total non-auto sales) based on an analysis of the Census of Retail Trade. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 29 . Primary Market Area Retention - This is estimated based upon fieldwork and stakeholder interviews, and is an estimate of the degree of leakage which may occur from Downtown by store type. Certain merchandise categories such as grocery or pharmacy have very high retention rates because people typically shop for these goods and services close to home. For goods such as furniture and hardware, the trade area retention rate is lower because people will typically travel further to make these purchases since they are made less frequently, and/or because of a dearth of that type of retailer Downtown. For most categories, we have assumed this retention rate will be higher in 2010, due to an improved Downtown and increased retailer variety. . Percent Sales Inflow from Secondary Market - While there is resident expenditure leakage from the trade area there is also inflow from residents that live outside the bounds of the trade area, as well as from seasonal residents not otherwise captured in statistical profiles. These inflow rates vary by type of merchandise, considering existing and potential downtown retailers, and change over the 2005-2010 period. The improved 2010 inflow rates assume a well-positioned, quality downtown experience not available in nearby areas. . Sales per Square Foot - The sales per square foot figures are estimated average sales per square foot figures for stores in the trade area based on interviews and other sources of information, including the Urban Land Institute's 2002 Dollars & Cents of Shopping Centers. . Warranted Square Feet - Is calculated using the following formula: Net Sales Potential (by category) / Sales per Square Foot (by category) . Non-Retail Space - Is calculated assuming that there is an additional 15 percent of "retail" space demanded that is utilized for non-retail uses such as doctor's offices or other professional services. As noted, resident expenditures generate approximately 40 percent (60,000 square feet) and 50 percent (160,000 square feet), respectively, of the total square feet demanded in 2005 and 2010. This methodology is summarized in Figure 25, and as noted, appears in full detail in the appendices. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 30 Figure 25: Retail Demand Generated by Residents Sources: us Census, Dollars & Cents of Shopping Centers; Urban Land Institute, Lambert Advisory Estimated Population Per Capita Income 4,498 $18,403 5,886 $19,260 1,387 Total Retail Expenditure Potential $24,918,191 $34,121,839 $9,203,648 Food & Beverage Shoppers Goods Convenience Goods $4,086,583 $23,503,123 $19,416,539 $10,982,450 $16,819,345 $5,836,896 $2,427,580 $10,692,897 $8,265,317 Food & Beverage Shoppers Goods Convenience Goods $400 $260 $378 Food & Beverage Shoppers Goods Convenience Goods 10,216 42,216 6,766 Total Supportable Retail Space 59,198 $400 $260 $378 58,758 64,652 34,959 48,541 22,437 28,193 158,369 99,171 Retail Demand Generated by Office Workers The office worker demand model summary appears on the following page. This category of retail demand is derived from employees that work in Downtown office buildings. To estimate the number of office workers Downtown, we used adjusted State of Florida ES-202 data. That is, we reduced the number of employees attributed to both Pinellas County and City of Clearwater, given that not all City/County employees work Downtown, and added employment figures provided by the Church of Scientology (not otherwise captured by the ES-202). We also cross-checked this figure against the amount of estimated leaseable office space downtown, dividing it by industry standard space-per-office-worker figures. This yielded and verified an estimate of approximately 5,900 office workers in 2005. Using historical trends, County employment projections, and information from the Church of Scientology, we have estimated this number to increase by over 1,600 office workers by 2010. The International Council of Shopping Centers regularly publishes a survey of downtown and suburban office workers that contains average annual retail expenditures near workers' offices. Purchases by category (food & beverage, shoppers' goods, convenience goods) were estimated based on these average annual expenditure figures, Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 31 inflated to 2005 dollars based on actual CPI. Dividing the potential gross spending figures by annual sales per square foot estimates yields the square footage implied by office worker demand, approximately 47,000 square feet in 2005 and 60,000 square feet in 2010 - representing 30 percent and 18 percent of the totals, respectively. Figure 26: Retail Demand Generated by Office Employees Sources: ES-202 Employment Data, Church of Scientology, Office Worker Retail Spending Patterns: A Downtown and Suburban Area Study (ICSC 2003), Dollars & Cents of Shopping Centers( Urban Land Institute 2002), Lambert Advisory Estimated Downtown Office Employment 5,866 7,537 1,671 Spending per employee Lunches $1,286 $1,286 Shoppers Goods $785 $785 Convenience Goods $559 $559 Dinner/Drinks after work $157 $157 $2,786 $2,786 Expenditure Potential Food & Beverage $8,464,380 $10,876,039 Shoppers Goods $4,602,382 $5,913,686 Convenience Goods $3,276,765 $4,210,376 Total Potential Employee Expenditures $16,343,528 $21,000,101 $4,656,573 Food & Beverage Shoppers Goods Convenience Goods $400 $300 $325 $400 $300 $325 Food & Beverage Shoppers Goods Convenience Goods 21,161 15,341 10,082 27, 190 19,712 12,955 6,029 4,371 2,873 Total Supportable Retail Space 46,585 59,857 13,273 Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 32 Retail Demand Generated by Visitors Our estimate of gross retail demand generated by several different types of visitors to Downtown: Clearwater/Clearwater Beach visitors (including hotel visitors, day trippers, people visiting friends and relatives, and business visitors), Institutional visitors (including visitors to the City, County, religious institutions, and Morton Plant Hospital). The demand estimate is based on numbers of visitors and their average expenditure rates (from Research Data Services data provided by the City), and estimated capture rates. Again, the capture rates have been increased from 2005 to 2010, assuming enhanced retail and restaurant options will be added in Downtown. Dividing the potential gross spending figures by annual sales per square foot estimates yields the square footage implied by visitor demand for retail - approximately 44,000 square feet total in 2005 and 114,000 square feet total in 2010, approximately one-third of total retail space, in both years. A summary of the demand generated by visitors appears below. The full model, with detail by visitor group, appears in the appendices to this report. Figure 27: Retail Demand Generated by Visitors Sources: Research Data Services, Morton Plant Hospital, Church of Scientology, Lambert Advisory 2005 2010 Food & Beverage Shoppers Goods $11,925,029 $4,302,363 $30,889,805 $18,964,776 $11,140,649 $6,838,286 Food & Beverage Shoppers Goods $400 $300 $400 $300 Food & Beverage Shoppers Goods 29,813 14,341 77,225 37,135 47,412 22,794 Total Supportable Retail Space 44,154 114,360 70,206 Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 33 48: Office Based on employment and office development trends for both the City and County, Lambert has prepared an estimate of office space demand for Downtown over the next five years. This considers key assumptions including: . Pinellas County office employment is projected to increase at an average of 4 percent annually for the next five to ten years; Downtown office employment is likely to grow at a rate close to or slightly lower than the County rate. . The Building Owners and Managers Association (BOMA) estimate of office space per employee (250 SF per employees), based on a survey of office developments in Florida. Figure 28: Demand for Office Space Sources: ES-202 Employment Data, Building Owners and Managers Association, Lambert Advisory City of Clearwater Office Employment Moderate 2.5% 3,895 3,992 Aggressive 4.0% 3,952 4,110 4,092 4,274 4,194 4,445 4,299 4,623 404 671 Estimate Net Absorption - SF (@ 250 SF/employee) Moderate 973,750 998,094 1,023,046 1,048,622 1,074,838 Aggressive 988,000 1,027,520 1,068,621 1,111,366 1,155,820 Net New Office Demand 124,838 205,820 It should be noted that these figures exclude City, County, and Church of Scientology employment, which is why they differ from employment figures quotes elsewhere in this report. Based on these estimates of employment, Downtown Clearwater is projected to have total demand for between 125,000 and 200,000 square feet of office space over the next five years. This figure is net new space demanded; it assumes that some of the existing vacant space is absorbed and also that the 2010 market will maintain some level of vacancy. 4C: Hotel As noted in Section 3, although the Clearwater hotel market is only moderately stable, it is evident that a considerable amount of product is older, 2- to 3-star quality product. With visitation projected to grow substantially over the next several years, Downtown should be able to support a small to mid-size (125-175 rooms), limited service (branded) product that is strategically located. Such a Downtown hotel would compete primarily with the hotels along US-19 and US-60, serving business and institutional visitors. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 34 Section 5: Recommendations and Next Steps Based on the preceding data and analysis, Lambert Advisory has formulated certain recommendations for a strategic direction the City of Clearwater could take to further the redevelopment and revitalization of Downtown Clearwater. The recommendations that follow include strategies for specific sites, as well as general recommendations that the City, Main Street, Downtown Development Board (DDB), and Community Redevelopment Agency (CRA) should take into consideration for ongoing Downtown redevelopment efforts. Due to the changing nature of the markets described and projected herein, and so that these efforts might have the greatest impact possible in the near term, we have focused our recommendations to a short-term (5- to 7-year) time frame. Additionally, we have focused our attention on the Downtown core, where a critical mass of new development and redevelopment is already underway. SA: Site Analysis Figure 29 shows the sites the City/CRA identified as prime redevelopment parcels and the additional parcels Lambert has identified as having strategic importance to redevelopment efforts. We have focused on the downtown core at this point, in order to capitalize on the critical mass that has been established by large-scale planned and under-construction developments in the core. Figure 29: Redevelopment Parcels DRAFT Final Report - For Discussion Purposes Only A: The Bluff Parcels: The first phase of Opus South Corporation's development of these South Osceola parcels has been approved. Phase One will be Water's Edge, a 25-story 157-unit condominium and townhome tower with approximately 10,000 square feet of ground-level retail. The Water's Edge sales office opened in late July 2005. Phase 2 may include redevelopment of the City Hall parcel and, as such, is subject to (an as-yet unscheduled) referendum. B: 628 Cleveland Street: Beck Development is planning to build the 13-story, 126-unit Station Square condominium development, adjacent to existing Station Square Park. The development will include 10,000 square feet of retail space and at least 100 public parking spaces. C: Downtown ''Super Block'~' Acqua at the Downtown Plaza is planned for this 4-acre parcel across from the Steinmart/ Harborview property and in the heart of downtown. Acqua will feature a 10-screen movie theater, 35,000 square feet of retail space, 87,800 square feet of office space, and 245 residential units. D: Southeast Corner of Osceola and Drew (adjacent to ''Super Block"): Colliers Arnold owns this parcel and is considering a two-tower mixed-use development concept. Uses under consideration include condominium (+/- 100 units), hotel (+/- 60 rooms), retail, art gallery/museum space, and public parking. E: 1100 Cleveland Street: Guy Bonneville plans to renovate this Cleveland Street office building (Clearwater Centre) and convert it to a mixed-use development with 71 condominiums and 44,300 square feet of retail and office space. F: 512-534 Cleveland Street: These two parcels (a half-acre total) are key retail parcels in the heart of downtown. According to Pinellas County Property Appraiser records, 512 Cleveland has approximately 24,000 square feet of retail space, and is currently vacant. 534 Cleveland has approximately 9,000 square feet of office space, and is being used as such. Given the available details on the above projects A through F, approximately 700 residential units, 65,000 square feet of retail space, 5,000 net square feet of office space (planned office space, less the current 118,000 square feet at Clearwater Centre), and 60 hotel rooms could be added in the Downtown core over the next five years. Based on this, and on the market analysis and demand potentials in previous sections, Lambert has developed three opportunity programs for the remaining two sites. G: 400 Block of Cleveland Street (south side): This block lies immediately south of the Acqua superblock, and currently includes Pat Lokey's, Royalty Theater, and Starbuck's. Given its location downtown and near the bayfront (affording water views), Lambert considers this a prime residential and retail location. The recommended program would include 150 condominium units in a 10-story building, with ground floor retail (resulting in no net loss of downtown retail on this block). The recommended unit mix and average unit sizes follow. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 36 . 23 1BR units with an average unit size of 850 square feet . 60 2BR units with an average unit size of 1,250 square feet . 45 3BR units with an average unit size of 2,000 square feet . 23 4BR units with an average unit size of 2,500 square feet Given current sales activity of comparable product, Lambert estimates pricing for these units at $290 per square foot, a range of to $250,000 to $725,000. An alternative to a residential program is an office development that would accommodate some of the 125,000 to 200,000 square feet of office space projected to be demanded over the next five years. Lambert recommends a development with 150,000 square feet of Class A office space and ground floor retail (again, resulting in no net loss of retail on the block). We would expect such a building to command rents on the upper end of the current rental rate range in the market, $20.00 per square foot. With either scenario, the City will likely need to participate in site acquisition, as the nine component parcels have as many owners. Additionally, under the office scenario, rents are not currently at the point where new construction is supported, despite growing demand, and therefore there may be a need for capital participation to write down the cost of development. Note that the historic fa<;ades of these buildings could be preserved in the redevelopment process and that neither of these proposed scenarios need result in the loss of retail space or, indeed, any ofthe current, successful tenants. H: Harborview Conference Center Parcel: The 8-acre Harborview parcel is adjacent to the new Main Public library and overlooks both the Bayfront and Coachman Park. Lambert Advisory recommends the development of a quality limited service hotel (e.g., Hilton Suites, Marriott Courtyard, Starwood Westin) with 125 to 150 rooms on the parcel. Based on the hotel market and demand analysis, we estimate that such a hotel would see occupancy rates of 70 to 75 percent and command an average daily rate of $110. Planning for such a project should also incorporate a meeting/convention component (within the hotel), new space for the highly successful Steinmart department store, and adequate parking for all of these uses and the library. I: Unit block of North Fort Harrison Avenue: Additionally, Lambert recommends that the City formulate a targeted fa<;ade improvements program for the west side of the unit block of North Fort Harrison Avenue (20-42 N. Fort Harrison and 432 Cleveland). These seven parcels under separate ownership (5 owners) account for approximately 21,000 square feet of retail space in the core of Downtown. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 37 58: Other Recommendations This downtown market study provides the crucial data and analysis that are needed to inform the strategic next steps in the effort to further revitalize and redevelop Downtown. As is usually the case at this point in the process, the market study does not provide all the answers, but rather frames key questions and delineates specific areas of focus for the City. Based on the information we have analyzed to date and beyond specific site recommendations above, Lambert recommends that the City of Clearwater could best help position Downtown for further investment by focusing its efforts on two specific initiatives: creating and implementing a targeted parking strategy and organizing and undertaking a retailer attraction program. Strategies for and component tasks of these two initiatives follow. Note that the parking strategy and retailer attraction effort are interrelated, in that the parking strategy will enable and enhance retailer attraction. Market-Driven Parking Strategy: Retail and Office In Section 4, we estimated the amount of retail space that will be demanded by merchandise category and the amount of office space that could be absorbed in Downtown over the next several years. We also have a general notion of where, in Downtown, existing space may be filled and additional space developed. One of the key factors that drive both downtown retailers and office users to locate Downtown is adequate, proximate parking. Given the relative cost of developing parking, the City and DDB can playa role in helping fill this unmet need. Therefore, we expect that the parking strategy should determine the following: Office Users . Market-driven ratios: Determine current market-driven ratios among major office users in Downtown (i.e., spaces per 1,000 square feet) and how this relates to existing code; . Demand vs. supply: If demand exceeds the current supply of parking given the market opportunity, identify the most likely location where office space will be filled and where additional parking (either in surface lots or structures) could be located to serve this demand; . Strategies utilized by other municipalities: Identify strategies other municipalities have implemented to encourage the development of parking by private or quasi-governmental entities in order to fill gaps in office parking needs in the market; . Potential revenues: Estimate revenue that could be obtained to off-set additional cost of parking development; . Incentives! support provided by other municipalities: Identify structure of guarantees or fiscal support that other municipalities have provided in order to service the parking demand of major office tenants and what is required of those tenants to insure their continued occupancy in downtown over a reasonable time frame. Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 38 Retailers and Restaurant Users . Level of demand: Determine the total number of spaces that may be needed given the mix of retailer use and demand estimates provided by Lambert Advisory; . Existing inventory: Inventory close-in parking, including information on the number of spaces, hours of operation open to the public, cost of the parking, lighting conditions, and perceived safety of the parking; . Demand vs. supply: Compare the demand for parking to the supply of reasonably priced parking in close-in locations; . Cost estimates: Determine the cost of enhancing close in parking access and conditions in Downtown including an analysis of the cost to the City/DDB of providing gratis self-parking and/or valet parking for a specified period of time to major new restaurants who agree locate in the downtown core during key lunch and dinner hours; and . Priorities: Determine priorities for phasing in downtown parking over time. Directed Retailer Attraction Effort In Section 4, we defined merchandise categories where demand indicates there are gaps in the near term retail supply. The next stage is to identify specific retailers to target, establish working strategies, and work with Downtown property owners in order to identify appropriate space for those retailers. This effort would include: . An inventory of all ground floor space in downtown by size, square footage, existing tenant (where applicable), and other features (venting for restaurants, dedicated parking, etc.) and developing a database of this information; . Drafting a targeted list of local and regional retailers/restaurants that may be able to be attracted to downtown given existing space; . Based on the mix of space downtown and the survey of the quality of that space, estimating the investment required to match the existing vacant or underutilized retail space in Downtown to (and/or rehab the space for) certain types of retailers and restaurants; . Determining how much retail could be developed in the downtown that would be separate and distinct from existing retail space; . Clearly delineating roles for the Main Street program, DDB, CRA, and City in tenant attraction, location, and funding the cost and effort required to attract those retailers; . Developing the marketing materials and branding program for downtown as required for tenant attraction; and . Determining the extent and requirement for outside expertise to assist in the tenant attraction/retention effort. Events and Programs Finally, the scope of work for this study included discussion of events and programs that would act as regional draws to Downtown Clearwater. Below is a sampling of events that were or are scheduled for 2005: Downtown Clearwater Market Study DRAFT Final Report - For Discussion Purposes Only 39 . Farmer's Market . Fun 'n' Sun Illuminated Night Parade . Main Library Lecture Series . Fourth of July . The MAIN Thing happy hour series . Chef and a Show . Chili Extravaganza Challenge . Oh Boy! Oberto Redfish Cup . Films on the Bluff . Taste of Clearwater . WildSplash . Clearwater Hispanic Heritage Festival . Sister Cities Wild Bazaar . Florida Orchestra . Clearwater Celebrates Neighborhoods Week . Suncoast Cycling Classic . Ice Cream Social . Clearwater Jazz Holiday . Clearwater Heritage Day . Christmas Under the Oaks . Smooth Jazz Fest . Florida Pirate Festival . Cinco de Mayo . Festival of Trees We believe that Downtown has a very active and varied event calendar, especially for a city the size of Clearwater. That said, most of the activities take place in and around Coachman Park and the Main Public Library. To better leverage the opportunities created by the above events, the Main Street program, DDB, or (at such time one is formed) a downtown merchant's association should: . Plan events and promotions to draw attendees of the existing events into Downtown before and after event times. . Coordinate with event programmers to incorporate Downtown retailers into existing events (e.g., the Chef and a Show series could feature chefs from Downtown restaurants). These are key aspects of event leverage incorporated by other Downtown groups throughout the State of Florida and will enhance the opportunities for local merchants to participate in these activities. Additionally, the City should take care that planned developments for the Downtown core do not limit access between the Library/ Coachman Park and Downtown retailers and restaurants, and that future streetscape, signage, and parking improvements encourage movement to and from the primary retail blocks along Cleveland Street. 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Q) a:: ~ 'tl 'tl co ~ Q)' 'tl .S (9 _CIl ~ (j co Cii Ui Q) f2 ::J o C/) <ESIDENT EXPENDITURES FORECAST, BY MAJOR CATEGORY, Downtown Clearwater Census Tract: 2005 - 2010 2005 2010 TOTAL POPULATION 4,498 5,886 PER CAP IT A INCOME $18,403 $19,260 TOTAL INCOME $82,784,688 $113,361,591 TOTAL NON-AUTO RETAIL EXPENDITURES $24,918,191 $34,121,839 % OF TOTAL INCOME 30.10% 30.10% 2005 2010 EXPENDITURES BY STORE TYPE: TOTAL $24,918,191 $34,121,839 GENERAL MERCHANDISE $5,521,871 $7,561,399 DEPT STORE $2,451,950 $3,357,589 MISC GEN MDSE $3,069,921 $4,203,811 APPAREL & ACCESSORIES $3,054,970 $4,183,337 MENS & BOYS CLOTHING $142,034 $194,494 WOMENS READY TO WEAR $451,019 $617,605 CHILDREN'S CLOTHING $47,345 $64,831 FAMILY CLOTHING $996,728 $1,364,874 CLOTHING ACCESSORIES STORES $717,644 $982,709 SHOES $438,560 $600,544 OTHER APPAREL NEC $261,641 $358,279 FURNITURE & HOME EQUIPMENT $1,161,188 $1,590,078 FURNITURE STORES $234,231 $320,745 HOME FURNISHINGS $226,756 $310,509 HOUSEHOLD APPLIANCES $64,787 $88,717 RADIO & TV $231,739 $317,333 COMPUTER AND SOFTWARE STORES $246,690 $337,806 MUSIC STORES $156,985 $214,968 HARDWARE $142,034 $194,494 MISCELLANEOUS S-G $2,982,707 $4,084,384 USED MERCHANDISE $47,345 $64,831 SPORTING GOODS, BICYCLE $328,920 $450,408 BOOK STORES $236,723 $324,157 OFFICE SUPPLIES, STATIONERY STORES $169,444 $232,029 JEWELRY STORES $814,825 $1,115,784 HOBBY, TOYS, GAMES $152,001 $208,143 CAMERA, PHOTO SUPPLIES $17,443 $23,885 GIFT, SOUVENIR STORES $493,380 $675,612 LUGGAGE, LEATHER $276,592 $378,752 SE\I\i1NG, NEEDLEWORK $14,951 $20,473 FLORIST $99,673 $136,487 ART DEALERS $142,034 $194,494 NEWS DEALERS $29,902 $40,946 MISC NEC $159,476 $218,380 SHOPPER GOODS/SUBTOTAL $12,862,770 $17,613,693 FOOD STORES $4,627,308 $6,336,425 GROCERY STORES $3,805,008 $5,210,405 CONVENIENCE STORES $630,430 $863,283 OTHER FOODS NEC $191,870 $262,738 EATING & DRINKING ESTABLISHMENTS $4,086,583 $5,595,982 RESTAURANT, LUNCH, CAFETERIA $2,379,687 $3,258,636 FAST FOOD $1,547,420 $2,118,966 Lambert Advisory LLC RETENTION AND SALES INFLOW FACTORS RESIDENT EXPENDITURE POTENTIAL 2005 2010 GENERAL MERCHANDISE $5,521,871 $7,561,399 APPAREL & ACCESSORIES $3,054,970 $4,183,337 FURNITURE & HOME EQUIPMENT $1,161,188 $1,590,078 HARDWARE $142,034 $194,494 MISCELLANEOUS S-G $2,982,707 $4,084,384 SHOPPER GOODS/SUBTOTAL $12,862,770 $17,613,693 FOOD STORES $4,627,308 $6,336,425 EATING & DRINKING ESTABLISHMENTS $4,086,583 $5,595,982 DRUG $1,572,338 $2,153,088 LIQUOR $79,738 $109,190 CONVENIENCE GOODS/SUBTOTAL $10,602,690 $14,518,842 BUILDING MATERIALS $1,457,714 $1,996,128 PRIMARY MARKET AREA RETENTION GENERAL MERCHANDISE 50.00% 50.00% APPAREL & ACCESSORIES 10.00% 12.50% FURNITURE & HOME EQUIPMENT 5.00% 7.50% HARDWARE 5.00% 5.00% MISCELLANEOUS S-G 40.00% 45.00% FOOD STORES 10.00% 80.00% EATING & DRINKING ESTABLISHMENTS 40.00% 60.00% DRUG 90.00% 90.00% LIQUOR 90.00% 90.00% BUILDING MATERIALS 10.00% 10.00% PERCENT SALES INFLOW FROM SECONDARY MARKET GENERAL MERCHANDISE 200.00% 200.00% APPAREL & ACCESSORIES 75.00% 125.00% FURNITURE & HOME EQUIPMENT 20.00% 30.00% HARDWARE 5.00% 5.00% MISCELLANEOUS S-G 75.00% 125.00% FOOD STORES 10.00% 40.00% EATING & DRINKING ESTABLISHMENTS 150.00% 600.00% DRUG 30.00% 80.00% LIQUOR 10.00% 10.00% BUILDING MATERIALS 5.00% 5.00% NET SALES POTENTIAL GENERAL MERCHANDISE $8,282,807 $11,342,099 APPAREL & ACCESSORIES $534,620 $1,176,564 FURNITURE & HOME EQUIPMENT $69,671 $155,033 HARDWARE $7,457 $10,211 MISCELLANEOUS S-G $2,087,895 $4,135,439 SHOPPER GOODS/SUBTOTAL $10,982,450 $16,819,345 FOOD STORES $509,004 $7,096,797 EATING & DRINKING ESTABLISHMENTS $4,086,583 $23,503,123 DRUG $1,839,635 $3,488,003 LIQUOR $78,941 $108,098 CONVENIENCE GOODS/SUBTOTAL $6,514,163 $34,196,020 BUILDING MATERIALS $153,060 $209,593 Lambert Advisory LLC <ESIDENT EXPENDITURES FORECAST, BY MAJOR CATEGORY, Downtown Clearwater Census Tract: 2005 - 2010 WARRANTED SPACE BY STORE GROUP TOTAL SALES POTENTIAL 2005 GENERAL MERCHANDISE APPAREL & ACCESSORIES FURNITURE & HOME EQUIPMENT HARDWARE MISCELLANEOUS S-G $8,282,807 $534,620 $69,671 $7,457 $2,087,895 SHOPPER GOODS/SUBTOT AL $10,982,450 $509,004 $4,086,583 $1,839,635 $78,941 FOOD STORES EATING & DRINKING ESTABLISHMENTS DRUG LIQUOR CONVENI ENCE GOODS/SUBTOT AL $6,514,163 $153,060 BUILDING MATERIALS TOTAL SALES POTENTIAL $17,649,673 2005 $250 $300 $225 $225 ~ $260 SALES PER SQUARE FOOT: GENERAL MERCHANDISE APPAREL & ACCESSORIES FURNITURE & HOME EQUIPMENT HARDWARE MISCELLANEOUS SHOPPER GOODS SHOPPER GOODS/SUBTOT AL FOOD STORES EATING & DRINKING ESTABLISHMENTS DRUG LIQUOR CONVENI ENCE GOODS/SUBTOT AL $275 $400 $400 ~ $384 BUILDING MATERIALS $115 AVERAGE $292 WARRANTED SQUARE FEET: GENERAL MERCHANDISE APPAREL & ACCESSORIES FURNITURE & HOME EQUIPMENT HARDWARE MISCELLANEOUS SHOPPER GOODS 33,131 1,782 310 33 6,960 42,216 SHOPPER GOODS/SUBTOT AL FOOD STORES EATING & DRINKING ESTABLISHMENTS DRUG LIQUOR 1,851 10,216 4,599 316 CONVENI ENCE GOODS/SUBTOT AL 16,982 1,331 BUILDING MATERIALS TOTAL WARRANTED RETAIL SPACE NON-RETAIL SPACE NON RETAIL PERCENT 60,529 10,682 15.00% TOTAL ANNUAL NET NEW DEMAND CUMULATIVE NET NEW DEMAND 71,210 Lambert Advisory LLC 2010 $11,342,099 $1,176,564 $155,033 $10,211 $4,135,439 $16,819,345 $7,096,797 $23,503,123 $3,488,003 $108,098 $34,196,020 $209,593 $51,224,958 2010 $250 $300 $225 $225 ~ $260 $275 $400 $400 ~ $384 $115 $292 45,368 3,922 689 45 13,785 63,809 25,807 58,758 8,720 432 93,717 1,823 159,349 28,120 15.00% 187,469 23,252 116,259 Estimated Annual Retail Expenditures, Visitors 2005 2010 Clearwaterl Clearwater Beach Visitors (hotel, VFR, and business visitors) Number of Visitors 937,411 1,004,632 Change 67,222 Expenditure Potential Food & Beverage $217,518,801 $260,741,371 Shoppers Goods $77,697,560 $93,136,631 Downtown Capture Rate 5% 10% Food & Beverage Expenditures $10,875,940 $26,074,137 $15,198,197 Shoppers Goods Expenditures $3,884,878 $9,313,663 $5,428,785 Expenditures, Downtown Visitors $14,760,818 $35,387,800 $20,626,982 Visitor Days 260,000 663,000 403,000 Daily Food and Beverage Expenditure $33 $33 Daily Shoppers Good Expenditure $12 $12 Expenditure Potential Food & Beverage $8,659,050 $22,080,577 $13,421 ,527 Shoppers Goods $3,093,006 $7,887,166 $4,794,160 Downtown Capture Rate 10% 20% Food & Beverage Expenditures $865,905 $4,416,115 $3,550,210 Shoppers Goods Expenditures $309,301 $1,577,433 $1,268,133 Expenditures, Institutional Visitors $ 1,175,206 $ 5,993,549 $ 4,818,343 Visitor Days 300,000 300,000 Daily Food and Beverage Expenditure $10 $10 Daily Shoppers Good Expenditure $5 $5 Expenditure Potential Food & Beverage $3,000,000 $3,000,000 $0 Shoppers Goods $1,500,000 $1,500,000 $0 Downtown Capture Rate 5% 10% Food & Beverage Expenditures $150,000 $300,000 $150,000 Shoppers Goods Expenditures $75,000 $150,000 $75,000 Expenditures, Day Visitors $ 225,000 $ 450,000 $ 225,000 Inpatient Admission Days 107,902 107,902 Inpatient Visitors (.5 per inpatient) 15,415 15,415 Outpatients 9,421 9,421 Estimated MPH-Related Visitors 132,737 132,737 Food and Beverage Expenditure $5 $5 Shoppers Good Expenditure $5 $5 Expenditure Potential Food & Beverage $663,685 $663,685 Shoppers Goods $663,685 $663,685 Downtown Capture Rate 5% 15% Food & Beverage Expenditures $33,184 $99,553 Shoppers Goods Expenditures $33,184 $99,553 Expenditures, MPH Visitors $66,369 $199,106 $132,737 0) COco N-.:t CD U ...- (J) 0 ro Q) 1'-00 -.:t_ 1'-_ C\!, Cl I'-_N c.. s::: -.:t - 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