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LO C i <br />Market Analysis for Downtown Redevelopment <br />CONSULTN G City of Centerville Economic Development Authority <br />April 3, 2023 <br />■ Proximity to new housing developments and <br />household growth. <br />■ Growing employment base nearby. <br />■ Access to Interstate 35E. <br />■ Existing and established transportation corridor <br />■ Proximity to Centerville Elementary School. <br />■ Existing and established retail businesses. <br />Weaknesses of Downtown Centerville <br />■ Availability of large developable tracts of land. <br />■ Limited access to and views of Centerville Lake. <br />■ Lower traffic volumes than other retail nodes in <br />the area. <br />■ Competitive secondary location to sites at the <br />Main Street and Interstate 35E interchange. <br />■ Access to Interstate 35W. <br />Demographics and Economic Analysis <br />■ LOCi Consulting defines the primary market area <br />(PMA) for both housing and retail uses in <br />Downtown Centerville as the communities that <br />are generally within a 10-minute driving distance <br />from Downtown Centerville. The PMA includes <br />the following communities: <br />o Centerville <br />o Columbus <br />o Forest Lake <br />o Hugo <br />o Lino Lakes <br />o North Oaks <br />o White Bear Lake <br />o White Bear Township <br />■ The PMA population is about 110,000 people and <br />42,000 households. About 47,000 people live <br />within 10 minutes' driving time of Downtown <br />Centerville. <br />■ Overall, the PMA is projected to see annual <br />population growth of about 0.4% per year. That <br />growth is comparable to the Minneapolis -St. Paul <br />Metro Area as a whole. <br />■ Reflecting current and planned housing <br />developments in Lino Lakes and Hugo, population <br />growth is projected for the areas immediately to <br />the northwest and southeast of Downtown <br />Centerville. <br />■ The median household income for the Downtown <br />Centerville PMA is about $104,000, about 14% <br />higher than the Twin Cities Metro Area. Incomes <br />above the Metro Area average are attractive to <br />retailers, especially those that target <br />discretionary sales. <br />■ The daytime population for the Downtown <br />Centerville PMA is smaller than the resident <br />population, meaning each day more workers <br />commute out of the PMA than commute into it. <br />With about 95,000 people, the daytime <br />population is about 15% lower than the resident <br />population. <br />Multifamily Housing Market <br />■ For the for -sale real estate market, rising interest <br />rates have slowed sales. But inventory remains <br />low so prices have held steady. <br />■ For rental housing, new product is continuing to <br />come on-line, pushing the vacancy rate higher <br />than 5%. It is expected that new units will <br />continue to be absorbed but rents will not rise as <br />fast as in recent years. <br />■ Senior housing in the PMA is still recovering from <br />the stresses of the COVID19 pandemic. Active <br />adult and independent living appear to have <br />recovered. Assisted living and memory care have <br />been slower to recover, and several new projects <br />have opened in the market, putting further <br />pressure on occupancies. <br />Retail Real Estate Market <br />■ Strong consumer spending has increased the <br />amount of retail space absorbed by the market. <br />Rents have increased but not enough to <br />incentivize developers to build more space. The <br />limited amount of development that is occurring <br />is happening in the strongest retail nodes with the <br />highest traffic. <br />■ Sources interviewed said that national and <br />regional convenience retailers want to see traffic <br />counts of about 15,000 to 20,000 vehicles per day. <br />Main Street in Downtown Centerville sees about <br />10,000 vehicles per day. <br />Page 6 <br />