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LOCiMarket Analysis for Downtown Redevelopment <br />CONSULTING City of Centerville Economic Development Authority <br />April 3, 2023 <br />Executive Summa!y <br />In 2005 and 2006, the City of Centerville, Minnesota, <br />completed its downtown master planning process. <br />The goal of the plan was to create a vibrant <br />downtown with mixed -use and neighborhood <br />districts, pedestrian oriented transportation, added <br />streetscaping, and a central gathering space. <br />Because of economic uncertainties, the downtown <br />redevelopment plan did not move forward. <br />Purpose <br />The purpose of this market analysis is to revisit the <br />subject of downtown redevelopment, in light of the <br />current market and economic realities. <br />This study is not an update of the master plan from <br />2006. This study is a market analysis that identifies <br />the market potential for redevelopment in <br />Downtown Centerville. This study identifies <br />residential and commercial redevelopment concepts <br />that have the best chance to be successful in the <br />marketplace. <br />The analysis includes: <br />■ A review of the multifamily market in the area. <br />■ An overview of the retail market in the area. <br />■ Interviews with developers, real estate agents, <br />property managers, and brokers. <br />■ An informal survey to gather community input. <br />■ Demand estimates for multifamily units and retail <br />space in Downtown Centerville. <br />Here are key findings from the analysis. <br />Residential Demand Estimates <br />The figures that follow show summaries of the <br />residential demand calculations in this report. The <br />analysis shows that there is housing demand across <br />almost all housing types. Note that for the most part, <br />the demand forecasts are mutually exclusive, <br />meaning there is little overlap between demand for <br />different product types. Where there is overlap, it is <br />noted. <br />For -Sale Condominiums and Townhomes <br />■ We find demand for between 45 and 90 <br />condominium and townhome units between 2022 <br />and 2027. <br />This demand is driven by younger first-time <br />homebuyers who tend to be more price sensitive <br />and empty -nester, move -up homebuyers looking <br />for association -maintained, single -level housing <br />options. <br />■ We believe that most of this demand would be for <br />multilevel townhomes priced between $350,000 <br />and $450,000, targeted to younger professionals <br />with and without children looking to live in an <br />association -maintained home in a suburban <br />downtown district. <br />There is also some demand potential for <br />condominium units in an apartment -style <br />building. This product type would work best <br />positioned to capitalize on access and visibility to <br />Centerville Lake. (This product style would also <br />overlap with some of the age -restricted for -sale <br />product discussed later.) <br />Rental Housing <br />The analysis found demand for between 115 and <br />140 units of affordable rental housing targeted to <br />households with incomes less than 60% of Area <br />Median Income ($63,360 as set by the US <br />Department of Housing and Urban Development <br />(HUD)). <br />■ We recommend that developers focus on one-, <br />two-, and three -bedroom units in apartment style <br />buildings to meet the affordable rental demand. <br />■ The analysis found demand for between 75 and <br />100 market -rate rental units. <br />Page 13 <br />