2023-05-10 CC Packet - Laserfiche WebLink

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LOCiMarket Analysis for Downtown Redevelopment CONSULTN G City of Centerville Economic Development Authority April 3, 2023 Hugo The City of Hugo has been working to redevelop portions of its own downtown. Dennis Properties is proposing to acquire and develop a 4.3-acre property adjacent to Egg Lake. The proposal includes 63,000-square feet of commercial space —restaurants, retail, and office space. The proposal does not include residential space. Two rows of buildings would be constructed between Highway 61 and Egg Lake with about 250 spaces of parking. The land is currently owned by the City of Hugo and would be sold to the developer for $1 provided the developer can meet the criteria of the city's plan. No additional financial incentives would be provided. The developer is actively marketing the space, but the project has not yet been presented to the city for approval. Lino Lakes ■ Kwik Trip has started construction on a new gas station/convenience store at the intersection of Lake Drive and Hodgson Road. ■ City staff said a new Starbucks and dental office will be added to the shopping center at Interstate 35W and Apollo drive. The dental office is planned to be 4,200-square feet and the Starbucks will be 2,240-square feet. ■ Tidal Wave Auto Spa is under construction at the Main Street Village development at the intersection of Main Street and Otter Lake Road. ■ Previous proposals for the larger Main Street Village development have included significant big box, grocery, and inline retail. Developers are marketing this space, but no firm projects have come together. Interviews LOCI Consulting interviewed several sources familiar with the retail real estate market. Key points from those interviews follow. Household growth in the area is attractive to retailers. ■ Several sources said that the Main Street/Interstate 35E area will see retail growth because retailers are attracted to the housing growth in the area. Traffic counts on Main Street and Centerville Road determine the types of retailers who would be attracted to Downtown Centerville. One regional coffee chain executive said they look for 20,000 vehicles per day for their locations. Main Street sees only about 10,000 vehicles per day. ■ Another source said convenience stores and gas stations want to see traffic counts closer to 15,000 vehicles per day. Outlot retail developments have been popular in recent years at the expense of in -line retail. ■ Freestanding stores on the edges of shopping centers are preferred to inline retail within the center. Retailers like the ease of access, better options for buy -online -pick -up -in-store, and potential for drive throughs. More retailers want drive-thru options. National and regional coffee chains see 30% increases in sales when they add drive-throughs. One source said they would not consider suburban locations without them. ■ Local "mom and pop" coffee shops without drive- throughs are challenged to compete when national coffee shops can see these volumes. ■ Another source said that fast casual restaurants like Chipotle and Noodles and Company are looking for locations with drive-throughs. Convenient parking is essential for retailers. ■ Retailers will not compromise on parking in suburban trade areas. With traditional shopping center options available, they do not have to consider these locations. Current retail rents are unlikely to support new retail construction. Page 172 Developers said that the retail rents typical in the area—$15 to $25 per square -foot per year —will not support new construction. In mixed -use