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HomeMy WebLinkAbout9.a. South Urban Gateway Analysis for Reinvestment (SUGAR) 4ROSEMOUNTEXECUTIVE SUMMARY CITY COUNCIL City Council Date: August 19, 2014 AGENDA ITEM: South Urban Gateway Analysis for AGENDA SECTION: Reinvestment (SUGAR) New Business PREPARED BY: Eric Zweber, Senior Planner AGISMDA W, C1•Q• ATTACHMENTS: South Urban Gateway Analysis for APPRQVEDBY: Reinvestment Report; Market Potential Assessment for South Urban Gateway Corridor RECOMMENDED ACTION: Motion to approve the South Urban Gateway Analysis for Reinvestment (SUGAR) Report. SUMMARY The South Urban Gateway Analysis for Reinvestment (SUGAR) is an area-specific planning study to review the current businesses and land uses in the South Gateway and evaluate the possibilities for private investment and redevelopment. The South Gateway District is an hourglass shaped neighborhood currently comprised of commercial and agricultural uses along South Robert Trail between County State Aid Highway (CSAH) 42 and CSAH 46. The project area serves as a gateway to Rosemount for all travelers heading north on South Robert Trail including commuters from Farmington, Empire Township, and Northfield. The north half of the project area is developed with commercial and light industrial uses, many of which are over 25 years old. The south half of the project area is a mix of farm fields, a former village dump, a car repair business, and a natural gas storage facility. The SUGAR report was prepared over the last year by the South Gateway Committee,which consisted of: Melissa Kenninger,Resident (Chair) Jamal Abdulahi,Resident Richard Battaglia, Business Owner (Rick's Auto) Kay Butler,Business Owner (McDonald's) Mark DeBettignies, City Council William Droste,Mayor Randy Dukek, Business Representative (ISD 196 Coordinator of Transportation) Joseph Kurle,Planning Commission Robert Leuth, Port Authority Nicholas Rapp,Business Owner (Rapp Chiropractic) Michael Weber, Planning Commission The creation of the Report was accompanied by the Market Potential Assessment for South Urban Gateway Corridor prepared by the Maxfield Research. This Market Assessment supports the implementation strategies recommended within the Report. City staff conducted two open houses to gather input on the Report and its recommendations, first on the morning of Wednesday June 4 specifically for the business and property owners and the second on Thursday,June 5 for the general public,including businesses. On Wednesday morning,representatives of the South Gateway businesses from Marcus Theater,Lighthouse Marine, Burger King,Jason Laube's State Farm and Dr. Chroust attended and were joined by Paul Eggen of State Farm,Vicki Stute of the Chamber and the Terrys from Terry's Hardware. On Thursday evening,representatives of the South Gateway area from the Carlson's, Berg Construction, Crown Rental, the former bowling alley and Lighthouse Marine attended and were joined by two residents and Brian Brakke of Merchant's Bank. Most of the discussion was about the individual properties with only one objection from Lighthouse Marine that the property where his property is located will remain community commercial. This will keep his business non-conforming, due to the amount of exterior storage on the site. He stated that he has been looking for a larger location for about three years and cannot find a location that he can afford. Lighthouse Marine is located in the building owned by Berg Construction. The broker for Berg Construction's building stated that the current owner of Lighthouse Marine is much more successful than the previous two owners and has increased the amount of outside storage as compared to previous owners of the business. He stated that the Bergs'main concern is the ISD 196 bus garage and he stated that the large number of buses that drive on 151st Street to get to Chippendale Ave has scared some businesses looking to lease the Berg Construction's building. Following the adoption of the SUGAR Report by the City Council, the Planning Commission will begin reviewing and implementing the Report's recommendations, such as amending the Comprehensive Plan designations and addressed the proper Zoning district for gas stations and quick automobile maintenance businesses. South Robert Trail Access Study In conjunction with the SUGAR study, staff has been conducting a the Trunk Highway 3 Corridor Study with the Minnesota Department of Transportation (MNDOT) to determine potential access points and intersections along South Robert Trail. This can be a useful tool when working with developers to redevelopment parcels in accordance with the land uses depicted in the SUGAR report. WSB has prepared an access layout that would support redevelopment while meeting the standards and geometries of the traffic projections. Unfortunately, MnDOT has requested fewer accesses than WSB had prepared, partially because MnDOT classifies access spacing on this segment of South Robert Trail as a principal arterial while the City, the County and the Metropolitan Council classify South Robert Trail as a minor arterial. Staff is discussing this issue with MnDOT staff to fords a suitable resolution. Planning Commission and Port Authority Review The Planning Commission has reviewed the SUGAR report at their July 22 meeting and recommended that the City Council approve the SUGAR report. The Port Authority will be reviewing the SUGAR report at their August 19 meeting and staff has recommended that they recommend that the City Council approve the SUGAR report. Staff will provide the City Council an update at the meeting if the Port Authority acts different that the staff recommendation. RECOMMENDATION Staff recommends approval of the South Urban Gateway Analysis for Reinvestment (SUGAR) report. 2 a- � -may t �! 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P w t 54 iv.,[!, AOL 5' 0 -Mqmwmat� South Urban Gateway Analysis for Reinvestment (SUGAR) rVC)SEMOUNT - 2875 145th Street West Rosemount, MN 55068-4997 Approved August 19, 2014 CONTENTS Vision....................................................................................................1 Introduction............................................................................................2 BlockAnalyses.........................................................................................8 Rosemount Market Square..................................................................8 SouthRose....................................................................................9 Former Carlson Site/Bus Garage..........................................................11 Rick's Auto/Bowling Alley.................................................................13 MovieTheater...............................................................................15 CSAH 46 Northwest.........................................................................17 CSAH46 Northeast..........................................................................20 Implementation...........................................................................................21 CREDITS South Gateway Committee Melissa Kenninger,Resident (Chair) Jamal Abdulahi,Resident Richard Battaglia,Business Owner(Rick's Auto) Kay Butler,Business Owner(McDonald's) Mark DeBettignies,City Council William Droste,Mayor Randy Dukek,Business Representative (ISD 196 Coordinator of Transportation) Joseph Kurle,Planning Commission Robert Leuth,Port Authority Nicholas Rapp,Business Owner (Rapp Chiropractic) Michael Weber,Planning Commission City Staff Kim Lindquist,Community Development Director Eric Zweber,Senior Planner Jason Lindahl,Planner Julie Wotczak,GIS Analyst Clarissa Hadler,Community Development Intern Financial Assistance Dakota County Community Development Agency: Redevelopment Incentive Planning Grant 1i List of Figures Figure 12030 Comprehensive Plan Current Land Use Map.......................................3 Figure2 Zoning Map....................................................................................4 Figure 3 Non-Conforming Uses......................................................................5 Figure 4 Non-Conforming Sites......................................................................6 Figure 5 Visibility Map................................................................................7 Figure 6 Rosemount Market Square Block Map...................................................8 Figure 7 South Rose Block Map....................................................................10 Figure 8 Former Carlson Site/Bus Garage Block Map............................................11 Figure 9 Rick's Auto/Bowling Alley Block Map..................................................13 Figure 10 Movie Theater Block Map...............................................................15 Figure 11 CSAH 46 Northwest Block Map.......................................................17 Figure 12 CSAH 46 Northeast Block Map........................................................19 Figure 13 Proposed Land Use Changes............................................................21 List of Tables Table 1 Rosemount Market Square Block Analysis.................................................9 Table 2 Chippendale/Carrousel Way Block Analysis.............................................10 Table 3 Former Carlson Site/Bus Garage Block Analysis........................................12 Table 4 Rick's Auto/Bowling Alley Block Analysis..............................................14 Table 5 Movie Theater Block Analysis..............................................................16 Table 6 Murgic's Automotive and Dovestone/Pahl Blocks Analysis...........................18 iii VISION The City identified the need to review the South Urban Gateway commercial district for a number of reasons,including the number of non-conforming uses and site; the amount of undeveloped land; some businesses have recently changed or have made new investments in their business;and to clarify and market the differences of South Urban Gateway district from the Downtown district and the future commercial districts at Akron Avenue,US Highway 52 and Minnesota Highway 55. The South Urban Gateway Analysis for Reinvestment (SUGAR) is modeled after the Development Framework for Downtown Rosemount and its success in creating redevelopment and investment Downtown. To begin SUGAR,the South Gateway Committee created a vision that states that purpose of the study as well as stated the difference from Downtown planning efforts. "The South Gateway is positioned along regional transportation corridors to serve Rosemount residents'demands, as well as those of the neighboring communities. The South Urban Gateway Analysis for Reinvestment aspires to support private investments in suitable businesses while encouraging new businesses to serve the expanding needs demanded by a growing community. The scale and character of South Urban Gateway development should complement the existing street pattern and planned extensions to maintain a sustainable and viable business community." Unlikely Downtown,the South Urban Gateway will support a wide varied of commercial business that meet the needs of not only Rosemount's residences,but also the neighboring communities. The City desires to support the existing businesses and encourage bringing their site into compliance with the City Codes when the businesses invest in themselves. The City does not anticipate creating a tax increment financing(nF) district or invest significant City funds in the South Urban Gateway as it has in Downtown and therefore understands that depending on private investments may mean that the vision of the South Urban Gateway may take numerous decades to be fulfilled. Finally,the City is expecting that the existing street pattern will remain and therefore the future investments and redevelopment will need to meet the scale of the existing blocks. To support the creation of this report and the district's investment,a market study has been prepared by Maxfield Research and a traffic access plan has been approved by the Minnesota Department of Transportation (MnDOT). The market study and access plan are considered appendixes to this report. 1 INTRODUCTION The South Urban Gateway Analysis for Reinvestment(SUGAR) is an area-specific planning study to review the current businesses and land uses in the South Gateway and evaluate the possibilities for private investment and redevelopment. The South Gateway District is an hourglass shaped neighborhood currently of commercial and agricultural uses along South Robert Trail between County State Aid Highway (CSAH) 42 and CSAH 46. The project area serves as a gateway to Rosemount for all travelers heading north on South Robert Trail including commuters from Farmington,Empire Township,and Northfield. The north half of the project area is developed with commercial and light industrial uses,many of which are over 25 years old. The south half of the project area is a mix of farm fields,a former village dump,a car repair business,and a natural gas storage facility. SUGAR will create a development plan that will evaluate what businesses and uses are suitable to remain in the north half of the project area while creating a redevelopment strategy for the other parcels and buildings.The plan will also evaluate the best and highest development scenario for the south half along with addressing Brownfield clean up and redevelopment. Since the south entrance to the City traverses the project area,and numerous rush hour drivers pass by each day,the City sees the potential to add important tax base while providing additional jobs for our residents and other commuters,thereby reducing commuter trips. SUGAR includes a market/feasibility study, recommendations of Comprehensive Plan Land Use Amendments,and recommendations of zoning code revisions necessary to support private investments and redevelopment. The South Gateway District is surrounded by residential neighborhoods to the west and northwest; a commercial strip development existing to the west and planned to the east along CSAH 42; the mixed use Downtown Rosemount located directly north along South Robert Trail;and business park/industrial use located to the east. Educational uses are less than a mile away to the north with Rosemount High,Middle,and Elementary Schools and about a mile to the east on CSAH 42 with Dakota County Technical College (DCTC). The development and the redevelopment of the South Gateway District will improve the jobs-housing balance by providing jobs and employment centers near the existing residential developments. Rosemount High School and DCTC can provide workers trained and educated specifically for the businesses located in the South Gateway. The north half of the project area is developed mostly with buildings constructed from 1961 through the early 1980s.There are vacancies or short term uses in buildings that no longer suit retailers'needs,such as the former farm implement dealership on the southwest corner of South Robert Trail and CSAH 42. The south half of the project area is a mix of agriculture and brownfields. SUGAR will provide recommendations that support investments in existing businesses while encouraging the development of vacant lands or redevelopment of obsolete sites into uses that are more suitable to the mature mixed use community that Rosemount has become. The market/feasibility study has evaluated the highest land use potential for the project area and the expected redevelopment timeline. SUGAR's recommendations have considered the transitions needed between residential neighborhoods to the west and the business park/industrial uses to the east. Development in the South Gateway District has already begun with reinvestment in Rosemount Market Square retail along CSAH 42 and recent commercial development on Chippendale Avenue. The South Gateway is large enough and has city services in place to develop multiple phases 2 simultaneously. In the north half, the southwest corner of South Robert Trail and CSAH 42 is expected to redevelop first. In the south half,it is anticipated that the intersection of South Robert Trail and Canada Circle will be developed first,including a street connection to Boulder Trail. Land Use The land use designation (figure 1) for the majority of the South Gateway is CC: Community Commercial,which is appropriate for most retail and office commercial uses. One lot(Lot 32) within the South Gateway is designated BP: Business Park. Lot 32 is the Independent �0 School District#196 administrative offices that are housed within a two story office ' building. A small area north of Canada 32 Circle and west of South Robert Trail (Lots 41,42, and 43) is designated RC: Regional ` Commercial. This area is the former Rosemount Village dump and the former �e South Robert Trail right-of-way. The former dump is currently used as the City public works yard and the former right-of- way is currently vacant. The regional r commercial land use envisions this area to ,.M"" t 3!i be redeveloped into commercial uses that require outdoor storage (such as auto repair w and sales) or are more industrial-like (such JP as contractors or equipment rental). W 0 2 a .� W V � r f- w O ayay.itere -RG R#4C 8-Cam V:,.1 RR Ru•a+Rekdent>rl __... CC C.—ty Cornme :CR;c«c—,"r Rrx deaeal yts-- - .a V _.s'Ir�VarM C.l!t�•::.�. -.. tlttal .•_R n y .rr s_y Ra:nn-m 3Y P..,s^n:Ra. ..':N Y.sur Manspemnt Figure 1.The City adopted the current land use map with the adoption of the 2030 Comprehensive Plan in November 2009. No Comprehensive Plan Amendments have been requested or approved in the South Gateway since 2009. 3 Zoning There are five different zoning districts within the South Gateway District: C-3: Highway Commercial;C-4 General Commercial;BP: Business Park;GI: General Industrial;and PI: Public and Institutional. The zoning districts of the woe north half of the South Gateway have 0 zoning districts that are compliant with their land use designation(General Commercial zoning for the Community Commercial land use and Business Park zoning for the Business Park land use). None of the zoning districts of the south half of the South Gateway are compliant with their land use designation. Most of the lots in the south half of the district are vacant and therefore the proper zoning district can be addressed when the ,,. properties develop. The two southern lots a that are developed are Lot 38 (Murgic's d Automotive: Highway Commercial) and Lot ' 40 (Sera Stream Propane: General a Industrial). SUGAR will evaluate if these Z two businesses are appropriate to remain as Z _ long term uses. - v I 39 37 a 36 Non-Conformities In the context of the South Gateway, W o zoning non-conformities are businesses that 40 do not meet the entirety of the regulations of the zoning district that they are in. Being non-conforming can have impacts on a business's operations and investments because non-conformities cannot expand. There are two general types of non- conformities: non-conforming uses and - non-conforming sites. Figure 2 Zoning districts describe the appropriate uses allowed in the Ten of the 43 lots within the South districts and the design and operational standards that the uses need to operate within. If a business or land use is not compliant with the zoning Gateway have non-conforming uses. Lots 1 district standards,then they are non-conforming. and 2 have automobile orientated uses (Holiday gas station and Valvoline oil change);Lots 11, 13,and 14 are the former Carlson Tractor site and the current school district bus garage;Lot 26 has a contracting business and recreational vehicle sales business;Lot 29 is a car wash;Lot 30 is a business that includes light assembly and manufacturing;Lot 33 has a number of vehicle repair businesses;and Lot 40 has an industrial propane distribution business. For Lots 1 and 2,this report recommends considering amending the Zoning Ordinance to allow gas stations and 4 quick auto service adjacent to retail commercial uses. For Lot 33, this report recommends changing that lot to a RC:Regional Commercial land use that would allow vehicle repair. For the remaining seven non-conforming lots,the report recommends that zoning and land uses stay the same; therefore,the only way for these lots to become conforming is through redevelopment into allowed business use. Non-Conformin Uses Map ID Common Name Conformance # 1 Holiday Station Non-Conforming 1 2 3 5 6 . 13 2 Valvoline Instant Oil Chan Non-Conforming 9 4 11 3 Burger King Conforming 7 4 Rosemount Market Square Conforming 5 Hon Kong Bistro Conforming 15 16 t 7 8 6 McDonald's Conforming 18 19 14 t� 7 Dairy ueen Conforming 20 21 26 27 Q� 8 Taco ohn s Conforming 22 23 28 pO� 9 Chippendale Center Conforming 25 30 29 g� 10 Vermillion State Bank Conforming 24 11 ISD#196 Non-Conform ng 31 12 Vermillion State Bank Conforming 32 33 13 Former Carlson Tractor Non-Conforming 14 ISD#196 Non-Conforming 15 State Farm Insurance Conforming 34 16 Leaps&Bounds Daycare Conformin 17 Winters Pediatric Dentistry Conformin 18 Detlefson Office Conformingbt 19 Dance Connection Conforming 20 Rapp Chiropractic Conforming 21 Rose Park Mechanical Bldg Conforming 22 Chroust Family Dentistry Conforming 23 3 Gus Sewing Conforming 24 Vacant Land Vacant 25 Vacant Land Vacant " ' ` 35 26 Berg Retail Strip Center Non-Conforming\• 27 Vacant Land Vacant 0 41 28 Crown Rental Conforming8 29 The Spa Carwash Non-Conformin > �� 42 43 30 Access Specialties Non-Conforming ui 31 Rosemount Theatre Conforming 32 ISD#196 Conforming ° / z Q 38 33 Rick's Automotive Repair Non-Conforming 34 City Limits Bowfin Alley Conformin = 35 Vacant Land Vacant " / 39 37 F 36 36 Vacant Land Vacant 37 Vacant Land Vacant w 38 Mur is Automotive Conforming to 40 0 39 Vacant Land Vacant W 40 Sem Stream Propane Non-Conformin Cn fey 41 Former Village Dump Vacant 42 1 Former Village D mp Vacant 43 1 Former Village Dump Vacant Figure 3 Non-conforming uses are businesses that are not allowed in the zoning district that they are in. In general,businesses that are non- conforming uses cannot be expanded and businesses often tend to decay over time because business owners cannot invest in their business. These decaying businesses can have an impact on the neighboring businesses and provide a negative view of the entire commercial neighborhood. Non- conforming uses can become conforming uses in one of three ways. First,their property can be re-zoned to a zoning district that would allow their business. Second,the Zoning Ordinance can be amended to add their use to the zoning district that their property is in. Third,the existing business can go away and a conforming use opens in its location. The SUGAR report recommendations look at these options on a block by block basis. 5 Seventeen of the 43 lots in the South Gateway have non-conforming sites. Of the 17 lots, seven of these non-conforming sites are also businesses that will remain non-conforming uses. As stated above,it is not anticipated that these seven businesses would invest in their businesses to resolve their non-conforming sites. The City expects that these lots would become conforming when the properties redevelop. The remaining ten lots that have business that are or will be conforming uses that would be expected to improve their sites during future investment in their businesses. Non-Conforming Sites Map ID# Common Name Conformance � 1 2 5 6 2 1 Holiday Station Conforming 13 2 Valvoline Instant Oil Chan Non-Conforming 9 4 11 3 Burger King Non-Conforming 7 4 Rosemount Market Square Conforming 15 16 17 8 5 1 Hong Kong Bistro Non-Conforming 6 McDonald's Conforming 18 19 14 7 Dairy Queen Conforming 20 21 26 27 8 Taco John's Conforming 22 23 9 Chippendale Center Conforming 30 28 10 Vermillion State Bank Non-Conforming 24 25 29 11 ISD#196 Non-Conforming 12 Vermillion State Bank Non-Conforming 31 33 13 Former Carlson Tractor Non-Conforming 32 14 ISD#196 Non-Conforining- 15 State Farm Insurance Non-Conforming 34 16 Leaps&Bounds Daycare Conforming 17 Winters Pediatric Dentistry Conforming 18 Dedefson Office Conforming 19 Dance Connection Non-Conforming WACHTER 20 Rapp Chiropractic Confomun g LAKE 21 Rose Park Mechanical Bldg Conforming 22 Chroust Family Dentistry Conforming 23 3 Gus Sewing Conforming 24 Vacant Land Conforming 25 Vacant Land Conforming 35 26 Berg Retail Strip Center Non-Conforming 41 27 Vacant Land Conforming 28 Crown Rental Conforming 29 The Spa Carwash Non-Conforming 42 43 30 Access Specialties Non-Conformi 31 Rosemount Theatre Conforming----- 32 ISD#196 Conformin 33 Rick's Automotive Repair Non-Conforming 38 34 City Limits Bowling Alley Non-Conforming='y 35 Vacant Land Conforming 36 Vacant Land Conforming 39 37 36 37 Vacant Land Conformin 38 Mur is Automotive Non-Conformin 39 Vacant Land Conforming 40 Sem Stream Propane Non-Conforming 40 41 Former Village Dump Conforming 42 Former Village Dump Conforming 43 Former Village ump Conformi Figure 4 Non-conforming sites are businesses that either are dimensionally non-conforming(i.e.,the building is too close to the property line)or do not meet the aesthetics standards of the City Code. In general,businesses can resolve their non-conforming site status through reinvestment in their businesses. Businesses that are conforming use often will invest in their business over time,while businesses that are non-conforming use often will not because they will not see the return on their investments.These non-conforming use sites will likely continue to decay. The SUGAR report does not provide any recommendation to amend the Zoning Ordinance to reduce the dimensional or aesthetics standards. 6 Visibility The South Gateway has positive visibility due to 6 sue ' the major,east-to-west running County Road on the north and south borders of the district and the State Highway running north to south through the �^ district. CSAH 42 running on the north boundary of the district has 17,400 daily trips driving by the district and CSAH 46 running on the south boundary of the district has 13,100 daily trips. Both of these County Roads would be expected to become busier as Rosemount and surrounding w= communities grow. South Robert Trail,running north to south through the district,has 8,900 daily trips. South Robert Trail traffic is not expected to significantly increase because the adjacent north- south transportation corridors will be improved as 0 development occurs. The only new road planned within district is an extension of Boulder Avenue within Business Park to South Robert Trail at the general location of the existing Canada Circle. This intersection is expected to have a signal and will have significant traffic counts when the UMore property,about 3/4 • of a mile to the east,develops. The Boulder Figure 5 The existing local street network within the district does not have Avenue extension will increase the visibility of the significant traffic counts and is not expected to increase. The block northeast of the South Robert Trail and redevelopment of the sites that are orientated to these local roads may be limited due to lower visibility. CSAH 46 intersection (Lots 35 and 36). 7 BLOCK ANALYSIS: ROSEMOUNT MARKET SQUARE BLOCK Block Overview.• The Rosemount Market Square block is bounded by County Road 42 to the north, 151"Street West to the south,Canada Avenue to the east,and Chippendale Avenue to the east. It includes properties 1 through 9. Development Concept Properties in the Rosemount Market Square blocks were platted between 1979 and 1994 and individual sites were developed between 1979 and 2012. The Holiday site was platted as part of South Rose Park Addition in 1979. The eastern portion(Hong Kong Bistro,McDonalds, Dairy Queen,and Taco John's) was platted as part of South Rose Park 2°a Addition in 1983. The middle portion (Valvoline,Burger King,Rosemount Liquor, s , Chippendale Center,and the Rosemount Market Square mall) was y platted in 1994. The most recent development in this area was the reconstruction of McDonalds in 2012. Key Elements " ,F This block is guide CC—Community Commercial and zoned C-4, Figure G Rosemount Market Square General Commercial. County Road 42 provides high visibility with a limited (3/4) midblock access. Chief access to the site comes from Canada Avenue to the east and Chippendale Avenue to the west, which includes a full intersection with a stoplight at County Road 42. An examination of the properties on this block finds a diverse mix of high quality retail,professional service, and restaurant uses with limited non-conformities. • The Holiday gas station is a non-conforming use but conforms to the site standards. • Hong Kong Bistro is a conforming use but does not meet many of the site and building standards (building materials,parking lot,and screening). • Valvoline Instant Oil Change is a non-conforming use and fails to meet the minimum lot size standard. • Burger King is a conforming use but fails to meet the pedestrian access standard. • The Rosemount Market Square Mall,McDonald's,Dairy Queen,Taco John's,and the Chippendale Center are all confirming uses and sites. Dakota County plans to expand County Road 42 to six lanes as conditions warrant. Expanding County Road 42 would require additional right-of-way which will likely impact setbacks to abutting properties in Rosemount Market Square. Rezoning to C-3 would allow both Holiday and Valvoline as conditional uses;however,this change would not address the non-conforming site issues. It is important to note that a change to C-3 would also open the area to other uses in this district including auto sales,lumber,and construction businesses that were intentionally removed during the 2005 zoning update. The existing C-3 8 conditional use permit standards for auto orientated uses would call for the building to be the primary source of screening,require repair activity to take place inside a building,and limit the amount and location of outdoor product display. Contactor's offices would be subject to similar standards but with a screened outdoor storage/display area for products,materials,or supplies up to forty-five (45) percent of the gross floor area of the principal building. Table 1: Rosemount Market Square Block Analysis Map ID# Name Use Site 1 Holiday Station Store Non-Conforming Conforming 2 Valvoline Instant Oil Change Non-Conforming Non-Conforming—Lot Size 3 Burger King Conforming Non-Conforming-Ped.Access 4 Rosemount Market Square Conforming Conforming 5 Hong Kong Bistro Conforming Non-Conforming—Parking Lot, Screening 6 McDonald's Conforming Conforming 7 Dairy Queen Conforming Conforming 8 Taco John's Conforming Conforming 9 Chippendale Center Conforming Conforming Implementation The strategy for Rosemount Market Square should maintain the current diverse mix of high quality retail,professional service, and restaurant uses while balancing the reinvestment needs of existing non-conforming auto-oriented use. This strategy could include: • Maintaining the existing CC—Community Commercial land use designation and C-4, General Commercial classification for the majority of the block. • Consider zoning changes targeted to non-conforming auto related uses. • Address non-conforming sites through business investments,code enforcement,and redevelopment. BLOCK ANALYSIS: SOUTH ROSE BLOCK Block Overview The South Rose block is bounded by 151"Street West to the north, Chippendale Avenue to the west and Carrousel Way to the east and south. It includes properties 15-24. Development Concept The South Rose block includes two separate plats with individual sites developed over nearly 30 years. The northern three-fifths of the block were platted as part of Rose Park Second Addition in 1982 and contain the Leaps and Bounds Child Care (1979),Detlefson Office Building(1984),State Farm(1985), Winter's Pediatric Dentistry (1994), and the Dance Connection (2003). The southern two-fifths of the 9 "T, block were platted as part of Rose Park Third Addition in 1991 and contain the Rose Park Mechanical building(1984),a multi-tenant ; commercial building(2000),the Rapp Chiropractic/American Family building Chroust Family Dentistry and two undeveloped lots. Key Elements -" This block is guided CC-Community Commercial and zoned C-4, General Commercial. Located one block south and behind the Rosemount Market Square Mall,this block has efficient access via 151"Street West and Chippendale and Canada Avenues but with significantly less visibility. As a result,this block contains almost exclusively destination-oriented personal and professional service uses. Over the years,different types of retail uses have attempted to locate here unsuccessfully. Figure 7 South Rose Block Table 2: Chippendale/Carrousel Way Block Analysis Map ID# Name Use Site Non-Conforming—Building 15 State Farm Conforming Materials,Ped Access,Parking Lot, Screening 16 Leaps&Bounds Child Care Conforming Conforming 17 Winters Pediatric Dentistry Conforming Conforming 18 Detlefson Office Conforming Conforming 19 Dance Connection/ATA Conforming Non-Conforming—Ped.Access 20 Rapp Chiropractic/Am.Family Conforming Conforming 21 Rose Park Mechanical Bldg. Conforming Conforming 22 Chroust Family Dentistry Conforming Conforming 23 3 Guys Sewing Conforming Conforming 24 Vacant N/A N/A 25 Vacant N/A N/A An examination of the properties on this block finds two locations with non-conforming site issues. The State Farm site fails to meet the building materials,pedestrian access,parking lot,and screening standards. By comparison,the Dance Connection/ATA building, constructed in 2003,meets nearly all the existing site and building standards but fails to meet the current pedestrian access requirements. In this case,rezoning to C-3 would do little to address existing non-conformities because there are no non-conforming uses and the applicable standards for the non-conforming site issues are the same for both the C-3 and C-4 districts. However,rezoning could potentially open up the Rose South block to 10 other regional/destination uses (contractors or specialty retail) to complement the existing destination- oriented personal and professional services. Any strategy should be carefully designed to include appropriate screening standards to limit potential impacts on surrounding uses. Implementation Strategies for the South Rose block should address how to encourage a mixture of destination- oriented personal,professional,and retail use as well as reinvestment by existing businesses to eliminate non-conforming site issues. • Maintain the existing CC—Community Commercial land use designation and C-4,General Commercial classification for the majority of the block. • Address non-conforming sites through business investments,code enforcement,and redevelopment. BLOCK ANALYSIS: FORMER CARLSON SITE/BUS GARAGE BLOCK Block Overview The Former Carlson Site/Bus Garage block is bounded by :W County Road 42 to the north,Highway 3 to the south and east, and Canada Avenue to the west. It includes properties 10—14. Development Concept _ Properties in the Former Carlson Site/Bus Garage block were platted in 1979 as part of the South Rose Park Re-Plat. The first development on this block occurred on the former Carlson Tractor site in 1966. Subsequent development on this block included the Independent School District 196 bus garage in 1984 »7 and the Vermillion State Bank in 1988. ' • The Carlson site contains a 6,000 square foot metal *a' storage building,which is completely open along one side, and a 20,472 square foot metal/masonry office and shop. • The Bus Garage site includes an 18,547 square foot office and shop masonry building with a 2,300 square foot ; canopy over fuel pumps constructed in 1984. Figure 8 Former Carlson Site/Bus Garage Block • The bank site contains a 4,128 square foot brick masonry building with a drive-thru constructed in 1988. Traffic count data shows 17,400 daily trips along County Road 42 with just over one-half that number of trips (8,900) along Highway 3. Traffic along Canada Avenue varies depending on location with 5,500 trips north of 151"Street West and 3,400 trips south of 15155 Street West. The Former Carlson Tractor block has high visibility as a result of its location at the intersection of County Road 42 (a Principal Arterial) and Highway 3 (a Minor Arterial). Despite the site's visibility, access is relatively limited,coming from uncontrolled access points along Canada Avenue and Highway 3. 11 Key Elements This block is guided CC—General Commercial and zoned C-4,General Commercial. The predominant use of the former Carlson site is outdoor storage of construction machinery and materials on an unimproved surface. The site has non-conformities with respect to outdoor storage, building materials,lighting,parking lot design, screening,and pedestrian access. Similarly,the dominant use of the Bus Garage site is outdoor storage of vehicles but on an improved asphalt surface. This site is non-conforming with respect to outdoor storage,lighting,parking lot design, screening,and pedestrian access. The Vermillion State Bank is a permitted use but non-conforming with regard to minimum lot size. In this case,rezoning to C-3 would not address the type and scale of non-conformities. Changing to C-3 would allow outdoor storage of products,materials,or supplies but would limit that area to forty- five (45) percent of the gross floor area of the principal building. Currently,outdoor storage is 8.6 times the size of the principal building on the Carlson site and 18.9 times the size of the principal building on the bus garage site. And this change would not address the remaining non-conforming site issue because the applicable standards are the same for both zoning districts. Table 3: Carlson/Bus Gara a Block Analysis Map ID# Name Use Site Size 10 Vermillion State Bank Conforming Non-Conforming—Lot Size 0.17 Acres Non-Conforming—outdoor 11 ISD #196 Non-Conforming storage,lighting,parking lot 1.99 design,screening,and Acres pedestrian access. 12 Vermillion State Bank Conforming Conforming 0.61 Acres Non-Conforming—Building Former Carlson 5.8 13 Tractor Non-Conforming Materials,Lighting,Ped. Acres Access Non-Conforming—outdoor 14 ISD #196 Non-Conforming storage,lighting,parking lot 6.5 design,screening,and Acres pedestrian access. Future redevelopment would likely require combining or subdividing existing property,resulting in access changes and/or right-of-way dedication. Dakota County plans to expand County Road 42 to six lanes when conditions warrant,with the County seeking 100 feet on both sides of right-of-way from the existing center point of County Road 42. In addition,the Minnesota Department of Transportation would likely seek to remove and/or consolidate accesses along Highway 3. For discussion purposes,staff prepared a redevelopment concept plan for the Former Carlson Tractor/Bus Garage block. This concept plan is based on the footprint for the Rosemount Cub Foods and attached strip mall as well as the Holiday Inn Express and Green Mill restaurant located near Interstate 35E and Cliff Road in Eagan. All totaled,this concept plan includes nearly 83,000 square feet of retail,73,000 square feet of hotel (120 rooms, fitness center,pool,and meeting rooms) and 7,500 square feet of restaurant space. Some general conclusions for the Former Carlson 12 Tractor/Bus Garage block: 1. Two properties could mean relatively easy site assembly. 2. Relocating existing businesses could be challenging. 3. Relatively large commercial redevelopment site. 4. Site's good visibility is both a strength and weakness. 5. Decent existing access. 6. Market could likely support C-4 uses at this location. Implementation The size,location, and underutilization of the properties on the Former Carlson Tractor/Bus Garage block make it a prime candidate for redevelopment. Together the Carlson and Bus Garage sites amount to over 14 acres or nearly 1 '/z times the size of the Rosemount Cub Foods block (9.6 acres). • Maintain the existing CC—Community Commercial land use designation and C-4,General Commercial classification. • Work with Independent School District 196 to relocate the existing bus garage. • Encourage individual property owners to market the entire block. • Encourage redevelopments that expand the entertainment opportunities within the district. • Address non-conformities sites through business investments, code enforcement, and redevelopment. BLOCK ANALYSIS: RICK'S AUTO/BOWLING ALLEY BLOCK Block Overview � Rick's Auto/Bowling Alley (properties 34& 35) blocks. ^� V- Development Concept The Rick's Auto and Bowling Alley sites were developed in 1961 and,like the Carlson site,pre-date official creation of the City and y, its zoning regulations. The Rick's Auto site has two accesses on .; Highway 3 and contains three metal buildings totaling 20,337 square feet with outdoor storage on an unimproved (dirt) surface.'I* ° The vacant bowling alley site has one access on Highway 3 and ,ti 4, s contains a nearly 23,000 square foot masonry building. Sloping topography on Rick's Auto/Bowling Alley block results in relatively good access and visibility on the north end (Rick's Auto) .. with more limited access and visibility conditions at the south end .3' (bowling alley). , Figure 9 Rick Auto/Bowling Alley Block Key Elements This block is guided CC—Community Commercial and zoned C-4, General Commercial. The block includes Rick's Auto and the vacant City Limits bowling alley. The Rick's site is non-conforming with regard to building materials,outdoor storage,parking lot, screening,and pedestrian access. The Bowling alley site is non-conforming with regard to building materials,building facrade breaks,parking lot,and screening. In this case,rezoning to C-3 would do little to address existing non-conformities. 13 While changing to C-3 would allow the auto repair use,it would not address the amount of outdoor storage or the remaining non-conforming site issues for either location. Table 4: Rick's Auto/Bowlin&r eV Block Analysis Map ID# Name Use Site Size Non-Conforming—Materials, 3.4 33 Rick's Auto Non-Conforming Outdoor Storage,Parking Lol Acres Screening,Ped.Access Non-Conforming Materials 34 Ale Limits Bowling Conforming Building Facade Breaks, Ace s y Parking Lot,Screening While the vacant bowling alley and underutilization of the Rick's site create favorable redevelopment conditions,limited access,visibility and size hinder the block's redevelopment potential. The limited size and triangular shape of both properties likely mean the highest and best use of the site would be as a single property with the option for multiple users or building pads. In the same way,the narrow depth and tapered corners likely rule out re-guiding the site to manufacturing use with rail access. Some general conclusions for the Rick Auto/Bowling Alley Block: 1. Two properties could mean relatively easy site assembly. 2. Relocating existing businesses could be challenging. 3. Site's redevelopment potential is limited by size,access,and visibility. 4. Redevelopment market is likely destination commercial or C-3 uses with outdoor storage. Future redevelopment of this area includes combining or subdividing of property would likely also include access changes and/or right-of-way dedication. The Minnesota Department of Transportation would likely seek to remove and/or consolidate accesses along Highway 3. Implementation Strategies for the Rick's Auto/Bowling Alley block should address how to promote reinvestment by existing businesses to eliminate non-conformities while encouraging redevelopment appropriate for the site and needs of the community. • Amend the block's future land use designation to CR—Regional Commercial and zoning to C-3,Highway Commercial. • Encourage individual property owners to market the entire block. • Address non-conforming sites through business investments, code enforcement,and redevelopment. 14 BLOCK ANALYSIS: MOVIE THEATER BLOCK Block Overview The Movie Theater block is bounded by 15151 Street West to the north, 153d Street West to the south,Canada Avenue and highway 3 to the east,and Chippendale Avenue to the west. It includes properties 26-32. Development Concept } �, The Rosemount Theatre block was established as part of three different subdivisions and developed over several years. The l Berg Retail Center,vacant Lot 27,Crown Rentals,Spa Carwash, and Access Specialties International sites were platted in 1979 as part of the South Rose Park Addition Replat. Development of these sites began with the Berg Retail Center in 1979 followed by Access Specialties International in 1983, the Spa Carwash in 1988,and Crown Rental in 1998.The Marcus Theatre property s was part of the Carrousel Plaza plat in 1993 and was constructed the following year. And the Independent School District 196 r offices property was part of the Carrousel Office Center Plat in Figure 10 Movie Theater Block 2001 but the building was not constructed until 2006. There is a wide range of traffic activity around and through this block. The highest traffic levels are along the east sides with 8,900 daily trips along Highway 3. While there is substantial traffic along Highway 3, topography,site lines,and access limitations lessen its impact,both positively and negatively. More moderate traffic levels exist along 1515`Street West(6,600 daily trips),Chippendale Avenue (5,100 daily trips),and Canada Avenue (3,400 daily trips). These collector and local streets provide direct access and good visibility to properties along the perimeter of this block. The lowest traffic levels for this area are along Carrousel Way(600 daily counts),which serves the theatre site and the internal properties of this block. It should be noted that this count was measured mid-block. Counts along Carrousel Way west of the Marcus Theatre are likely higher. Key Elements. Most of the Theater block is guided CC -Community Commercial with only the Independent School District building guided as BP—Business Park. Similarly, the entire block is zoned C-4,General Commercial with the exception of the ISD building which is zoned BP—Business Park. It contains a mixture of retail, office,entertainment,and service uses. Non-conformities are focused on the three older sites,with the three newest sites conforming to the City's existing zoning regulations (see attached maps and table below). The Berg Retail Center contains five different businesses (Berg Construction Services,Min-Kota Building Systems,Carquest Auto Parts,Lighthouse Motor Sports &Marine,and Pilgrims Promotions) focused on vehicle sales and service and construction office activities. It is non-conforming with regards to use,building materials,and outdoor storage. The Berg Retail Center is in common ownership with the vacant Property 27 to the west,which is used for associated outdoor storage. 15 The two other sites with non-conformities are the Spa Carwash and Access Specialties International. The Spa Carwash is non-conforming with respect to use,setbacks,and pedestrian access. Access Specialties International is non-conforming as to use (light assembly and warehousing),building materials,pedestrian access,parking lot,and screening. Table 5: Rosemount Theatre Block Analysis Map ID# Name Use Site Size 26 Berg Retail Center Non-Conforming Non-Conforming: Building 2.13 Acres Materials,Outdoor Storage 27 Vacant Land Vacant Land Vacant Land 1.5 Acres 28 Crown Rental Conforming Conforming 0.98 Acres 29 The Spa Carwash Non-Conforming Non-Conforming: Setbacks, 1 Acre Pedestrian Access Non-Conforming: Building 30 Access Specialties Intl. Non-Conforming Materials,Pedestrian Access, 1.27 Acres Parking Lot,Screening 31 Rosemount Theatre Conforming Conforming 8.69 Acres 32 ISD 196 Offices Conforming Conforming 2.1 Acres The three conforming sites (properties 28,31,and 32) also have development challenges. The Marcus Theatre has long sought additional signage and access along Highway 3. In the past the Minnesota Department of Transportation has denied access along Highway 3 but the Theatre did reach an agreement for shared parking and signage with the ISD office building to the west. Crown Rental has sought additional outdoor storage for its site. However,as the committee has discussed for other blocks,the C-4,General Commercial zoning district does not allow outdoor storage. In this case,rezoning to C-3 would not fully address the type and scale of non-conformities present on the Theatre Block. Rezoning to C-3 would allow auto oriented uses through a conditional use permit. However,it would not address the non-conforming site challenges such as outdoor storage, building materials, and setbacks or the non-conforming use issues (light assembly and warehouse) at Access Specialties International. C-3 allows outdoor storage of products,materials,or supplies but limits that area to forty-five (45) percent of the gross floor area of the principal building. Existing outdoor storage on this block exceeds that standard. While half the uses on the Movie Theatre Block are non-conforming,wholesale scale redevelopment of this area seems unlikely. Unlike conditions on the Former Carlson Tractor/Bus Garage or Rick's Auto/Bowling Alley blocks,existing conditions on these sites do not appear to fall to a level necessitating clearing and reconstruction. The area's redevelopment potential is further limited by parcel size,access,and visibility. Similar to conditions on the South Rose Park block to the west,the most challenging sites on the Rosemount Theatre Block are the older retail uses that need outdoor storage and are located on properties with limited visibility. However,both blocks also contain newer destination service,office, and entertainment uses that appear better suited for the neighborhood's design,its location within the community,and market conditions. 16 Implementation Strategies for the Movie Theater block should encourage owners of the most challenging properties (Lots 26-30) to address existing site non-conformities while promoting recruitment and retention of businesses better suited for the market and existing conditions in this area. According the market study this could include a focus on family entertainment uses. • Maintain the existing land use and zoning designations • Encourage individual property owners to market their properties together. • Encourage redevelopments that expand the entertainment opportunities within the district. • Address non-conforming sites through business investments,code enforcement,and redevelopment. BLOCK ANALYSIS: CSAH 46 NORTHWEST BLOCK Block Overview The CSAH 46 Northwest block is bounded by the Canadian Pacific Railway to the north and west,County Road 46 to the 'rl' south,and Highway 3 to the east. The area includes properties ► 37—42. By and large, the area includes a mix of underdeveloped and vacant properties. Recent �t Comprehensive Plan changes re-guided the entire area as either Regional or Community Commercial but individual sites continue to have a range of zoning classifications (PI—Public •" and Institutional,C-3 -Highway Commercial,BP—Business Park, or GI—General Industrial). Non-conformities are ; focused on the Murgic's and Sem Stream sites,where future redevelopment remains uncertain. Development Concept Figure 11 CS.M1 46 Northxccst 11 lock Generally,the existing land uses in this area include vacant land,the former Rosemount Village landfill, automobile repair, and a propane storage and distribution site. In 2006, the City amended the Comprehensive Plan to re-guide this area for commercial development with the understanding that rezoning to a particular commercial zoning classification would occur with a specific development proposal. As part of that process, the Planning Commission and City Council stated a preference for the area to serve as a potential location for existing businesses relocated from the downtown and could include automobile and repair shop related uses typical of the C-3,Highway Commercial district. The 2008 Comprehensive Plan Update refined the land use designations in the area to guide the land owned by the City as RC —Regional Commercial with the balance guided as CC—Community Commercial. In this area,the highest traffic counts run east/west along County Road 46 with 13,100 trips per day. Dakota County projects traffic along County Road 46 will increase to 36,000 trips per day by 2030. Traffic volumes are estimated at 8,900 trips per day along Highway 3 and 500 trips per day along Canada Circle. 17 Key Elements This block contains a mixture of existing properties with non-conformities and vacant land (see attached maps). Properties 37,39 (Car Nav Five),and 40 (Sem Stream) are all guided Community Commercial but zoned General Industrial. Property 38 (Murgic's Automotive) is guided Community Commercial and zoned C-3,Highway Commercial. Properties 41,42,and 43 (Former Rosemount Village Landfill) are guided Regional Commercial but zoned either BP—Business Park or PI—Public and Institutional. As a result,the Murgic's site has non-conforming site issues (building materials, setbacks,pedestrian access) while Sem Stream has both non-conforming use and non-conforming site (setbacks,building less than 10 percent) challenges. Table 6:Murgic's Automotive and Dovestone/Pahl Blocks Analysis Map ID# Name Use Site Size 35 Pahl Property Conforming- N/A 32 Acres Vacant/Farm Land 36 Dovestone Property Conforming- N/A 21 Acres Vacant/Farm Land 37 Car Nav Five (East) Conforming- N/A 7 Acres Vacant/Farm Land Conformin Non-Conforming: Building 38 Murgic's Automotive Materials,Setbacks, 3.25 Acre Auto Repair Pedestrian Access 39 Car Nav Five (West) Conforming- N/A 6.3 Acres Vacant/Farm Land Non-Conforming— Combustible Non-Conforming—Setback 40 Sem Stream Products Building Less than 10 15.3 Acres Distribution and Percent of Lot Storage 41 Former Rosemount Conforming N/A 3.6 Acres Village Landfill Former Rosemount 42 Village Landfill Conforming N/A 2.5 Acres Former Rosemount 43 Village Landfill Conforming N/A 1.5 Acres This block contains both new development and redevelopment opportunities. New development could occur on the 13 acre vacant Car Nav Five properties. These parcels are currently zoned GI— General Industrial but guided for Community Commercial. Preliminary analysis indicates these parcels could accommodate 60,000 to 70,000 square feet of buildings,although actual performance is likely somewhat lower given the needs for parking,ponding, setbacks,and outdoor storage. Existing access to the site comes from Canada Circle along the west (back) side of the property. Redevelopment could occur on the Murgic's,Sem Stream,or former Rosemount Village landfill sites. The City completed an environmental assessment and preliminary site development plan for the former landfill site in 2007. The preliminary site development plan included five lots ranging in size from 1.05 to 2.43 acres with access from Canada Circle. The area is currently zoned BP— Business Park and PI—Public and Institutional but guided Regional Commercial. The Regional 18 Commercial land use designation contrasts with the current zoning classifications but generally matches up with the City Council's preferences from 2007. Based on the zoning standard requiring a minimum ten (10) percent building coverage per lot,it's estimated this area could accommodate at least 33,000 square feet of commercial/industrial space. It should be noted that the City still operates its Public Works yard on this property and any redevelopment would necessitate relocation of that facility. Redevelopment of the Sem Stream site remains uncertain. The site was originally developed in 1963 and operates as a storage and distribution center for bulk propane gas. The property has infrastructure including above-ground storage tanks,pipe loading racks,a rail spur,and pipeline along County Road 46. The rail spur crosses the old Highway 3 and existing Canada Circle corridors and extends almost to the existing Highway 3 right-of-way. The 2007 comprehensive plan amendment made the site's land use non-conforming and was not supported by the landowner. However, the site continues to operate under the existing condition and can be maintained,repaired, or replaced,but not expanded. Like the Sem Stream site,redevelopment of the Murgic's site is uncertain. As noted above,the existing automobile repair is a conforming use but the site has several non-conforming issues. The use is also consistent with the City's Council 2007 preferences. During the September open house the property owner expressed a desire to remain in this location long-term and a willingness to work with the City on non-conforming issues. However, the owner also voiced concerns with the investment necessary for future expansion to meet current zoning standards. Implementation Strategies for the CSAH 46 Northwest block should reinforce the City Council's 2007 preferences. Despite the projected market demand and traffic growth along County Road 46,the market study also finds this block has some of the lowest land and building values in the corridor and predicts redevelopment to be approximately ten years away. • Maintain the RC—Regional Commercial land use designations for Lots 41,42,and 43. • Amend the future land use designation for Lots 37,38,39,and 40 from CC—Community Commercial to RC—Regional Commercial. • This block may be appropriate for relocating existing non-conforming use businesses from either downtown or other parts of the district. • Redevelopment may contain auto related uses and limited amounts of outdoor storage provided there is appropriate screening and buffer of the residential neighborhood west of the railroad. • Address non-conforming sites through business investments,code enforcement,and redevelopment. BLOCK ANALYSIS: CSAH 46 NORTHEAST BLOCK Block Overview The CSAH 46 Northeast block is bounded by the Rosemount Business Park to the north,County Road 46 to the south,U Pull R Parts to the east,and Highway 3 to the west. The area includes properties 35 and 36. 19 Development Concept The CSAH 46 Northeast block consists of vacant property awaiting development. In 2006, the City amended the Comprehensive Plan to re-guide this area for commercial development with the understanding that rezoning to a particular commercial zoning classification would occur with a specific development proposal. As part of that process,the Planning Commission and City Council stated a preference for the area to contain uses typically associated with the C-4,General Commercial district. Traffic count data for the South Urban Gateway are illustrated on a map provided to committee members during the December - meeting. In this area,the highest traffic counts run east/west along County Road 46 with 13,100 trips per day. Dakota County projects traffic along County Road 46 will increase to 36,000 trips per day by 2030. Traffic volumes are estimated at 8,900 trips per day along Highway 3 and 500 trips per day along Canada Circle. Key Elements 3 The CSAH 46 Northeast block has a mix of land use and zoning fro; designations with vacant properties awaiting future development. The Dovestone property (36) is zoned GI— General Industrial and the Pahl property (35)is zoned BP— �e Business Park,but both properties are guided Community ICI Commercial. Both properties are vacant and therefore have no non-conforming issues. -° _ M*W A. Figure 12 CSAH 46 Northeast Block The South Urban Gateway study reviewed several development concept plans for this area. This plan includes two sites on either side of the future extension of Boulder Trail. Ultimately,the committee endorsed a concept plan that included approximately 150,000 square feet of retail in two buildings on the Dovestone property. On the Pahl property the concept plan included 136,000 square feet of retail in three buildings with another 50,000 square feet of office warehouse/showroom. Implementation Strategies for the CSAH 46 Northeast block should reinforce the City Council's 2007 preferences. Despite the projected market demand and traffic growth along County Road 46,the market study also finds this block has some of the lowest land and building values in the corridor and predicts redevelopment to be approximately ten years away. • Maintain the existing CC—Community Commercial land use designation. • Future development should be consistent with the City Council's 2007 preferences and work to transition land uses between commercial uses along TH 3 and existing industrial uses to the east. 20 IMPLEMENTATION • Comprehensive Plan Amendment for the Rick's Auto block and the south half of the CSAH 46 Northwest block. • Zoning Ordinance amendment to remove Gas Stations and Immediate Service Automotive Maintenance establishments from the C-3 Zoning District. • Work with Independent School District 196 to relocate the existing bus garage. • Encourage individual property owners to market the entire Carlson and Rick's Auto blocks. • Encourage individual non-conforming use property owners within the Movie Theater block to market their properties together. • Encourage redevelopments that expand the entertainment opportunities within the north half of the district. • The CSAH 46 Northwest block may be appropriate for relocating existing non-conforming use businesses from either downtown or other parts of the district. • Redevelopment within the CSAH 46 Northwest may contain auto related uses and limited amounts of outdoor storage provided there is appropriate screening and buffer of the residential neighborhood west of the railroad. • Development of the CSAH 46 Northeast block should focus on retail and office business with a regional draw while considering the need to transition between the new commercial development and the industrial and business park uses to the east. • Address non-conforming sites through business investments,code enforcement,and redevelopment. Recommended Land Uses Based on the block by block review by the SUGAR Committee,two amendments are recommended to the Comprehensive Plan. First,the Rick's Auto block (Lots 34 and 35) is recommended to be s changed from CC: Community Commercial to RG: u Regional Commercial. Second,the south half of the Northwest CSAH 46 block(Lots 37,38,39, and 40) is recommended to be changed from CC- = Community Commercial to RG: Regional Commercial. All other land uses are recommended to stay as they were determined in the 2030 Comprehensive Plan. The rational for these two recommendations are described greater detail in their Block Analyses above. 0 The increase in RC: Regional Commercial will allow -- a greater variety of business uses in the South South Urban Gateway A-!_y.i.for Neinveslmenl � Gateway,particularly uses that would require small SRO MOUI.TT Recommended land Use 1 amounts of outdoor storage or flex uses that require some warehousing or manufacturing space Figure 19 Proposed Land Use Changes 21 adjacent to their retail or office space. The regional commercial areas are located on the blocks adjacent to the Union Pacific railroad line,but development site plan review will need to consider the appropriate screening or buffering from land uses on the far side of the railroad. There is no recommendation to change the existing zoning on the properties within the South Gateway. Appropriate zonings that are complementary to the designated land uses will be considered when vacant properties are developed or when improved sites are redeveloped. 22 xfleld q Rcscarcli Inc. May 31, 2014 Ms. Kim Lindquist Director of Community Development City of Rosemount 2875145 th Street West Rosemount, MN 55068 Dear Ms. Lindquist: Attached is the analysis titled, "A Market Potential Analysis for the South Urban Gateway Corridor in Rosemount, Minnesota". The market analysis focuses on the amount of develop- ment supportable in the South Urban Gateway Corridor with attention given to a potential mix of retail categories based on the demographic characteristics,growth trends in the area, and the existing retail supply in Rosemount and the surrounding area. Maxfield Research, Inc. estimates demand for retail and other uses on the property based on projected growth for the Rosemount Trade Area, changing demographic patterns, and project- ed market conditions for commercial, residential and other real estate sectors. Recommenda- tions regarding the amount of square footage supportable over various periods of time are provided along with the calculations of demand through 2025 and to 2035. Detailed findings and recommendations are found in the Conclusions and Recommendations section at the end of the report. Please contact us if you have questions or require additional information. Sincerely, MAXFIELD RESEARCH INC. V 7 Mary Bujold President Attachment 612-338-0012(fax)612-904-7979 1221 Nicollet Mall,suite 218,Minneapolis,MN 55403 www.maxfieldresearch.com TABLE OF CONTENTS Page PURPOSE AND SCOPE OF STUDY........................................................................................ 1 CORRIDOR LOCATION ASSESSMENT................................................................................... 2 Introduction ................ ................................................................................................ 2 RegionalLocation............................................................................................................ 2 Rosemount Characteristics ............................................................................................. 4 Corridor Location and Characteristics............................................................................. 10 Adjacent and Surrounding Land Uses............................................................................. 10 Accessand Visibility........................................................................................................ 11 Appropriateness of the South Urban Gateway Corridor for Commercial Uses.............. 13 DEMOGRAPHIC ANALYSIS................................................................................................... 14 Introduction .................................................................................................................... 14 MarketArea Definition ................................................................................................... 14 Populationand Household Growth Trends.................................................................... 16 Population Age Distribution............................................................................................ 18 Household Incomes....................................................................... ......... 20 ......................... EmploymentForecast..................................................................................................... 22 Covered Employment by Industry.................................................................................. 23 RETAIL MARKET ANALYSIS.................................................................................................. 25 Introduction ......................................................... . ...................................................... 25 Consumer Expenditure Patterns..................................................................................... 25 Retail Demand Potential and Leakage............................................................................ 29 Types of Retail Goods and Customer Shopping Patterns............................................... 31 Retail Mix in Rosemount................................................................................................. 32 Local Retail Market Conditions....................................................................................... 33 Retail Development Potential......................................................................................... 35 OFFICE MARKET ASSESSMENT............................................................................................ 37 Introduction .................................................................................................................... 37 Business Establishment Growth...................................................................................... 37 Local Office Market Conditions....................................................................................... 39 Office Demand Projections.......................................................................... ............... 41 INDUSTRIAL MARKET ASSESSMENT.............................................................................. 43 Introduction .................................................................................................................... 43 Local Industrial Market Conditions................................................................................. 43 Industrial Demand Potential........................................................................................... 45 MAXFIELD RESEARCH INC. TABLE OF CONTENTS (continued) Page SOUTH URBAN GATEWAY CORRIDOR........................................................................... 46 Introduction .................................................................................................................... 46 LandValues..................................................................................................................... 46 BuildingValues................................................................................................................ 47 CONCLUSIONS AND RECOMMENDATIONS........................................................................ 49 Introduction .................................................................................................................... 49 Conclusions and Recommendations............................................................................... 49 Estimated Demand for Space-South Urban Gateway Corridor...................................... 51 Suggested Redevelopment Timeframes......................................................................... 52 FinancialTools................................................................................................................. 54 KeyTakeaways................................................................................................................ 54 LIST OF TABLES Table Number and Title Page 1. Traffic Volume Trends,South Urban Gateway Corridor, 2007, 2012, & 2030 ........... 11 2. 2010 Traffic Volumes, Surrounding Commercial Areas.............................................. 12 3. Households by Median Household Income, Dakota County, 2013 ............................ 21 4. Households by Median Household Income, Dakota County, 2018 ............................ 22 5. Employment Growth Trends, South Urban Gateway Corridor Trade Area, 2000-2030 23 6. Covered Employment by Industry, Rosemount and Dakota County. ........................ 24 7. Estimated Household Expenditures by Selected Product Types,South Urban Gateway Corridor Market Area, 2014....................................................................................... 26 8. Retail Demand Potential and Leakage, City of Rosemount, 2014 .............................. 30 9. Demand for Retail Space, South Urban Gateway Corridor, 2014 to 2025.................. 35 10. Projected Demand for Office Space, South Urban Gateway Corridor, 2014 to 2035. 42 11. Projected Demand for Industrial-South Urban Gateway Corridor, 2014 to 2035...... 45 12. Sample Land Values by Use Type, Dakota County...................................................... 46 13. Estimated Demand for Space-South Urban Gateway Corridor, 2015-2035............... 51 14. Estimated Demand for Space-City of Rosemount, 2015-2035 ................................... 52 MAXFIELD RESEARCH INC. LIST OF CHARTS Chart Number and Title Page 1. Population Growth Trends, South Urban Gateway Corridor, 2000-2030....................... 17 2. Household Growth Trends,South Urban Gateway Corridor, 2000-2030....................... 18 3. Age Distribution of the Population, City of Rosemount, 2000-2030............................... 18 4. Population Growth, 2000-2030, City of Rosemount and Dakota County ...................... 19 5. 2013 Covered Employment: %of Total .......................................................................... 24 6. Average Annual Household Expenditures and Median Household Income, 2014......... 28 7. Average Annual Household Expenditures by Category, 2014......................................... 28 8. Retail Surplus/Leakage Factor by Industry, 2014............................................................ 29 9. Rosemount Retail Mix-2014............................................................................................ 32 10. Multi-Tenant Retail Space,Total and Occupied-4Q13.................................................... 33 11. Retail Vacancy Rates,4Q13 ............................................................................................. 34 12. Average Retail Rent/Sq. Ft.-4Q13,....................I...............I.............................................1 34 13. Businesses that Primarily Occupy Office Space by Size of Business, 2011, Rosemount Zip Code55068...................................................................................................................... 37 14. Employees Occupying Office Space by Business Size, Rosemount Zip Code, 55068...... 38 15. Businesses that Primarily Occupy Office Space by Size of Business 2012,South Urban GatewayCorridor............................................................................................................. 39 16, Employees Occupying Office Space by Business Size,South Urban Gateway Corridor.. 39 17. Multi-Tenant Office Space,Total and Occupied,4Q13................................................... 40 18. Office Vacancy Rates,4Q13............................................................................................. 41 19. Average Office Rent/Sq. Ft., 4Q13................................................................................... 41 20. Industrial Space,Total and Occupied,4Q13.................................................................... 43 21. Industrial Vacancy Rates-4Q13........................................................................................ 44 22. Low/High Industrial Rent/Sq. Ft., 4Q13...............I.............. .. 44 ........................................... MAXFIELD RESEARCH INC. LIST OF MAPS Map Number and Title Page 1. Regional Location............................................................................................................. 3 2. South Urban Gateway Corridor....................................................................................... 5 3. South Urban Gateway Corridor Drive-Times................................................................... 6 4. South Urban Gateway Corridor, Conforming/Non-Conforming Uses, 2014 .................. 8 5. South Urban Gateway Corridor, Future Land Use, 2030................................................. 9 6. South Urban Gateway Corridor Site ................................................................................ 10 7. South Urban Gateway Corridor Primary Market Area .................................................... 15 8. South Urban Gateway Corridor Commercial Draw Area................................................. 16 9. South Urban Gateway Land Values per Square Foot ...................................................... 47 10. South Urban Gateway Building Values per Square Foot................................................. 48 11. South Urban Gateway Analysis Suggested Timeframes for Redevelopment.................. 53 MAXFIELD RESEARCH INC. PURPOSE AND SCOPE OF STUDY Purpose and Scope of Study Maxfield Research Inc. was engaged by the City of Rosemount to complete a market potential analysis to evaluate existing market conditions in the Corridor and to determine, based on a plan for redevelopment, the amount of commercial, residential and industrial square footage supportable in the Corridor over various periods of time. The South Urban Gateway Corridor is located on either side(east-west) of State Highway 3 (South Robert Trail) between County Road 42 (150th Street) and County Road 46 (160th Street) in Rosemount, Minnesota. The South Urban Gateway Corridor has long been a core commercial and industrial area in the City. While Rosemount has an historic Downtown which lays to the north of the South Urban Gateway Corridor, higher traffic counts along County Road 42 and South Robert Trail made the South Urban Gateway Corridor area an attractive location for uses that generally require convenient access and high visibility. Over time, as other commercial nodes to the west of this area have been developed and increased in size,the South Urban Gateway Corridor district has experienced less development intensity. Our research includes an analysis of the existing supply of commercial and industrial uses in the South Urban Gateway Corridor in addition to market conditions for retail, office, residential and industrial development. The market analysis focuses on the amount of development supporta- ble on the subject property with attention given to a potential mix of retail and office catego- ries based on the demographic characteristics and growth trends in the area. MAXFIELD RESEARCH INC. 1 CORRIDOR LOCATION ASSESSMENT Introduction This section of the report presents an analysis of the location and characteristics of the South Urban Gateway Corridor in Rosemount, Minnesota discussing the regional location, the City of Rosemount, and the property's general characteristics. Adjacent land uses, accessibility to and visibility of the South Urban Gateway Corridor and its proximity to employment concentrations, shopping and services are presented. Finally,this section discusses the appropriateness of the Corridor for various uses including retail, office, industrial and multifamily development. Regional Location Rosemount had a 2010 population (Census) of 21,874 people and is located in northeastern Dakota County in the southern half of the Twin Cities Metro Statistical Area,which encom- passes 13 counties and includes about 3.0 million people (2010 Census). Dakota County is the third most populous county in Minnesota, behind Hennepin County and Ramsey County. As of 2010, Dakota County had reached a population of 398,552 people. The map below shows the location of the South Urban Gateway Corridor within the seven-county core of the Metro Area. Non-urbanized portions of the region are shaded green. The map shows that Rosemount is located in an area designated as"Developing" by the Metro- politan Council,the regional planning agency serving the Twin Cities seven-county metropolitan area. Much of the southeast Metro Area south of 1-494 is designated as a developing area, including the City of Rosemount. Developing Communities focus on accommodating growth, supporting centers along corridors, encouraging connected land use patterns for new develop- ment and encouraging the development of communities where shopping,jobs and a variety of housing choices coexist. Although the South Urban Gateway has commercial and industrial uses that have been in existence for a number of years, Rosemount as a community still has a substantial amount of land remaining for development. As the community adds new households and jobs, the poten- tial demand for additional commercial space will increase. MAXFIELD RESEARCH INC. 2 CORRIDOR LOCATION ASSESSMENT Map 1 Regional Location Twiu Cities ll{cgn +nlifautArea . 'ajf �'A� 4 r 9 2030 FrurtxeHavrk x ,//��Aa.r '�,'� • ' .�y� i •'�'• �Ff,�.Sa/t,�i Cam% • Planning Areas � �n�Yr rl�J1• A),a BILYed on the - sf a dry ✓/fr �,. ri A>- �' A� FR - �44ti( 2008 comprehensive Pinar Updaruv f A t`7a31 �k q't.. 1 '. s• ' ��, r °OFF..., rte.+ NJr ' L_ 1 't ,: • r Y� !r - � 1. !I r ��...: rl� � I I u I � ' M �..._ ._. ' ,rL. � �, r Site _ r �.f j"..'.� y o;�•^u'a�'H�M.'� ,K�r��r{;.�,�=ll.. wf �.., , SSl a- a -- - — ---- ' f. •^a.Fwo` V sat rm.tTnsr..:Wn+nm ...... ._ ._......_--- • -+s - • _kl,l/q ll.i ra oarrt nOi2'. tf:Ic,a l- pLn,x Lnn b•.w•dglvl:u ��...-:'.r.? • ..r.._.r dNfv 2_F 2014 180113111.`.ase refer to the Co nficeltensive Plsma Con+lwsile map or the Regimal Systems sumps for die most tacent itlro maiiam 'fllese rna x+ure avuilutde at the N4et"iahtun Coturcil D tiw Censor(651)642-1140. Geographic Plunning Areas Additional Infarnlntion Urban Planning Arena Rural Planning Arens Regional Naturml ....... Ryeivnad'i'rail Nveloping Area I Rural Center Rcmtrca Arens II Developed",u .. Rou+CrwIhVenter d,;,pd V IdS.C'CT:.>m1.ad 4'W tln aNnAd lWnl n.aWlt.a1-ul Wl I 2030fnuuitvays trFlb tilt MOWlwtira+Cammil —*we Principal Avorlal AjIll.CldlUtill - - Rngiv ld Park Qtren War"Divc:MIJU l Rural Rural Residential MAXFIELD RESEARCH INC. 3 SITE LOCATION ANALYSIS Rosemount Characteristics The City of Rosemount covers approximately 35.21 square miles in northern Dakota County. The City of Eagan (pop. 64,206) is located north of Rosemount and the City of Inver Grove Heights(pop. 33,880)forms the eastern border. Rosemount is bounded by Apple Valley (pop. 49,084) and Empire Township (pop. 2,444) to the south. Rosemount expanded rapidly in the 2000s,adding an average of 726 people per year for a growth rate of 49.6%between 2000 and 2010. Over the next 20 years, Rosemount is projected to nearly double in population, adding about 19,200 people, a growth rate of 87.8%to 2030. In comparison,the Twin Cities Metro Area household base is projected to expand by only 25.6% during this same period (2010-2030). All of Rosemount is located within the Metropolitan Urban Service Area (MUSA)which is the area in the Seven-County Metro Area where the Metropolitan Council ensures that regional services are provided or planned. The City of Rosemount is approximately one-third developed. Rosemount has a significant amount of land to its east which is currently undeveloped. As growth pushes further to the west and south,we anticipate that development in the communi- ty will fill in a logical progression. Map 2 shows one,three and five-mile radii from the South Urban Gateway Corridor location. Map 3 shows drive times from various locations to the South Urban Gateway Corridor. This information is helpful in determining a draw area for retail and other commercial services in the Corridor. As shown on the map, properties in the South Urban Gateway Corridor can be reached within a 15-minute drive from much of the immediate surrounding area. This 15- minute drive time reaches up into northern Eagan and as far south as the southern border of Lakeville. MAXFIELD RESEARCH INC. 4 SITE LOCATION ANALYSIS Map 2 South Urban Gateway Corridor 14yer ivvi jly s BE+aontEtiS}t45� .., ss''Q Eitan _ a.. s tai ?i{ f?t'.18f.I - — .. Or .(PI r.a.tMs {fis M1 �[�nir r ._� tttlth StE } ' a a ;Ruest a: � _ ti 41e[IVttflii»t t F3CRi F �,k 1 F�9�E9Ffpt,�tOR i ��� a�Vit�'K�fl MAXFIELD RESEARCH INC. 5 SITE LOCATION ANALYSIS Map 3 South Urban Gateway Corridor Drive Times 1{ T Lt7 r'I9=Ttii(tK' tP:'cjl A ka Bea h _H P S A. 5,tp 4U. t t ; 'tvrr t V111BY l4T.1I!I.ITCtN� ` � IEtI ft, t?DCiFt 1 i 1 IN ' hCiftea I&s:5t .�' ESA'' T PA.UL..: Pt.t •"•.• Brae fits E � fs� }7H S1F�CT`.PAkE1L. ' . R!c EL EilE1 A HE T5,�"""' G 7� 5 11 nrk P'aill P j EN PRA�E IE . , BL CI thtG I iAGE GROVE 21 t 84 .. PRICIft LAKE - I r X10! ' b tt r .�,•. amp to 1; hlsw Ida et Welch EI '�. ite �wC �' a,•. Lemsdale - MAXFIELD RESEARCH INC. 6 SITE LOCATION ANALYSIS The South Urban Gateway Corridor is currently designated as predominantly commercial uses. Agricultural land is expected to be rezoned in the future toward commercial or industrial use, but most likely commercial uses. Commercial uses extend to the north into the Downtown. The adjacent roadways,current traffic volumes and other characteristics continue to support the South Urban Gateway Corridor as a primary commercial node in the community. The majority of land in Rosemount is most likely to be developed over time with residential uses, including a mix of single-family and medium and high-density multifamily. Although single-family and owner-occupied multifamily construction was robust in the 2000s, Rosemount also has its share of industrial,commercial and agricultural land uses. The large amount of land owned by the University of Minnesota, UMore Park, is currently being mined for sand and gravel. A plan to convert the property to a mix of uses with predominantly residential (low, medium densities) has been identified. It is anticipated that development on the property will begin sometime this decade and continue through 2030. The substantial number of housing units that can be accommodate in Wore Park will enhance the Corridor's ability to attract these households to retail, entertainment and service uses in the area. The South Urban Gateway property is currently planned primarily for commercial uses with some allowances made for industrial/business park and some high-density residential on the west side of the property that would abut existing medium to high-density residential that already exists. The intent with redevelopment would be to shift all parcels to land uses that would conform to the City's Comprehensive Guide Plan, treating the South Urban Gateway Corridor area as a major commercial node in the City. MAXFIELD RESEARCH INC. 7 SITE LOCATION ANALYSIS Map 4 South Urban Gateway Corridor,Zoning-Conforming/Non-Conforming Uses,2014 :gq .,,a y, i C Pra eqM IDR Comman Rhnw 14 9rN 91'vr ti 't_as1NSTW 1 fbRdayStatl¢nstma � tlp►lR fnrrr�'rp, �� � 2 Ya1vRNae Mxlmtal[hanga 3 putter Ring g I '`� - 4 Ratertwunt Mardet Square n I-04riR{AR"tIl si W 5 Hong Rang Bostic ., 7 party tUSeen 5 g Taas lodn's IO Vesmlllion State yank R 11 Independent Sdvd Disinctet 12 Vernntgai State Ormtk GxhonTractof SupPIY W lndapandaMSdtcal Dist 196 `E 15 State Farm Ins. a 15 Wap'&90.0,15 family Oayave tear' ...4r 11 Winters pediatnapantistry a ��- '►' is OadefsanOffics s< WAY - 1 �(�� - 19 Dance Cann¢ttian/Ate t 5 20 Rapp CMnpatctic(Amedran Fam p- 21 Rose park dtechaniral Bldg. spNO 81w _ -o - 27 cMmut Family Dentilmy 23 1104y'Sealing 3 _ I 24 vacant Land 2 25 Vacant lot 4 .t Y 26 ate Rated Stnp Cant—S. L, s 27 Vacant Luna 29 Crown Rental r .� 7act»s(w r 24 Tea Spa C.invasit 20 Access SpeslaRFes lnWmanan i 31 RacumountTFeatra �. ... _ 32 lid 196 31 Rick's Automattra Repair 34 City limits Bowling Allay 4, 3S -Farm tool? COBNGI.t rn w 36 Vacant land - �, 37 Gilded Coml land 39 AturglcAutamaUva W Goided Como land tsarN,S,i W III �y tl - _ I 4 d 5e Slraant F.F. ` r _ 42 fatnwr RafaRleWlt VtRaga Dump 42 Former Rasemasmt VLBage dump L �} 41 former lrosamaunt VLRa¢Pump o tSITNST IV...... .r.::`-MOJJ •.r' _ ".`��. :.>._•. w cp S .37:.'1 ol �QfM1� / 39 ti�u`: 2f W South Urban Gateway Analysis for Reinvestment ,$MSEtylOt..il V 1 Zoning I�l MINNESOTA *Conforming #Non-Conforming #Vacant MAXFIELD RESEARCH INC. 8 SITE LOCATION ANALYSIS Map 5 South Urban Gateway Corridor, Future Land Use, 2030 I I `'E �• �� Pro act Ma IDB Carnaion Namo i �ir37R-gTW'I pS•u•• H��l NPIMay 3tmionicore 2 Velrehne 11111a0011 Change BurCa YmIC c 1 t_ �_ 4 Rnsvmovn.Market FRsara �.—rowga.lsgnl.sr3a.._-.. � '�"'. 6 McdenaliR 7 OaIIY QDecn _ x law IDhn't Chippendale Canter S! ID Vermillion Aare Sank s Ic.e51`91 �., j' 11 Independent school Distort Oil R „yT�r3 12 Vermilltun Slate Bank $1STaY �'1 13 Carlson 7eactor And Simply i J i UI Independent 5t1mn10 @t U6 y y 75 3talo rarm W, 7p� � �� �r� I6 Laalrs&Boultds 6am11YQaycare aces 17 Winton Pediatric Dentistry , 18 Dodelspn Otflq p WAY OrV / 777., 17 Dames CwmctlonlAla .. a j / 2D Raytr<hlropraRiHtcmarican Fam 04 /!/j/ 71 Rosa Park Mechankal W$ --------- s /J ! # Chmust Faintly Oondrhy g f 23 3GUYsseWIng 3 24 Vaeant Land ' 29 Vanm tot 26 Bars ltataB Strip Center•su `Y Rental Ve"m Unrl c pT 28 Crew. 7 I I eH / 29 The Sim Carwash t; 30 Arcass SpodalNNS lMamallon � - _. 31 Rosemount Pmatre Y iJ e{ 32 Isd 196 .� t. Rn� 33 Rick's Auto nwtiw Repair v.. 3e Gtr emits Bowling Alloy 35 Fans land? i 36 Vacant Law -.Rltpgkl'3RLY4""� 37 Guidedfointland 1 N� i � �•p� 3x MurRlcAnwlrw[We I 39 Guided Ccmttand I50/8Yw-'-^'+_-� ' M Sam Stream,LP, _•> I 00KS'w 41 Forman AmamwUtt Village 0lmip 42 Fonmir RmUmoRmtVlllage Chop 43 F.mwr Ru3emcR tVillage Dump ..� i......_ �,c f y+ aeaa*riurt Re aga•noemmr.:n art N-I Raw-a 0 MDR evew.a,-AY tt--i#PO_°wane P-0prn so-lrf J a.. Mh'd~ 4.13 Pro.-- nec CYr'M vcOmMerwl t"rerr na aoir Rn4Maan:,"ien'n"�n'R•"*_, ipava•x_ awMrun.MlvpaarM .'NC N•gNaaa.eal COwawcie a4R Ae'nNMlRaerrca in ha MaMn•IaeriterMY PiftbWNaalaaxrl ulY}'a MMfHaI South Urban Gateway Analysis for Reinvestment A ,*WSEMOUNT Land Use(2030) N I ON MIN NE307A MAXFIELD RESEARCH INC. 9 II SITE LOCATION ANALYSIS Site Location and Characteristics The subject property totals approximately 47.4 acres in the southern portion of Rosemount. The south border of the Gateway Corridor is the south border of the City of Rosemount. The Gateway Corridor is located between County Road 42 and County Road 46 on either side of State Highway 3. The map below shows an outline of the South Urban Gateway Corridor and its relationship to the immediate surrounding area. Map 6 South Urban Gateway Corridor as .�. ' Rid a d Adjacent and Surrounding Land Uses North: Commercial office and retail uses; access into Downtown Rosemount East: Commercial and industrial uses,vacant land, institutional use. South: Industrial uses and vacant agricultural land. West: Multifamily for-sale and senior housing; commercial office and retail uses. MAXFIELD RESEARCH INC. 10 SITE LOCATION ANALYSIS Access and Visibility Excellent access and visibility are vital to the success of retail and service businesses. Currently, access to parcels in the South Urban Gateway Corridor can be obtained from several locations off South Robert Trail and at selected access points off County Road 42. Due to the heavy traffic volumes on County Road 42, access to parcels south of County Road 42 may be restricted in the future as additional improvements are made to County Road 42 to move traffic along more rapidly. Improvements and upgrades made to County Road 46 have quickly siphoned traffic off of County Road 42 to County Road 46 due to east-west travel now being more rapid along County Road 46 between Highway 52/55, Cedar Avenue (Highway 77)and Interstate 35 than taking County Road 42. While this has reduced traffic increases along County Road 42 recently, it has also pulled some drive-by traffic off County Road 42 down to County Road 46, likely affecting some convenience uses on the north side of the South Urban Gateway Corridor. Traffic counts on County Road 46 are projected to rise over time to about 36,000 by 2030. Larger develop- ment parcels that are under-utilized and/or vacant have the potential to attract larger commer- cial retail uses. These larger sites sandwiched in between two major thoroughfares (County Roads 42 and 46) should be promoted to larger users that could capture traffic from both of these thoroughfares. Table 1 displays the 2007 and 2012 estimated traffic volumes (measured in annual average daily trips)and the 2030 projected traffic volumes for adjacent roads near the Gateway Corri- dor. TABLE 1 TRAFFIC VOLUME TRENDS GATEWAY CORRIDOR 2007 2012 &2030 Annual Average Daily Traffic AADT Est!mate Estimate Projected Change,2007-2012 [Change,2012-2030 2007 2011/2012 2030 No. Pct. No. Pct, County Road 42 West of Highway 3 18,000 17,700 28,000 -300 -1.7% 10,300 58.2% East of Highway 3 15,300 12,600 27,000 -2,700 -17.6% 14,400 114.3% County Road 46 West of Highway 3 12,500 13,700 36,000 1,200 9.6% 22,300 162.8% East of Highway 3 10,900 9,800 25,000 -1,100 -10.1% 15,200 155.1% Highway 3 North of County Road 42 14,000 12,400 n/a -1,600 -11.4% --- --- South of County Road 42 9,600 8,900 n/a -700 -7.3% - AADT=Annual Average Daily Traffic Sources: MnDOT;City of Rosemount;Dakota County;Maxfield Research Inc. MAXFIELD RESEARCH INC. 11 SITE LOCATION ANALYSIS Traffic counts show that there have been fluctuations in traffic volumes over the past five years from 2007 through 2012. Traffic fluctuations can result from any number of factors including detours, road construction, additional improvements to adjacent roadways,etc. It appears as though there has been some traffic diversion away from Highway 3 and from County Road 42. Some of this traffic has moved over to County Road 46 and other traffic may be finding alter- nate routes to travel east-west or north-south. However,strong growth is projected in AADT on the major roadways to 2030. To provide some perspective on traffic volumes,Table 2 shows traffic volumes as of 2010 for four other commercial intersections in the nearby area as well as four intersections where lifestyle/open-air centers are located. Table 2 highlights that areas with higher traffic volumes generally support a greater amount of commercial and retail uses. The volumes shown on Tables 1 and 2 reflect average annual daily trips (AADT) and incorporate the turning movements of vehicles at the intersection. The figures shown on the tables are individual counts for each side of the intersection and do not necessarily account for separate vehicles. A vehicle may cross the intersection or make a turn in a specific direction and may cross the intersection more than one time in a day. The counts are not intended to be aggre- gated but show the average level of traffic volume on a portion of the roadway. TABLE 2 2010 TRAFFIC VOLUMES* SURROUNDING COMMERCIAL AREAS Side of Intersection North East South West Neighboring Commercial Nodes Hwy 77 @ Hwy 13,Eagan 76,000 26,500 68,000 22,500 Hwy 52 @ 1-494,Inver Grove Heights 57,000 97,000 61,000 77,000 Hwy 52 @ Concord,Inver Grove Heights 48,000 10,000 45,500 1,550 Cedar Ave @ Co Rd 42,Apple Valley 46,500 35,500 36,000 28,000 Lifestyle Centers 1-94 @ Hemlock Ln,Maple Grove(Arbor Lakes) 32,000 119,000 18,900 108,000 1-494 @ Valley Creek Rd,Woodbury(Woodbury Village) 76,000 34,000 61,000 21,000 Hwy 10 @ Main St,Coon Rapids (Riverdale VIIlage) 67,000 31,000 32,000 77,000 1-35W @ Lexington Ave,Blaine(Village of Blaine) 22,600 42,000 17,300 52,000 *Annual Average Dail Traffic(AADT). Sources: MnDOT•Maxfield Research Inc. MAXFIELD RESEARCH INC. 12 SITE LOCATION ANALYSIS Appropriateness of the South Urban Gateway Corridor for Commercial Uses Strengths and weaknesses of the commercial potential of the South Urban Gateway Corridor are summarized below. Corridor Strengths Corridor Weaknesses • Convenient access to major roadways • Mix of uses(office, retail, industrial) including South Robert Trail, County not always compatible with each other Road 42 and County Road 46; • Older retail uses appear worn • Current heavy traffic volumes on Coun- • Apple Valley retail competes with this ty Roads 42 and 46 and increasing traf- area for customers for some types of fic on County Road 46 uses • High household incomes in the area Small parcel sizes for properties to the which are desired by many retailers west of South Robert Trail will pose a • Solid household growth projected for challenge for redevelopment Rosemount • Situated in an existing, recognized commercial node within the City; most residents in the City are aware of the Gateway Corridor; additional surround- ing uses are a mix of commercial, in- dustrial, agricultural and residential MAXFIELD RESEARCH INC. 13 DEMOGRAPHIC ANALYSIS Introduction This section of the report presents our analysis of demographic characteristics and growth trends in the South Urban Gateway Corridor. An appropriate draw area was determined from which commercial uses and retail space would likely attract shoppers and tenants. We then analyze key demographic data in the Market Area, as they relate to the demand for various types of commercial uses including retail, office and industrial development. Market Area Definition Maxfield Research Inc. determined the Market Area for the South Urban Gateway Corridor based on proximity to other commercial nodes,commuting patterns, geographic boundaries, and interviews with commercial brokers and our expertise in commercial analysis. The Primary Market Area (PMA) includes a larger area from which a wide variety of uses would be drawn including commercial uses and industrial uses. A smaller Retail Trade Area was also determined that comprises a geographic area from which residents would likely consider patronizing businesses that offer products and services or entertainment-based retail located in the Corri- dor. The larger PMA includes the Cities of Rosemount, Eagan,Apple Valley, Inver Grove Heights, Lakeville, Empire Township and Farmington. This is the area from which a broad base of industrial and commercial uses could be drawn. Industrial users tend to look for locations that offer them a strong central location to vendors and customers and good access to distribu- tion corridors. Destination commercial uses are based on the purchase of major products and services, such as furniture, appliances, or products that are distinctive in some way. Although we do not necessarily view the Corridor as a destination retail location, some destination uses could be accommodated there in the future. We also identified Dakota County as a Secondary Market Area for some types of goods and services that would have a regional draw such as the movie theater. Maps of the Market Areas follow. MAXFIELD RESEARCH INC. 14 DEMOGRAPHIC ANALYSIS Map 7 South Urban Gateway Corridor Primary Market Area .vlfaat «� 3 laka Rd r« s4Pauf 3a� South 4 ,«3fPYOt. Owe Ri�hliefd o �'tio� ` S _= r fiunNsN « IU - s s. air S t f?a1it Wk �i �loomingtoq m:��aA �a14 • - - rfrirPlf. .. . .: . •�_' bower. _ *c�.mxt� b Rv tiial7rt Y - id Savage Biitmvilta �_ - ttela Vemill1lim 17 190th. 1 ,sue X _ Hampton F.{ ° r0'24U1h StE Trier a' �C u � MAXFIELD RESEARCH INC. 15 DEMOGRAPHIC ANALYSIS Map 8 South Urban Gateway Corridor Commercial Draw Area �. 3 c rove !? . .i 7 4 �i Lo ai cm Hitis - Gtey ri0iPi1 d,IW c _ 7 pIIth 6 G .( t i � h,fcu., Lakeville - r Farminaton 5trpod Harnptan N Tr • Ii 1� e, W } Population and Household Growth Trends The following charts present population and household growth trends and projections for the Retail Draw Area from 2000 to 2030. The 2000 and 2010 population and household figures were obtained from the U.S. Census Bureau. Projections for 2020 and 2030 were compiled by Maxfield Research Inc. based on building permit trends, existing land area, historic growth trends and projected economic development. The following points summarize key demographic findings. • As of 2010, Rosemount and the surrounding communities contained 73,402 people and 27,254 households. From 2000 to 2010,the population increased 18.8%while the number of households expanded by 26.3%. Rosemount alone gained 7,255 people and 2,845 households during this period. MAXFIELD RESEARCH INC. 16 DEMOGRAPHIC ANALYSIS • By 2020,the Rosemount and the surrounding communities are projected to add nearly 18,000 people and 7,200 households. The substantial growth in population is expected to occur as families are attracted to new housing in the area. Chart 1: Population Growth Trends South Urban Gateway Trade Area 2000-2030 ■Rosemount ®Empire Twp. IN Apple Valley 70,000 60,000 --- -----_—— — '�_ c ¢ , NN Vh 50,000 j 0 40,000 —.__— �+{ s_ eL ..__ ._— — �+rzl.«]_— 1l k E 30,000 P5, y - � . 20,000 ` t�. 10,000 -- 0 2000 2010 2020 2030 Sources: US Census; ESRI; Metropolitan Council; Maxfield Research Inc. • Between 2010 and 2020, Dakota County's population and household base are expected to increase+8.4%to 432,100 and+10.3%to 167,700, respectively. As of 2010, Rosemount, Apple Valley and Empire Township contained roughly 18.4% of the County's population. By 2020,these communities are expected to contain approximately 20.5%of the County's population. • Population in the Seven-County Metro Area is projected to increase 6.5%to 3,035,000 in 2020 while the number of households will grow by 7.8%. MAXFIELD RESEARCH INC. 17 DEMOGRAPHIC ANALYSIS Chart 2: Household Growth Trends South Urban Gateway Trade Area 2000-2030 R Rosemount i Empire Twp. r.-Apple Valley 30000 -- t . a 25000 --- x 20000 O 15000 --_.___._.— w—.._._ Z 10000 c. 5000 0 2000 2010 2020 2030 Sources: US Census; ESRI Inc.;Metropolitan Council;Maxfield Research Inc. Population Age Distribution The age distribution of the population relates to the type of retail services needed in a given community. Younger people are more likely to seek a variety of retail services including enter- tainment, electronics and specialty apparel. Child stores increase in popularity for the 25 to 34 and 35 to 44 cohorts while home furnishings are more frequently sought by the 45 to 54 and 55 to 64 age groups. The following chart presents the age distribution of the population in Rose- mount from 1990 to 2030, based on Census data and projected demographic trends by age cohort. • The table shows that largest age cohort in Rosemount will continue to be children and teens. This group is expected to continue to increase over the next 20 years as families move to Rosemount. Older adults and young seniors(55 to 74) are expected to experience the greatest rate of growth during this period, as the baby boom generation ages in to their early senior years. • Although all age groups in Rosemount will experience population growth during the next 20 years,the middle ages groups are not expected to experience quite as much growth as oth- er cohorts. This is primarily because those ages 35 to 54 are generally a smaller age cohort in the Twin Cities overall, due to demographic shifts and fewer births during the period when these people were born. MAXFIELD RESEARCH INC. 18 DEMOGRAPHIC ANALYSIS Chart 3: Age Distribution of the Population City of Rosemount, 2000-2030 17 and 18-34 35-44 45-54 55-64 65-74 75+ Under N 2000 E 2010 0 2020 M2030 � Overall, as more households relocate to Rosemount, the need for retail goods and services in close proximity to residences will increase. These next ten to1S years should reflect strong household growth in Rosemount and an increase in the potential opportunity to at- tract more retail goods and services to the community. Chart 4: Population Growth 2000-2030 Total T�T .1 143,78C 75+ 1629 65 to 74 3,118 M Rosemount 55 to 64 '4,4 1 2 9 31,950 Dakota County 45 to 54 35 to 44 .1,037 3,262 17- 20 to 24 2,511 -20,000 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 Number of People I Sources: US Census;Minnesota State Demographer;Maxfield Research Inc. I MAXFIELD RESEARCH INC. 19 DEMOGRAPHIC ANALYSIS Household Incomes Household income data helps ascertain demand for different types of retail services. People with lower incomes are likely to seek out discount retailers as well as necessities like grocery items. Retail services and goods such as dining and home furnishings will experience higher spending from more moderate income households while upper income households will also shop for specialty apparel, recreation and sporting goods, and luxury items. Tables 3 and 4 show household incomes for Rosemount and other communities in Dakota County for 2013 and 2018. Household income data was compiled by Ribbon Demographics. The following summarizes the significant points from Table 3. • The 2013 estimated median income in Rosemount ($77,178) is 7.5% higher than the median income in Dakota County($71,361). Therefore, the Market Area is relatively affluent com- pared to Dakota County as a whole,suggesting that households have more resources to de- vote toward retail services and goods. • By 2018,the median household income in Rosemount is expected to increase just slightly to $77,475. The median household income for Dakota County is expected to increase to $79,593 during this time period. The anticipated increase in household incomes in Rose- mount however, may be significantly affected by new housing that is developed in the area, especially in Wore Park. This could cause the median household income to rise to equal or above that of the County. MAXFIELD RESEARCH INC. 20 DEMOGRAPHIC ANALYSIS TABLE HOUSEHOLDS BY MEDIAN HOUSEHOLD INCOME DAKOTA COUNTY 2013 City A es15-24 892 -34 es; --A4 A es45-54 A es55.64 s65.74 es 75+ Total Developed Communities Burnsville $30,258 $55,096 $68,710 $80,945 $76,352 $50,981 $29,205 $55,096 Eagan $36,280 $62,095 $82,211 $98,975 $93,790 $49,457 $29,508 $62,095 Inver Grove Heights $38,445 $59,985 $76,139 $81,238 $76,152 $54,489 $36,552 $59,985 Ulydale $62,500 $76,786 $89,583 $101,786 $99,167 $77,083 $44,625 $77,083 Mendota $62,500 $50,000 $112,500 $100,000 $100,000 $83,333 $33,416 $83,933 Mendota Heights $43,333 $74,826 $106,849 $107,036 $106,461 $61,900 $49,764 $74,826 South St,Paul $25,313 $52,769 $61,021 $61,820 557,453 $40,865 $26,316 $52,769 Sunfish lake $112,500 $175,000 $162,500 $155,000 $150,000 $70,313 $48,333 $150,000 West St.Paul 930,797 $48648 S59A18 $66134 S61,496 $35,D87 $24,047 1 848,648 Subtotal $38,446 $59,985 582211 $98,975 1193,790 $54,489 $33,416 62,096 Growth Communities Apple Valley $39,116 $62500 $77,907 $89,448 $87,617 $55,875 $31,169 $62,500 Farmington $55,545 $79,912 $90,098 $80,635 $76,533 $56,042 $34,725 $76,533 Hastings $28,144 $65,660 $76,226 $72,769 $69,089 $40,737 $45,642 $65,660 Lakeville $41,486 $75,889 $94,717 $37,375 $94,278 $54,550 $62,439 $75,989 Rose Taunt $54,009 $77178 $91,986 $94,351 $92,275 S60,587 $31197 S77.178 Subtotal 41486 $75,885 889 a0 8 $89,448 $87,617 $55,375 $a4,7215 75889 RuratArea Castle Rack township $62,500 $74,219 $81,500 $76,293 $72500 $54,167 $31,875 $72500 Coates $62,500 $62500 $70,833 $87,500 $87,500 $46,250 $42,500 $62,500 Douglas township $0 $79,167 $92,857 $95,000 $90,625 $45,500 $25,875 $79,167 Empire township $55,357 $71,111 $80,147 $75,852 $72,581 $54,348 $35,625 $71,111 Eureka township $112,500 $85,227 $101,786 $93,548 $91,000 $55,882 $31,875 $93,000 Greenvale township $62,50D $69,643 $93,056 $87,500 $81,944 $51,389 $30,313 $69,643 Hampton $42,500 $73,611 $84,375 $82,500 $78,125 $48,929 $34,375 $73,611 Hampton township $46,250 $76,923 $83594 $78,125 $75,735 $46,667 $44,643 $75,735 Marshan township $62500 $71,875 $81,250 $72,783 $72,619 $45,625 $27,750 $71,875 Mlesvllle $0 $62,500 $30,000 $87,500 $95,833 $87,500 $42500 $62,500 NewTNer $30,000 $62,500 $87,500 $68,750 $81,250 $75,000 $14,999 $68,750 Nlningertownship - $42,500 $75,000 $85,000 $85,000 $80,769 $43,036 $25,000 $75,000 Northfield $70,833 $73,750 $91,071 $86,806 $83,333 $49,063 $26,500 $73,750 Randolph $25,000 $75,000 $82,143 $81,944 $76,563 $501000 $77,500 $76563 Randal phtownshlp $35,000 $80,682 $84,615 $79,412 $73,750 $46,250 $33,250 $73,750 Ravenna township $83,333 $81,250 $91,554 $95,109 $91,554 $65,948 $49,028 $83,333 Scioto township $62,500 $65,625 $100,000 $90,000 $82,500 $55,000 $30,625 $65,625 Vermillion $75,000 $75,000 $85,417 $76,785 $73,438 $59,375 $75,000 $75,000 Vermillion township $66,667 $74,219 $83,824 $82,065 $78,289 $60,119 $42,875 $74,219 Waterford towns hi $175,000 $71&75 87,5CC $84,375 $87,500 1 $51,786 $23750 S84.375 Subtotal $fi2500 $73983 $84808 $83,439 .$81010 $51,589 $112.566a 73759 Total $39259 $66,625 $83855 91;812 $79893 $55205 29522 $71.61 Sources:Ribbon Demographics,Maxfield Research Inc. MAXFIELD RESEARCH INC. 21 DEMOGRAPHIC ANALYSIS TABLE 4 HOUSEHOLDS BY MEDIAN HOUSEHOLD INCOME DAKOTA COUNTY 2018 City JARef 15.25 A as 25.35- [Age 35-4S es 45.55 A es s5-65 Was 65-75 A es75+ Totei Develo edCommunities Burnsville $31,526 $56,216 $69,332 $82,625 $79,382 $53,610 $30,369 $56,216 Eagan $38,672 $65,417 $81,466 $104,012 $99,840 $54,266 $32,113 $55,417 I nver Grove Heights $38,402 $62,494 $75,090 $84,346 $80,217 $57,162 $37,890 $62,494 Lllydale $75,000 $81,250 $100,000 $110,417 $106,818 $80,357 $45,875 $81,250 Mendota $75,000 $87,500 $100,000 $100,000 $106,250 $75,000 $31,042 $87,500 Mendota Heights $47,237 $86,089 $110,887 $113,655 $113,018 $66,694 $36,839 $86,089 South St.Paul $26,176 $54,182 $62,900 $63,446 $59,157 $42,178 $27,006 $54,182 Sunfish Lake $112,500 $175,000 $200,000 $175,000 $178,571 $72,500 $46,250 $175,000 West St.Paul $31,972 $50365 61202 $67,24D $63,929 $36.715 $24704 $50,365 Subtotal $39,671 $66,417 $41,466 $100101210 $99,840 $57,162 33 118- 79$35 }ow h Corn unities. Apple Valley $40,337 $65,525 $78,823 $91,465 $91,494 $59,282 $34,129 $65,525 Farmington $58,036 $81,510 $91,807 $83,176 $79,470 $58,403 $41,280 $79,470 Hastings $30,213 $67,647 $78,031 $75,139 $71,512 $42,261 $24,438 $67,647 Lakeville $43,631 $81,583 $97,623 $101,386 $99,327 $58,708 $35,326 $81,583 Rosemount 240,682 588,092 $94,878 $85,723 $50,169 $34.796 $77475 Subtotal -40682 S77A75, 03a,092 91 SS 723 5840A -34796 $74,340 Rural Ar a Cast]a Rock townshl p $55,000 $74,219 $84,239 $79,000 $76,500 $57,895 $42$00 $74,219 Coates $112,500 $68,750 $68,750 $112,500 $95,833 $47,5DD $38,750 $68,750 Douglas township $14,999 $83,333 $95,833 $100,000 $92,188 $44,543 $43,750 $83,333 Empire township $60,000 $73,355 $80,882 $77,394 $76,042 $57,661 $43,750 $73,355 Eureka township $62,500 $87,500 $104,167 $97,396 $96,000 $65,132 $36,250 $87,500 Greenvale township $66,667 $82,500 $96,429 $96,250 $91,250 $52,083 $31,250 $82,500 Hampton $42,500 $73,611 $88,462 $82,692 $81,667 $50,00C $29,375 $73,611 Hampton township $46,250 $79,808 $86,765 $61,250 $78,947 $50,962 $29,375 $78,947 Marshan township $42,500 $73,077 $87,500 $77,344 $74,375 $49,423 $40,625 $73,077 Mlesvll le $0 $125,000 $112,500 $100,000 $95,833 $42,500 $36,250 $95,833 New Trier $20,000 $75,000 $62,500 $81,250 $79,167 $75,000 $31,250 $75,000 Nininger township $42$00 $75,000 $90,278 $93,750 $86,667 $45,000 $27,250 $75,000 Northfield $62,500 $79,688 $101,042 $94,853 $86,765 $54,375 $27,500 $79,688 Randolph $30,000 $81,250 $90,625 $78,125 $79,167 $53,571 $31,2$0 $78,125 Re rd of ph township $50,000 $78,409 $88,393 $00,833 $79,688 $48,500 $30,000 $78,409 Ravenna township $85,417 $85,227 $94,500 $99,128 $95,427 $69,595 $50,834 $85,417 Sclota township $87,500 $70,833 $100,000 $100,000 $95,000 $57,143 $23,75D $87,50D Vermillion $87,500 $72,917 $89,583 $83,333 $84,375 $63,750 $39,750 $83,333 Vermillion township $54,167 $77,500 $88,281 $86,875 $82,955 $62,069 $49,375 $77,500 Waterford townshl p $68,750 7125 $97500 94643 93750 54167 $26250 78125 Subtotal $54,584 $78;611; 89,931 S"!2 90 313 85 521 $53,869 $33,75 - 74 461. Total $43,103 $78A17 _____$93,932 $101,043 1 $90,755 1# $84,510 1 $32,313 79,593 Sources:Ribbon Demographics,Maxfield Research Inc, Employment Forecast The employment data in Table 5 is from the Metropolitan Council and the Minnesota Depart- ment of Employment and Economic Development for Rosemount,Apple Valley and Empire Township. The following are key trends derived from Table 5. • Although employment growth often parallels population growth, it often is tied more strongly to transportation access. Cities with interstate access and intra-and inter-metro transportation attract more businesses and post higher employment gains. By 2015, more than 4,000 jobs are forecast to be added in the PMA. Employment over the decade is antic- ipated to increase 15.1%in the PMA,compared to 14.4%throughout Dakota County and 9.7%in the Seven-County Metro Area. MAXFIELD RESEARCH INC. 22 DEMOGRAPHIC ANALYSIS TABLE 5 EMPLOYMENT GROWTH TRENDS SOUTH URBAN GATEWAY CORRIDOR TRADE AREA 2000-2030 Change iii i 2010-2020 2000 2010 2025 2020 2030 No. Pct, No. Pct. Employment Apple Valley 12,106 15,259 16,711 20,100 22,000 3,153 26.0 4,841 31.7 Eagan 42,750 54,725 57,073 62,550 69,550 11,975 28.0 7,825 14.3 Rosemount 6,356 7,332 8,162 10,100 12,500 976 15A 2,768 37.8 Em I re Towns h i 217 268 350 390 480 Market Area Total 61,212; 77,316 81,946 92,750 104,050 16,104 26.3 15,434 20.0 Dakota County 154,242 185,261 198,540 229,523 261,892 31,019 20.1 44,262 23.9 7-County Metro Area 1,563,245 1,690,757 1,716,972 1,743,000 1,943,000 127,512 8.2 52,243 3.1 sources: MN Department of Em to ment and Economic Development;Maxfield Research Inc. Covered Employment by Industry Table 6 shows covered employment in Rosemount in 2000 and 2013. The chart following the table shows the increase in covered employment in Rosemount and Dakota County from 2012 to 2013. Covered employment data is published by the Minnesota Department of Employment and Economic Development. Some categories of employment may have been suppressed due to non-disclosure regulations. The following are key trends from Table 6 and Chart 5. • The number of covered jobs(Chart 5) located in the City of Rosemount increased by 8.7% from year-end 2012 to year-end 2013; • Average weekly wages increased by 6.9%over this same period. Since 2000, average weekly wages increased by 59.0%(Table 6). • Compared to Dakota County as a whole, Rosemount has higher proportions of jobs in Manufacturing and Education and Health Services than does the County. These industries increased substantially since 2000 in Rosemount. Despite the Recession, Rosemount expe- rienced an increase in Manufacturing employment. Rosemount also has a relatively high proportion of jobs in the Trade,Transportation and Warehousing industry sector, although somewhat lower than the County as a whole. • A substantial number of jobs are found in the Retail Trade sector as many suburban com- munities have jobs that provide goods and services to the local population. Future growth in industrial space could provide more jobs in the manufacturing, construction or other type of production sectors. These jobs tend to pay higher wages than those in the Retail Trade sector. MAXFIELD RESEARCH INC. 23 DEMOGRAPHIC ANALYSIS TABLE 6 COVERED EMPLOYMENT BY IN DUSTRY SECTOR CITY OF ROSEMOUNT 2000 and 2013 2000 2013 Employment Total Avg.Weekly Total Avg.Weekly Change Industry Sector Employment Wage Employment Wage 2000-2013 Constructlon 1,108 $1,232 1,127 $1,598 19 Manufacturing 1,254 $1,190 1,492 $2,059 238 Wholesale Trade 217 $788 --- --- --- Retail Trade 272 $367 345 $442 73 Transportation and Warehousing 357 $885 1,009 $1,029 652 Information --- -- 85 $840 --- FinanceandInsurance --- -- 68 $1,007 Real Estate Rental/Leasing --- -- 69 $485 --- Professional,Scientific,Technical 200 $B83 110 $920 -90 Management ofCompanles and Enterprises -- --- --- --- AdministrativeandSupport 142 $406 105 $603 -37 Education 1,786 $551 1,242 $991 •544 Health Services 149 $448 300 $516 151 Arts Entertainment&Recreation 65 $254 96 $221 31 Accommodation and Food Service 273 $172 543 $228 270 Other Services 126 $341 193 $605 67 Publ lc Admi nistration 137 $751 343 $801 206 Self-Employed 122 N/A 360 N/A 238 Total Employment 6,208 $625 7,487 $974 1,279 Sources: MN DEED;Maxfield Research Inc. Chart 5: 2013 Covered Employment: % of Total Public Administration Other Services Leisure&Hospitality Education&Health Services Professional&Business Services Financial Activities -5 Information .,.;;, Trade,Transportation,Utilities Manufacturing I AI Construction ( .._;.. Natural Resources and Mining 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% a Dakota County KI Rosemount Source: MN Department of Employment and Economic Development MAXFIELD RESEARCH INC. 24 RETAIL MARKET ANALYSIS Introduction This section presents and analyzes information relating to the condition of the retail market and the potential for future retail development in the South Urban Gateway Corridor. The potential for new retail development in Rosemount and in the Corridor is influenced by overall market conditions in the Trade Area, also referred to as the Market Area. Information analyzed in this section includes consumer expenditures by Trade Area residents, regional retail development trends, the commercial supply in the Trade Area, retail businesses by type in the Trade Area, and an assessment of lease rates among retail shopping centers in the area. Based on an analysis of this information, calculations of the retail potential for the South Urban Gateway Corridor are presented. Consumer Expenditure Patterns Table 7 shows consumer expenditures on retail goods and services in the Retail Trade Area in 2014, according to data obtained from ESRI based on Consumer Expenditure Surveys from the Bureau of Labor Statistics. The table shows the average expenditures per household and the amount spent in the Trade Area by product or service. In addition, a Spending Potential Index (SPI) is illustrated for comparison purposes. The SPI is based on households and represents the amount spent for a product or service relative to the national average of 100. An SPI of 115 shows that the average annual expenditure by local consumers is 15%above the national average. The average expenditure reflects the average amount spent per household, while the total expenditure reflects the aggregate amount spent by all households in the area. Consumer spending is influenced by market conditions and trends. In times of economic troubles, market conditions drive spending patterns, whereas in times of a booming economy consumer trends feature opportunity and convenience. Two-thirds of the national economy is driven by consumer spending. During the current recession, households have decreased spending, increased savings, and reduced credit card debt as many households have been faced with job losses. In essence, when the housing market began its decline in late 2006 into 2007, consumer spending and consumer confidence followed. During the recent recession, consumers curtailed their spending habits as credit and home equity lines diminished as available sources of cash. Although consumer spending has in- creased in recent quarters, a change in consumer habits is likely to result in consumer spending levels below pre-recession rates in the near term. MAXFIELD RESEARCH INC. 25 RETAIL MARKET ANALYSIS TABLE 7 ESTIMATED HOUSEHOLD EXPENDITURES BY SELECTED PRODUCTTYPE SOUTH URBAN GATEWAY MARKET AREA 2014 PMA Annual Dakota Spending Potential index Ex enditures Count to USA Total Average Average Category $000's) Per HH Per HH PMA Dakota Cty. Goods&Services Index Index Apparel&Services $15,354 $1,766 $1,872 82 87 Entertainment and Recreation $34,416 $3,959 $4,121 128 134 Nonprescription Drugs $1,193 $137 $144 117 122 Prescription Drugs $4,444 $511 $554 i11 120 Eye Glasses&Contact Lenses $846 $97 $104 119 127 Personal Care Products $4,567 $525 $542 124 128 Child Care $5,202 $599 $585 142 139 School Books&Supplies $1,864 $214 $225 121 127 Smoking Products $3,953 $455 $514 99 111 Computer Hardware $2,075 $239 $254 123 131 Computer Software $215 $25 $25 132 135 Pets $6,471 $744 $761 147 151 Food In Index Food at Home $48,599 $5,591 $5,967 117 125 Food Away from Home $32,558 $3,746 $3,926 124 130 Alcoholic Beverages $5,370 $618 $661 122 131 Misc.Beverages at Home $4,504 $518 $555 115 123 Home Index Index Home Mortgage Payment/Rent $110,725 $12,739 $12,635 142 140 Maintenance&Remodeling Services $17,242 $1,984 $2,054 129 134 Maintenance&Remodeling Materials $2,897 $333 $339 121 123 Utilities $48,915 $5,628 $5,993 117 125 Household Furnishings,Equipment,&Operations Index Index Household Textiles $1,058 $122 $130 122 130 Furniture $5,114 $588 $603 129 132 Floor Coverings $237 $27 $32 113 134 Major Appliances $2,894 $333 $334 127 128 Small Appliances $429 $49 $53 116 126 Housewares $668 $77 $80 108 113 Luggage $100 $12 $12 137 140 Telephone&Accessories $500 $57 $59 113 117 Lawn&Garden $4,125 $475 $505 118 125 Moving/Storage/Freight Express $629 $72 $81 117 130 Housekeeping Supplies $6,989 $804 $848 119 126 Financial&Insurance Index Index Investments $24,721 $2,844 $2,816 145 143 Vehicle Loa ns $41,126 $4,732 $4,733 130 130 Owners&Renters Insurance $5,182 $596 $607 128 130 Vehicle Insurance $11,981 $1,378 $1,452 122 129 Life/Other lnsurance $4,426 $509 $530 123 128 Health Insurance $24,107 $2,773 $2,973 118 126 F CONTINUED MAXFIELD RESEARCH INC. 26 RETAIL MARKET ANALYSIS TABLE 7 CONTINUED ESTIMATED HOUSEHOLD EXPENDITURES BY SELECTED PRODUCT TYPE SOUTH URBAN GATEWAY MARKET AREA 2014 PMA Annual Dakota Spending Potential Index Expenditures County to USA Total Average Average Category _ ($000's) Per HH Per HH PMA Dakota Cty. Transportation Index Index Cars and Trucks(Net Outlay) $37,472 $4,311 $4,408 126 129 Gasoline and Motor Oil $30,803 $3,544 $3,666 121 125 Vehicle Maintenance/Repair $11,144 $1,282 $1,344 124 130 Travel Index Index Airline Fares $5,067 $583 $606 134 139 Lodging $4,523 $520 $544 129 135 Vehicle Rental $373 $43 $45 134 139 Food&Drink $4,671 $537 $558 129 134 Average Annual Household Expenditures Summary Goods&Services $80,601 $8,529 $8,940 Food $91,030 $10,473 $11,109 Home $179,780 $20,683 $21,021 Household $22,743 $2,617 $2,738 Financial and Insurance $111,544 $12,833 $13,111 Transportation $79,419 $9,137 $9,419 Travel $14,634 $1,684 $1,753 Total $579,751 $65,955 $68,091 Note: The Spending Potential Index is based on households and represents the amount spentfor a product or service relative to the national average of100. Sources:ESRI•Maxfield Research Inc. The following are key points from Table 7. • Overall, residents from PMA are estimated to have spent approximately $194.4 million on retail goods and services in 2014,excluding housing,finance/insurance, and travel expendi- tures as well as vehicle purchases • Average annual expenditures (excluding the categories mentioned above) are estimated to be $21,619 per household in the PMA. • In virtually every product and service category, expenditures by PMA households are substantially higher than the national average and somewhat higher than the Twin Cities Metro Area. • Housing expenses account for approximately one-third of total consumer expenditures in the PMA with residents spending between 15%and 25%more than the Metro average. MAXFIELD RESEARCH INC. 27 RETAIL MARKET ANALYSES Households in the PMA spent a total of$575 million on retail expenditures in 2014. With the number of households projected to grow substantially to 2020, they would generate additional expenditures annually, not factoring in inflation. The South Urban Gateway par- cels would have an ability to compete for this additional retail potential. Chart 6: Average Annual Household Expenditures and Median Household Income, 2014 $74,000 _ c Avg.Spending/HH $72,000 _ �� ��� 2s Median HH Incomebru, $70,000 , $68,000. $66,000 i $64,000 V-1 $62,000 Rosemount Dakota Cty. Sources: ESRI Inc.;Maxfield Research Inc. Chart 7: Average Annual Household Expenditures by Category, 2014 $30,000 All Other Goods and Services j y x $25,000 � � � 0 Pets $20,000 ■Household Furnishings/Equipment $15,000 ■Food Away From Home $10,000 m Food at Home $5,000 a Entertainment/Recreation $0 Rosemount Dakota Cty. ■Apparel Sources: ESRI Inc.; Maxfield Research Inc. MAXFIELD RESEARCH INC. 28 RETAIL MARKET ANALYSIS Retail Demand Potential and Leakage Table 8 presents retail sales for the PMA in 2014. The sales information is from ESRI based on household counts from the U.S. Census Bureau. This information lists retail demand (potential sales), retail supply to consumers(retail sales) and provides a picture of the gap between the area's retail supply and demand. A positive value represents"leakage" of retail opportunity to stores outside of the PMA, while a negative value represents a surplus of retail sales, where customers are drawn to area retailers from outside the PMA. The following are key points of the retail demand potential, • In 2014, the City of Rosemount had leakage in retail sales in nearly all retail industry groups except for Health and Personal Care (i.e.tanning, spa, nails, massage,and hair salons), Lawn and Garden Equipment Supply Stores, Furniture Stores and Auto Parts and Accessories. • The highest leakage in retail sales occurs in General Merchandise, Clothing and Accessories, Electronics and Appliances and non-store retailers. Leakage in these categories is generally over 80%. Chart 8: Retail Surplus/Leakage Factor by Industry, 2014 Food Services& Drinking Places Nonstore Retailers Miscellaneous Store Retailers _ General Merchandise Sporting Goods, Hobby... Clothing and Accessories... Gasoline Stations Health&Personal Care I Food& Beverage Stores Bldg Materials,Garden Equip... Electronics&Appliance Furniture&Home Furnishings N Motor Vehicle&Parts _ 100 80 60 40 20 0 20 40 60 80 100 Sources: ESRI,Inc.;Maxfield Research Inc. MAXFIELD RESEARCH INC. 29 RETAIL MARKET ANALYSIS TABLE 8 RETAIL DEMAND POTENTIAL AND LEAKAGE CITY OF ROSEMOUNT 2014 Demand Supply Retail Gap Surplus/Leakage Numberof Industry Group(NAICS Code) (Retail Potential) (Retail Sales) (Demand-Supply) Factor Businesses TctalRetall Trade and Food&Drink(NAICS44.45,722) $293,653,491 $88,092,914 $205560,577 53.8 117 Total Retail Trade(NAICS44-45) $263,843,850 $79,909,990 $183,933,860 53.5 102 Total Food&Drink(NAICS 722) $29,869,641 $8,182,923 $21,626,718 56.9 15 EXPENDITURE Motor Vehicle&Parts Dealers $50,982,437 $6,641,315 $44,341,122 76.9 12 Automobil e Dea lers $43,805,299 $812,456 $42,992,843 96.4 2 Other Motor Vehicl e Dea I ers $3,271,548 $1,337,921 $1,933,626 41.9 3 Auto Parts,Accessories&Tire Stores $3,905,591 $4,490,938 ($585,347) (7.0) 7 Furniture&Home Furnishings Stores $5,731,354 $5,191,469 $539,885 4.9 4 Furniture Stores $3,567,496 $5,022,013 ($1,514,518) (17.8) 2 Home Furnishings Stores $2,223,859 $169,455 $2,054,403 85.8 2 Electronics&Appliance Stores $6,562,260 $509,717 $5,952,543 83.0 7 Bldg Materials,Garden Equip.&Supply Stores $9,570,865 $6,298,132 $3,372,733 21.1 11 Bldg Material&Supplies Dealers $8,114,087 $741,548 $7,372,539 83.3 7 Lawn&Garden Equip&Supply Stores $1,556,778 $5,556,584 ($3,999,806) (56.2) 4 Food&Beverage Stores $40,597,447 $31,785,490 $8,811,957 12.2 14 Grocery Stores $35,085,814 $27,615,759 $7,470,055 11.9 8 Specialty Food Stores $947,175 $203,423 $743,752 64.6 3 Beer,Wine&Liquor Stores $4,564,458 $3,966,308 $598,151 7.0 3 Health&Personal Care Stores $18,293,181 $18,750,234 ($457,053) (1.2) 5 Gasoline Stations $29,265,775 $6,124,221 $23,141,554 65,4 1 Clothing&Clothing Accessories Stores $13,484,652 $925,570 $12,559,082 87.2 8 ClothingStores $10,543,167 $498,287 $10,044,880 91.0 4 Shoe Stores $2,339,721 $0 $2,339,721 100.0 0 Jewelry,Luggage&Leather Goods Stores $601,763 $427,283 $174,481 17.0 4 Sporting Goods,Hobby,Book&Music Stores $6,474,885 $1,364,542 $5,110,343 65.2 8 Sporti no Goods/Hobby/Musl ca I InstrStores $5,089,253 $1,048,878 $4,040,376 65.8 6 Book,Periodical&Music Stores $1,385,632 $315,665 $1,069,967 62.9 2 General Merchandise Stores $50,374,406 $92,851 $50,281,554 99.6 2 Department Stores Excluding Leas edDepts. $21,577,278 $92,851 $21,484,427 99.1 1 Other General Merchandise Stores $28,797,128 $0 $28,797,128 100.0 0 Miscellaneous Store Retailers $6,106,629 $1,591,323 $4,515,306 58.7 23 Florists $341,176 $306,922 $34,254 5.3 2 Office Supplies,Stationery&Gift Stores $1,256,936 $307,050 $949,886 60.7 5 Used Merchandise Stores $969,614 $0 $969,614 100.0 0 Other Miscellaneous Store Retailers $3,538,904 $977,352 $2,561,552 56.7 16 Nonstore Retailers $26,299,959 $535,125 $25,764,834 96.0 8 Electronic Shopping&Mail-Order Houses $23,515,916 $0 $23,515,916 100.0 0 Vending Machine Operators $752,406 $81,260 $671,146 80.5 1 Direct Selling Establishments $2,031,637 $453,865 $1,577,772 63.5 7 Food Services&Drinking Places $29,809,641 $8,182,923 $21,626,718 56.9 15 Full-ServlceRestaurants $12,419,391 $1,703,011 $10,716,380 75.9 4 Limited-Servlce EatingPlaces $15,193,160 $6,385,248 $8,807,912 40.8 10 Special Food Services $1,034,446 $94,664 $939,781 83.2 1 Drinkl no Places-AlcoholicBevera es $1,162644 $0 $1,162,644 100.0 0 Note: All figures quoted in 2014 dollars.Supply(retail sales)estimates sales to consumers by establishments,sales to businesses are excluded. Demand(retail potential)estimates the expected amoutspent by consumers at a retail establishment Leakage/Surplusfactor measures the relationship between supply and demand atranges from+100(total leakage)to-100(total surplus). A positivevalue represents "leakage"of retail opportunity outside the trade area. A negative value represents a surplus of retail sales,a market where customers are drawn in from outsidethetrade area. Sources:FSRI;Maxfield Research Inc. MAXFIELD RESEARCH INC. 30 RETAIL MARKET ANALYSIS • By dollar volume, retail leakage was greatest in General Merchandise Retailers,Automobile Dealers, Eating and Drinking Establishments and Gasoline Stations. • Data indicates that, while surpluses exist in a few categories, Rosemount households are generally leaving the community to spend most of their retail dollars at retail outlets out- side of Rosemount. • Considering the forecasted age distribution and household incomes of the Rosemount and surrounding areas' populations, store types with high potential include: General Merchan- dise stores, Sporting Goods, Pet Stores, and Food and Beverage Outlets. • Demand potential in Rosemount and in the surrounding Trade Area will increase along with household growth over the coming years, especially as the economy continues to rebound. Types of Retail Goods and Customer Shopping Patterns The following describes the various types of retail goods and the manner in which customers generally shop for these goods. Because of the significant diversification of retail outlets, some of these categories overlap in certain cases. Shopping goods are those on which shoppers spend the most effort and for which they have the greatest desire to comparison shop. The trade area for shopping goods tends to be gov- erned by the urge among shoppers to compare goods based on selection, service and price. Therefore, the size of the trade area for shopping goods is affected most by the overall availa- bility of goods in alternate locations. Some examples of shopping goods include furniture, appliances, clothing and automobiles. Convenience goods are those that consumers need immediately and frequently and are there- fore purchased where it is most convenient for shoppers. Shoppers as a rule find it most convenient to buy such goods near home, near work or near a temporary residence when traveling. Examples of these types of goods include gasoline,fast food, liquor, groceries, pharmaceuticals, health and beauty aids,among others. Specialty goods are those on which shoppers spend more effort to purchase. Such merchandise has no clear trade area because customers will go out of their way to find specialty items wherever they are sold. By definition, comparison shopping for specialty goods is much less significant than for shopping goods. Examples of these include gift shops,florists, pet stores, art gallery, antiques, home furnishings,textiles (needlework and fabrics), art supplies, books. The home furnishings segment has some overlap between shopping goods and specialty goods. MAXFIELD RESEARCH INC. 31 RETAIL MARKET ANALYSIS Impulse goods are those that shoppers do not actively or consciously seek. In stores, impulse goods are positioned near entrances or exits or in carefully considered relationships to shop- ping goods. Impulse goods are most likely to be located as a segment within other stores to capture additional impulse revenue from customer traffic. Examples of these types of goods are: candy and drinks at a dry cleaning establishment, candy or small novelty items near the cash register at a gift shop, accessories or jewelry at the counter in a clothing store. These may be located within existing stores, but would not be a separate establishment. Retail Mix in Rosemount The following chart displays information on the mix of retailers in Rosemount. The information is based on the North American Industry Classification System (NAICS) for businesses in the Retail Trade and Food Services and Drinking Places sectors. This data is compiled by ESRI from Infogroup and is current as of April 2014. Infogroup references several sources to obtain their information including directory listings such as Yellow Pages and business white pages; annual reports; SEC (Securities and Exchange Commission) information;federal, state, and municipal government data;and, information from the US Postal Service. • Miscellaneous Store Retailers represent the largest number of retailers in Rosemount at 19.7%. Food and Beverage outlets represent almost 13.0%of all retailers in the City while Motor Vehicle Parts and Services represent 10.2%of all retail businesses. Chart 9: Rosemount Retail Mix-2014 12.8 10.2 ■Motor Vehicle&Parts 3.4 ■Furniture&Home Furnishings fig 6 a Electronics&Appliance Y Bldg Materials,Garden Equip.,. a Food&Beverage Stores a Health&Personal Care 9.4 ■Gasoline Stations s� far ■Clothing and Accessories- 19'7 Ea Sporting Goods,Hobby... m General Merchandise 12 2 Miscellaneous Store Retailers a Nonstore Retailers 0.9 6.8 0 9 4.3 1 Food Services&Drinking Places 6.8 Source: ESRI Inc.;Maxfield Research Inc. MAXFIELD RESEARCH INC. 32 RETAIL MARKET ANALYSIS Local Retail Market Conditions The following chart shows a comparison of multi-tenant retail space in Rosemount and sur- rounding communities in square feet. The blue represents total square feet and the purple represents occupied square feet. In most cases, vacancy rates appear to be quite low in north- ern Dakota County with only a couple of exceptions (Burnsville and Inver Grove Heights). As shown, Eagan has the highest amount of multi-tenant retail space followed by Burnsville. Apple Valley and Lakeville are almost equal, followed by Inver Grove Heights. Rosemount has the least multi-tenant retail space, although Rosemount's Downtown has more single-tenant and owner-occupied retail users. Chart 10: Multi-Tenant Retail Space Total and Occupied-4Q13 7,000,000 —.-_.._..-- 6,000,000 ----------------....----- - —---- 51000,000 - - - - a °J. 4,000,000 — -- a 3,000,000 ---- - --- 2,000,000 - - - - -- - 1,000,000 - 0 Rosemount Apple Valley Burnsville Eagan Lakeville Inver Grove ■Total SF ■Occupied SF Heights Source; MN Commercial Association of Realtors A comparison of vacancy rates shows that retail vacancy in Rosemount was 8.28%as of 4th Quarter 2013. This vacancy rate compares to 4.79% in Apple Valley, 7.78% in Eagan and 20.62% in Inver Grove Heights. Compared to other communities in northern Dakota County, Rose- mount is in the middle of the group in terms of its retail vacancy rates. MAXFIELD RESEARCH INC. 33 RETAIL MARKET ANALYSIS Chart 11: Retail Vacancy Rates-4Q13 25.0% 20.62% 20.0% — c u > 15.0% c m 9.55% a 10.0% -`7 4.79% 5.53% 5.0% 0.0% Rosemount Apple Valley Burnsville Eagan Lakeville Inver Grove Source: MN Commercial Association of Realtors Heights Average retail rents for space in northern Dakota County communities are shown on the chart below. Average retail rents are highest in Eagan,followed by Burnsville and Inver Grove Heights. Lakeville and Rosemount have similar average retail rents and Apple Valley is slightly lower than Lakeville and Rosemount, most likely because of the significant amount of space that is located in Apple Valley and its competitiveness. Chart 12: Average Retail Rent/Sq. Ft.-4Q13 $18.00 - --- — $16.00 -- --- ----- __ F $14.00 Z $12.00 - - - u $10.00 - — — „�, $8.00 c $6.00 --- - -- m °C $4.00 $2.00 -- - $0.00 -- --,-- -r- —, Rosemount Apple Burnsville Eagan Lakeville Inver Valley Grove Source: MN Commercial Association of Realtors Heights • Metro-wide, the delivery of new retail space has been flat over the past three years. The ensuing recession has been particularly hard on the retail sector as retail development typi- cally follows new housing "roof tops." MAXFIELD RESEARCH INC. 34 RETAIL MARKET ANALYSIS • After steadily increasing the past several years, retail market conditions seem poised for recovery as increasing employment and consumer spending will boost demand for retail space, The retail vacancy rate declined in the Metro Area from 7.3%at the end of 2010 to 6.3%during the third quarter of 2011. Regional centers posted the lowest vacancy rate in the Metro Area (3.3%), while Neighborhood centers posted the highest(9.6%). Retail Development Potential Demand for additional retail space, measured in gross leasable space in square feet, is calculat- ed in Table 9. The table combines demand information with supply to calculate the amount of retail space supportable for the South Urban Gateway Corridor. Sources of data used in the calculations include the Metropolitan Council and Maxfield Research Inc. (household growth trends), ESRI (consumer expenditures), Minnesota Department of Revenue (retail sales data by community). The demand calculation in Table 9 begins with an estimation of the total expendi- tures for retail goods and services by PMA residents, excluding expenditures for automobiles, homes,finance and insurance, and travel. The following points summarize the retail demand methodology. • Because of growth in the Trade Area household base and accounting for inflation,Trade Area residents are expected to increase their overall retail expenditures. TABLE 9 DEMAND FOR RETAIL SPACE SOUTH URBAN GATEWAY CORRIDOR 2014 to 2025 2014 2020 2025 Retail Demand from Rosemount PMA TradeArea Households 9,939 11,500 14,250 (times)Annual Household Expenditures x $21,619 $23,869 $26353 (equals)Total Trade Area Expenditures = $214,871,241 $274,494,913 $375,536,525 (plus)Approx.%Leakage Outside the Trade Areaz + 35% 32% 28% (equals)Lea kage Outside of Trade Area - $75,204,934 $87,838,372 $105,150,227 (equals)Total Purchasing Power $139,666,307 $186,656,541 $270,386,298 divided b Avera esales perSq.Ft. $257 $272 $285 (equals)Total Retail Space Demand(S q.Ft. - 543,449 686,237 948,724 Growth 1n retail demand 2014 to 2025 405,275 (times)%of PMAdemand growth ca ptu rableb Site x 8% --to-- 10% e uals: !Retails ace supportable in the Gateway Corridor(sq.ft. - 32.432 —to-- 40,528 1 Excluding expenditures for home buying,finance&Insurance,travel,vehicle sales. a Leakage is the estimated amount of retail dollars spent outside the PMA, 3 2014 purcha sin ower is a uaI to the estimated PMA retail sales based on information from the MN Dept.of Revenue. Note: The 20141 eakage factor 1s derived from subtracting the esti mated retails ales in the PMA from the totaIretailexpenditures by PMA residents. Sources: ESRI• MN De artmentof Revenue:Tax Research Dlvlslon;Maxfield Research Inc, Maxfield Research Inc. MAXFIELD RESEARCH INC. 35 RETAIL MARKET ANALYSIS • As of 2014,total leakage of retail expenditures from Rosemount is estimated to be at 54%, indicating a significant loss of potential sales outside of the City. New retail businesses that would locate in the South Urban Gateway Corridor and existing businesses that would up- grade and/or improve their spaces could likely attract stores in the previously-mentioned retail categories where leakage exists as the local population grows and development ex- pands in the community. • We anticipate that as new retail square footage and new uses would be added to the community that leakage of sales from Rosemount would decrease to 28% by 2025. It may be difficult to reduce leakage beyond this level due to the strong pull of the concentration of retail in Apple Valley. • Considering the forecast age distribution and household incomes of the local population, store types with high potential include: General Merchandise retailers, Food and Beverage outlets,and Sporting Goods Equipment stores. • Data indicates that, while surpluses exist in a few categories, retailers that would consider locating in Rosemount should be able to capture sales that are currently being transacted outside of community. • The household base in the community is expected to grow substantially over the next 20 years, but also show considerable growth over the next ten years. The result will be growth in retail expenditures by local Trade Area residents of$130.7 million over the next ten yea rs. • The current leakage of retail sales, growth in the number of households, and increased retail expenditures by residents results in total "purchasing power"--or retail sales in the PMA—of$270.4 million by 2025. • Dividing purchasing power by average retail sales per square foot equates to total demand for about 543,000 square feet of retail space in the PMA in 2014, increasing to about 948,000 square feet in 2025. • We estimate that the subject property can capture 8%to 10%of the growth in retail de- mand between 2014 and 2020 and additional demand between 2020 and 2025. MAXFIELD RESEARCH INC. 36 OFFICE MARKET ASSESSMENT Introduction This section presents and analyzes information relating to the condition of the local office market and the potential for future office development in the South Urban Gateway Corridor. The potential for new office development in Rosemount and in the Corridor is influenced by overall market conditions in the Trade Area,also referred to as the Market Area. Information analyzed in this section includes total number of business establishments that use office space in Rosemount and in the South Urban Gateway Corridor and information on the supply of office space,vacancy rates and average lease rates in Rosemount and in surrounding northern Dakota County communities. Business Establishment Growth The following charts show growth in business establishments for Zip Code 55068,the primary Zip Code for the City of Rosemount. Business Establishment Growth in Rosemount As shown on the chart below,the largest number of businesses that primarily occupy office space tend to be smaller with fewer than five employees. We identified a total of 118 busi- nesses that were categorized as having between one and four employees. The next highest category shows 32 businesses that have between 10 and 19 employees(32)followed by those that have five to nine employees(19). No businesses were listed as having 100 or more em- ployees that primarily use office space. Chart 13:Businesses That Primarily Occupy Office Space By Size of Business(Employees)2011 Rosemount Zip Code 55068 250 y zoo CA c .7 150 18 fA 100 d .a E Z 50 19 32 4 3 0 0 1 to 4 5 to 9 10 to 19 20 to 49 50 to 99 100 or more Size of Business(Number of Employees) Source: County Business Patterns MAXFIELD RESEARCH INC. 37 OFFICE MARKET ASSESSMENT The chart below shows the number of employees by business size category for those businesses that are primarily occupying office space. The largest number of employees, 416, is found in businesses with between 10 and 19 employees. Although there are only a small number of businesses with between 50 and 99 employees,the total number of employees, 195, accounts for 17.5%of all employees that utilize office space in the City. Chart 14: Employees Occupying Office Space by Business Size Rosemount Zip Code 55068 500 416 450 N 400 d e 350 266 E 300 W c 250 195 200 119 120 Z 150 100 50 -- - 0 1 to 4 s to 9 10 to 19 20 to 49 50 to 99 100 or more Source: County Business Patterns Size of Business(Employees) Businesses Occupying Office Space in the South Urban Gateway Corridor The following charts show the number of businesses in the South Urban Gateway Corridor that occupy office space. The chart shows that most of the'businesses in the Corridor that occupy office space have between five and nine employees(ten businesses). This is followed by those with fewer than five employees (nine businesses). There are no businesses that occupy office space in the Corridor with 20 or more employees. The second chart shows the total number of employees by business size for businesses in the Corridor that primarily occupy office space. As shown,we identified a total of 148 employees among the businesses that primarily occupy office space. These generally include service businesses such as insurance, accounting,small medical, real estate,finance and banking. MAXFIELD RESEARCH INC. 38 OFFICE MARKET ASSESSMENT Chart 15: Businesses that Primarily Occupy Office Space By Size of Business(Employees)2012 South Urban Gateway Corridor 250 H 200 N W C 150 m a E 100 0 Z 50 9 10 5 0 0 0 0 Ito 4 5 to 9 10 to 19 20 to 49 50 to 99 100 or more Size of Business(Number of Employees) Sources: County Business Patterns Chart 16: Employees Occupying Office Space by Business Size South Gateway Corridor 2012 500 450 - ---- 400 a� 350 m a a 300 E 250 200 - d a E 150 - Z 100 - 20 65 50 0 Ito 4 5 to 9 10 to 19 20 to 49 50 to 99 100 or more Size of Business([Employees► Source: County Business Patterns Local Office Market Conditions The following charts show total occupied and vacant multi-tenant office space in Rosemount and the surrounding communities. MAXFIELD RESEARCH INC. 39 OFFICE MARKET ASSESSMENT The following charts show the total amount of square footage and occupied square footage. Eagan has the highest amount of multi-tenant office space among the communities in northern Dakota County. Burnsville has the second highest amount of office space,followed by Apple Valley. The other communities including Rosemount have much smaller amounts of multi- tenant office space. Chart 17: Multi-Tenant Office Space Total and Occupied-4Q13 9,000,000 8,000,000 ---- — 7,000,000 --._ .� - --- - —---- --- +, 6,000,000 - m w 5,000,000 _.—__-- m 4,000,000 - -- -- �' 3,000,000 - -- - ------- 2,000,000 1,000,000 --- - - 0 Rosemount Apple Valley Burnsville Eagan Lakeville Inver Grove Heights ■Total SF z Occupied SF Source: MN Commercial Association of Realtors Office vacancy rates are mixed throughout the area. The highest office vacancy rate is in Lakeville at nearly 17%followed by Burnsville with nearly 16%. Office vacancies are lowest in Rosemount at 0.0%. The office sector has for some time now been the weakest performing real estate sector as compared to retail, industrial, and residential. MAXFIELD RESEARCH INC. 40 OFFICE MARKET ASSESSMENT Chart 18: Office Vacancy Rates-4Q13 18.0% -_--- -------- ---••46:$3"/u 16.0% 15.65% c 14.0% — X 12.0% 10.0% _ 9.40% a 7.99% 8.0% -- - a 6.0% - 4.0% -- - -- ----- 2:50%-- 2.0% 0.00% 0.0% --•-°-- Rosemount Apple Valley Burnsville Eagan Lakeville Inver Grove Source: MN Commercial Association of Realtors Heights Average office rents for 4th Quarter 2013 are very similar to Burnsville,Apple Valley and Eagan. Rosemount's average rents are somewhat lower, primarily due to the older age of the office space in Rosemount, similar to Inver Grove Heights. The other communities have higher proportions of new office space. Chart 19: Average Office Rent/Sq. Ft.-4Q13 $16.00 - — - -- - $14.00 -- Z $12.00 --—- - _- -- z $10.00 - — $8,00 r $6.00 — — - — e $4.00 -- --- -- — $2.00 $0.00 Rosemount Apple Burnsville Eagan Lakeville Inver Valley Grove Source: MN Commercial Association of Realtors Heights Office Demand Projections Table 10 shows the calculation of demand for office space for the South Urban Gateway Corri- dor from 2014 to 2035. The table shows the projected number of jobs in Rosemount from projected growth with an allocation of the proportion of office jobs that would typically require office space. MAXFIELD RESEARCH INC. 41 OFFICE MARKET ASSESSMENT Job growth is projected to account for potential demand for about 89,000 square feet of office space between 2014 and 2025 and another 100,000 square feet of office space between 2025 and 2035. We estimate that Rosemount could capture approximately 45%to 60%of the potential office space demand between 2014 and 2025 and another 60%to 80%of potential office space demand between 2025 and 2035. Within the Gateway Corridor, demand capturable from the larger community demand would be smaller,approximately 8,500 square feet to 16,000 square feet between 2015 and 2025 and between 15,000 and 28,000 square feet between 2025 and 2035. The South Urban Gateway Corridor space summary is found in the Conclusions and Recommendations section of the report. TABLE 10 PROJECTED DEMAND FOR OFFICE SPACE SOUTH URBAN GATEWAY CORRIDOR 2014 to 2035 2014 2025 2035 Office Demand-Rosemount Projected number ofjobs in Rosemount 7,996 11,300 15,000 (times)%ofjobs in industry types thattypically require office space x 20.09 20.0% 20.09/0 (equals)Projected number of offi ce-type jobs in Rosemount — 1,599 2,260 3,000 (times)V.of office-type jobs seeking/needingofficespace* x 75% 75% 75% (equals)Projected#ofemployees in officespace in Rosemount = 1,199 1,695 2,250 times Square feet of offices ace per employee x 180 180 180 (equals)Projected demand for offices ace in Rosemount(s q.ft.)_ — 215,89Z 305,100 405,000 Growth In office demand(2014 to 2035) 89,208 99,900 (times)%of demand growth capturable by Gateway Corridor 45% - 60% 609'.-80% (equals)Offices ace supportable on subject property(s q,ft.) 40,144 - 53,525 59;940 - 79,920 * Percent of office-type jobs seekin offices ace versus homeofficesor retail spaces. Source: Maxfield Research Inc. MAXFIELD RESEARCH INC. 42 INDUSTRIAL MARKET ASSESSMENT Introduction This section presents and analyzes information relating to the condition of the local industrial market and the potential for future industrial development in the South Urban Gateway Corri- dor. The potential for new industrial development in Rosemount and in the Corridor is influ- enced by overall market conditions in the Trade Area, also referred to as the Market Area. Information analyzed in this section includes total amount of industrial space occupied and total supply,vacancies and average lease rates for industrial space among the communities in northern Dakota County. Local Industrial Market Conditions The chart below shows that Eagan has the highest amount of total industrial and occupied industrial space among the communities,followed by Burnsville and Lakeville. Rosemount has more total and occupied industrial space than Apple Valley and slightly more than Inver Grove Heights. Chart 20: Industrial Space Total and Occupied Square Feet-4Q13 14,000,000 -- 12,000,000 — -- 10,000,000 ------- 8,000,000 -- -- 6,000,000 Cr Ln 4,000,000 2,000,000 - — — - -- - 0 Rosemount Apple Valley Burnsville Eagan Lakeville Inver Grove Heights ■Total SF ■Occupied SF Source: MN Commercial Association of Realtors The following chart shows the industrial vacancy rates for Rosemount and the surrounding northern Dakota County communities. MAXFIELD RESEARCH INC. 43 INDUSTRIAL MARKET ASSESSMENT The information shows that the lowest industrial vacancy rate is found in Apple Valley followed by Burnsville and then Rosemount. Conversely,the highest industrial vacancy rate was in Inver Grove Heights at 24.45%. Chart 21: Industrial Vacancy Rates-4Q13 30.0% ------- 25.0% 24.45% C 20.0% _ --11.44% ----- v 15.0% L' 10.14% a 10.0% - — 8'77% 5.0% 3.93% 0.0% Rosemount Apple Valley Burnsville Eagan Lakeville Inver Grove Source: MN Commercial Association of Realtors Heights The highest lease rates for industrial space are found in Burnsville,followed by Apple Valley and Lakeville. Again,a higher proportion of new industrial space is likely the result of the highest lease rates. However, Eagan's lease rates are somewhat lower despite also having a high proportion of new space. In industrial market in Eagan is likely experiencing a higher level of competition among various buildings resulting in some discounting of industrial lease rates. Chart 22: Low/High Industrial Rent/Sq. Ft.-4Q13 $18.00 -- - $16.00 --- — ------- $14.00 LL $12.00 --— - - --- N $10.00 $8.00 — - CU a $6.00 $4.00 $2.00 -- $0.00 Rosemount Apple Valley Burnsville Eagan Lakeville Inver Grove ■Average Rent Low ■Average Rent High Heights Source: MN Commercial Association of Realtors MAXFIELD RESEARCH INC. 44 INDUSTRIAL MARKET ASSESSMENT Industrial Demand Potential Industrial demand calculations are found on Table 11. Industrial demand is calculated by considering the proportion of jobs in the community that are found in industrial businesses and allocating that proportion to total job growth. As shown,the amount of industrial space demand projected as capturable in the South Urban Gateway Corridor ranges from about 124,000 to 248,000 square feet of space between 2014 and 2025 and another 278,000 to 370,000 square feet of space between 2025 and 2035. We note that these figures represent the optimal amount that could be captured. Analysis of the number of sites and space available should be given consideration in regard to optimizing the potential demand for commercial space in the Corridor. The demand for industrial space would not be in addition to but would be instead of the amounts shown for office and retail. TABLE 11 PROJECTED DEMAND FOR INDUSTRIAL SOUTH URBAN GATEWAY CORRIDOR 2014 to 2035 2014 2025 2035 Office Demand-Rosemount Projected number of jobs in Rosemount 7,996 11,300 15,000 (times)%of jobs in industrytypes thattypically require industrial space x 25.0% 25.0% 25.0% (equals)Projected number of Industrial-type jobs in Rosemount = 1,999 2,825 3,750 (times)9'oof industrial-type jobs seeking/needing industrial space* x 100% 100% 100% (equals)Projected#of employees in industrial space In Rosemount = 1,999 2,825 3,750 times S uarefeetofindustrials ace per employee x 500 S00 500 (equals)Projected demand for industrials ace in Rosemount(s q.ft. 999,500 1/112,500 1,875,000 Growth in industrial space demand(2014 to 2035) 413,000 462,500 (times)%of demand growth capturable by Gateway Corridor 30% - 60% 60%-80% (equals)Industrial.space supportable on Gateway property sq.ft. 123,900 - 247,800 277,500 - 370,000 Source: Maxfield Research Inc. MAXFIELD RESEARCH INC. 45 SOUTH URBAN GATEWAY CORRIDOR Introduction This section discusses feature of the South Urban Gateway Corridor parcels and their potential for redevelopment. Land Values Table 12 shows sample land values by use type for Rosemount and surrounding northern Dakota County communities. As shown on the table, Rosemount's land values have a range similar to that for Burnsville, but below that of Apple Valley for retail and office. Again, lower land values likely reflect the older age of most properties and the current potential demand for space. With the economic recovery,land values are already rising again. The low end of the range value range is lowest in Rosemount while the high end of the range is equal to the high end of the range in Burnsville for retail values. Office values in Rosemount are about equal to Burnsville and Eagan on the low end of the range and have a limited range compared to the other surrounding communities. We would expect that as Rosemount increases its household base,that land values should rise commensurate with increased demand for new development. TABLE 12 SAMPLE LAND VALUES BY USE TYPE 2013 Sample Land Values Retail Office Rosemount $4.00-$11.01 $4.50-$5.25 Apple Valley $10.50-$13.49 $6.25-$8.24 Burnsville $6.00-$11.00 $4.00-$10.00 Eagan $8.87-$13.98 $4.00-$10.15 Lakeville $9.00-$16.06 $2.00-$8,50 Inver Grove Heights $5.50-$9.04 $4.35-$9.02 Source; Dakota County Assessor The map on the following page shows land values for parcels in the South Urban Gateway Corridor. As shown, land values are highest along County Road 42 and reflect the parcels that are developed with retail and office uses, but primarily retail uses. Parcels to the southeast have the lowest land values and reflect primarily agricultural and industrial uses. MAXFIELD RESEARCH INC. 46 SOUTH URBAN GATEWAY CORRIDOR Map 9: South Urban Gateway Corridor-Land Values/Square Foot ..... .. _ - R eq MwKTIE Cammuptlane t nnkkyseiwl 1 �IvA 83In1(N fhvpe 3 Bwgw Ahig . :;•j .. ... .t � AO:nwNxwaAt xULYli 1 � .Hwq Kq\p uxlw ' ' 6 xtrlYltW3 Qxxygnlgl _ � x t33n3Wws �I 13 t ID \'Hx3p.v 91N lbMc .:I t� i �'^ li tlxkl%wkrl:kx33t QiWkl nl ". � i 12 L'nn 71rN Y3h QwA •'I j ''y it QtkypekrA SCW3�IMi7a6 _ . :- ,1 I •1•_.•I`� is h'nde W¢n Un 189 i`•~ 14 fir! F6 LtnHYQaWab FNZi,DgiNM / tJ Wti h.Mkk 2)'uuuF � 1 20 j 21 j 2� i� i� a u3iw crpM \,:�. ]a 0.rypQ gaWk+AautI3pl FSm �' 224 Z$t 31 A—o lk Mwl d 4Imp •. . _'_._ It ]<h�Srsug � [ L1 4actlpl tAlnl 32 :s png QewA Slop e3w.e.xn ' 17 Yw3M lawl � f • ltl (lowniwtlll Ju 'M'lgs GlnaA. �„ ]D A[lMf Sp[cMk31Mem3fwl 91. 1.1 Loa rA'DU3SC -. Y• FAI M WA� i ]1 Phyl MtaH mNStgxs YiIRt nur ]I CIy I.ieW pawlkg ALn• A.�I1�:; M ialwt_v M Vf MI..1 . ._ 11 (xvkdl.MLn1A ........ ... 34 xQC9c A+A.OA. c H �Wkp(:wd l.w.t it PateWr AanlNAwlvpl[s pvy i tl F.I Aa.—o -p D, ' _.._'P.___..FnwurRWlHiuW V6ta3e Daayi_� 4� c� i �� - soutlx Urban Gateway Analysts for Reinvestment A 4ROJEMOUI�!1 lLand Values.Per Square Foot N MINNFSpTA �c;�.ly.,iiT�F:•,r-azt� :ce...t±:.fit^;w.p•.��Ir•, .t:., Building Values The following map shows building values per square foot for parcels in the South Urban Gate- way Corridor. As shown, building values are highest for properties that are located along County Road 42. Building values in yellow and green highlight properties that may have the potential to be considered for redevelopment in the short-term. MAXFIELD RESEARCH INC. 47 SOUTH URBAN GATEWAY CORRIDOR Map 10: South Urban Gateway Corridor Building Values/Square Foot t Haticl+y Sldidnlar. , �. Aaa0"1-lal+x)Spury S i -S K'AS Ularq mW r fn6y(Along .. Y Tacq ldd{t 9 0,F.akk v.d., 13 j 16 vem"U Q!snta park .:`� �;� !11 _ .' I, IMw,uuhrtsalOON hfdrkl 11 3 $1a169d[dl j Na1UOa'n rl.'A.d.sl I r.v . 3 � -•r` t•t l,Wy.r.kd s.lwd Did l'Ja K` 14 !� a iH.y�nq�a,�a.maynnyaar. '2�dy 21 j/r �' � �j4�• zl; Ifegefa.,tNiva 19 Marc carriarliav'"a 20 20141 0iP*lKW'M WWro[ua It—P.,kM.a.,d.:d Ism" i <�� .' :� '. 11 .C.lunrtl�nQ+'Ua1d6113• La V...a land 32 �, vxxt 1.01 i ....-._.. ._.. ._. ... ,�'. 16 W'Rs 8.109 S1dfl Cladm•ya r .....F_.-.._...._._.. It .Vacud land r r.r t. �CTOKnitutni 4 20 1L�A.C0a'o'GI, ]L 1+OaMrlm,d'IS,eaVa j R 1 4194 �+(�1���+����y � � 3J likhbAatonr+lbo lhpuer i- . WA+(A"t�TER. 3) �L7 F.nuu DO.Wy tdlay -.. __...... _ LAKE :.�IF _ 11 Farm lAlur `. . _. l\ JS Y;ecot[•usd 1, 37 (Adkd Ll..lil l.nrd ..�.-_.. ...� in Ailydt Ad—*'. _a9 'am; C.pd l,-i .. ,g19rm Maram hP, 11. r.-f BI.0-9 wg3x pmg, 1•ombr4+Me,aanA Viing N:T +J Panur Iknlg,Km,vGOa.oqa V ............._.._.-.._...:.....-....-.._ .. ._...........951-_—__._—^_�... .. .:.. i� 'South Urban GatewayAnalysis for Reinvestment A P OSEMOI.xi V J: Building Vaiu�s•Per Square Foot K1 A71N N85OYA ,, �I:- o•r_rc a r»:-1,31[.)++r:•19ss ja rs»..nac a s)s+.sr,c+ MAXFIELD RESEARCH INC. 48 CONCLUSIONS AND RECOMMENDATIONS Introduction The previous sections focused on the"demand" and "supply"factors for various real estate sectors. Estimates of demand for retail, office and industrial uses in the South Urban Gateway Corridor are based on projected growth for Rosemount and the immediate surrounding area, changing demographic patterns, and projected market conditions for each real estate segment. Conclusions and Recommendations The following provides a summary of our findings and presents amounts of square footage supportable for the South Urban Gateway Corridor along with suggested timeframes for redevelopment for groups of properties. • The South Urban Gateway Corridor has several characteristics that make it a strong com- mercial district with potential for redevelopment. — Strong anticipated population growth across all age cohorts in Rosemount will create opportunities for a variety of retail and commercial space in the community. — The 2013 median income in Rosemount is high ($77,178) and is higher than that for Da- kota County although the County's median income is expected to catch up over the next five years. Rosemount would have the capability to pull ahead of the County again through continued development of more upper market single-family homes. However, Rosemount is relatively affluent compared to the Metro Area, suggesting that house- holds have more resources to devote toward retail services and goods. — The South Urban Gateway Corridor is sandwiched between two major thoroughfares, County Road 42 and County Road 46, providing the area with high visibility and high traffic counts from these roadways. This will be attractive to potential retailers. -- The Site is situated in a solid existing retail trade area with high incomes, and it is sur- rounded by other commercial uses. • While the local market has been sluggish, it is exhibiting signs of improvement. — After steadily increasing the past several years, retail market conditions seem poised for recovery as increasing employment and consumer spending will boost demand for retail space. The retail vacancy rate declined in the Metro Area to 6.3%during the third quar- ter of 2011. Regional centers posted the lowest vacancy rate in the Metro Area (3.3°0), while Neighborhood centers posted the highest(9.690. MAXFIELD RESEARCH INC. 49 CONCLUSIONS AND RECOMMENDATIONS • Consumer spending and retail sales trends in Rosemount support the perception that Rosemount is "under-retailed". As of 2014,total leakage of retail expenditures from Rosemount is estimated to be at 57%, indicating a significant loss of potential sales outside of the community. Examining consumer expenditure data with retail sales data,we note that the largest leakage rates occur in General Merchandise, Electronics and Appliances,Automobile Dealers and Food and Beverage Outlets with factors of up to 60%or higher leakage rates. Leakage is occurring in other categories, but the above represent the highest. Because of growth in the PMA household base and accounting for inflation, PMA resi- dents are expected to increase their overall retail expenditures from $139.7 million in 2014 to nearly$270.4 million by 2025. Inclusion of new retailers not already serving the local population will help reduce the leakage factor in Rosemount as local residents begin making a portion of their purchases locally that were previously made outside the community. Leakage will also be reduced as residents from outside the area who will travel to the Gateway area due to the avail- ability of a new variety of goods. Office users at the site are more likely to be smaller users or health care facilities that would serve the local population with needed services. Existing business service users are already located in the South Urban Gateway Corridor. Additional uses could be sup- ported to serve local business and service needs of the community as the household and business bases expand. MAXFIELD RESEARCH INC. 50 CONCLUSIONS AND RECOMMENDATIONS Estimated Demand for Space-South Urban Gateway Corridor Table 13 shows the estimated demand for space in the South Urban Gateway Corridor from 2015 to 2025 and from 2025 to 2035. Demand estimates are provided for retail, office, resi- dential and industrial space. Following the table is a map that shows the suggested redevelop- ment timeframes for properties in the Corridor. TABLE 13 ESTIMATED DEMAND FOR SPACE SOUTH URBAN GATEWAY CORRIDOR 2015-2025 2025-2035 Reta i I General Commercial (Sf) 25,000 - 35,000 80,000 - 100,000 Specialty Retail 5f 3,000.- 5,000 5,000 - 15,000 Estimated Lease Rates (PSF) $16.00 - $20.00 $12.00 - $23.00 Office General Office(Sf) 5,000 - 10,000 10,000 - 20,000 Medi ca I Office Sf 3 500 - 6 000 5,000 - 8,000 Estimated Lease Rates PSF $12.00 - $20.00 $18.00 - $25.00 Residential Apartments (Units) 80 - 100 100 - 125 Senior Housing(Units) 0 - 0 50 - 60 For-SaleTownhomes Units 0 - 0 40 - 50 Estimated Lease Rates(PSF) $1.40.- $1.40 $1.65 1.65 Industrial Office-Warehouse(Sf) 25,000 - 30,000 35,000 - 50,000 Warehouse(Sf) 100,000 - 150,000 100,000 - 200,000 Sing]e-User Sf 50 000 - 150,000 100,000 - 150,000 Estimated Lease Rates(PSF) $4.00 - $8.00 $5.00 - $10.00 Notes: Squarefootages shown reflect new space which would replace some older space and/or increase thetotal amount of commercial space in the Corridor. Corridor property is currently guided as commercial;Industrial is anticipated to occur south of the Gateway Corridor commercial district. Squarefootages assume that land area is availableto accommodate building sizes, Source: Maxfield Research Inc. Table 14 on the following page shows similar calculations/recommendations for the City of Rosemount as a whole. Estimates for each time period are not cumulative but demand remain- ing from the earlier time period may be added onto the next period provided that the space has not already been captured elsewhere in Rosemount or in the South Urban Gateway Corridor. MAXFIELD RESEARCH INC. 51 CONCLUSIONS AND RECOMMENDATIONS TABLE 14 ESTIMATED DEMAND FOR RESIDENTIAL UNITS AND COMMERCIAL AND INDUSTRIAL SPACE CITY OF ROSEMOUNT 2015-2025 2025-2035 Reta i I General Commercial (5f) 221,565 - 360,145 461,084 - 500,000 5 eci a Ity Retail Sf 50,000 - 60,000 75,000 - 80,000 Estimated Lease Rates(PSF) $16.00 - $20.00 Office General office(Sf) 35,000 - 50,000 60,000 - 80,000 Medical Office Sf 15,000 - 20,000 30,000 - 50,000 Estimated Lease Rates(PSF) $12.00 - $20.00 Residential Single-FamiIy(For-Sale)(Units) 1,280 - 1,800 3,000 - 3,400 Apartments(Units) 400 - 440 355 - 380 Senior Housing(Units) 260 - 280 410 - 440 For-Sa I e Townhomes Units 800 - 820 685 - 750 Estimated Lease Rates(PSF) $1.40 - $1.40 Industrial Office-Warehouse(Sf) 80,000 - 125,000 150,000 - 200,000 Warehouse(Sf) 200,000- 250,000 300,000 - 350,000 Single-User Sf 250 000 - 350,000 280,000 - 350,000 Estimated Lease Rates(PSF) $4.00 - $8.00 Source: Maxfield Research Inc. Suggested Redevelopment Timeframes The map on the following page shows suggested timeframes for redevelopment of parcels in the South Urban Gateway Corridor. Parcels that are non-conforming uses and those where land value ratios are the highest relative to the existing buildings and are not compatible with an overall focus for the area of a commercial retail and service district could be considered for redevelopment in the short-term. Vacant parcels also may have higher redevelopment potential in the short-term as potential users may view vacant parcels as easier to develop. MAXFIELD RESEARCH INC. 52 CONCLUSIONS AND RECOMMENDATIONS Map 11: South Urban Gateway Corridor—Suggested Redevelopment Timeframes '7 '- _ L lldldA]'JAllaa[§le <, _ '- i _. - 2 Yalniiue IIKI•w�t tYil[7mlpA - ) II§A1{v AiAb - :i- ..._ -. � S !ing ltglyNlKra s .. 6 Na4suJ,le '•. ! UAUX t�rnu i ._. ..... ... R L'Amldm'A ' 4 EiJlyexiklk CttlN - ;i 10 Yetn,IIi§Sub IWA 1! ktkVeA,Aku 01 13"' Il 4aliidm wale lSAllk ! 13 C411wnT d.Am 4541#7 W 1.1 I.AgKaAbd&Irsw1 Did 146 6r 17�'i ,` l3 ElAle IVIm G,3. • 18 19 ;! h@ la 7AAlprR OamdA FAmtly D4lwre i I' WkMn t4ekhie DAtYMry � 20 21 ! le 1Aege1 m t 913{Ac y` � ��� t9 DAAKO CamArakWAt§ 22 ,23 `. 5 �U m RAmcl:lglnrruv§tliA4nL�am 5 Ji Raac f uAk)kdKnktl Ok1b 24 ZrJ%' ZI Clrc�letCAl!.1rn„nwrr y :!a YAead Lx§I + 33 Vw AIAA 2d Borg Ituld'§ip cook, :A s II Y.erod Land - Ig Ce*aw i[He4 SP T*14 A Glwa.h JU Ate—swe kxet W.—tial .. _ )I ka,ImnM 711tARe Jx lAn 143 :cl RickY Awarmdve Aclrwc WACH R. � �i c yil,wai#aM1ao'�a,7 A V-4 I—I ;5: eAlidtd t:a§Il�4d 'I t: -,.q;P_-:�,...0 _. ��,•`1, � .. 5B M,c11s A0andNe - ...: i ' /' r i at r•AtlKrnar4»aalvA+ux'almyr .... -11 fltruteA Rmc§umll V'iajlt Dlarq. �_ 1IJ 1'anKA l6a:§ml§II VdIgt O�§r9t •41/1 r �I /42,143 \ f"38 fi o'T4i•p -- � r r� .... i 40 ggiv J _ ... ... . .RRIP-PLIFERMW ._ ... ji NJ WW;11119.11NNINiFeW 01111roamps"I South Urban Gateway Analysls for Reinvestment A S ROSL:MOU1 V i Suggested Redevelopment rimeframes-2015 to 2040 N M1WN98)1'A .as:.c<,I, ;xcamlo MAXFIELD RESEARCH INC. 53 CONCLUSIONS AND RECOMMENDATIONS Financial Tools Financial tools to assist with redevelopment in Minnesota have over time become more limited. Tax increment financing is, however still widely used to support redevelopment efforts at the municipal level. Other tools that have been used in the past and could be considered include: • Land Write-Downs • Grants • Low-Interest Loans • Partnering with other County and State Agencies • Essential Function Bonds All of these tools have specific benefits and challenges, but they generally represent the best methods of funding assistance for large-scale redevelopment. Key Takeaways South Urban Gateway Corridor • Rosemount is projected to add more than 7,900 households over the next 20 years to 2030. • Although demand for rental housing will increase modestly,we anticipate continued strong demand for single-family homes in the community. This will generally bring more families to Rosemount and larger household sizes, increasing the demand for retail goods and services. • Rosemount has a growing household base with a high median household income $77,178-2013. • There is a growing employment base in the community that includes higher proportions of jobs in Manufacturing, Education and Health Services and Trade-Transportation- Utilities. Many of these jobs pay higher than average wages. • Retail service businesses in Rosemount are spread out across several different concen- trations. Rosemount has a historic Downtown where a number of small independent businesses have located. • With projected high traffic volumes,the South Urban Gateway Corridor could attract more commercial development. MAXFIELD RESEARCH INC. 54 CONCLUSIONS AND RECOMMENDATIONS • Rosemount households are currently spending a high proportion of their retail dollars outside of the community, most likely in Apple Valley. • Retailers generally look for locations where there is a growing customer base, sites for new stores(vacant) and/or locations adjacent to major anchors. • Attracting new retail to the South Urban Gateway Corridor may require removing older space to make property available for new construction. • We recommend that you provide/offer larger size parcels for greater flexibility in at- tracting new retail. This would mean combining smaller parcels to create larger devel- opment parcels in the South Urban Gateway Corridor. • The South Urban Gateway Corridor could be repurposed as a focus for a larger commu- nity commercial center. This would require some site assembly and most likely waiting for a larger user. City-Wide Findings • Coming out of the Recession,development interest is expanding, but is focused primari- ly on residential and industrial development at this time. • Retail and office development are lagging behind as technology is causing shifts in the manner in which we purchase goods and utilize office space. • Fundamentally, population and household growth will feed demand for retail goods and services, but there will be greater emphasis on retail services than retail goods moving forward. • Retail development will evolve toward convenience nodes and central commercial dis- tricts with higher concentrations of goods and services;the South Urban Gateway Corri- dor has excellent visibility and access and is situated between two well-traveled highway corridors. • Industrial development typically fluctuates in demand; it is currently on an upswing and there is greater movement toward bringing some manufacturing process and jobs back into the US from overseas. 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AW Mai t W r , f , -2 RQSEMOUNT Trunk Highway 3 Corridor Study mmmE5oTA City of Rosemount, Minnesota I