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HomeMy WebLinkAbout4.b. Project Updates EXECUTIVE SUMMARY Port Authority Meeting Date: October 16, 2018 AGENDA ITEM: Project Updates AGENDA SECTION: Old Business PREPARED BY: Kim Lindquist, Deputy Director AGENDA NO. 4.b. ATTACHMENTS: Retail Strategies Update, October Retail News APPROVED BY: LJM RECOMMENDED ACTION: Information Item ISSUE Over the last year there has been a “project updates” item added to the agenda, toward the end of the meeting. Often the item is rushed as other topics on the agenda take up more time. To address this comment, the updates are being shifted into the Old Business section of the agenda. The item will be more formalized with some written information, although as stated previously, often information is confidential upon the request of the business. The latest update sent to the Port is pasted below with some quick updates included: RETAIL Applebee’s: The broker has indicated that they have received another proposal for the property and are working to come to terms with the business. They were hoping for additional interest and had contacted businesses who had previously proposed or showed interest in the site Multi-tenant Retail: Nothing new on the site. Warren’s property: Nothing new regarding the commercial sites. Merchants Bank site: I have confirmed that the Retailer continues to be interested in the site, however, there is no new progress on the site. Akron Ave: nothing new on retail prospects. MGM retail space: There has been no movement on this site. I have attached the brochure being sent out advertising the site and the realtor indicated that they are willing to split up the site since it is fairly large for one commercial tenant. 2 Contacted Pete Terry about the closed Hardware Store, he is not ready to lease and has a lot of inventory to move out of the building. He doesn’t have a timeline for getting the space ready to lease out. I have had a conversation with a Downtown development prospect. He is investigating market and financials and we will regroup later this month. INDUSTRIAL OPUS/UMore: nothing new, although DEED indicated they were expecting some feedback soon from the regional solicitations we’ve responded to. Rosemount Business Park: nothing new Opus business park site: Opus is also marketing this site outside of the project noted above RESIDENTIAL The footing and foundation permit for the second apartment building at Warren’s site is ready for pick up. RECOMMENDATION Information Item We make retail happen. RETAIL RECRUITMENT UPDATES •Celtic Crossing –We touched base with Lisa Diehl again to see if there were any updates to the vacancies as we are continuing to make outreach to retailers. She let us know that there is an offer on the table but ownership isn’t interested as the buildout costs are too high. She also has another opportunity and is waiting for their response to an offer. •National Sandwich Shop –We have reached out to another sandwich shop showing them an opportunity in Rosemount Crossing and are awaiting a response from them. •National Smoothie Shop –We reached out to the Real Estate Director and showed them availability in Rosemount Crossing and they stated that they don’t have an active franchisee in the market at this time but that we should check back in a few months. •Sunbelt Rentals –Our team contacted Sunbelt Rentals to try to get in touch with the owner of this property. We see this property as the top retail location in the market. We are waiting to speak with the owner to see if he’d be willing to sell and find a new home for Sunbelt as they don’t need the visibility that retailers need. •National Convenience Store –We contacted the Real Estate Director with options for them to review and she let us know that at this time they aren’t currently expanding in this area and are more focused on south Minnesota. •Pad between McDonald’s and Chipotle –We touched base with Colliers to see the status and he let us know that they are making progress with deals they have on the table and they should be at lease within 30 days. We are under the assumption they are still working with the national sandwich shop we sent them. ROSEMOUNT, MINNESOTA BETH MILLER PORTFOLIO DIRECTOR 205.314.0385 beth@retailstrategies.com September 2018 We make retail happen. RETAIL RECRUITMENT UPDATES •National Convenience Store–In our outreach to another C-store this month, our information was passed on to this group, so they reached out to us to learn more about what we do. He told us that he might be interested in a second location in Rosemount. We are working with them now. •Vacant Applebee’s –We had a call with Mark from Mid-America this month to discuss the status of the vacant Applebee’s. He said they had a regional user that had a contract fall through that ended up choosing a site in Lakeville instead. He now is in negotiations a local brewhouse however that is moving slowly so he is still open to looking at other offers. •We are attending Chicago ICSC Deal Making Conference next week and will be meeting with multiple brokers, retailers and developers on your behalf. We will include those updates in next months report. ROSEMOUNT, MINNESOTA BETH MILLER PORTFOLIO DIRECTOR 205.314.0385 beth@retailstrategies.com September 2018 1 Starbucks launches Uber Eats delivery in 100 Florida stores. (4) Tropical Smoothie Cafe, one of the fastest growing franchise concepts in the country, is proud to announce its aggressive franchise development plans for the Orlando and Tampa areas, and is currently seeking qualified entrepreneurs to open new restaurants throughout the two markets. (5) A different product from Sears–2.4 million square feet of space–including the state’s largest distribution center is now up for grabs. Avison Young’s Florida Capital Markets Group was tapped by Sears to sell 2,350,692 square feet of real estate assets across Florida, including the state’s largest distribution center in Ocala and three department store sites in Daytona, Tampa, and Port Richey. All of the locations are fully occupied by Sears. (6) Supermarket operator Publix has plans to open four stand-alone GreenWise Market stores this year: three in Florida and one in South Carolina. (37) Hurricane Florence Hurricane Florence could cost retailers $700 million in estimated lost sales includes purchases that retailers and restaurants will miss and not make up, and is in addition to damage caused directly by the storm, like property loss and insurance claims, according to Planalytics. (7) Zips Car Wash grows on the East Coast with the acquisition of four Wash Wizard Car Wash locations in Charleston, South Carolina. Before today's acquisition, the growing company operated just eight stores in South Carolina. Zips will now operate 12 stores across the state and 28 locations up the Eastern Seaboard. The company operates 136 locations in 14 states (40) Florida Carolina’s 2018 October Retail News 2018 2 Chicken Salad Chick announced today the launch of its first restaurant in Oklahoma. The new location in the Tulsa area marks the brand's 95th restaurant location across 10 states. The Broken Arrow restaurant kicks off a string of new market development for Chicken Salad Chick with restaurants set to debut in Arkansas, Kentucky and Missouri before the end of the year. (12) Chef and Owner David Choi of Seoul Taco announced the brand’s Chicagoland expansion. Beginning this winter, Seoul Taco fans can now get their fix of the Korean-Mexican fast casual at locations in Chicago’s Hyde Park neighborhood and suburban Naperville. “We’ve been looking to open in communities that would embrace the Seoul Taco concept,” says Choi. Choi currently owns and operates five Seoul Taco locations in Illinois and Missouri. The brand’s Chicago flagship location opened in 2017 in the city’s River North neighborhood (13) Hy-Vee announced in August 2017 that it planned to build, own and operate 26 Wahlburgers locations, which would make it the restaurant chain’s largest franchisee. They currently have 3 open in West Des Moines, Mall of America and Olathe, KS. They are also adding menu items to its 80+ Market Grills in- store restaurants and have rolled out Wahlburger at home to 1,300 grocery stores across 26 states. (14) Natural Grocers closes its first store in Tulsa Area. Currently, there are no plans to close other stores, according to Natural Grocers. Founded in 1955, the supermarket chain — which specializes in natural and organic groceries and dietary supplements — operates 148 stores in 19 states. (15) Taco Bueno Restaurants L.P. is closing 16 locations across four states, reducing its total unit count to 172, the quick-service Tex-Mex brand said Tuesday. The Farmers Branch, Texas-based company said 10 of the closures, effective Monday, were in the North Texas area, three were in Okla., two in Mo. and one in Kan. (16) Farmer’s Fridge, the Chicago-based startup that sells salads and other meals from vending machines, plans to double its operation next year. Launched in 2013, Farmer’s Fridge has grown to about 185 machines in Chicago and Milwaukee, with another 225 coming on line by the end of this year, said founder and CEO Luke Saunders. This latest round of financing will help the company beef up its Chicago workforce, while adding 400 to 500 more fridges in other Midwestern cities such as Detroit, Indianapolis, Cincinnati and St. Louis by the end of next year (17) The fourth Amazon Go store and the first outside of Seattle will open next Monday in Chicago. (33) Big Frog Custom T-Shirts & More®, a high-technology garment decorating retail store where customers have the freedom to design their own apparel, today announces development plans to add 10 stores across Chicagoland Area. Big Frog is seeking qualified franchise partners to open in key markets throughout the state including Batavia, Downers Grove, Orland Park, Schaumburg, Des Plaines, Wheaton, Elgin, Evanston, Arlington Heights, and Wheeling. There is also opportunity to develop in Rockford, Springfield, Joliet, Peoria, and Waukegan. (41) Mid-West 3 Walk-On’s now has 22 locations: four in Baton Rouge, two in New Orleans and San Antonio, and one each in Lafayette, Houma, Shreveport, Lake Charles, Covington, Broussard, Alexandria, Gonzales, Mobile, West Monroe and Bossier City, La., and Lubbock and Tyler, Texas. Other locations are coming soon in Alabama, Florida, Louisiana, Mississippi, Tennessee and Texas, with several additional markets across the Southern U.S. likewise on the drawing board. (18) Chicken Salad Chick, the nation’s only southern inspired, fast casual chicken salad restaurant concept, announced today it’s expanding in Mississippi with its first Biloxi area location in D’Iberville, which will be the brand’s fifth restaurant in the state. The new restaurant will open on Tuesday, October 2nd and is located at 3821 Promenade Parkway. (19) The Southeast’s fast-growing chicken tenders brand, Huey Magoo’s, catapults its rapid expansion with the exciting announcement of several new stores opening in the Atlanta area starting next year, reports president and CEO Andy Howard. New Huey Magoo’s franchisees and seasoned franchisees of Papa John’s Dean Thompson, Derry Thompson and Alex Larson join the Magoo’s team to bring the popular Central Florida based brand to Atlanta with an initial 10 stores and possible additional 36 stores, totaling 46 new Huey Magoo’s franchises coming to the Greater Atlanta area. (20) Gourmet mini-burger chain Burgerim is targeting Lafayette as part of its entry into the Louisiana market. The chain is putting its first store in the state in Baton Rouge, said Carmen Austin, associate broker and retail specialist with Saurage Rotenberg Commercial Real Estate LLC, which represents the California-based franchisor in site selection in the state. Burgerim debuted in the United States in 2016, and has stores in California, Tennessee and Texas. Additional franchises are planned across the country, with projections of nearly 100 stores in the U.S. by the end of this year and 300 worldwide by the end of 2019. (21) Hwy 55 Burgers, Shakes & Fries, the highly-decorated brand in the restaurant industry and franchising community, is continuing its impressive growth in the state of Tennessee and again bringing its All-American, retro-themed diner to the Oak Ridge area. The new restaurant, the fifth in Tennessee and the first in the Oak Ridge area, will open on September 17th and will add 35 jobs to the community. As part of the master franchise agreement, Hwy 55 is planning to open an additional 45 locations in the Tennessee area in the next seven years. (22) Publix Super Markets has announced plans to develop a new GreenWise Market in Atlanta. Conceived to compete with Whole Foods and Sprouts Farmers Market, the organic and natural food concept is expected to total 25,000 sq. ft. in the city’s East Cobb suburb, the Atlanta Business Chronicle confirms. The opening is anticipated as the first in a rollout of as many as three to five new Atlanta stores. (26) Southeast 4 Portland-based Killer Burger has added two new director level positions as it ramps up franchising efforts with a focus on AZ, CO and TX. The first of two Arizona stores is open with the second store opening in early 2019. Also, they have appointed a new Director of Operations for their corporate stores. (23) A survey of Surprise, AZ residents in 2015 found that half of them wanted a Costco in their city. Since then, political and civic leaders have been trying to figure out a way to entice Costco to open one of its clubs in Surprise. That included celebrating the chain’s birthday with a party and giant cake this month. (30) Discount Tire, the nation’s largest independent tire and wheel retailer, has opened the franchise’s 1,000th tire store located in Phoenix, Arizona. The tire retailer currently has stores in 34 states with plans to expand in three more states in the near future. (39) SAN ANTONIO — Walmart will close three neighborhood market stores in San Antonio as the retail giant makes adjustments to its overall strategy in Texas. (1) Green Zebra Grocery, an Oregon chain of healthy convenience stores, plans to expand along the West Coast in the next five years. She plans to build two dozen locations reaching from Southern California to Seattle over the next five years, but could open as many as 100 stores. A typical Green Zebra store is about 5,000 square feet. Green Zebra’s inaugural store raked in $4 million in revenue in 2014 and the company is on pace to hit $12 million this year.(2) New Bakery in Texas and the South East is looking for franchisees. Currently, 11 Buttermilk Sky Pie Shops are open and baking goodness – located in Texas and the Southeast. Buttermilk Sky Pie Shop is excited to announce their newest pie shop opening (Late Sept. 2018) in Mansfield, Texas. Investments can range from $270,324 to $348,339 depending on your site location and lease. Ideally need 1,000 sq ft space. (3) H-E-B grocery retailer operates 343 stores in Texas and 62 in Mexico and had sales of more than $25 billion last year. H-E-B's sales per store are about three times the U.S. median weekly sales of $398,000, or $20.7 million a year. The new Midway store has 250 employees and its department heads have culinary degrees and have been personal chefs and restaurant owners. "We only have so much bandwidth," he said. It took two years to build the new Midway store. And demographics have to support it.” (35) Southwest & West 5 First Watch plans to open at least 100 more “urban farm” concept restaurants by the end of 2019. The company has 330 restaurants in 29 states including about 260 First Watch restaurants and 70 eateries under The Egg & I brand. The chain seeks freestanding units near upscale retail or end cap locations, around 3,500 square feet.(8) Domino’s plans to take advantage of Papa John’s woes, CEO said that the chain was preparing to build about 2,350 restaurants in the next decade and build 2 supply chain centers in the next 2 years to keep pace with growth. (9) Ross operates 1,680 stores in 38 states. Company executives said this month that they were aiming to open 3,000 stores at a pace of 100 a year. The company also operates six distribution warehouses: Three are in California, two are in South Carolina and one is in Pennsylvania, according to its website. (10) SoBol, a Long Island based company wants to have 100 open by 2022, Graf said. The chain has 18 locations open in the North East. (25) American Eagle plans 50 to 80 new Aerie stores. (36) Five Below has opened 67 new stores so far in 2018 in addition to its 625 stores it already operates. It plans to open an additional 50 stores this quarter, CEO Joel Anderson said in an earnings call last week. Five Below is one of the country's fastest-growing retailers, with 22.7% net sales growth year-over-year. (38) Subway will remodel 9,000 stores a year adopting a new look Fresh Forward look. Subway has 44,000 stores worldwide. Beyond design initiatives, the company is revamping its culinary program with an eye towards adding regional flavors in markets where it makes sense. (27) Inspire Brands, parent company of Arby’s, Buffalo Wild Wings and Rusty Taco, has agreed to buy Sonic Corp. for $2.3 billion, including Sonic’s debt, or $43.50 per share. (28) National Expansion In Other News… 6 Michael Kors Holdings is renaming itself Capri Holdings after the company’s deal to acquire Versace. The luxury goods manufacturer plans to open about 100 new stores throughout the world in addition to the 200 it currently operates while expanding its online business. Michael Kors, which acquired Jimmy Choo last year, expects the addition of Versace to drive its annual revenues to $8 billion. (29) Neiman Marcus Group ended its fiscal year with four straight quarters of sales gains. Even so, the company continues to operate under $5 billion in debt with a loan of $2.8 billion due in Oct. 2020. The retailer is seeking to restructure its debt. (31) Camping World Holdings "What we're ultimately, Jim, trying to do is find the millennial, the millennial who doesn't want to go in their father's … motor home," the CEO said. "They want to go in a smaller unit, a lighter unit. They want to pull it with their Prius. And we've made a concerted effort, through Gander, to enter that market." (32) Same-store sales at Barnes & Noble fell 6.1 percent year-over-year in the most recent quarter while online revenues fell 14.3 percent. The chain has been engaged in a legal battle with former CEO Demos Parneros, who alleges he was fired after a deal to sell the company to an unnamed book retailer fell through. The board of Barnes & Noble, which fired Mr. Parneros in July, said he was let go due to unspecified violations of corporate policy. B&N has 600+ stores and 23K employees. (34) Washington REIT, whose $2.4 billion in commercial real estate holdings reside exclusively in the Washington D.C. metro, may be looking to get out of the retail business, according to Bloomberg. While the company has made no formal announcement, the report said Washington REIT had contacted several potential buyers for its retail portfolio, which accounts for about a third of its holdings. (37) An investment banking firm this month suggested Papa John’s should close up to 250 stores in non-core markets such as the West Coast and in the Northeast as a result of sagging sales. (11) Citing statistics from the International Council of Shopping Centers, the report said non-retail and non-restaurant space in shopping centers increased to 23.1 percent this year from 19.2 percent in 2012. Forty-four percent of shoppers say they prefer to visit shopping centers that have a wide variety of non-retail tenants. (11) TravelCenters of America has sold its freestanding convenience stores. The company has entered into an agreement to sell its Minit Mart convenience store business for approximately $330.8 million to EG Group, a privately held convenience store retailer based in the United Kingdom. The Minit Mart portfolio includes 225 stand-alone convenience stores. (43)