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HomeMy WebLinkAbout4.a. Project & Economic Development Coordinator Update EXECUTIVE SUMMARY Port Authority Meeting Date: January 21, 2020 AGENDA ITEM: Project & Economic Development Coordinator Update AGENDA SECTION: Old Business PREPARED BY: Eric Van Oss, Economic Development Coordinator AGENDA NO. 4.a. ATTACHMENTS: Retail Strategies Update, ED Contact List, Retail Predictions 2020 article APPROVED BY: LJM RECOMMENDED ACTION: Information Item ISSUE Previous discussions with the Council and Port Authority indicated a desire for more information regarding completion of workplan activities. The following highlights some of the project and economic development activities since the last Port Authority meeting. Companies marked with an asterisk are from staff’s cold call list. Commercial Contacts: Kwik Trip: Staff continues to work with Kwik Trip after they indicated interest in the location at Akron Avenue. Carousel Way: Davis is hoping to have a lease signed by the future user in January, which would allow for a February planning application submittal, The Davis company was also looking for an existing 10,000 square foot space to rent in Rosemount. They were unable to find suitable space so they will start to search for an acre property for a second medical tenant. Multi-tenant Retail: Noodles has picked up their permit and should be starting construction shortly. Israelson property: The Mayor and staff met with a restaurant/retail group who might be interested in one of the Israelson sites. Staff has forwarded him all requested information. Warren has also indicated there is some interest in a memory care building on his site. Merchants Bank site: Staff has been notified by the potential buyer that the deal has fallen through. Staff has suggested other locations in the City. 2 Akron Ave: The Council hired Westwood to put together a site plan for the eastern parcel, including the City Recreation Center. Per the Parks and Recreation Director, they continue to work on the layout. MGM retail space: Spoke to the leasing agent this week. She continues to talk to a few different users. One wants a portion of the space and another would want the entire site; if either decide to move forward. CDA vacant property off Akron Avenue: The CDA is listing the site with CBRE. The site is zoned for high density residential. Companies contacted include Dominium, Aeon, Common Bond, and Schafer Richardson. *Schafer Richardson: Staff met with Schafer Richardson regarding potential Rosemount developments. They specialize in mixed use, affordable housing and redevelopment projects. They were made aware of the CDA property in addition to the Morrison Redevelopment. Midwest Fastener Supply: A company that manufactures fasteners (screws, bolts) via 3D printing is searching for an acre parcel for a new building. They are based in Eagan, but are looking to expand in a new facility. They were asking about the city owned property in the business park. This should be a further discussion topic for the Port at an upcoming meeting. *Hillcrest Development: Staff reached out to Hillcrest – an industrial and retail developer in the Twin Cities. They are currently not looking for new development opportunities and are focusing on renovating their existing building in the first half of 2020. *Hyde Development: Staff spoke with Paul Hyde regarding industrial redevelopment. Hyde Development has increased their spec industrial development due to strong growth in the Twin Cities market, particularly among 3rd party logistics companies. Staff provided available sites in the business park and highlighted the recently certified Xcel and DEED Shovel Ready sites. *Camp Bow Wow: Staff spoke with Diana Hall the Burnsville/Eden Prairie Camp Bow Wow franchisee. She is not looking to expand beyond two locations currently; however, she put staff in contact with the corporate office for other potential franchisees in Dakota County. *Fleet Farm: Staff reached out to Fleet Farm regarding a Rosemount location. They remain interested in Rosemount but are not actively searching for a site in 2020. Beirut Restaurant: Staff spoke with John Khoury regarding a Rosemount establishment with an end of 2020 timeframe. Staff is meeting with Mr. Khoury in January. *TPI: Staff spoke with Chris Flagg from TPI Hospitality regarding a hotel development. They are not currently looking for new opportunities in Dakota County as they believe the recent development in Eagan and the Mall of America has disrupted the submarket. They do believe Rosemount has attractive sites for development once the new supply gets absorbed into the market. *JLL: Staff was approached by JLL looking for a 70-acre site within an hour of Minneapolis. Information relating to sites that fit the parameters was provided. 3 *Lund Food Holdings: Staff contacted a representative with Lund’s parent company specifically on a new location on Akron. There is potential interest, especially if more residential and the rec center are developed. *Kowalski’s: Staff contacted Robert Kowalski (real estate lead for Kowalski Markets) regarding a market site near Akon Ave. As with several of the other grocers/supermarkets there is interest; however, there are concerns about the number of adjacent residential developments and distance from new market developments in Lakeville/Apple Valley. INDUSTRIAL UMore Industrial site: Continuing to pull together information in response to the recent meeting Biscayne Business Park/ Cerron Commercial Properties: nothing new due to wintertime. Rosemount Business Park: No new information currently. Marketing: Staff has compiled a list of companies and developers to contact in 2020. It is a mix of large retailers, higher end chain restaurants, and developers (housing, mixed use, medical, industrial, and commercial). This list does not include individuals looking to start a new business or with businesses a single location (such as breweries). Please contact staff with any additions or recommendations to this list. Staff will update the Port Authority on the status of cold calls that result in a conversation or meeting with a company representative. The initial list has 123 companies of which 23 have been contacted resulting in 10 conversations. Workforce: DCTC: Staff is working with DCTC on holding an April 2020 Community Forum on Employer-Educator Partnerships. This forum will include Rosemount businesses that have established training programs as well as businesses looking to create their own pipelines. The next planning meeting is scheduled for February 2020. Events: 2020 Regional Economic Conditions: Staff attended the Federal Reserve Bank of Minneapolis’s 2020 Regional Conference. The conference touched upon sector trends within the Midwest. Sector spotlights included, agriculture, healthcare, mining, and manufacturing. Healthcare is expected to be strong in 2020 and manufacturing will continue to grow at a slower pace. Workforce shortages are a persistent issue throughout the upper Midwest and hampers faster growth. Dakota County Regional Chamber Annual Meeting: Staff attended the Dakota County Regional Chamber. The event highlighted successes in 2019 and provided a look forward to 2020 for Dakota County businesses. We make retail happen. RETAIL RECRUITMENT UPDATES •UPS Store –Our team reached out to see if they would consider another location so close to their Apple Valley location. The real estate director let us know that he needed to check on the sales numbers for that store and he would get back to us. At first glance he thought it was too close; however, he said it could be considered if the numbers were really good. •Schlotzsky’s –We reached out see if they would consider the market. The closest location is in Edina. We are awaiting a response at this time and will continue to follow up. •Cushman Wakefield –Ben Drew –We reached out to Ben to get the latest update on the 19 acres on Akron and 145th. He let us know he doesn’t handle this property anymore. However he did speak to the lack of residential to support any major retail at this time and said the owner doesn’t plan to do any development anytime soon. •KW Commercial –Ben Little –Our team reached out to check the status of the Anytime Fitness property. We are waiting to hear back at this time. •Autozone –We reached out to the broker for them again to see if they were ready to proceed. He let us know that until there is more action at Rosewood Center that they planned to hold off. Once other things begin to happen at this development, they would consider a location here. •Panera Bread –We contacted this group and they told us that at this time this is too close to their Apple Valley location. They told us to stay in touch should this change in the future. ROSEMOUNT, MINNESOTA BETH MILLER PORTFOLIO DIRECTOR 205.314.0385 beth@retailstrategies.com *Confidential* December 2019 Company Industry Kraus Anderson Healthcare/Industrial Davis Healthcare Scannell Industrial Meritex Industrial Opus Industrial Ryan Companies Healthcare/Industrial Duke Realty Industrial Oppidan Industrial Hyde Development Industrial CSM Industrial Interstate Development Industrial United Industrial Appro Development Industrial Frauenshuh Inc Healthcare/Office Trammell Crow Co.Healthcare/Industrial Hillcrest Development Industrial Java Capital Partners Commercial Copper Creek Commerical/Retail IRET Multifamily McGough Office/Industiral Hoyt Properties Inc.Industrial Crawford Merz Industrial ARTIS Real Estate Investment Trust Lee & Associates Real Estate Investment Trust Transwestern Real Estate Investment Trust CRBE Real Estate Investment Trust JR Hospitality Hotel TPI Hospitality Hotel MaaDaaDizi Hotel/Retail JLL Commerical Hy-Vee Grocery Kwik Trip Gas Station Casey's Gas Station Lunds Grocery Fresh Thyme Grocery Trader Joe's Grocery Kowalski's Grocery Midwest One Financial Sunrise Banks Financial Premier Banks Financial Bell Bank Financial Heartland Credit Union Financial Copper Creek Retail/Curling Sprouts Grocery Total Wine Liquor HomeGoods Home Improvement UltaBeauty Retail Sierra Retail/Clothing The Tile Shop Home Improvement Erik's Bike Retail Menards Home Improvement Choice Bank Financial Apogee Enterprises Manufacturing Tennant Co.Manufacturing Cardinal Glass Industries Manufacturing Speedway Gas Station Dicks sporting goods Sheels sporting goods Play it Again Sports sporting goods Petco Retail PetSmart Retail camp bow wow Service Wells Fargo financial Common Bond Affordable Housing Dominium Affordable Housing Senior Housing Partners Senior Housing/Retail Solhem Cos.Multifamily Lupe Development Multifamily Excelsior Group Multifamily Water Senior Living and Shelter Corp Senior Housing/Multifamily Schafer Richardson Multifamily/Mixed-Use True Food Kichen Fast Casual Tropical Smoothie Café Fast Casual Five Guys Fast Casual Blaze Pizza Sit Down Buffalo Wild Wings Sit Down Yard House Sit Down Texas Roadhouse Sit Down Chilli's Sit Down Old Country Buffet Sit Down Pot Bellies Fast Casual Red Savoy Sit Down Cannon River Winery Brewery/Winery Saint Croix Vineyards Brewery/Winery Alex Bailly Vineyard Brewery/Winery Falconer Vineyards Brewery/Winery Punch Bowl Socail Sit Down Panera Bread Sit Down Brueggers Fast Casual Roit Sit Down The Tavern Grill Sit Down Bonefire Wood Fire Sit Down Wild Boar Sit Down Green Mill Sit Down Brick and Bourbon Sit Down Buca di Beppo Sit Down P.F Changs Sit Down Café Zupas Sit Down Redstone American Grill Sit Down Rusty Taco Sit Down Cowboy Jacks Bar/Grill Davanni's Pizza Sit Down Muddy Cow Sit Down Porterhouse Steak Sit Down Old Chicago Sit Down Leeann Chin Fast Casual Smash Burger Fast Casual Bakers Square Sit Down Cheesecake Factory Sit Down Fairview Provider Alina Provider HealthPartners Provider Mayo Provider Lifetime Gym/Wellness Kraus Anderson Developer Davis Developer Frauenshuh Inc Developer Trammell Crow Co.Developer Core Power Gym/Wellness LA Fitness Gym/Wellness Snap Fitness Gym/Wellness Orange Theory Gym/Wellness Presbyterian Homes and Services Provider 1/15/2020 Six Predictions for Retail Real Estate in 2020 https://www.nreionline.com/retail/six-predictions-retail-sector-2020 1/4 It was a brutal year for the U.S. retail sector, despite a robust economy and healthy consumer spending. Massive store closures, retailers’ right-sizing, changing consumer behaviors, new delivery models and the upheaval of e-commerce competition impacted the sector Six Predictions for the Retail Sector in 2020 Retail real estate had just had one of its toughest years ever. Will there be relief in sight in 2020? Liz Wolf | Jan 08, 2020 1/15/2020 Six Predictions for Retail Real Estate in 2020 https://www.nreionline.com/retail/six-predictions-retail-sector-2020 2/4 competition impacted the sector. However, there’s also opportunity. Traditional retailers are rethinking their physical location strategies and beefing up their online presence, while clicks-to- brick retailers are expanding their physical footprints. “Retail has never been more interesting than it is right now and it’s never been harder,” says Deb Carlson, a director in the Twin Cities office of real estate services firm Cushman & Wakefield. “The roles are out the window. Everyone is sitting back and saying, ‘How do I tweak what I’m doing?’” NREI asked retail real estate experts what might await the industry in 2020. Here are their top predictions. 1. Retail closures/bankruptcies will continue to be a burden for landlords. At least one major department store will file bankruptcy, likely J.C. Penney, according to Nick Egelanian, founder/president of SiteWorks Retail Real Estate Services. “J.C. Penney has had the worst sales trend, and despite testing a new prototype in Dallas, I think they are just too far gone,” he notes. Meanwhile, Macy’s could announce the closure of up to 250 underperforming stores, in Egelanian’s view, and additional bankruptcies will be concentrated among mall-dependent brands. In addition, at least one major mall REIT bankruptcy might take place in 2020, likely CBL & Associates, Egelanian says. CBL, whose stock has been beaten down already to about $1 per share, has no real strategy for replacement of department stores and other mall staples and is heavily exposed to industry headwinds, Egelanian notes. 2. There will likely be more restaurant bankruptcies this year, says Lauren Leach director of real estate advisory services at consulting 1/15/2020 Six Predictions for Retail Real Estate in 2020 https://www.nreionline.com/retail/six-predictions-retail-sector-2020 3/4 says Lauren Leach, director of real estate advisory services at consulting and advisory firm Conway MacKenzie. “This goes for both quick-serve restaurants and full-service dining,” Leach notes. “The sector is oversaturated, pressure to remodel exists, and consumers are turning towards local and healthier options. Much like retailers, many restaurants are faced with massive debt and need to raise menu prices to keep afloat.” Furthermore, restaurant chains that haven’t kept up with recent popular delivery options have been cast aside, Leach says. There also will be a bigger push to incorporate mobile ordering, which means adjusting physical restaurant layouts to accommodate for customers picking up food, she adds. 3. Digital/physical retail will continue merging in innovative ways. The “magic retailer” is the one that can do both well, Carlson says. Retailers will no longer choose just one lane, but seek to thrive with an omni-channel model that provides a seamless shopping experience through physical stores, online sites, social media and mobile browsing. “The maturation of e-commerce and the continued evolution of bricks-and-mortar store layouts—or store closures—leads to retailers analyzing a wealth of consumer data to better minimize any friction in the purchase lifecycle and personalize to specific consumer needs in order to trigger a purchase,” says Ricardo Rubi, retail marketing specialist/partner at New York consulting firm Simon- Kucher & Partners. 4. Mall owners will continue to focus on evolving to meet changing consumer tastes, meaning more “experiences” and mixed-use elements. Food halls, theaters, gyms, restaurants and entertainment venue will remain in demand as landlords work to find the right tenants to draw foot traffic. “And experiential means more than just ‘give me a glass of wine with my shopping,’” Carlson notes. “It means give me a TJ Maxx, so I can dig around and find something unique It’s any way you can engage the customer to have to show 1/15/2020 Six Predictions for Retail Real Estate in 2020 https://www.nreionline.com/retail/six-predictions-retail-sector-2020 4/4 find something unique. It s any way you can engage the customer to have to show up. It’s all about getting people in, and you have to make it fun.” Landlords will also continue adding non-retail anchors like co-working offices, hotels, apartments, medical and seniors housing to draw consumers to their properties. 5. Artificial intelligence will play a bigger role in retail. “This will definitely be at the forefront and is even here now; we’re just not aware how it’s capturing our shopping journey,” says Anjee Solanki, national director of retail services for the United States with real estate services firm Colliers International. AI captures not only what shoppers intend to purchase, but what inspires them based on what they see through websites such as Amazon or Pinterest, Solanki notes. “The next time you’re looking for home-decorating inspiration, see what types of ads organically pop up in your web search. Data on holiday shopping was collected as early as June from “Pinners” searching for top-trending gifts.” 6. Delivery speed will be top of mind for retailers. “Warehouse automation allows merchants to deliver efficiently and quickly, cutting out the need for human labor,” Solanki says. At the same time, “same-day delivery,” heightened competition and costs associated with creating the best omni-channel experience will also create additional cost burdens for retailers, she adds.