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HomeMy WebLinkAbout5.b. Retail Trends EXECUTIVE SUMMARY Port Authority Meeting Date: December 21, 2021 AGENDA ITEM: Retail Trends and Land Use AGENDA SECTION: New Business PREPARED BY: Eric Van Oss, Economic Development Coordinator AGENDA NO. 5.b. ATTACHMENTS: National League of Cities Re-envisioning Retail APPROVED BY: LJM RECOMMENDED ACTION: Information Item BACKGROUND Retailers are expected to open more brick and mortar stores than they close for the first time since 2017. In a fast-growing community like Rosemount this presents an exciting opportunity to attract new business and become a more self-contained retail community, lessening the need for residents to shop elsewhere. Historically, Rosemount has segmented development by use and land use designation. Current retail trends and growth areas often encompass multiple uses and differ from past single use commercial areas. Looking forward staff believes it is important for elected officials to understand the intersection of retail trends and land use, so they are able to make informed decisions on projects that may differ from the historic development patterns. Retail Trends Box Stores: Traditional department stores are still closing more stores than they are opening. Specialty retailers are seeing more of a mixed bag, with growth in stores location for companies like The Home Depot and Dick’s Sporting Goods. Others like CVS are closing locations. Experiential Retail: More stores are adding experiential space to attract shoppers. Dick’s Sporting Goods and REI are including features such as climbing walls and putting greens. Clothing retailers, such as Levi’s, are including cocktails lounges. Grocery Anchored Open Air Shopping: These shopping destinations include larger, open-air shopping complexes as well as strip malls, which typically feature an anchor store and several smaller stores or services like pharmacies and fitness studios. Grocery stores are often the anchor and help drive their success. Foot traffic in these suburban open-air shopping areas has already surpassed 2019 levels. Neighborhood-embedded shopping centers that could accommodate outdoor experiences were well positioned to quickly recover from the pandemic. These centers are generally mixed and include more streetscaping, pedestrian connections, and quasi-public space that can be used for live events that drive additional foot traffic. Blurring of Retail and Distribution: Stores have become integral in fulfilling e-commerce orders. They serve as distribution hubs and convenient places for shoppers to pick up and return online purchases. As online sales grow, so too does the cost of shipping goods to customers’ homes. Retailers are finding it is less expensive to ship items from their stores, which are located closer to where people live. For example, Target estimates that it costs on average 40% less to ship orders from its stores, compared with the expense of shipping from its warehouses. Impact on Land Use Staff expects Rosemount will begin to see a divergence between retail trends and the City’s existing code. In the near term it is important to acknowledge these trends as new projects are considered by the Planning Commission and Council. It is likely development and new retail projects will ask for deviations from the existing code to accommodate the changing landscape. Some examples include: o Reduced parking in favor of patio or quasi-public space. o CUP requests to allow additional uses within a commercial district.  Example: Small-scale or artisan manufacturing — businesses creating a tangible product that can be replicated or packaged — in a retail space. o Retail stores that also function as distribution centers. In the longer-term land use and zoning regulations should be designed with flexibility that decrease regulatory hurdles. A code analysis would help to find obsolete overly burdensome regulations and streamline the code in a more future oriented way. For example, broader, more accommodating definitions of commercial uses has helped cities ensure responsiveness to market adjustments and encourage shorter periods of vacancy. Acknowledging the importance of public space and neighborhood connectivity, dated regulation related parking minimums, landscaping, sidewalk width, and circulation could be brought in line with current trends. Staff believes keeping pace with these trends is pivotal to Rosemount maintaining its reputation as a pro-growth and pro-business community to invest in. RECOMMENDATION None. Informational and discussion item.