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Downtown Market Analysis 2010

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Downtown Market Analysis 2010 Market Analysis Downtown Rolling Meadows Prepared for the City of Rolling Meadows June 30, 2010 TABLE OF CONTENTS I. INTRODUCTION AND SUMMARY OF CONCLUSIONS .................................................. 1 II EXISTING CONDITIONS IN DOWNTOWN ROLLING MEADOWS ................................. 5 III. SURVEY RESULTS ........................................................................................................ 13 IV. RETAIL MARKET ANALYSIS ......................................................................................... 17 V. RETAIL RECOMMENDATIONS ..................................................................................... 30 VI. RESIDENTIAL MARKET ANALYSIS .............................................................................. 34 VII. RESIDENTIAL RECOMMENDATIONS .......................................................................... 46 ADDENDA Downtown Rolling Meadows Commercial Inventory Survey Results Major Shopping Centers within Three Miles of Rolling Meadows Big Box Retailers and Grocery Stores within Rolling Meadows Market Area Grocery Prospects for Rolling Meadows Plaza I. INTRODUCTION AND SUMMARY OF CONCLUSIONS Background to the Assignment Goodman Williams Group was retained by the City of Rolling Meadows to conduct a market study of its Downtown, which extends along Kirchoff Road roughly from Owl Lane on the west to Oriole Lane on the east. Specifically, the consultants were asked to make recommendations on the redevelopment of two key underutilized properties: The 11-acre site at the Southeast corner of Kirchoff Road and Meadow Drive. (The Rolling Meadows Plaza site formerly anchored by Dominick’s). The 1-acre property located at the southeast corner of Kirchoff Road and Owl Drive. (The remaining Riverwalk parcel) Methodology To understand the potential of these two properties, the consultants completed the following tasks as part of broader commercial and residential market studies: Interviewed key downtown property owners and representatives of the real estate industry to learn of plans for their properties and ideas for the Downtown. Completed a brief survey of residents living in Downtown Rolling Meadows, asking about their shopping habits and preferences. Categorized the existing retail, service, and institutional uses in Downtown Rolling Meadows that were inventoried by City staff. Analyzed demographic, household, and economic trends to gain an understanding of the competitive position of Downtown Rolling Meadows. Inventoried retail, residential, and commercial development in Rolling Meadows and nearby Northwest Suburban communities that are comparable to, or competitive with, Rolling Meadows. Briefed members of the Rolling Meadows Economic Development Commission. Rolling Meadows Downtown Market Assessment Page 1 Goodman Williams Group and Mallon and Associates Summary of Commercial Findings and Recommendations Downtown Rolling Meadows is the geographic and civic heart of the community, with City Hall, the Post Office, and the Library located on, or just off, Kirchoff Road. Kimball Hill Park is located just north of Kirchoff and a number of civic/entertainment events are held to bring people to the Downtown. Downtown, however, is no longer the commercial center of Rolling Meadows. Most of the remaining retail and commercial uses along Kirchoff are located in the 130,436-square-foot Rolling Meadows Shopping Center, which is anchored by Jewel/Osco. To the extent that the City desires to expand the Downtown commercial base and attract additional retail development, efforts should focus on the redevelopment of Rolling Meadows Plaza located at the southeast corner of Kirchoff Road and Meadow Drive. The Plaza contains over 132,000 square feet of retail space, nearly all of which is vacant. The largest space is the former Dominick’s grocery (72,000 square feet), which closed in 2004. Previous efforts to redevelop the Plaza with a mix of retail and residential space were not successful. The likelihood of being able to attract an anchor tenant to utilize the entire former Dominick’s space is slim, given the regional pull of Woodfield Mall and other nearby retail centers. The former Dominick’s space could be subdivided and leased to a smaller anchor in the 20 – 45,000 square foot range. Potential retailers might be found in one of the following categories: Ethnic/Independent Grocers Hardware/Home Improvement/Building Materials Lawn and Garden/Furniture Fitness/Health Institutional Under this scenario, if all or part of the building could be leased to a “junior box” anchor tenant, additional smaller retailers, restaurants, and service businesses would likely follow. The re- positioned neighborhood center could include a total of 40,000 to 75,000 square feet of commercial space. As part of the redevelopment, the eastern end of the existing center could be demolished, freeing up acreage for future residential development. If a junior anchor cannot be secured for the center, the potential for additional commercial space at this location is more limited. This more conservative scenario envisions retail development along Kirchoff Road similar in scale to the Kirchoff Road Market. It is estimated that approximately 20,000 to 30,000 square feet of commercial space could be supported, and the rear portion of the center could be redeveloped for residential uses. Restaurants can be an important component of the redeveloped Downtown. An analysis of the expenditure potential of Rolling Meadows households suggests support for a number of independent eating and drinking establishments. Complementing the restaurant and retail tenants would be personal and professional service businesses. Rolling Meadows Downtown Market Assessment Page 2 Goodman Williams Group and Mallon and Associates Summary of Residential Findings and Recommendations Despite the recent downturn in the housing market, Downtown Rolling Meadows remains an attractive location for additional residential development. Appropriate residential development could target a variety of market segments, including: Independent Seniors Downsizing empty nesters Younger working households Townhouses or lower-density residential development would be appropriate on sites abutting side streets and the nearby single-family neighborhoods. Higher-density buildings would be more appropriate along Kirchoff Road. The Remaining Riverwalk Parcel along Kirchoff at the western end of the Downtown should be considered for future residential, rather than retail development. Wellington Partners, which completed the first three buildings, was unable to develop this forth parcel, which is now owned by the City of Rolling Meadows. In 2009, Affordable Housing Continuum proposed to build an affordable rental property with 40 apartments for adults aged 55 and older. This proposal, which was not positively received by the Economic Development Commission, included a small amount of ground floor commercial space. To maximize the price offered for the land, The City of Rolling Meadows should consider issuing a Request for Proposals (RFPs) for the property, setting up a competitive environment for interested developers. The RFP need not specify the exact nature of the housing that could be built on this parcel. Future residential development is also recommended on the back portion of the 11-acre Rolling Meadows Plaza site. The size and nature of any residential development will be dependent on the success of the commercial redevelopment, which is the priority for this site. Planning for future residential development can wait until commercial development is underway, at which time the for-sale residential market will likely have improved. Our research and analysis is contained in the remaining sections of this report. Rolling Meadows Downtown Market Assessment Page 3 Goodman Williams Group and Mallon and Associates Rolling Meadows Downtown Market Assessment Page 4 Goodman Williams Group and Mallon and Associates II. EXISTING CONDITIONS IN DOWNTOWN ROLLING MEADOWS Background on Rolling Meadows Rolling Meadows is located in Cook County, approximately 30 northwest of Downtown Chicago and eight miles northwest of O’Hare International Airport. The City enjoys excellent regional transportation connections via Interstate 90 (Jane Addams Memorial Tollway) and Route 53. Kirchoff Road is the first exit off Route 53 north of its intersection with I-90. The City is a mature community with an estimated population of 24,405. Incorporated in 1955, most of the community is developed with modest single-family homes that were built by Kimball Hill beginning in the 1950s. The City also has numerous multifamily housing developments, including some newer condominium developments located along Kirchoff Road. The City has a significant employment base, with a number of corporate office buildings located along the I-90 Corridor. Additional office and retail development is located along the major commercial arteries that traverse Rolling Meadows, including Golf, Algonquin, and Plum Grove Roads. Located geographically in the center of the community, Kirchoff Road had been the commercial center of Rolling Meadows. Retail anchors included Crawford’s Department Store, Sears Hardware Store, and both Dominick’s Finer Foods and Jewel/Osco. During the past several decades, the development of new community and regional-scale retail centers along the major arterials on the outskirts of Rolling Meadows and in neighboring communities eroded the position of those retailers on Kirchoff. In
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