Mack Avenue Retail & Restaurant Market Analysis Grosse Pointe & Detroit, Michigan Prepared for: City of Grosse Pointe Park City of Grosse Pointe City of Grosse Pointe Farms City of Grosse Pointe Woods City of Detroit Prepared by: Gibbs Planning Group 12 July 2016 TABLE OF CONTENTS INTRODUCTION .................................................................................................................. 1 Executive Summary ............................................................................................................. 1 Background .......................................................................................................................... 3 Methodology ......................................................................................................................... 4 Trade Area ........................................................................................................................... 6 Demographic Characteristics ............................................................................................... 7 Tapestry Lifestyles ............................................................................................................... 9 Employment Base ................................................................................................................ 12 TRADE AREA CHARACTERISTICS ................................................................................... 14 Location ................................................................................................................................ 14 Access .................................................................................................................................. 15 Other Shopping Areas .......................................................................................................... 16 SUMMARY OF FINDINGS .................................................................................................... 19 2019 Supportable Retail and Appropriate Tenant Discussion .............................................. 21 Retail Category Definitions ................................................................................................... 21 Shopping Center Definitions ................................................................................................. 24 Rationale ............................................................................................................................... 25 Limits of Study ....................................................................................................................... 25 APPENDIX ............................................................................................................................ 27 Exhibit A: Primary Trade Area Business Summary .............................................................. 27 Exhibit B: Primary Trade Area Community Profile ................................................................ 29 Exhibit C: Primary Trade Area Housing Profile .................................................................... 35 Exhibit D: Primary Trade Area Dominant Tapestry Map and Descriptions ........................... 37 INTRODUCTION Figure 1: Aerial photo of one of the key intersections of the Mack Avenue study area. In Grosse Pointe Woods, Mack Avenue is within the municipal jurisdiction; for the remainder of the study area it serves as the border with Detroit. Executive Summary This study finds that the Mack Avenue study area can presently support up to 283,500 additional square feet (sf) of retail and restaurant development, generating over $73.6 million in new sales. By 2021, household income growth in the primary trade area could increase the total captured sales to $77.3 million. The demand could partially be absorbed by existing businesses and/or with the opening of 80 to 105 new restaurants and stores. Additional retail development in the study area can provide needed goods and services for the existing surrounding consumer base of nearby residents, employees and regional visitors. Furthermore, adding to the critical mass of retailers and restaurants in the study area can increase the vibrancy of the study area and strengthen the pull of trade area consumers. Apart from the still evolving downtown Detroit and suburban malls in Oakland and Macomb County, the area is underserved by desirable shopping and an urban experience. The demographics of the trade area represent a pent up market for a variety of retail offerings and Mack Avenue has several advantageous locations to bring these retailers to the market. The leading categories of supportable retail growth are grocery, general merchandise, electronics, department store merchandise, sporting goods and pharmacy. GPG understands the Grosse Pointe communities may be implementing a new high-speed fiber optic cable network in the near future. Similar fiber systems in Chattanooga, Tennessee and Kansas City, Kansas have generated significant booms in housing demand and have created thousands of new jobs. While there is no data to forecast the network’s potential impact on Grosse Pointe’s retail sales, new housing demand and job creation will likely generate a notable increase in Grosse Pointe retail and restaurant sales beyond the estimates of this study. Mack Avenue Retail Market Study 1. Gibbs Planning Group, Inc. 12 July 2016 The five Grosse Pointe communities, Grosse Pointe Park, Grosse Pointe City, Grosse Pointe Farms, Grosse Pointe Woods and Grosse Pointe Shores, altogether cover 10.4 square miles, bordered by Detroit on the south and west, Lake St. Clair on the east and south, Harper Woods on the west and St. Clair Shores on the north. Grosse Pointe has many famous historic estates and is home to many well-to-do professionals who work in Detroit and throughout southeastern Michigan. With history dating back to the 1800s, Grosse Pointe has gained a reputation as a notable American suburb with successful businesses, ample recreational activities, quality public services and exceptional schools. The study area is the approximate four-mile stretch of Mack Avenue from Alter Road to 8 Mile Road. There are a number of contemporary shopping centers mixed with stretches of traditional retail development. A wide variety of national, regional and local retailers exists along Mack Avenue; however, there are a number of advantageous sites for future development. While there are a number of opportunities for continued development within the existing Grosse Pointe Park, City and Farms shopping areas, Mack Avenue presents an ideal location to attract new retailers to the market and to improve the corridor for residents of Grosse Pointe and Detroit. Table 1: 2016 Supportable Retail Est. 2016 Est. 2016 Number Retail Category Supportable SF Retail Sales of Stores Retail Apparel & Shoe Stores 14,100 sf $2,891,750 9 - 12 Book & Music Stores 4,000 sf $761,900 1 - 2 Department Store Merchandise 12,500 sf $2,257,200 5 - 6 Electronics & Appliance Stores 13,100 sf $4,270,500 5 – 6 Furniture & Home Furnishings Stores 18,300 sf $4,829,550 5 - 7 General Merchandise Stores 36,700 sf $6,415,500 8 - 10 Grocery & Specialty Food Stores 56,800 sf $19,885,850 3 - 5 Jewelry Stores 5,400 sf $2,013,750 3 - 4 Lawn & Garden Supply Stores 2,700 sf $576,200 1 - 2 Miscellaneous Store Retailers 38,100 sf $8,548,350 11 - 15 Office Supplies & Gift Stores 9,000 sf $1,926,400 8 - 9 Pharmacy 10,400 sf $3,729,600 1 - 2 Sporting Goods & Hobby Stores 12,300 sf $3,015,950 3 - 4 Retail Totals 233,400 sf $61,122,500 63 - 84 Restaurants Bars, Breweries & Pubs 6,000 sf $1,936,000 2 - 3 Full-Service Restaurants 15,300 sf $4,275,600 4 - 5 Limited-Service Restaurants 20,600 sf $4,439,750 7 - 8 Specialty Food Stores 8,200 sf $1,836,000 4 - 5 Restaurant Totals 50,130 sf $12,487,350 17 - 21 Retail & Restaurant Totals 283,500 sf $73,609,850 80 - 105 This study further finds that the Mack Avenue primary trade area has a population of 151,600 persons, decreasing under current trends to 149,000 persons by 2021. Median household income in the primary trade area is $50,000, which is similar to state and national figures. The average household income is higher than state and national averages at $75,800, representing the influence of high-wage earning individuals. The trade area is well educated, as 34.7 percent of adults over the age of 25 have earned a bachelor’s degree or higher. Housing favors owner- 2. Mack Avenue Retail Market Study Gibbs Planning Group, Inc. 12 July 2016 occupied units, which comprise 57.7 percent of all housing, compared to 25.2 percent renter- occupied households; the vacancy rate is 17.1 percent. The primary trade area has a labor base of 48,900 workers. Figure 2: The Mack Avenue corridor runs through Grosse Pointe Woods and is the border between Grosse Pointe Park, the City of Grosse Pointe, Grosse Pointe Farms and Detroit. Background Gibbs Planning Group, Inc. (GPG) has been retained by the Grosse Pointe communities to conduct a retail feasibility analysis for an approximately four-mile stretch of Mack Avenue running from Alter Road to 8 Mile Road. The area serves as an important corridor for residents of Grosse Pointe, Detroit and commuters who use Mack Avenue. The vibrancy varies throughout the corridor, but there are a number of valuable shopping centers and destinations as well as advantageous sites for infill development or redevelopment. Many residents and public officials instinctively see the opportunity for additional retail and restaurant development