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Board of Supervisors Gary F. Snellings, Chairman Laura A. Sellers, Vice Chairman Meg Bohmke Jack R. Cavalier Paul V. Milde, III Cord A. Sterling Robert “Bob” Thomas, Jr.
Anthony J. Romanello, ICMA‐CM County Administrator March 11, 2015
MEMORANDUM TO: Stafford County Planning Commission
FROM: J
SUBJECT: RC1400155; Reclassification – George Washington Village
The application is for a reclassification of Assessor's Parcels 28-87; 29-32, 29-36, 29-38A, 29-39C, 29-81, 29-82 and 29-83; 37-63; and 38-1, 38-1A, 38-3, 38-4, 38-4C, 38-55, 38-58C, 38-58D, 38-66, 38-69, 38- 70, 38-70A, and 38-71 from the A-1, Agricultural; A-2, Rural Residential; R-3, Urban Residential – High Density; B-2, Urban Commercial; and M-1, Light Industrial Zoning Districts consisting of 1,051.59 acres to the P-TND, Planned Traditional Neighborhood Development Zoning District, to allow for the development of a planned community, proposed to include up to 2,957 residential units and up to 1,550,000 square feet of commercial floor area.
A public hearing on the application was initiated on December 10, 2014, continued to January 14, 2015, February 11, 2015 and again to this meeting. During the meeting, staff addressed several questions the Commission had. The applicant reviewed modifications to the proffers and addressed other features of the project. The Commission had follow-up questions that are summarized below.
Requests directed to Staff:
1. Requested an evaluation of how the amended application addresses previous comments, including any new comments and issues.
Attachment 1 is the original summary of issues with a response to each comment, including several new comments.
2. Provide the turn-key cost to construct a fire and rescue station (excluding operation/staffing costs). Also, questioned if it would it be optimal to collocate the fire and rescue station with the station planned at the Stafford Regional Airport.
The following cost estimates illustrate the approximate costs associated with constructing, equipping, and operating a basic fire and rescue station for this project based on current cost estimates except as noted. These figures are estimated at levels consistent with a neighborhood style facility appropriate for this development. The estimates are slightly lower than that of a full- scale, fire and rescue station. These figures would increase over time.
1300 Courthouse Road, P. O. Box 339, Stafford, VA 22555‐0339 Phone: (540) 658.8600 Fax: (540) 658.7643 www.staffordcountyva.gov
Memorandum to: Stafford County Planning Commission March 11, 2015 Page 2 of 3
· $4,000,000 for the construction of a 10,000 Square Foot Fire Station for Engine & Medic Apparatus, Crew Quarters, and Flex Use/Community Space · $550,000 for a Class A Engine · $200,000 for a Patient Transport Unit · $900,000 for Annual Personnel Staffing of the Engine (from the Public Safety Staffing Plan) · $402,000 for Annual Personnel Staffing of the Ambulance/Medic (from the Public Safety Staffing Plan)
It is absolutely critical to highlight the fact that the immediate and most significant impact to Fire and Rescue services is the need to provide the Engine and Ambulance/Medic crew required based on the size and scope of this development. Although the revised site location is recognized as an acceptable component of the necessary infrastructure, it alone does not provide for the physical resources needed to respond to the significant operational impact that this development will have on Fire and Rescue services.
After review of the proposed development and analysis of the future needs for both the airport and the George Washington Village project, the Fire and Rescue Department does not believe that a co-located facility would be compatible or in the best interest of future resource deployment. The ultimate needs, timing and response requirements within these two very different areas of service would not be achieved in a single facility at or near the airport.
3. Requested a copy of the slide presented at the February 11th meeting with an overlay of the draft Airport Impact Areas over the development plan.
Attachment 2 includes this slide.
4. Will a Phase 1 be conducted for the cemeteries.
This is addressed in the Attachment 1 Summary of Issues & corresponding plats in Attachment 3.
5. Obtain additional comments from the School Board following amendments to the application.
This request has been forwarded to the School Board staff. As of the release of this memo, no additional response has been provided.
6. Obtain the impact this project may have on law enforcement.
Staff is in the process of obtaining this information from the Sheriff’s Department.
7. Determine if the stated in-kind proffer values are accurate?
Staff has requested background information for the basis for the cost estimates in the proffer statement and to date, has not received this information.
8. Concern was expressed that there may be a trend toward fewer brick and mortar stores, making it difficult for this much retail to be realized. The Commission requested staff obtain information on the latest trends in retail from Economic Development.
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A Retail Study commissioned by Economic Development and several recent articles that outline retail trends are provided in Attachment 4.
9. Requested staff evaluate the fiscal impacts of the project.
Staff has prepared a Review of Fiscal Impacts and Proffer Contributions for the project and will provide it under a separate cover.
Requests directed to the Applicant:
• Consider moving the phasing of the commercial development to an earlier point in the development, relative to the residential units.
• Consider expanding the number of properties eligible for water hook-ups to parcels beyond immediate adjacent parcels.
• Questioned the location of three cemeteries believed to be on the site. The applicant stated there are no cemeteries on the property. The first point in Attachment 1 includes additional information.
• Questioned if the applicant would replace any wells that are impacted, how long it might take, if pump and haul would work, and if providing a public water hook-up is the only alternative, provide more information as to how the process works.
• Research the history of well impacts that occurred during the development of Augustine North.
Also included are the latest draft proffers, dated February 11, 2015 (Attachment 5), proposed Ordinance O15-01 and proposed Resolution R15-05 (Attachment 6). The time limit for the Planning Commission to make a recommendation is March 11, 2015.
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Attachments (6) Attachment 1 Page 1 of 8
Summary of December 10, 2014 Staff Report Issues and Concerns George Washington Village (Originally prepared on January 14, 2015)
Status Update (Amended on March 11, 2015)
Cultural Resources
1. There are several resources present, including three cemeteries, a farm complex, and structures. The applicant is in the process of performing a Phase 1 Cultural Resources Study in the areas identified by staff, which will be submitted once complete. In addition, the applicant is proffering to complete the work prior to developing the site. Staff recommends the evaluation of the Phase 1 study prior to approval of the rezoning, as supported by policy 9.1.3 in the Comprehensive Plan.
The applicant noted that two of the cemeteries are off-site. These areas are excluded from the area being rezoned, but are located on the edge of the development. Staff notes there may be two other Cemetery sites within the subject property. Attachment 3 includes portions of the boundary plat and GDP that identify the location of the known cemeteries and potential development in the vicinity. Also, staff identifies the potential locations of the two other cemeteries.
Staff would recommend a Cemetery evaluation be conducted in the areas of the subject property immediately around the known cemeteries and confirmation of the presence of the other cemeteries.
The Stafford County Historical Commission was scheduled to discuss the cultural resources on the George Washington Village site on March 5th, including cemetery sites, but their meeting was cancelled due to inclement weather.
Regulating Plan/Generalized Development Plan
2. Staff notes that the applicant has not submitted a perennial stream evaluation for the site to verify the location of the CRPA. The CRPA serves as a basis for the limits of the T-1 zone. Since the transect zones are established upon zoning approval, staff recommends the rezoning not be approved until the CRPA limits are confirmed.
No change to this comment.
3. Staff notes that the T-4 zone requires three types of residential units. Although three residential dwelling types are noted in the Regulating Plan, the location of Village units are not identified in the layout on the Generalized Development Plan (GDP). The Village units should be identified on the GDP.
No change to this comment.
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4. It is required that all residential areas are within pedestrian sheds around civic buildings and uses. Staff notes that the active park, identified as a civic use, does not qualify under the pedestrian shed definition. Another use will need to be added or the plan that is consistent with the pedestrian shed requirements.
The applicant has resolved this comment as a result of modifications to the development plan. See additional comments at the end of this section.
5. A residential unit mix consistent with the GDP is stated within the monetary contribution section of the proffers, but the language does not establish those unit numbers as maximums.
No change to this comment.
Transportation
6. Several intersections along Courthouse Road, with the exception of the Ramoth Church/Winding Creek Intersection, are projected to have a failing Level of Service (below Comprehensive Plan recommendations) or further degrade (intersection delay). Staff points out some of the findings at the intersections along Courthouse Road:
• The Austin Ridge Drive intersection is projected to be a LOS F without this project. With the project, the overall intersection delay increases from 293 to 435 seconds in the PM peak hour. • The Mine Road intersection would degrade from a LOS C to LOS F in the AM peak, and worsen a projected LOS F with delays increasing from 82 seconds to 187 seconds. • Traffic exiting Kelsey Road and Rockdale Road onto Courthouse will experience major delays, increasing from 120 to 419 seconds in the AM peak hour and 52 to 869 seconds in the PM peak hour.
No change to this comment. To date, a revised TIA has not been submitted.
7. Staff notes that transportation facilities are proposed to be funded and constructed through the creation of a CDA, requiring separate action by the Board of Supervisors. Should the CDA not be approved, none of the infrastructure improvements or monetary contributions would be required.
No change to this comment.
8. Staff had suggested shifting the alignment of Mine Road to the east to minimize the amount of off-site land acquisition and provide closer proximity of Mine Road to the Town Center. The Applicant wishes to maintain the alignment proposed.
No change to this comment.
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9. Staff notes concern with a few of the access connections into the site from Courthouse Road:
• The proposed extension of Austin Ridge Drive, providing access from Courthouse Road to the proposed Town Center, may be problematic, specifically at the Courthouse Road intersection. This is the first intersection off of interstate 95 heading west. Traffic exiting Interstate 95 attempting to reach the far left lane to head south to the Town Center would create traffic conflicts. Staff recommends alternative methods of managing this weaving traffic pattern be considered to minimize conflicts.
No change to this comment.
• The proposal shows Kelsey Lane, a dead end street with rural residential lots, connecting through and providing a direct through connection to Mine Road. Staff noted the higher density development utilizing Kelsey Lane may negatively affect the residents on Kelsey Lane due to increased traffic flows and delays at the intersection with Courthouse Road. Staff suggests a connection not be provided to Kelsey Lane or access is designed to minimize impacts.
The applicant has addressed this issue by limiting access to Kelsey Lane for emergency access only. See additional comments regarding this under the New Comment section of this attachment.
Airport Impacts
10. The site is located under the northern flight pattern for the Stafford Regional Airport where there may be potential impacts related to exposure to aircraft noise and safety with respect both to people on the ground and the occupants of aircraft.
Impacts may be reduced slightly as residential uses have been prohibited within 3,000 feet of the runway centerline.
11. The Stafford Regional Airport Authority does not support approval of the request as it contends that the proposal is inconsistent with the land use recommendations in the Comprehensive Plan and note that any development in the horizontal zone may represent an incompatible use. They recommend a decision be delayed until a Land Use Compatibility planning effort is complete and adopted by the County.
No change to this comment.
Passive Park Area
12. A proposed 248 acre passive park is proposed to be dedicated to the County and located primarily in the stream valley areas along Accokeek Creek. The following comments are provided from Parks and Recreation in regards to the passive park:
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• The County doesn’t have a stream valley park policy and therefore this may not be desirable. • Request clarification as to how much of this passive area is usable by the public. • Request clarification as to the type of trail materials in the RPA • The Parks and Recreation Department has not completed the next study for parks utilization. It could show if additional parkland is needed and if so, what type of park land and where. That study might confirm the need for this passive park area in this area of the County.
No change to these comments.
Public Safety
13. The following issues were raised by the Fire and Rescue Department:
• Provide automatic fire sprinklers in all residential buildings. • Concern that the layout is not consistent with the P-TND concept. Fire Department access may be a concern due to P-TND parking thresholds not consistent with the more suburban development pattern. • Requesting full cash proffers consistent with the County’s proffer guidelines.
No change to these comments.
Environmental
14. Staff suggests that steep slopes greater than 25%, floodplains, and streams/wetlands located outside of CRPAs should be included in the T-1 transect zones, based on the T-1 definition and state permitting guidelines. The definition for T-1 states that this area “Consists of lands approximating or reverting to a wilderness condition, including lands unsuitable for settlement due to topography, hydrology or vegetation. This shall include all lands designated as critical resource protection area (CRPA), unless approved by the appropriate county, state, or federal offices to permit certain activities within the CRPA.”
The same comment applies. In addition, staff notes there are a few residential lots and Village Center parking lots located within 100-year floodplain area. Staff recommends these uses be removed from the 100-year floodplain.
15. An existing farm pond, located in the area of the Town Center, is planned to be filled in. Staff recommended this pond be preserved and retrofitted to provide stormwater management. Several stream channels drain to it and it may also be within a CRPA.
No change to this comment.
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16. Staff suggested relocation of the 40-acre active recreation park as it is located over several intermittent streams and wetlands, which may be difficult to avoid.
Although adjusted slightly, the same impacts apply to the natural resources.
17. The site is surrounded to the north, west, and south by rural residences that utilize private wells. Staff notes that mass clearing and grading will be required as part of the development and will result in increases in impervious surface. This will affect surface drainage and groundwater recharge that can have an effect on the subsurface aquifers that feed wells. In response to this issue, the applicant is proffering to provide necessary public easements for the purpose of extending public water and sewer lines to adjoining properties. The individual property owners will likely need to pay for the cost of constructing the utility connection.
The applicant is proffering to escrow 100,000 with the Department of Utilities to address impacted wells on adjacent properties.
Schools
18. If the UDA develops as recommended, the population would support new school facilities in closer proximity to the site. In addition to the elementary school site already proffered, the School Board staff estimated that the following additional facility needs would be generated by this project: • One (1) Elementary/Middle School Site (40 buildable acres) should be located within the Development and be available no later than 75% of development build out. Should include pedestrian connectivity (sidewalks) from any and all residential subdivision that are adjacent to the site. • One School Campus Site with 70 buildable acres, located outside of the proposed development but in the County’s USA and be available no later than 75% of development build out. • 4 Housing Lots for Stafford County Public School BOOTs program. One lot to be provided at 25% build out, one at 50%, one at 75% and one at 100%. • Appropriate Cash Proffers per County Proffer Guidelines including $850K for Turf Field at Colonial Forge HS to be provide at the time of application approval
The School Board has since commented and prefers cash as opposed to property. The applicant has designated a 20 acre elementary school site. Additional input is being requested from the School Board.
Comprehensive Plan
19. The project is not in conformance with some of the George Washington Village UDA recommendations. To the south of Accokeek Creek, single family dwellings are proposed throughout this portion of the UDA, where office development is proposed. Also, the proposed suburban form of development in the Villages is not consistent with the intent of the UDAs to promote a more urban form of development. Staff notes that the
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Board has requested the Planning Commission to reevaluate the UDAs and consider amendments.
Amendments to the proposal include prohibiting residential development on the portions of the site closest to the Stafford Regional Airport. Residential development has been replaced with commercial uses and public facilities. On the balance of the area to the south of Accokeek Creek, residential development is proposed where office development is currently recommended. In addition, the applicant has modified the street layout and reduced lot sizes, characteristic of a more urban design pattern.
The applicant has submitted a Comprehensive Plan Amendment application that addresses these inconsistencies. The application is being scheduled for a March 25th public hearing.
Fiscal Impacts
20. Staff notes that the study assumes construction of 1.5 million square feet of commercial space. The proffers require only 30,000 square feet of commercial space in order to exceed 750 dwelling units. The commercial development will provide positive financial benefits to the County and will need to occur for the results of the study to be realized. Additional phasing of the commercial development with the residential development would help to ensure a financial balance is achieved.
Additional phasing has been incorporated into the proffers. The Planning Commission has expressed concerns with the phasing proposed and the applicant was going to consider the Commission’s comments.
21. The proposed cash contributions are less than the County’s recommended monetary proffer guidelines of $25,935 per multi-family dwelling; $40,338 per townhouse; and $46,925 per single-family detached dwelling unit.
No change to this comment.
22. The proffer contributions do not include the customary annual adjustments based on construction cost indexes. Due to the size of this project, the timeframe is anticipated to extend out to year 2030, when expanses may be much different than current estimates.
No change to this comment.
Additional comments:
Site Layout: Staff notes that part of the adjustments that were made to the site layout include placement of commercial uses in sporadic locations along Woodcutters Road, somewhat separated from the residential villages. Staff recommends uses should be consolidated at main entrances to the residential villages.
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Town Center: In the town center, staff notes that the retail and residential uses are separate. In addition, the plan currently identifies only retail commercial use. Staff suggests allowing for flexibility in the use and design of the town center by: • allowing for both office and retail commercial uses, and • allowing a mix of uses in individual buildings (residential or office over retail) should that form of development be marketable in the future.
A question was raised about how much of project could be built without interchange. The Applicant stated that the Town Center could not be built without the interchange improvements. Staff notes that without such restriction in the proffers, there is no guarantee that some portion of the Town Center could not be built.
Other Transportation Proffers: Proffer 4(a)(ii)(2): Realignment and extension of Austin Ridge Dr. The proffer “Anticipates the improvements will occur within the first 5 years of the project. Staff notes that the statement is not enforceable and recommends a more specific timeline. Proffer 4(a)(ii)(3): Widening of Courthouse Road: The proffer “Anticipates the improvements will occur within the first 5 years of the project. Staff notes that the statement is not enforceable and recommends a more specific timeline. What happens if the development of GW Village is delayed? The Courthouse Road widening project has a regional benefit to existing development along Courthouse Road and areas to the west. Delays in the GW Village project could delay this needed road network improvement. Proffer 5.(a)(i) Construction of Mine Road: The proffers talk about building a 2 lane segment initially from Courthouse Rd to the North Village and then a future 4 lane extension from North Village to Ramoth Church Road. There is no apparent statement as to if or when the initial 2 lane segment will be widened to 4 lanes. In addition, an overall phasing schedule for the construction of Mine Road should be included.
Kelsey Road: The applicant’s proposal to limit access to emergency vehicles in response to citizen concerns may be in conflict with VDOT regulations and County Subdivision Ordinance Section 22-190, which establishes the number of street access connections that are required to adjacent subdivisions. In the case of this project, up to 23 access connections may be required, including this connection to Kelsey Road. Presently, the Plan appears to depict fewer than the required number of connections. The applicant can seek relief from this requirement through either an Administrative Exception or Waiver from the Planning Commission. The proposed access limitation is not specified in the proffers. If it is added, it should be clarified that it is subject to VDOT and County approval.
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CDA Funds: Staff recommends that the proffer language clarify how the proffer funds would flow through the process since the County is not responsible for the CDA’s debt. Consideration should be given to the applicant making proffer payments directly to the CDA, with proof provided to the County as payments are made.
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Airport Overlay Attachment 2 Page 1 of 1 Attachment 3 Page 1 of 5 Attachment 3 Page 2 of 5 Attachment 3 Page 3 of 5 Attachment 3 Page 4 of 5 Attachment 3 Page 5 of 5 Attachment 4 Page 1 of 70
THE FINAL REPORT:
RETAIL ATTRACTION & MARKETING FOR STAFFORD VIRGINIA
RESEARCH, ANALYSIS & MARKETING RECOMMENDATIONS
The Riddle Company April 2012 Attachment 4 Page 2 of 70
General & Limiting Conditions
Every reasonable effort has been made to ensure that the data utilized in this assessment reflect the most accurate and timely information available. The assumptions, recommendations and other information developed by The Riddle Company (TRC) are from demographic and market research, information and data provided by the County and its stakeholders, general knowledge of the marketplace, the industry, meetings and discussions with the County, their staff and local market representatives. No responsibility is assumed for inaccuracies in reporting by the County and stakeholders, its agents and representatives or any other data source provided for use in preparing this study. No warranty/guarantee or representation is made by TRC that any of the projected demand estimates or results suggested will actually be achieved. This report is intended to provide Stafford County with a platform for building a sustainable retail base and as a starting point for retail attraction marketing. It should not be used for purposes other than those for which it is prepared or for which prior consent has first been obtained from TRC.
This study is qualified in its entirety by, and should be considered in light of, these limitations, conditions and considerations.
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Table of Contents
Executive Summary 4 Situation Analysis 8 Salient Facts Factors and Messages, Worth Noting 11 Research Component 12 Market & Economic Overview 18 Retail Site Selection Dynamics 20 Retail Marketplace Profile 23 Psychographic Analysis 29 Stafford Retail Market Strengths, Constraints & Opportunities 32 Market Perception 37 The Trade Areas 37 Retail Opportunities 40 Retail Demand, Leakage, & Gaps 41 Retail Attraction Opportunities 45 Retailers to Target 47 Best Practices 48 The Retail Strategy 52 Retail Marketing & Attraction Objectives, Goals, & Tactics 52 The Retail Audience 53 Guiding Policies 54 Tactics and Absolutes for Achieving Retail Attraction Goals 55
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Executive Summary
Stafford County wishes to refine and accelerate its efforts to develop a vital and sustainable retail base, and it rightly views a relevant mix of retail as a critical cornerstone of this process. To ensure the targeting of demographically and psychographically appropriate retailers for Stafford County, the Department of Economic Development is taking steps to ensure critical information is available to support retail attraction. Part of the Department‟s strategic mission in pursuit of success is determining what retail classifications and chains most likely match up to the wants and needs of area residents, visitors and office workers, which retailers are currently looking to expand, and which have the greatest opportunity to succeed and prosper in the County across the long-term.
Stafford County retained The Riddle Company (TRC) to undertake a market assessment and develop a strategy, the first step of a long-term retail attraction initiative. TRC and its subsidiary Community Retail Catalysts, provide a broad spectrum of services to help communities succeed in retail attraction. For the County, it is important to note that this is not a market analysis. TRC‟s mission was to gather, collate and analyze available primary and secondary market and demographic research related to the demographics and psychographics of the people who work, live, visit, shop and “play” in the County, all to properly orient the retail attraction effort and to lay the initial groundwork for development of, (1) a strategically positioned, highly targeted, retail attraction marketing effort and, (2) a well-considered list of appropriate retail classifications and specific retailers to target with a range of attraction activities.
Timing for this effort is critical, due to the continued challenges in the capital and real estate markets and those impacting the overall economy, including retail. While many retailers and restaurants such as Whole Foods, Dick‟s Sporting Goods, Dunkin Donuts and Panera Bread, along with Wal-Mart and the TJX Companies continue to look for expansion opportunities that makes bottom-line sense, the arena of available players has shrunk and growth is occurring at a much slower, more deliberate pace. As a result, competition among sites and between communities is increasingly fierce.
Stafford County, the nation‟s seventh wealthiest community, has enjoyed tremendous growth over the past decade. That growth, including both population and income, has outpaced many of the neighboring counties and those most competitive for retail in the Washington MSA. Stafford County‟s collective economic power and influence is impressive:
The County is very strong financially, with one of the only budget surpluses on the East Coast and a AA bond rating and, thus, should easily be able to continue to prosper despite any lingering effects of the recession and current economic climate.
The appeal of this market as a residential destination has resulted in a base of 128,961 residents, representing a 39.5% rate of growth from 2000-2010.
The residential base is highly educated, young, family oriented, upwardly mobile with above average education levels, and with an average household income (HHI) of $96,975, which is expected to rise to over $100,000 by 2015.
The cost of living is below that of the top retail markets in the Washington MSA, and competitive to those markets immediately adjacent including housing, local taxes and cost of goods.
Stafford‟s employment and commercial base is growing. The current employment base is 37,3361 and is projected to grow more than 1.4% per year. This growth is partly driven by the increased military and facilities at the Marine Corp Base Quantico and corresponding business sectors. By the end of the second quarter of 20112, fifty six new companies established a presence in the County (the most current data available at the drafting of this document).
1 Virginia Employment Commission 1/2012 2 Virginia Employment Commission
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Unemployment has remained below the U.S. average over the past few years. The latest figures from Virginia Employment Commission show unemployment in Stafford to be only 4.9%3, a drop from 5.8% in 2010, and well below the current U.S. rate at 8.3%.
The County boasts great neighborhoods and a high quality of life; it is safe, affordable and has nationally ranked schools. Economically, there are several strong employment clusters (defense, technology), which are well positioned in this marketplace, despite some of the recent discussion about reductions in defense spending. All of this combined along with the location and solid economic health of the local government, favorably position the market as a destination for a broad mix of retail goods and classifications at a range of price points.
There are some constraints and challenges including lack of density and the somewhat limited road networks. But the strengths clearly outweigh the negatives. With a proactive approach to retail market attraction, the County has an opportunity to build a sustainable base and fill the gaps that exist in the retail basis.
Looking Forward
Positioning Stafford County to attract new retail will require a comprehensive, process-driven, commitment that includes immediate and long-term actions, and compelling and aggressive messaging and marketing. A key component of this process will be generating, nurturing and sustaining the willingness of local leaders and stakeholders to support and encourage retail development. This process must also include marketing aimed at local residents/consumers who also must be educated and continuously informed about current retail strengths, benefits of shopping in the County, new retail and tourism experiences, and any other related activities and events that will resonate positively. Industry oriented marketing should focus on leveraging local assets and strengths as well as market opportunities. Ongoing marketing and communications efforts should include messaging about the overall economic climate, current retail demand and purchasing power, and detailed demographic data. Also include information about current and future available retail opportunities and any local policies that support and encourage retail investment, such as no requirement for a business license.
Retail Attraction Goals & Objectives
To succeed now and in the future, Stafford County must focus its efforts on achieving the following:
Educate the overall retail industry about the many benefits of investing now in Stafford, and about the short- and long-term potential for success, including new developments and projects in the pipeline and coming on-line (especially those that are funded, entitled and corporately tenanted such as the Quantico Corporate Center).
Create ongoing awareness of the myriad strengths of the County that are driving residential and commercial growth, and visitors and tourists to and through the market.
Significantly raise the visibility of Stafford County within the national and regional retail arenas with positive, benefits-driven messaging and images calculated to resonate with those target audiences. More importantly the messages must convince them that Stafford offers all the diverse requirements necessary to provide the return on investment they seek, now and down the road.
3 VEC, November 2011
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Maintain a pro-active approach to PR and generate positive, signature, “branded buzz” within the retail community that Stafford County is a great location for retail.
Attract destination retailers, including specialty stores, restaurants, entertainment uses and large space users.
Attract retail to key corridors near employment clusters and residential neighborhoods.
Strengthen and preserve the existing retail base.
Develop a relationship on behalf of the County with target retailers via outbound contact, in- person at retail industry events, marketing events sponsored by the County, and real estate organizations in and around the region.
Identify and cultivate strategic partners in the retail attraction and marketing effort (brokers, owners, universities and other institutions whose research might be useful to support retail attraction efforts and as potential consumers).
Develop a reputation for the County as the one source for current and accurate market information requisite for the retail industry.
Gain an understanding of retailer‟s requirements and the factors that trigger site location and expansion decisions.
Target Audience
Prominent, better/upscale local and national retailers - Key targets within this group are senior corporate executives involved in making or influencing market and location decisions. Specifically, these include owners, VP-level real estate and site locators, VP-level marketing and sales promotion executives, and VP-level operations people (important to win over because they are often known to kill deals).
Restaurants – local and national - Local restaurants that are expanding, local chefs seeking to create a name for themselves, and national restaurant chains expanding in the region.
Real estate professionals - Real estate brokers (local and national), owners/investors, investors and lenders, market research firms (local and national) and site location consultants.
Media – Local business and general market, national business and trade press, including those that cover retail, real estate, lifestyle/quality of life, site location, even planning/urban design.
Consumers – Residents and workforce in the County and throughout the region, including adjacent communities and jurisdictions all of which represent a potential customer base that could support area retail. Once they are persuaded to shop locally, ideally if motivated (by civic pride), they can help to spread the word about retail opportunities.
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Certain activities and strategies that are absolutes for achieving and sustaining success include:
Strengthen and centralize data collection, organization and access, even create a retail URL.
Develop and maintain an updated inventory of available sites for retail expansion.
Empower a point person within the department as the „go-to‟ contact for all retail inquiries.
Establish and increase the County‟s profile in the retail industry, a first priority, join ICSC.
Proactive marketing to, and within, the retail industry to create awareness about the market and to support recruitment and prospecting.
Developing a comprehensive, retail database with space needs, requirements and contacts.
Create retail-centric marketing collateral and information tools, in print and on-line.
The following long-term tactics will support ongoing success:
Establish a County Retail Committee or Advisory Board. In the near term, consider including a representative from the industry on any relevant committees. Strengthen cross-marketing efforts including those with the State and local tourism organizations. Create case studies of retail success stories. Initiate and host an annual Stafford County Retail Summit. Develop a marketing/branding strategy. Develop a retail mailing/emailing contact list. Proactive retail recruitment and prospecting. Focus on property assemblage to create parcels suitably sized for retail development.
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Situation Analysis
Stafford is nothing less than one of America‟s great small counties (population under 150,000), so say the numbers and an impressive array of regional, national, and international media (Forbes, American City Business Journals, CNBC, and Site Selection).
Stafford County is one of the richest and fastest growing communities in the nation, ranked 7th for wealth in 2011 by the U.S. Census Bureau. The residential base grew 39.5% over the last decade and has an average household income of $96,975.
The County is in excellent financial shape. While many communities are facing deficits, Stafford County ended fiscal year 2011 with a budget surplus estimated at $6.6 million4. The surplus is attributed to higher than estimated tax revenues, and a commitment to very strong fiscal management. This commitment to fiscal management has also resulted in Standard and Poor‟s Rating Services raising Stafford County‟s bond rating to AA5.
The County Government and residents are committed to investing in their future and support ongoing expenditures on infrastructure, recreation and cultural facilities, roadways and schools.
All of this contributes to the County‟s strong reputation as a desirable place to live, as does a network of neighborhoods with an array of housing alternatives, priced well below other competitive markets within the MSA. All of these attributes are complemented by quality of life factors geared to families – safety, open space and recreational assets, and nationally ranked schools.
Stafford County is very competitive as a place to do business. Its appeal as a business location is partly attributed to no business license tax, low property taxes, affordable commercial space, and its central location between Washington and Richmond.
The County is extremely competitive when ranked against other counties nearby (Caroline, Culpeper, Fauquier, King George, Prince William, Spotsylvania, and Charles County, MD), and those in the greater Washington MSA (Washington, DC, Loudoun, Fairfax, Montgomery, Co. MD).
Unemployment at 4.9% is one of the lowest in the region and well below the national rate of 8.3%6. The County has had five consecutive quarters of growth and projections call for job growth to continue into 2012.
While many other markets are retracting, Stafford‟s business base is growing. Almost without exception, every business sector added jobs in 2010.
Other than manufacturing, mining, agricultural, all areas are expected to see job growth in 20127. National, international and local firms are key to the County‟s success. Growth is driven by the
4 Final surplus figures will be available upon completion of the year-end audit (est. December 2011) 5 The bond rating affects the interest rates on money that the county borrows. The higher the rating, the lower the interest rate, ultimately saving money. 6 Unemployment rate, Bureau of Labor Statistics, February 2012 7 ESRI
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affordable cost of real estate, the County‟s location near key federal institutions and proximity along I-95.
New and planned developments such as Stafford Hospital Center and the future Stafford Technology & Research Park are helping to create new employment opportunities and a draw for other business sectors, including retail.
Stafford is in a region with a very rich history and, itself, has centuries of history, including George Washington‟s boyhood home at Ferry Farm. Stafford is also home to (and near) several nationally important tourist attractions including the White Oak Civil War Museum & Research Center and the National Museum of the Marine Corps. These, along with local recreational assets including wineries, drive visitor traffic to the market. Tourists and visitors spend money, especially on meals, but also on items not easily found in their own market.
One of Stafford County‟s strongest assets is often overlooked, even misunderstood – Marine Corps Base Quantico (MCBQ). While the Base also shares borders with Prince William and Fauquier Counties, a significant portion of MCBQ and one of its primary gates are located within the County. MCBQ has a steady and growing workforce (off and on base) and substantial visitor traffic. Roughly 25,000 employees work on base, and close to 18,000 vehicles come and go daily (estimates provided by MCBQ and EDA). While there are shopping options on base, many of those stationed at MCBQ (off and on base), shop off base.
There is a Commissary at the MCBQ, but access is limited to active and retired military personnel and immediate family. Though the Commissary is popular with many of the military wives/spouses because of the discounts, many families, especially those living off base, shop at market-based grocers that offer a wider array of brands and goods.
The general retail offerings on the Base and within the gates (Town of Quantico) are limited and include convenience retail, quick food restaurants, Starbucks and the Base Exchange. On any given day you will find active military and Base personnel at local restaurants and businesses. Though we have not been able to quantify the exact demand, visual confirmation is consistent with local real estate experts‟ assumptions and individual retailers‟ experiences that the demand resulting from the presence of MCBQ is significant8.
Despite a slowdown in commercial leasing, Stafford still boasts one of the region‟s lowest commercial vacancy rates, presently calculated between 9% and 10% for Class A space9.
The retail vacancy rate hovers around 6% when last checked in January 2012. This rate has increased ever so slightly in the last two quarters of 2011 from 6.0% to 6.04%. The increase is believed to be temporary due to the loss of a few tenants including Borders Books.
The County is surrounded by strong retail centers, several within a half-hour to forty five minute drive. All have signature tenants and anchors, including Central Park in Fredericksburg (Target, Old Navy, Best Buy, Lowes, Wal-Mart, Petsmart), Potomac Town Center in Woodbridge (Wegmans, Joseph. A. Banks, Gymboree, with another 200,000 sf planned), and off-price centers
8 Includes conversations with national restaurants executives who indicate a significant portion of their customers are military personnel from MCBQ 9 Co-Star, January 2012
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such as Potomac Mills (IKEA, Nordstrom‟s Rack, Off-Fifth, Kenneth Cole, Maxstudio.com Outlet Store, Michael Kor‟s Outlet and more), and Celebrate Virginia South anchored by Wegmans.
The County boasts over 150 restaurants, but affordable national chains – primarily mid-price and quick service food establishments dominate the mix. The demand for food and drink (restaurants) in 2010 was estimated to be $220,892,566. Total sales for the same period were $159,396,974, leaving a sales gap of over $61 million. This gap could be filled by those choices that typically appeal to the business community, full service dining, destination and international eateries, higher-end family-oriented and entertainment venues, even alternatives for “date night” (Cheesecake Factory, Clyde‟s, Corner Bakery Café, PF Chang‟s).
Though residents have a choice of grocers within the County, it is limited to the Bloom, Aldi, Giant, and Shoppers Food Warehouse brands. There are two Wegmans within a half-hour drive to the north or south, as well as several other full service stores. Noticeably absent from the local market are Whole Foods, Trader Joe‟s, Safeway and Harris Teeter (Safeway closed its store in 2001 and is unlikely to reopen in the near future).
Connectivity to the market is limited. Though there are multiple exits in the County along I-95, and continuous access along Route 1, the east-west access is limited. Like many Northern Virginia communities, the County has earned a reputation for congestion, at times paralyzing, especially during standard and “federal” rush hours, but also at peak travel times and on weekends. As a result, residents often shop out of the market, including before their commute back to Stafford to avoid highest levels of gridlock; others avoid key intersections all together.
Stafford County has a limited Economic Development marketing budget, and has focused what marketing dollars it does spend on redevelopment, business development, attraction and retention. Existing communication tools such as the quarterly newsletter do not regularly address retail topics, but could easily be expanded to include regular updates on leasing and market information.
The County is redesigning the Department of Economic Development‟s website, and the new site will include a section for retail. This new site presents an opportunity to highlight the retail market, including data and demographics and other relevant information on existing and planned projects, all information that is important to retailers.
Stafford County is lacking a clear concise “brand”. While the County publishes and makes available a broad range of detailed on- and offline information about Stafford County, there is limited strategic and consistent expression of a clear, cogent, “Stafford brand”. The lack of it leaves people in a variety of the County‟s primary and secondary target audiences on their own to figure out what the County‟s is and offers -- good, bad, meaningful or irrelevant. While there are many good things one can say for and about Stafford, one major negative is its failure to-date to craft, control, and promulgate consistent, powerful, positive, signature self-expression – a brand presentation that proactively asserts what the County is, stands for today, and aspires to be tomorrow.
Let it be noted that lack of brand does not mean lack of communication. The County has a number of communications tools including the website, the Economic Development newsletter, the new Wayfinding Program, even many economic development and related business meetings.
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At a time when place branding is increasingly important, not just for business and residential growth and development, but also for retail attraction and retention, leaving Stafford without a cogent, consistently expressed place brand presentation puts it at a distinct disadvantage. As the County continues to expand, but also competes for business attraction against other counties in the MSA, place branding will become more critical.
Salient Facts, Factors and Messages
Stafford County is at a crossroads: Stafford is the 7th wealthiest county in the country. It is one of the fastest growing communities in the nation, and in a better fiscal position than most other communities.
Demand drivers for retail are improving. Current median income of $94,317 and average household income at $96,975 outpaces that of U.S. households. The residential population of 128,961 is growing, representing a 39.5% increase during the past decade. Key corridors intersections boast higher than average traffic counts including I-95 and Route 1, and the intersections of I-95 and Garrisonville Rd/Route 610, and I-95 and Route 17.
Stafford‟s population is younger, wealthier, and better employed than the average of U.S. households. The median age in Stafford County is 34.6 years, which is less than many of the surrounding counties; over 30% of the population has at least a college degree; over 91% of the population over 16 is employed, with two-thirds of those employed in white-collar jobs.
Stafford is a family oriented community – with large families and households. In 2010, there were 41,769 households. The average household size in Stafford County is 3 persons, which is higher than the average U.S. household size (2.6 persons) and every other county within the immediate region and the MSA, except for Prince William County (3.05 persons).
Stafford County‟s home ownership rate is 79.5% compared to 69.7% for U.S. households, and higher than the other markets in the MSA, except for Loudoun County at 82.1%.
The cost of housing in the County, with an average value at year-end 2010 near $327,000, is still below that in the top competitive markets within the MSA.
The County‟s location centers it right between the Richmond MSA and the Washington MSA, the State‟s and America‟s capitals. This location along I-95 is a major traffic corridor, frequented by regular business and tourist traffic. Multiple interchanges along I-95 provide easy access to the County from directions north and south and to many adjacent jurisdictions. This is also a prime route for retail distribution and several retailers have distribution centers easily accessible to this corridor (Trader Joes, Harris Teeter). Retailers often locate retail stores near distribution facilities and sometimes select locations that may not appear optimal, but that are conveniently accessible for distribution.
Recreational assets such as Smith Lake Park and tourist attractions such as Ferry Farm, the White Oak Civil War Museum & Research Center, and wineries bring a steady stream of visitors to the market.
Stafford has a very compelling tax structure which makes it competitive to do business. The structure makes it really appealing for franchises, local and regional retailers and start-ups.
Office vacancy and retail vacancy rates are declining, below both regional and national rates. Rental rates for retail and office are also below the regional rates.
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Research Component
Approach & Methodology
The purpose of the research phase was to gather and understand all relevant data, enabling The Riddle Company (TRC) and the Stafford County Economic Development Department to establish an accurate, informed launch point for the Stafford efforts. The overall goal is to support ongoing, yet efficient and effective, retail attraction and marketing.
TRC‟s analysis was completed primarily using a combination of data from Stafford County, ESRI, Virginia Employment Commission, the Bureau of Labor Statistics, ICSC and 2010 U.S. Census. ESRI uses current 2010 Census; however, not all of the data sets for 2010 are available. In those instances, ESRI uses a combination of the 2000 Census and the American Community Survey (ACS) to develop estimates and projections based on historical trends. Though not entirely current, this is the best market data available and past estimates show little variation to current data. Utilizing these and other resources allowed us to track data at the smallest level. The data and market intelligence we gathered forms a solid basis for next-step, strategic planning for retail marketing and attraction, and will support ongoing retail investment.
Our assessment provides an analysis of current conditions including:
Identifying prevailing trends and patterns (locally and nationally) A review of the County‟s strengths and challenges Gaps in the retail marketplace Defining the trade area Opportunities for attracting viable retail
Study Area
The project area includes the entire County. We also developed three submarket trade areas referred to as Southern Gateway, Courthouse/Central Area and the Northern Trade Area. The detailed review of these three submarkets provides a more detailed understanding of the metrics including population, income, and workforce, as well as retail sales, demand and gaps.
For the purposes of marketing the County to the retail industry, it is our recommendation that the County use countywide metrics and data. Individual data sets for the trade areas should be used only to promote the individual submarkets and specific projects in those trade areas (The Town Center at Aquia, Courthouse Area).
Retail Trade Areas
Trade area definition is fundamental to demonstrating local market potential. Trade areas can be used to gain an understanding of spending power and shopping patterns, gaps and opportunities, and which retailers might be a good fit. Customized trade areas can also be used to understand local market dynamics.
Many retailers and their representatives use traditional models for trade area analysis (1, 3, 5 mile rings or 5, 10 and 15 minute drive times). Ring analyses and standard drive times may not accurately reflect
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the market and do not always account for local geography, physical barriers, traffic patterns and competition. Customized trade areas, often called polygons, can be useful to help retailers gain a realistic understanding of local dynamics.
Our Team worked with the County GIS team to determine the essential components of the County‟s geography, ongoing infrastructure and development programs, traffic patterns, and the boundaries of the Urban Development Areas (UDA‟s) and the Redevelopment Areas (RDA‟s). We used this to develop three trade areas within the County.
The following is a list of what we considered in defining the trade areas in the three regions of the County:
The existing road network Planned roadway improvements Traffic counts and challenges Existing retail projects in and outside the County Existing anchor tenants Planned development projects Residential development (current and planned) Employment centers Topography/Geography The Stafford County Redevelopment Master Plan Marine Corps Base Quantico
We began this exercise by defining three trade areas using the traditional delineations (ring boundaries, and drive times) (Exhibit II). We immediately determined the traditional approach was not appropriate. In fact, using these standard prototypes would result in an inaccurate profile of the market. A good example is the use of standard drive times in the northern part of the County. Selecting the intersection of U.S. Route 1 and the Town Center at Aquia, we ran traditional drive times (5, 7, 10, 15 minutes), which suggested an individual could travel between Fredericksburg and Quantico (On I-95 from Exit 130 to Exit 148), in approximately ten minutes. The geographies are based on direct routes and, in this market, primarily centered around I-95. The models do not accurately take into account the complicated local road network and congestion found in the County. This was particularly noticeable at the shorter drive times which do not account for the limitations in residential communities‟ design, including a few which are gated communities, and result in circuitous rather than direct transit routes. The ring boundaries reflected similar challenges.
We revised our approach and developed custom polygons (Exhibit I, Exhibit III) that take into account Stafford County‟s geography, existing developments and infrastructure, the location of existing retail projects (assumptions of shopping patterns and traffic based on anchors, and residential clusters), residential density, employment anchors, and the road network.
The following map depicts the three primary trade areas defined for the County, one lying in the northern section of the county, another in the southern section, and the third in the central area.
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Exhibit I
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The following are examples of the initial trade areas using traditional models (ring boundaries and drive times), developed for the for the three submarket/trade areas. The complete set is available in the Appendix.
Exhibit II
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Exhibit III
The following maps illustrate the final submarket trade areas using polygon boundaries.
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Market & Economic Overview
Retail Realities & Trends National and Regional
The retail industry retracted significantly in 2008, and the local and national markets are still feeling the effects. For example, the fastest increase in vacancy rates, at the most severe rate in recent history, occurred between 2008-2010.
The high vacancy is having an impact on rental rates. Locally, the most significant declines in effective rents over the last year occurred in Prince George‟s County, MD and Loudoun County, VA, which also post the highest vacancy rates in the metro (7%, 7.9%).
Fortunately, rents have stabilized and vacancy rates dropped slightly in the last two quarters of 2011, coming down from a peak in 2009, as less new product has come on line. Retailers have repositioned stores or even moved to better centers that were overpriced before the recession (2008). However, occupancy levels must still improve to stimulate broad-based rent growth. Real rent growth is not actually projected until 2012. Certain local markets, especially those where available product in premium locations is limited including DC, Fairfax County and Arlington/Alexandria have already seen rents rise in certain submarkets, reaching 0.5% or more.
Record-low retail completions in the past two years, combined with a doubling of space demand, will support ongoing recovery of fundamentals. Overall, the retail market is recovering faster in the Washington Metro Area and surrounding markets, compared to other large metro areas, primarily due to steady population and job growth, high incomes and relatively low unemployment rates.
Urban markets are seeing even faster recovery in the retail sector than suburban counterparts (Bethesda and DC vs. Loudoun and Prince George‟s County) and exurban markets (Germantown, Leesburg).
Slower than expected retail sales in the last quarter of 2011 are expected to have an impact on short term expansion10. Though 2011 has experienced positive lease up activity in the Washington MSA, national economists and local markets predict the retail leasing market will not regain full momentum until late 2012 or early 2013. And, once that momentum returns, Washington/Baltimore and adjacent suburbs will be targeted first by many retailers seeking to expand.
Many retail projects have been delayed or even cancelled in the past 24 months. Stringent underwriting standards are making debt financing difficult to obtain, and lenders are looking more closely at deals even requiring a say in merchandise and tenant mix, and final right of approval on lease terms and executions. Public companies often face higher scrutiny. Those retailers, not dependent on credit to expand, are well positioned to return to the market now. Others, including independent stores, face tough challenges with access to capital.
Class A shopping centers that are well located and anchored by a dominant grocer or big box tenant have fared “well” during the recent downturn. These centers have been able to keep tenants and lure quality tenants from Class B and C centers. Many Class B and C centers have turned to local and non- traditional tenants, as well as temporary and seasonal tenants, to maintain cash flow and occupancy rates.
10 NRF, ICSC
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Many traditional and older malls have seen a rise in vacancy attributed to the closing and shifting of anchors. This has impacted their ability to attract the “in line” tenants. Similar to older centers, these properties are seeing an increase in nontraditional tenants including grocers, and service providers (medical office, gyms). Some owners are even subdividing anchor space to accommodate non-retail mixed with smaller retail space users.
The shift in tenant mix is having varied results at the mall and smaller centers. All shopping center owners work hard to fill inline space, and depending on small, local retailers to occupy in-line shop space may slow recovery. Growth of small tenants, even independent operators, is lagging due to lack of credit and access to capital.
Though there is expansion, retailers are being ever so cautious and far more aggressive in negotiations. According to a recent survey by CB Richard Ellis, 59% of U.S. retailers plan to open more stores due to the attractive rental rates available in the current market environment. O f those retailers surveyed, 94% indicated they have been able to negotiate tenant improvements in their leases, including landlord financial contributions toward building out their space, the term of the lease, and the rights to terminate early.
The competition for credit-worthy, top-performing national retailers has dramatically increased across all markets. The dominant players are grocers and drugstores, especially those that are resilient against the growth by discount chains like Wal-mart and Target.
Active retailers have clearly figured out how to operate in “the new normal.” It is still a tenant‟s market; those credit tenant retailers (national and public) that are expanding can demand more from landlords, especially when taking over large spaces such as those recently vacated by several of the chains that have closed in the past three years (Borders, Linens & Things).
According to the International Council of Shopping Centers (ICSC)11 and the National Restaurant Association (NRA), restaurants and food service providers are projected to lead the retail recovery. Growth in this market is highest for regional and mid-price ranged restaurants. Consumers are eating out less and, when they do eat out, they demand quality at a “fair price”. Mid-priced chains and local restaurants that have local connections and supply chains are proving appealing, in part due to increased awareness on sustainability, but also due to cost savings. Grocers and specialty food stores are also benefitting from increased sales, across all products (food and gadgets).
Other sectors seeing recovery include sporting goods, mid-priced and niche apparel, and personal health categories. Furniture and electronics still lag due to deep discounts available online, as well as weakness in the housing market. Despite this slowdown, several more traditional retailers, such as Best Buy, Kohl‟s and JC Penney, have introduced new prototypes and smaller footprints (Best Buy Mobile), seeking infill sites and locations with well established shopping and traffic patterns.
When it comes to spending, affluent shoppers are spending more and sooner than others. At the opposite of the spectrum, frugality is now embraced by all. This has resulted in growth and profitability for discount retailers, as well as department stores and luxury retail, and the growth is expected to continue through 2012.
11 ICSC is the leading retail real estate industry association with over 43,000 members. ICSC conducts research on retail investment, development and retailer trends.
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The bottom line has become ever important and the safe bet wins. Target just re-evaluated its expansion into urban markets, cancelling stores in the Mid-Atlantic and Northeast; their argument – they can do three suburban stores at $15 million apiece and easily project returns, rather than investing $50 million into one urban deal with an unproven return on investment.
Convenience is still paramount. Research over the past decade indicates that consumers want to drive Iess and tend to shop closer to home or on the Internet for goods.12 And shopping patterns influence expansion. Research by the ICSC shows that, over the long-term, online and traditional retailing will be part of retailers' strategies, providing complementary shopping experiences for consumers. According to the National Retail Federation, online sales have increased, particularly in those markets with gaps in product, and for niche products (baby equipment and supplies, menswear, books, electronics, and furniture).
Forrester Research, a leading market research firm that specializes in the retail industry, predicts that e- commerce sales will represent 8% of all retail sales in the U.S. by 2014, up from 6% in 2009. A review of sales generation activity in 2010 and 2011 indicates that more and more offline sales are influenced by online research. Forrester estimates that combined online and web-influenced offline sales in 2011 accounted for 42% of total retail sales. That percentage is expected to grow to 53% by 2014. The influence of online shopping is having an impact on the built retail experience, especially in those markets where retail is not conveniently located. As such, the shopping industry must aggressively evolve or the vacancy rate, especially in suburban markets and rural environments with limited access to stores, will continue to grow.
What future retail development will look like is anyone‟s guess. Industry experts predict new development to be focused on mixed-use formats involving office, residential, and hotels, within a walkable environment (either contained or urban) and where public transit is available nearby. Many of these developments will have a grocery or specialty food store as an anchor. “Category killer”13 big-box stores are expected to diminish, with growth in smarter smaller formats.
Retail Site Selection Dynamics
In the aggressively competitive, modern American marketplace, where alongside TV, radio, direct mail and other traditional media, the Internet plays an increasingly central role in providing and promoting information and education about and access to “things”, specifically to the people who want them – creating sustained retail success is both an art and a science.
The same is true when it comes to retail attraction, where many similar dynamics apply. A region, county, city or neighborhood hoping to attract specific types of retailers (to serve and enjoy success with particular marketplace demo- and psychographics that match those required by the respective retail attraction targets) must create and then efficiently and effectively project positive, strategically differentiated images and messages. This must be undertaken in a manner most likely to generate the awareness, interest, response and interaction necessary to bring the targeted retailers to the table and, ultimately, to sign a lease, and develop space.
12 ICSC, NRF 13 ICSC used this definition for with the big-box retail chains that focus on one or a few categories of merchandise and offer a wide selection of merchandise in those categories (Toys “R”Us, Best Buy).
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When making location decisions, the majority of retailers prefer to assemble preliminary market intelligence through discreet means (using in-house staff or industry experts) to minimize unwarranted attention and negate false hope and expectations. Concerns frequently cited by retailers and their representatives are that they are often unclear which organization or individuals to contact to gain current market information, local project data, how local incentives apply – or if they apply – and which information is most reliable. This is particularly common in communities where more than one organization is promoting the same market and sites.
With respect to gaining knowledge about potential markets, retailers, developers and their representatives have articulated their preferences for knowing and understanding a community‟s approach to and strategy for retail attraction and development. Though this information may not directly influence location decisions, it guides them in their approach once a location decision is made.
Matching Appeal to Specific Retailers‟ Site Selection Criteria
Part of the process of attracting retailers to Stafford County is understanding how the County‟s strengths fit into the site selection process and how those strengths translate into opportunities for the retailers. There are traditional, primary and secondary indicators that are used by retailers to narrow their site location considerations. These are supplemented by soft market information, including traditional and non-traditional factors, such as:
Traditional
Primary Factors
Demographics Employment Income levels (household and disposable) Education Competition
Secondary Factors
Market segmentation Traffic patterns, counts and travel times Daytime population and an available, affordable workforce Cost of land Current leasing activity (retailers, square footage, asking rates) Absorption and occupancy rates Regional and local shopping patterns Planned developments Tax burden
Non-traditional
Somewhat less tangible barometers of the local market also factor into retailers‟ site selection decision making, typically used to evaluate underserved and emerging markets. Stafford is an emerging market, thought not urban, and consequently, will fare differently if evaluated for non-traditional factors. Staffo rd‟s status is noted in the parenthesis in the following list; however, some simply do not apply.
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Growth (higher rate) High density areas (limited) Walkable environments (na - limited to none) Minority populations (limited) Women – the “mom factor” (high) Babies, school age kids (higher) Fine and lively arts creative class (less)
How this information is communicated also is important for site selection decisions. More and more communities maintain a wealth of information and readily make it available through print and interactive formats to retailers and their representatives.
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Retail Marketplace Profile
TRC assessed the Stafford County marketplace using Countywide and individual trade areas. The analysis at both the countywide level and trade area level is useful in identifying which retailers to target and for which areas.
From TRC‟s perspective, and based purely on the numbers, Stafford County is and would be a great place to do business for several classifications of retailers (to be specifically identified later in this document). A glimpse at what the market has to offer shows why:
The Demographics Location Population 2000 2010 2015* Stafford County 92,445 128,257 136,739 Northern Trade Area 76,719 100,110 104,905 Central/Courthouse Trade Area 17,473 29,005 29,281 Southern Trade Area 45,263 64,450 70,126 Average Household Income Stafford County $75,034 $96,975 $108,636 Northern Trade Area $70,222 $92,212 $103,415 Central/Courthouse Trade Area $79,277 $106,468 $118,728 Southern Trade Area $71,555 $90,981 $102,756 Average Household Size (# persons) Stafford County 3.01 3.09 2.99 Northern Trade Area 3.09 3.1 3.09 Central/Courthouse Trade Area 2.65 3.14 3.14 Southern Trade Area 2.81 2.78 2.77 Median Age (years) Stafford County 33 33.9 34.1 Northern Trade Area 29.8 31.6 31.4 Central/Courthouse Trade Area 34.3 35.5 34.8 Southern Trade Area 35.6 36.9 36.8 Total Housing Units Stafford County 31,405 44,961 48,961 Northern Trade Area 24,832 32,830 36,565 Central/Courthouse Trade Area 5,728 9,314 8,987 Southern Trade Area 16,852 24,987 27,601 *Some categories based on projects using Projections, as 2010 Census is not entirely available. Note: Combined totals of all trade areas equal more than total Stafford number since trade areas extend beyond Stafford borders
Stafford County shows well across all metrics.
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The residential base is growing. Almost 36,000 new residents moved into the County between 2000 and 2010. This residential growth rate, at 3.25% annually, and 39.5% for the ten years between 2000 and 2010, outpaces the region (with exception of Loudoun County (82%)), the Commonwealth of Virginia (13%), and the U.S. rate (9.7%). Household wealth is increasing and is higher than in the US and many markets in the region. The market is very family-oriented: 79.8% of households are characterized as “family households with 64% of households defined as “husband and wife families”. 46.2% of households have children under 18 years of age. Family and household size tend toward larger.
Comparison of 2000-2010 Population Growth Rate, Stafford vs Competitive Markets 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0%
Rate of growth of Rate 20.0% 10.0% 0.0%
Comparison of Median Household Income (2010) $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0
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Comparison of Average Household & Family Size - 2010 4 3.5 3 2.5 2 Average 1.5 Household Size, 2010 1
Number persons of Number 0.5 Average Family Size 0
Median Age, Stafford vs Competitive Communities - 2010 39 38 37 36 35 Years 34 33 32 31
Housing
Based on our analysis, Stafford clearly has a stable, intelligent, residential base with the high disposable income that retailers seek. As more residential product comes on line, Stafford is expected to continue to attract higher income residents, including those from other markets that are moving to this area to take the new jobs that have continued to grow in the region. This solid residential base in the County will impact many facets of the economy including retail and general business growth.
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Where Stafford Residents Live
In 2010, 73.5% or 32,339 of the occupied housing units (41,779) in the market area were owner-occupied; The cost of housing is less than competitive markets in the region and the U.S.14; The average value of homes was $327,909; 20% of the owner occupied homes were valued at $400,000 and higher; Less than 6% of units were vacant.
Housing Units by Occupancy Status and Tenure
2000 2010 2015 Census Number/Percent Number/ Percent Number/Percent
Total Housing Units 31,405 100.0% 44,961 100.0% 48,639 100.0% Total Occupied 30,187 96.1% 41,779 92.9% 45,008 92.5% Owner Occupied 24,322 77.4 % 33,490 74.5% 35,720 73.4% Renter 5,865 18.6% 8,632 19.2% 9,288 19.1% Total Vacant 1,218 3.8% 2,839 6.3% 3,631 7.5%
Home Ownership Compared to Rental Occupied Housing, Stafford vs Competitive Communities - 2010 90.0% 80.0% 70.0% 60.0% 50.0% Owner 40.0% Occupied 30.0% (2010) 20.0% 10.0% Renter 0.0% Occupied (2010)
14 Current figures are not available
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Value of Owner Occupied Housing Units in Stafford County, 2010
2% 1% 4% $150,000-$174,999 $175,000-$199,999 7% 7% 12% $200,000-$249,999 16% $250,000-$299,999 $300,000-$399,999 17% $400,000-$499,999 34% $500,000-$749,999 $750,000-$999,999 $1,000,000+
Employment and Business
Stafford has a sizeable and growing workforce, stable job growth, and unemployment is well below the region and the U.S. Industries that have realized the largest job growth in the past year include retail, healthcare, hospitality and social services, construction and professional, scientific and technical services. There are also nodes of development emerging, including the Courthouse area and the northern section of the County with easy access to MCBQ.
There is ongoing creation of permanent new jobs in the County and the market15; At year-end 2011, there were 37,336 employees in the County; Stafford‟s appeal as a business destination is growing. According to the Virginia Employment Commission, there were 166 new startup firms from January 2010 through April 2011; As of the end of the second quarter in 2011, (the best figures available at the draft of this report), the total number of businesses in Stafford County was 2,275. Ninety-eight percent of these companies have less than 100 employees; Close to 23% of local employment is in real estate, finance and insurance, and professional, scientific and technical services;16 Several of the nation‟s leading technology and defense contracting firms have locations in Stafford County including Science Applications International Corporation, Anteon Corporation, The Analytic Sciences Corporation, QinetiQ North America, Northrop Grumman Corporation, Intuit and ManTech International; Quantico is a major draw with an estimated 25,000 persons (military, civilian, and contractor) and, over 18,000 vehicles come through the gates daily. This does not account for temporary employees or visitors to the various academies and agencies, many who remain in the market for several days whether for training or short term assignment; There is ongoing development and construction, including two top hotel brands (Courtyard Marriott, Fairfield Inn), and over 180,000 square feet of new commercial office space in the northern end of the County; The local population is well-educated (over 34% has a bachelors or graduate degree compared to 27.5% of the U.S. population).
15 Based on numbers provided by Virginia Employment Commission for new hires, and BRAC relocation at MCBQ 16 This figure may not include military employment in these sectors
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The following highlights the occupational distribution of the employed population. (U.S. Census 2010):
66.1% are in white collar jobs (compared to 61.5% of U.S. employment); 23.1% are in professional service jobs (compared to 17.3% of U.S. employment); 18.1% are in management, business/financing jobs; 17.2% are in blue collar jobs (compared to 21.1% of U.S. employment). 14.4 % work in the administrative support; 10.0% work in sales; 6.7% work in service industries.
Percent of Population, 16 + Years of Age, Employed - 2010
Services
Sales
Administrative Support
Blue Collar
Professional
Management/Business/Financial
White Collar
0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00%
(The figures do not add up to 100%, as some positions fall into more than one category)
The local population is well-educated (over 34% has a bachelors or graduate degree compared to 27.5% of the U.S. population).
Educational Attainment Stafford Residents -2010
Bachelor Degree or Higher
Graduate Degree
Bachelor Degree
Associates Degree
Some College
High School Graduate
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00%
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Psychographic Analysis
Tapestry Reporting
One of the steps in understanding a community‟s retail potential is gaining insight into the psychographic make up. Relevant psychographic data was reviewed and analyzed for the defined trade areas, using the ESRI Community Tapestry system. The ESRI system evaluates the current population and, using a series of indicators (income, age, education, employment, etc), provides reliable insights into these consumers‟ wants and needs. Each neighborhood is also analyzed and sorted by more than 60 attributes, including income, employment, home value, housing type, education, household composition, age and other key determinants of consumer behavior. U.S. consumer markets are multidimensional and diverse.
The psychographics of needs and wants segmentation operate on the theory that people with similar tastes, lifestyles, and behaviors seek and cluster with others having the same profile (“Birds of a feather flock together.”) and that these behaviors can be measured, predicted and targeted. Retailers understand these tendencies and use this information to profile, categorize and understand consumers in markets being evaluated, and to determine whether prospective consumer segments are a fit for the goods and/or services they sell.
Hallmarks of Community Tapestry and any effective segmentation methodology are accuracy and stability. The versatility and predictive power of segmentation enables communities, investors, companies and local organizations to better understand the consumer and their preferences. Segmentation and the creation of customer profiles are critical facets of retail site selection and are central to the process of looking for the best locations for new stores, evaluating the success of existing locations, selecting merchandise suited to customer preferences, directing advertising with the right messages and images to the right audiences, targeting direct mail and other promotions to the most responsive recipients, etc. An accurate customer profile illuminates and helps define customer behaviors. The profile will pinpoint the retailer‟s core customer groups, as well as opportunity groups.
There are 65 different classifications in this system. In turn, Community Tapestry provides several different methods of dividing the 65 classifications into summary groups for a broader view of U.S. neighborhoods:
LifeMode: 12 summary groups based on lifestyle and life stage Urbanization: 11 summary groups based on geographic and physical features and income
The following are the primary market designations for Stafford County, utilizing the ESRI‟s Community Tapestry segmentation system. (The details for each category are included in the Appendix)
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Top Stafford Tapestry Segments (Demographic Summary 2010) 17
Percent of Stafford Percent of Rank Tapestry Segment Households U.S. Households
1 Sophisticated Squires 24.60% 2.70% 2 Up and Coming Families 20.40% 3.50% 3 Boomburbs 13.40% 2.30% 4 Enterprising Professionals 11.60% 1.70% 5 Exurbanites 8.00% 2.50% 6 Aspiring Young Families 6.30% 2.40% 7 Suburban Splendor 3.70% 1.70% 8 Cozy and Comfortable 3.60% 2.80% 9 Pleasantville 2.40% 1.70% 10 Prosperous Empty Nesters 1.80% 1.80%
We compared the local segmentation to the U.S., which is how segmentation is typically benchmarked. We examined the individual trade areas as well. The following charts compare the top ten tapestry segments in Stafford County to those categories in the U.S. and within the trade areas. The segmentation categories within the trade areas may vary from those for County because the actual geography of the trade areas extends beyond the County boundaries.
Top Ten Tapestry Segments in Stafford County vs U.S.
Prosperous Empty Nestors
Pleasantville
Cozy and Comfortable
Suburban Splendor
Aspiring Young Families
Exurbanites U.S. Households Percent Enterprising Professionals
Boomburbs Stafford County Households Up and Coming Families
Sophisticated Squires
0.0% 10.0% 20.0% 30.0%
17 Detail of Tapestry Definitions in the Addendum
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Top Tapestry Segments in Trade Areas vs U.S.
Midland Crowd Cross Roads`10 Inner City Tenants (9) U.S. Households Mainstreet USA (5) Military Proximity (6) Southern Prosperous Empty Nestors Trade Area Pleasantville Cozy and Comfortable Central/ Courthouse Suburban Splendor Trade Area Aspiring Young Families Northern Exurbanites Trade Area Enterprising Professionals Boomburbs Up and Coming Families Sophisticated Squires
Tapestry Segment
0 10 20 30 40 50 Percent of Households
What exactly does this mean?
Residents of Stafford County enjoy cultured country life on the urban fringe. These city “escapees” are willing to accept longer commutes in exchange for quality of life and to live near fewer neighbors. Residents of Stafford‟s neighborhoods tend to be young affluent families, a significant portion are married couples with children, many with young children. And these residents are educated; more than one-third of the population aged 25 years or older holds a bachelor‟s or graduate degree; another third has attended college. The population is not as ethnically diverse as many emerging markets in the US. More than two thirds of the residents (72.5% U.S. Census 2010) are white. Participation in the labor force is high, with many beginning their careers earning above-average incomes, mostly working in white-collar jobs. An above average number supplement wages with interest, dividends (stocks and bonds) and rental income and many have large life insurance policies. Homeownership is high, with many residents living in new single-family housing (many of the housing units were built in the last ten years). Many are beginning or expanding their families, so baby equipment, children‟s clothing, and toys are essential purchases. Many of these homeowners tend to be “do-it-yourselfers”, taking care of their lawns, (larger landscaping is frequently done by contractors) and complicated home improvement projects. And since many are first-time homeowners, basic household furniture and lawn fertilizer, weed control, and insecticide products are also important. It is not surprising to find more than two vehicles parked in the driveway, a compact SUV and a minivan. Many households also own a motorcycle. These residents like their gadgets – from gas grills and kitchen tools, such as bread-making machines, to the big-screen TVs, DVD players, digital camcorders, video
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game systems, scanners and latest cell phones – a typical household may own three cell phones and multiple computers. Personal computer use by children younger than 18 years is extremely high. Family vacations are important (trips to Disney World, Sea World, and other theme parks are popular destinations) as is sports. They attend baseball and basketball games, and go to golf tournaments. Their children actively participate in organized sports. Households easily spend more than $250 a year on high-end sports equipment. For exercise, they play tennis and golf, ski, jog, and even play softball. They eat out at family restaurants, especially on the weekends, and buy fast food at the drive-through or for takeout.
Stafford Retail Market Strengths, Constraints & Opportunities
We undertook a SWOT analysis to help us identify key factors that will have a significant impact on the development and integrity of Stafford‟s sustainable retail market, the County retail brand presentation, and lead us toward development of the recommended retail marketing and communication activities. (See Appendix for Detailed SWOT). This included:
(Internal) Strengths: What core strengths does Stafford County possess that are the potential basis for attracting new retail tenants and investment? Here we are looking at positive attributes currently present in and understood about Stafford County (e.g., infrastructure, high levels of education, income, housing values, etc.), particularly in comparison to competitor communities (locally and across the U.S.).
(Internal) Weaknesses: Of what weaknesses should the County be mindful? For example, what is the impact of local issues, conflicts or characteristics that, in one way or another, limit current or future retail market opportunities?
. (Internal/External) Opportunities: What market conditions currently exist that present significant opportunities for capturing target audiences‟ imaginations? What target audience needs are not being met by the market and what can the County do to improve the retail environment?
(Internal/External) Threats: What market conditions pose an immediate threat to the growth of Stafford‟s retail marketing mission? For example, what issues and/or conditions threaten Stafford‟s future and attractiveness to new retailers, even residents, workforce, industry, and the overall market?
Taking into consideration all the factors and information examined, Stafford appears very well positioned to appeal to a variety of retailers in a range of price points and goods and/or services classifications, due to:
Stafford’s Strengths
Impressive demographics generally “unbruised” by the recession – a growing, highly educated population; extremely high and still increasing household incomes; high, stable housing values; relatively “low” unemployment.
Stafford is one of the wealthiest communities in the nation and the region, ranked 7th for median household income. The County has a budget surplus, positive job growth and the bond rating was recently upgraded to AA. All are indications of the very strong financial health and potential growth. Stafford is one of few markets in the nation that can claim any of these, let alone all three.
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The County Government is committed to continually improving the quality of life for residents and citizens and employers and workers. To that end, the County Government‟s and Virginia‟s commitment to planning for the current and future growth is evident in investment in long-term planning, infrastructure, and education.
Stafford offers great community amenities, including solid neighborhoods with strong identities, affordable housing, recreational facilities and open space, and nationally ranked schools. These have resulted in a growing residential base that is attracted to Stafford because it is a safe, good place in which to live and raise a family.
Stafford is extremely well located between two large MSA‟s (Richmond and Washington, DC) which results in very high traffic volume, primarily on north-south routes (I-95, Route 1). With multiple exits on I-95, Stafford is uniquely positioned to capture some of this traffic.
The County has a solid base of retailers already in the market, with positive performance and a “relatively” low vacancy rate (hovering at 6%).
Opportunistic gaps exist in the County‟s current retail offerings. Notable categories include food related businesses, apparel, kids and children-oriented retail.
No business license requirement or associated tax (gross receipts) is imposed. The meals tax is low, which actually impacts where people dine and shop for takeout (even in grocery stores). This is equally compelling to both restaurants looking at the market, and local consumers.
The cost to entry in Stafford County is lower. The tax environment, combined with retail asking rates that are well below those in Stafford‟s most competitive markets, might help to position Stafford as a primary market choice rather than a secondary one.
Constraints & Challenges
Challenges – even barriers – to new retail entry do exist within Stafford. These can be categorized by market potential, capacity, and by general market issues, outlined below.
Perhaps the most apparent challenge is the lack of population density (residential and daytime workforce). Stafford is not competitive when you compare the total population in the top regional markets, and retailers like dense markets.
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Population: Stafford County vs Top Most Competitive Retail Markets 1,200,000 1,000,000 800,000 2000 600,000 Population 2010 400,000 Population 200,000 -
The County also lacks ethnic diversity, which typically adds cultural breadth and depth and an international flavor to the community. Many of the communities surrounding Stafford have much higher levels of diversity, which is a prime target for retailers expanding their brands.
Population by Race/Ethnicity, 2010, Stafford County vs Competitive Markets 80.0% 70.0% 60.0% 50.0% White Alone 40.0% 30.0% Black Alone 20.0% Hispanic Origin 10.0% 0.0%
Many perceptions exist about Stafford in the regional and national marketplace. What is lacking is a broad understanding of the forward-looking residents that are well-educated and well-paid. This includes the military personnel, many with high levels of training in sophisticated technology and information systems. Also, often overlooked is the level of innovation that occurs in the County across many industries many directly related to the military and government installations nearby.
There are enduring negative, albeit inaccurate, perceptions among longtime area residents (and even among some longtime Stafford residents) about “blue collar Stafford” and what it does or doesn‟t have to offer, as compared to Fairfax, Fredericksburg, and Loudoun counties.
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The lack of a strong market presence and market awareness within the regional real estate community results in missed opportunities. The lack of a strategically, forcefully, and regularly promoted brand can render Stafford relatively invisible in the competition for new retail, especially those entities expanding into Northern Virginia and first time entry to the MSA.
Failure to adopt a coordinated and pro-active approach to retail recruitment and development with consistent, forceful brand promotion will leave Stafford behind the curve for retail growth, and limit the attributes often included in the definition of high quality of life descriptions (grocers, department stores, niche apparel stores and sit-down, signature restaurants).
Retail has not been a priority for the Stafford Economic Development team to date. The County has a limited economic development budget, and no resources have been dedicated in the past to support retail attraction. Many of the surrounding jurisdictions and communities have a higher profile in the retail industry, and have committed marketing dollars to develop and implement pro- active outreach and marketing initiatives specifically targeting retail (Loudoun, DC, Prince George‟s County).
Failure to date to develop a solid marketing brand for the County also poses challenges. The County has limited funding available to marketing and communications, particularly for business attraction. In recent years, these resources have been focused on corporate rather than retail attraction. Many communities have increased funds for retail marketing activities over the past decade as the environment has become increasingly competitive for tenants.
There is a lack of available, even suitable retail product in those areas with some of the greatest demand (Courthouse Area, Northern Trade Area). Some of this is a result of project delays, but also, due to lack of development or spaces that meet the retailers‟ needs, such as small size of footprint or outdated infrastructure. Though there is demand in the market, it is not yet strong enough to trigger expensive redesigns or new build-to-suits.
Like many suburban counties, Stafford lacks a unifying, distinguishing architecture, which often helps to create an identifiable sense of place and can result in some very compelling retail spaces. Stafford also lacks a central core, a “downtown” or a center, which often becomes a magnet for retail and leads to clusters of uses.
As is often the case in growing communities struggling to balance residential growth, large corporate expansion and job growth, retail has not been a priority for Stafford County. This is evidenced by the lack of economic resources including public initiatives intended to support retail investment and projects. Many of the surrounding jurisdictions and communities have a higher profile in the retail industry and have developed pro-active outreach and marketing initiatives specifically targeting retail (Loudoun, DC, Prince George‟s County). This is partly driven by private developers themselves who are expanding into markets as Loudoun County, VA, and Prince Georges County, MD and timing, including the rapid expansion that occurred in the retail industry in the first half of the past decade.
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Opportunities
Stafford County has a fairly sizeable retail gap. Many communities in the region and those considered competition have submarkets that may be overbuilt, leading to poaching within brands. Stafford is not “over-retailed” and has clear need for retail across all segments.
The County is developing a new website – to be completed in 2012. This presents a timely opportunity to enhance the community‟s retail profile and provide relevant intelligence essential to the retail industry (demographic and market data). This also creates an opportunity to perpetuate positive media and project information in the marketplace, with links to other resources and retail partners.
Stafford‟s low profile within the retail sector is actually an opportunity! The new website and retail centric collateral will help Stafford to create a signature and accurate impression among target audiences with the clear articulation and promotion of Stafford‟s strengths and market position.
Stafford‟s cost of living, low cost of space (retail rents) and level of high-class assets should be leveraged to attract and retain retailers, residents and employers. The combination of a low cost of living, affordable real estate and stalwart demographics makes Stafford a truly appealing destination for retail (and other business), especially in today‟s climate.
Stafford‟s “central” location between Richmond and Washington, DC results in very high traffic volume traveling through the County on the two primary north-south routes (I-95, Route 1). Stafford is uniquely positioned to capture some of this traffic, whether business, tourist related, or commuters, especially those seeking a rest or a meal.
A number of projects have recently been completed such as the Stafford Hospital Center, and others are scheduled to come on line over the next twenty four months (Quantico Corporate Center, The Chichester Building, and the Town Center at Aquia). These present new market opportunities for retailers and restaurants considering this market now and in the near term.
Restaurants are expected to lead the growth and recovery in the retail industry over the next 36 months. There is demonstrated demand for restaurants and food related business throughout the County. Stafford‟s low cost to entry, combined with its economic strength, put it at considerable advantage as a potential location for local restaurants and national chains expanding in the market. Combine this with the County‟s proximity to strong local restaurant markets, such as the District of Columbia and Old Town Alexandria, and there is a persuasive argument that Stafford is an easy location for expansion, especially for local restaurateurs seeking to grow their portfolios, even young chefs seeking to develop their own concepts.
Leasing Market/Landscape
Retail leasing in Stafford County is dominated by several local “affiliates” of national firms. Prominent among these are KLNB, Thalhimer Commercial Real Estate and CBRE. The majority of their efforts are focused on built centers with national ownership. One of the benefits of these affiliates is their firms often do both landlord and tenant representation. They also have access to broader networks of national retailers, as well as more sophisticated tools and market intelligence. A handful of local firms also have listings or represent tenants in the market including Rappaport Management, Papadopoulos (restaurants) and Next Realty Mid-Atlantic. Despite the growth in the region during the past few years and
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opportunities for new retail within the market, Stafford has not fully captured the attention of other national and regional firms that have dedicated resources and representatives. These include Thur & Associates, Streetsense, H & R Retail, Newmark Knight and Transwestern Realty – all who represent target tenants.
There also seems to be some “lack of awareness” among area brokers about the market attributes and specific opportunities. The slowdown in the number of deals/leases done annually presents an opportunity to gain an elevated profile and presence in front of broader networks of national and regional brokers and, ultimately, retailers. Stafford County offers those brokers that represent multiple tenants a “new” prospect and an opportunity to increase their clients‟ market presence.
Local real estate fundamentals are competitive. The vacancy rate hovers around 6%18 well below vacancy rates in competitive markets/counties which range between 8 and 12%. Retail lease rates average around $18/ft for inline space, and up to $28.50/ft for end-line space. The lease rates are also below rates in competitive markets which average from $34 a foot for inline space in Loudoun and Montgomery County to over $80/ft in downtown DC and Bethesda, MD.
Market Perception
Stafford has experienced a number of significant market and real estate wins recently, all of which help to shape the County‟s image overall. These include the new Stafford Hospital Center, the successful BRAC relocation process to MCBQ, and traction on the planned Technology & Research Park. Other activities and milestones that help to shape perception include the acclaim that income levels ranked in the national marketplace and the $6 + million budget surplus. All of these factors help to shape the story that Stafford is a market that is emerging, is well-positioned for growth, and where opportunity exists.
The retail industry is a bit more fluid and visible than other sectors; therefore, it is difficult to keep the data current, but extremely important to do so. It has more visibility and more “sex appeal” than other sectors, thus successes and positive attributes all contribute to the County‟s draw as a destination. However, the lack of information found in the marketplace on current retail activity and assets may actually hinder both retail business sales growth and attraction. The County‟s own website lacks readily accessible data required by retailers. This information is expected to be included with the new website that is scheduled to go live in spring 2012. Another example is Stafford‟s presence in State and regional tourism brochures. Even a limited or inaccurate reference to the restaurant mix or retail projects can alter perception.
The Trade Areas
When you begin to drill down further into the demographics and household dynamics of each trade area, one begins to gain a better understanding of household wealth. Like the County overall, each of these three trade areas19 also boasts very strong demographics, with certain metrics that are actually more powerful than Countywide.
18 Costar Report, January 2012 19 Data for individual categories within the three trade areas do not equal the figures for County overall. The trade areas have overlap, and may include population in adjacent jurisdictions.
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For example, 50% of households in the Courthouse Area have an income over $100,000 as compared to 41.9% in the County. Households in this area also have a higher median home value at $327,556 vs. $303,621 in the County.
Disposable Household Income Central Northern Courthouse Southern Trade Area Trade Area Trade Area % of Households with income 34.90% 50.30% 17.0% over $100,000 Median Disposable Income $61,326 $74,106 $58,965 Average Disposable Income $72,877 $85,691 $71,803
Comparison of Household Income by Trade Area
$120,000
$100,000
$80,000
Median HH Income (2000) $60,000 Median HH Income (2010) Median HH Income (2015) $40,000
$20,000
$0 Northern Trade Area Southern Trade Area
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Northern Central/Courthouse Southern Stafford Trade Trade Area Trade Area Area Population* 99,662 24,215 64,450
Average Household Income $92,212 $106,468 $90,981
Median Age 30.5 35 36.9
Number of Households 31,305 7,608 22,994
Average Household Size 3.09 3.14 2.78
Owner Occupied Housing 65.4% 79.5% 72.7%
Number of Employees, 2010 20,300 7,175 19,484
Civilian Population Employed 92.2% 94.2% 93.8%
Bachelor Degree or Higher 33.4% 33.6% 31.2%
*May Include population in other jurisdictions
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Retail Opportunities Existing Retail
The aerial highlights key retail projects located within and near the County and anchor tenants.
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Retail Demand, Leakage & Gaps
Retail demand is driven by local income and spending power. The gap is defined as the difference between demand and actual sales. The gap is also representative of leakage of the potential sales leaving the local economy; sales that may support additional retail expansion and development.
In 2010, demand for retail goods and services within the County was calculated to be $1,493,567,60520. ESRI calculates this demand using models that integrate income, density, household size, disposable income, and past sales trends. The documented sales within Stafford County across all retail segments were $837,481,504. The difference between demand and sales within the County is over $656 million and represents the gap.21
Category Sales Gap Retail Trade & Food & Drink $656,086,101 Total Retail $594,590,509 Food & Drink $61,495,592
The following chart illustrates how the gap presents in the County overall and the individual trade areas.
Comparison of Sales, Demand and Gaps by Trade Area, 2010
1600
1400
1200
1000 Demand
Sales 800 Gap millions $ of millions 600
400
200
0
Trade Areas
(Note the figures for demand, sales and gap in the three trade areas do not add up to the total within the County because there is overlap in the trade areas).
20 ESRI Retail Marketplace Report 21 ESRI Retail Marketplace Report
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Sales, Demand, Gaps
The following chart shows a detailed break out of retail sales and the estimated gaps across a variety of retail segments Countywide and within the three trade areas. Note the numbers do not equal 100% due to overlap within individual trade areas as mapped.
Central/ Northern Trade Courthouse Southern
Total Retail Trade and Food & Drink Stafford Area Trade Area Trade Area
Demand $1,493,567,605 $1,060,659,249 $295,245,823 $765,405,201 Sales $837,481,504 $613,679,060 $55,912,482 $461,639,575 Gap $656,086,101 $446,980,189 $239,333,341 $303.765,626 Total Retail Trade $1,272,675,039 $904,162,021 $251,779,668 $652,763,187 Sales $678,084,530 $494,809,157 $45,535,699 $390,495,670 Gap $594,590,509 $409,352,864 $206,243,969 $262,267,571 Total Food & Drink $220,892,566 $156,497,228 $43,466,155 $112,642,014 Sales $159,396,974 $118,869,903 $10,376,783 $71,143,905 Gap $61,495,592 $37,627,325 $33,089,372 $41,498,109 Furniture & Home Furnishings Stores $34,920,376 $25,810,496 $6,989,101 $18,210,491 Sales $15,999,256 $7,180,801 $722,031 $12,395,564 Gap $18,921,120 $18,629,695 $6,267,070 $5,814,927 Electronics & Appliance Stores $39,466,193 $27,723,282 $7,826,479 $21,021,405 Sales $14,314,724 $13,268,174 $2,463,511 $3,516,339 Gap $25,151,469 $14,455,108 $5,362,968 $17,505,066 Food & Beverage Stores $307,451,614 $202,097,172 $60,311,153 $157,559,895 Sales $164,271,571 $85,745,162 $5,551,443 $100,348.334 Gap $143,180,043 $116,352,010 $54,759,710 $57,211,661 Grocery Stores $295,461,787 $193,666,777 $57,958,577 $151,743,295 Sales $159,905,218 $83,606,469 $5,343,369 $97,501,255 Gap $135,556,569 $110,060,308 $52,615,208 $54,242,040 Specialty Food Stores $2,170,366 $2,091,668 $425,568 $1,122,795 Sales $924,135 $285,191 $150,152 $1,258,366 Gap $1,246,231 $1,806,477 $275,416 -$135,571 Health & Personal Care Stores $46,096,458 $30,851,130 $9,084,085 $23,816,639 Sales $20,147,032 $10,939,641 $1,267,872 $16,522,928 Gap $25,949,426 $19,911,489 $7,816,213 $7,293,711 Clothing and Clothing Accessories Stores $28,169,987 $25,961,050 $5,557,100 $15,245,400 Sales $7,865,194 $15,118,927 $760,160 $3,122,836 Gap $20,304,793 $10,842,123 $4,796,940 $12,122,564
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Sporting Goods, Hobby, Book, and Music Stores $20,297,674 $13,873,483 $4,005,534 $10,033,408 Sales $5,778,395 $5,064,997 $184,937 $1,147,546 Gap $14,519,279 $8,808,486 $3,820,597 $8,605,862 General Merchandise Stores $160,056,580 $130,876,541 $31,656,245 $78,598,808 Sales $107,286,728 $81,192,830 $0 $59,826,623 Gap $52,769,852 $49,683,711 $31,656,245 $18,772,185
Leakage/Surplus
Leakage/Surplus analyses are helpful to identify opportunities for new retail and to shape a merchandise mix. The following depicts the estimated leakage for individual retail categories within Stafford. Leakage refers to those sales actually leaving the defined trade area. Surplus refers to those sales that exceed demand and are driven by sales from consumers outside of the trade area. The charts show the leakage by Industry Subsector (clusters within the retail category using NAICS) and by Industry Group (retail store category using NAICS). The rating is based on a scale of 1 – 100. The Leakage/Surplus Factor reports were run for the County overall and then the three trade areas. The charts show leakage or loss of sales in all categories (industry subsector and industry groups) for the County.
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Retail Attraction Opportunities
Though the County has close to 150 restaurants, there are still many national and regional chains that do not have a presence in the County. Many already have a presence in the larger regional marketplace but have not yet expanded to this market (Austin Grill, Bruegger‟s Bagels, Prêt a Manger, Red Hot & Blue). Others are not aggressively expanding or seeking sites in suburban markets at this time (Morton‟s, Rosa Mexicana, Capital Grill, or Hooters). A comprehensive list of the national retail tenants and restaurants absent in Stafford County, but with a presence in the region and mid-Atlantic, is available in the Appendix.
Stafford‟s market profile clearly fits the site and market criteria for a number of restaurants, including several that are recognized as the top ten restaurant chains in America: Bonefish Grill, Cheesecake Factory, PF Chang's, Qdoba, Olive Garden, Macaroni Grille, Long Horn Steak House. Others such as Sakura, Gordon Biersch, Noodles & Company, Bertucci‟s, the Burger Joint, Clyde‟s, Corner Bakery Café, and Au Bon Pain also appear, at first glance, to be a good fit.
Many brands of retail and individual categories, including grocers, are also missing from the local marketplace. Names frequently mentioned include Ann Taylor, American Apparel, Babies “R”Us, Brooks Brothers, Nordstrom‟s, Dick‟s Sporting Goods, Pottery Barn, Harris Teeter, Trader Joe‟s, and Whole Foods. (A comprehensive list is available in the Appendix.)
In our experience, it‟s important to understand where the target tenants are currently located within the region, what is the depth of their geographic draw (miles/minutes) and their current plans for expansion. Some tenants are retracting in this region, including Pottery Barn, Barnes & Noble; others have a store in the region that serves the market at present, based on their individual market size, including Wegman‟s, DSW, Nordstrom‟s Rack, and IKEA, to name a few.
Retail Sectors to Target
Drawing from our initial retail market assessment, primary research efforts, and the connection to retail and retailer trends at the regional and national levels, our knowledge of the market, local projects, and retailers‟ requirements, we have developed a prioritized list of retail categories we think would succeed in the County. TRC‟s analysis identified important, unmet market demand within the County and the individual trade areas. This analysis suggests that there are strong opportunities for restaurants, food related stores and grocers, specialty retail and entertainment uses, and even regional businesses. An annotated list of target retail businesses follows this analysis. (A spread sheet is attached with relevant data, requirements, etc.).
Based on TRC‟s supply and demand analysis, a review of the marketplace psycho- and demographics, and of retail trends, we have identified the following retail categories that we believe are supportable in the County.
High-end Grocery and Food - The range offerings in the grocery market in Stafford County is less than that in surrounding markets and the broader region. The mix of brands all fall within the mid- priced market (Giant, Shoppers Food Warehouse, etc). Missing are the more distinct and higher-end stores such as Trader Joe‟s and Harris Teeter. There also is a demand for specialty grocers and food markets as well as food- and kitchen-related products (Sur La Table, Williams Sonoma) that fill the needs of the “epicurious” and food-focused consumers. Market data indicates that the residents like to cook and shop at high-end kitchen stores. The high levels of education and preference for quality and fresh goods, suggests that grocers that offer unique and international food items, including organic and “green” products, should do well.
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Apparel and Accessory - The clothing/apparel & accessories sector consists of those retailers selling men, women and children's clothing, uniforms, jackets, hats, socks, gloves, robes, hosiery and swim suits. The sector also includes accessories, such as handbags, attaché cases, umbrellas, cosmetic bags, jewelry, watches, luggage, even dog collars and leashes. One of the largest gaps in the County‟s retail offerings occurs in this sector, and it represents one of the strongest opportunities for growth. The data indicates a strong case for shoe stores, sportswear, apparel (higher end women‟s and professional), menswear, discount, kids and “tween” brands. Sales in this sector nationwide have risen over the past year, as have individual retailers‟ market share (including stock prices), and are expected to continue to rise as consumer confidence continues to grow.
“Green” Retail - “Green-oriented” retail stores selling a range of merchandise, from house wares and cleaning products to clothing, are thriving in metropolitan and sophisticated suburban markets populated by young families and well-educated consumers. Retailers specializing in a variety of “green” products are emerging across all markets in response to growing awareness and demand for environmentally-sensitive goods. The highly educated population in the County and the growing commitment to sustainability across all sectors within the MSA are accompanied by a demonstrated growth in “green” products and services retailing. Many traditional retailers are launching new lines and stores that specialize in “green” goods. This sector also represents an excellent opportunity for local business growth.
Restaurants and Entertainment Retailers - Restaurants are expected to lead the continued growth in the retail industry through at least the 2nd Quarter of 2012. Mid-priced and casual restaurants are expected to enjoy the most growth as individuals and families still want to enjoy meals out, but prefer to control the cost. Seven of the top ten restaurant chains22 are absent from the market including Cheesecake Factory, PF Chang‟s and Olive Garden. Based on the demographics, the top performing restaurants for preference and growth make a good first choice to target. Other strong targets include brew pubs like Gordon Biersch (or regional chains as the Ginger Man based in Texas) which serve lunch and dinner and offer entertainment, all the while at price points appealing to families. Mid-priced restaurants (not family chains) that offer alternatives for the “after work” crowd and “date night” also seem to be well suited (The Cheesecake Factory, Austin Grille, and McCormick & Schmick's).
22 NRN Consumer Surveys 2011
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Retailers to Target
There are over 225 national chain restaurants and retail brands absent in the County (Appendix). The following is a list of potential retailer prospects for the County to target. The list was developed based on the research, our findings, market knowledge, familiarity with the retailers and their needs, and with searches completed using Stafford metrics, NRF, ICSC and the 2010 Tenant Directory. This is a target list and should be viewed exactly as that. (These are retailers whose target customer base closely matches that of Stafford County). Not all of these retailers are currently expanding, but, when not building, they are always looking for those markets that fit their long-term potential. Detailed site selection and location criteria for each retailer are presented in the Appendix to this report.
Big Box & Department Stores Stride Rite Babies “R”Us/Toys “R”Us combination Cost Plus-World Market Restaurants Dicks Sporting Goods Austin Grill Sports Authority Au Bon Pain Bertucci‟s Food & Grocery-related Bonefish Grill Harris Teeter Bruegger‟s Bagels Trader Joe‟s Boston Market The Fresh Market Cheesecake Factory Weis Markets Chop‟t Whole Foods Clyde‟s Omaha Steaks Corner Bakery Café Costco Cosi High-end deli Einstein Bros Bagels Bakery (and café) Elevation Burger Gordon Biersch (or regional brew pub) Specialty Retailers/Entertainment The Ginger man Aveda Lebanese Taverna Bath & Body Works Legal Seafoods LA Fitness Long Horn Steak House Sur La Table Macaroni Grill Williams & Sonoma Olive Garden Noodles & Company Apparel/Accessories PF Chang's American Apparel Qdoba Ann Taylor/Ann Taylor Loft Red Hot & Blue Browns Shoes Red Lobster Chico‟s Sakura Children‟s Place Sweet Green Coldwater Creek TCBY Eddie Bauer The Burger Joint J Crew Wolf Gang Puck Men‟s Wearhouse Modell‟s
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Best Practices
A Brief Overview
During the past 10 years, a growing number of communities have begun to focus on retail marketing and attraction, taking a proactive approach to building a retail base.
Increasingly, public and non-profit organizations around the country have dedicated a wealth of resources to this task. Many communities have retained staff (full and part-time) dedicated to retail attraction and development. Public sector participation in retail-oriented trade shows has also increased, most notably at the International Council of Shopping Centers (local and national shows) and, also, more focused events such as the International Franchise Association Annual Convention, the Gourmet Food Show and the Grocers‟ Show. Some even go to MAPIC – the international retail show.
Markets large and small must proactively take the initiative to generate consistent, branded outreach calculated to create awareness of and interest in an environment that is inviting to the types of retailers desired. Few, if any, markets other than New York City enjoy unsolicited interest from retailers.
The most common hurdles faced by communities in retail marketing and recruitment include negative and incorrect perceptions of marketplace factors, lack of informed, dedicated leadership, a lack of direction (a plan, a process, follow-through) and the frequent unavailability and unaffordability of suitable sites. A broad range of strategies and tactics can be employed to overcome those and other marketing challenges, and are largely dependent upon available resources, public priorities, market strengths, and the actual target markets (suburban vs. urban, first vs. second-tier markets, etc.). The single most influential element that affects a community‟s ability to combat these issues is strong leadership. This includes a consensus governing, and driving retail attraction program goals, strategies, tactics, development, delivery and overall stewardship. Second to that is the availability of resources (people and dollars) to dedicate to sustained retail marketing and attraction.
The following section addresses the various successful, respected tactics and approaches (Best Practices) employed by many communities for retail attraction. Those communities that have succeeded have demonstrated an across-the-board understanding among community leaders and administrators that retail growth is desired. More importantly, retail opportunities must be avidly and systematically pursued, along with a generally accepted consensus that certain, specific geographic areas in their respective marketplaces ought to be the focus of new retail.
Retail Marketing and Promotion strategies are popular tools that can help a community to focus its attention on harvesting the right kind of new retail. The well-considered establishment of priorities, goals, objectives and retail targets allows for the dedication of resources and policies to support retail. Targeted strategies are most often directed to a defined geographic market (individual neighborhoods and downtown areas, submarkets). Citywide retail development strategies do exist; however, they are far less common than more narrowly focused plans, since the demand for retail typically varies dramatically from neighborhood to neighborhood. Chicago launched what was the best example of a citywide strategy. The City developed and adopted a citywide retail development program that resulted in the formation of “Retail Chicago,” a division of the Office of Planning, an aggressive outreach program to connect retailers, brokers and developers, local sites and tools. (Program office recently closed due to budget
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challenges, but the tasks have been continued by the Economic Development Office). Philadelphia‟s Center City has one of the best downtown marketing campaigns. Philadelphia‟s Be In On It campaign was created to initially shape perception. This has now expanded to include targeted marketing in select sectors including kids oriented retail and big-box tenants.
Financial Programs – Loans and Grants Dallas established the Main Street District Initiative Loan and Grant Program to provide start-up capital, and to provide personnel and services for local economic development initiatives in the downtown‟s Main Street retail core area. The retail recruitment incentives include grants for tenant improvements (provided as reimbursements to property owners after the expenditure has been made), rent subsidies/provision of free rent for tenants for a prescribed period, and/or assistance with other related start-up costs as determined on a case-by-case basis. Downtown Los Angeles offers a mix of financing tools to retailers including funding for façade improvements, and a revolving loan fund for working capital and capital improvements. Washington, DC developed a retail TIF program, making funds available to underwrite the costs of major façade and exterior renovations for retail tenants. Short-term startup rent subsidies by the landlords have been effective tools in Charlotte, sponsored by the Charlotte Center City Partners (BID). A similar tool was implemented in Vancouver in the Eastside neighborhood. Utilized on a case-by-case basis, it is intended to bring essential retail into the neighborhood and offset costs in the first three years, allowing a business to become financially sound.
“Buy local” campaigns have been used effectively to promote retail and shopping to local markets and keep retail dollars within the community, enhance competitiveness and sustainability of area businesses and also to thwart shopping online. National and local organizations that work together can strengthen independent businesses as well as those in shopping centers and commercial areas. Portland, Maine launched a “buy local” program that included a “loyalty card” with incentives and benefits building on its strong independent arts- and food-related businesses. The program has been successful and has helped reinvigorate shopping and patronage along key corridors throughout the city. The campaign was also successful in pressuring Whole Foods to buy produce and products from area businesses.
The Buy Fresh Buy Local Campaign throughout the Commonwealth of Virginia helps consumers find local products, while building relationships between growers, food artisans, farmers‟ markets retailers, restaurants and institutions. The Piedmont Environmental Council launched Virginia‟s first chapter which has grown to include various communities. Charlottesville, for instance, successfully has used this as a means to promote area restaurants outside the local markets. Other successful “buy local” programs exist in Denver, Bellingham, Washington, Brooklyn and Baltimore. All of these programs include compelling message of the beneficial economic impact derived from supporting area businesses and retaining revenue within their respective cities.
Retail Recruitment Cities‟ dedicated retail attraction teams – focused entirely on new retailer attraction and existing retailer expansion – can significantly and positively influence retail investment and retail location decisions and, along the way, accelerate process timing. To succeed, these retail staffs have to be laser-focused on marketing and promoting information of interest to retail prospects. Retail recruiters should have (1) a clear and realistic mission;(2) an equally as clear and realistic understanding of the marketplace‟s data and profile (including strengths, weakness, opportunities and challenges); (3) applicable skills in and marketing tools for economic development and real estate and (4) have a demonstrated ability to sell and follow through. San Jose has a dedicated retail attraction agency team that focuses on promoting retail opportunities in the downtown area to prospective tenants and brokers. Agency staff facilitates all facets of the process for new tenants, from site introduction to lease execution and store openings. Philadelphia has a full time retail recruitment manager that focuses on building
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relationships with the local brokerage community and retailers. This role is supplemented with two consultants, one focused on national tenants and the other on regional recruitment. Portland, Oregon has established the position of Downtown Retail Development Manager at the Portland Alliance (The BID) and supplemented that service with a part-time recruiter with experience in retail leasing and property.
Cogent, Compelling, Cohesive, Proactive Marketing Tools – online and offline – is essential to successful retail attraction and development. There simply is no other way to drive awareness, interest and sustained interaction that results in real conversations about a community‟s opportunity consumer bases, marketplaces, funding programs, etc. information retailers want and need to know to make informed decisions. Communities that undertake a direct, strategically driven and energetic approach to retail recruitment enjoy significantly and measurably better results than those that are reactive23, and they tend to utilize a variety of tools to support these efforts. Examples include vertical advertising to targeted retail real estate and merchandising decision makers and influence audiences; general market collateral; retail marketing packages with retail centric data; targeted mailers announcing new businesses or sites; state-of-the-art Internet websites with retail orientation or subsections; retail contact databases used for e- mail and hard copy direct marketing; PR and print coverage; hosting marketing events, networking, and participation in trade shows.
Chicago, Philadelphia, Oakland, Washington, D.C. and Baltimore‟s Downtown Partnership have all developed outreach marketing packages tailored to retail. According to the feedback from brokers and retailers, this collateral is well-received by the industry. Combining all of the pertinent information on the market, applicable incentives, sites, and the regulatory process, onto a central, retail-oriented website or a link to retail on the city‟s or BID‟s websites, simplifies and facilitates the retailers‟ search for critical information. Good examples to look at are www.philadelphiaretail.com, http://www.wdcep.com.
Consumer and Retail Surveys often are undertaken as part of the groundwork on marketing program development to understand shopper behaviors. Surveys can be used to collect primary market research regarding the preferences and behaviors of residents related to shopping in the downtown area. Surveys (done in hardcopy or online) can be used to gauge consumers‟ “most likely to shop” interests in having specific stores in a community, which types of stores area residents currently shop, where shoppers currently go for discreet selections ( apparel, children‟s products, accessories, gifts, home furnishings, etc.). More and more communities are using the results of the surveys to pitch target retailers.
Participation at ICSC and Other Retail Industry Organizations Communities‟ participation in retail trade shows has dramatically increased in the past decade. ICSC is the favored organization (regional deal making sessions and the Spring Convention), second only to the National Retail Federation annual show. Some also attend the MAPIC (international retail show). Since 1998, attendance by cities and government agencies at the ICSC Spring Convention has dramatically increased, with a presence that has expanded and evolved to some very sophisticated venues.
Chicago, Sacramento, Las Vegas, Washington, D.C., New York (EDC), Louisville, and Portland, Oregon have all maintained strong presence at ICSC‟s annual “gathering of the clans” in Las Vegas. High- ranking public officials create attention and buzz, but their presence also sends a very deliberate message – that this community is and wants to be seen as a serious player in the retail attraction arena. The mere presence of the key community leaders at the show including in meetings with target retailers, potential investors and developers can help to position a market favorably within the retail industry. That
23 International Council of Shopping Centers
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presence can also positively affect perception about a community and market among retail industry leaders. When highly visible individuals attend the show, their presence:
• Enhances market awareness and understanding of that market‟s strength and a favorable approach to creating new commerce for itself to benefit the community and the retailer; • Helps initiate/strengthen critical relationships with retailers and their representatives; • Spurs broader retailer awareness of/interest in current and future opportunities in the respective marketplace. Communities claim and measure success in variety of ways, most typically through the eventual location of retail.
Funding a meaningful ICSC presence can be overwhelming, especially in slower economies. Many communities opt for attendance at regional shows such as the Mid-Atlantic Idea Exchange (now a national program) and the Virginia Deal Making session (regional show). Both of these conferences provide great opportunities to develop relationships with retailers and a higher profile in the industry.
Retail Councils: Retail councils and committees can help a community to gain consensus on critical issues and to pursue awareness among broader audiences. Dedicated retail committees also allow a voice for retail development and recruitment, and are useful vehicles within cities that help to support retail attraction and development. These groups also encourage dialogue between stakeholders, providing increased knowledge on the needs, demands, and requirements of both retailers and landlords. The Portland, Oregon Downtown Retail Council (DRC) is comprised of retailers, restaurateurs, hoteliers and real estate professionals within the Downtown Business Improvement District (BID) service area, and provides input to leadership on efforts to keep the downtown district vibrant and prosperous. The Council promotes and advocates for a successful downtown retail environment. The DRC also works with public and private partners to implement the formal retail strategy. The Retail Committee in Washington, D.C. actually has its roots in the leasing and development arenas, formed when the downtown vacancy rate exceeded fifteen percent. Few retailers participate, but often attend meetings and provide presentations on their businesses, new opportunities and trends, and insight on policies and initiatives. The Committee focuses on supporting the City‟s retail attraction and marketing efforts (public and private) and also influences policies that affect retail attraction and investment. The Philadelphia Retail Marketing Alliance (PRMA), only a few years in formation, spent its first eighteen months attended only by public and quasi – public partners. Only after firmly establishing a direction for retail marketing and attraction, did they invite private stakeholders to participate. This allowed PRMA to set an agenda with a confirmed course of action, solid goals and objectives. The group meets quarterly to address issues and challenges affecting the retail market, coordinate media and PR activities, and general attraction.
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The Retail Strategy: What To Do & How
Retail Marketing & Attraction Objectives, Goals, & Tactics
Despite the still somewhat unsteady economy, tremendous retail attraction opportunities do exist in Stafford County. One of the greatest barriers to success, we believe, is that the industry does not yet understand the market or have a vision of the potential opportunities for success that lie within the County. Therefore, perhaps the greatest retail challenge for Stafford County is making sure that the retail industry becomes – and remains – aware of and excited about the fundamental long-term strength of the market.
Achieving this is not an overnight process. The best solution is with a solid, smart, long-term plan centered on consistent, compelling, aggressive messaging. In addition, images demonstrating both the breadth of market potential for retailers and the County‟s aspirations for (and commitment to) continued retail growth and an improved quality of life are helpful.
A key component of your success will be generating awareness to and an audience with the retail industry. Another important step is nurturing and sustaining the willingness of local leaders and stakeholders to support and encourage retail development. And yet another is a “mirror” marketing effort aimed at local consumers who also must be educated and continuously informed about current retail strength, benefits of shopping in the County, new retail and entertainment experiences, store hours, and any other related activities and events that will resonate positively.
A number of steps and investments are required to achieve the goals for retail attraction and ultimately, a truly compelling quality of life in the County. Many of the following actions and recommendations are the beginning of what should be a long-term pro-active commitment. All of these are driven by the overall arching goal:
To enhance the quality of life offerings for the Stafford residents and visitor, through the creation of a compelling and sustainable base of retail in the County in the near- and long-terms.
To accomplish this, the County must be prepared to focus attention on, and dedicate resources toward retail attraction and retention activities and tools. The ideal solution is to develop and implement a strategic retail marketing and attraction campaign with efforts focused on achieving the following:
Significantly raise the visibility of Stafford County within the national and regional retail arenas. The combination of positive, benefits-driven messaging and images calculated to resonate with target audiences, convincing them that Stafford offers all the diverse requirements necessary to provide the return on investment they seek, now and down the road.
Generate positive, signature, “branded buzz” within the retail community that Stafford County is a place that means business,” and is doing deals even in a slow economy – maybe even that this is the next market to “pop”.
Educate the overall retail industry about the many benefits of investing now in Stafford, and about the short- and long-term potential for success, including new developments and projects in the pipeline and coming on line (especially those that are funded, entitled and corporately tenanted).
Create ongoing awareness of the myriad strengths of the County that are driving residential and commercial growth, as well as visitors and tourists to and through the market.
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Develop a relationship on behalf of the County with target retailers via outbound contact, in- person at retail industry events, marketing events sponsored by the County, and real estate organizations in and around the region.
Share motivation for retail growth and cultivate strategic partners in the retail attraction and marketing effort (brokers, owners, universities and other institutions, even residential groups).
Develop a reputation for the County as the one ”go to” source for current and accurate market information requisite for the retail industry. The retail section on the Web site is an important step in this process and must clearly articulate what data is available, what additional resources the County can provide (GIS mapping, ESRI data), etc.
Gain an understanding of priority retailer‟s requirements and the factors that trigger site location and expansion decisions.
Attract more retail including street-front oriented businesses along Route 1 and in the Courthouse Area, destination and anchor retailers, including specialty stores, grocers and food related stores, restaurants and entertainment uses.
Strengthen and preserve the existing retail base and the linkages between existing uses, (recreational, tourist, retail) including across submarkets.
Foster entrepreneurial opportunities especially for restaurants, local chefs and specialty retail.
The Stafford County Retail Audience
Stafford County‟s appeal as a corporate destination does not necessarily translate to an equal strength for retail attraction. Rather, the Stafford County retail market must rely on a regional consumer base. That said, the retail audience is broader than simply the consumer base, and must include those individuals and organizations that can influence retail site selection and awareness with and access to the retail industry.
There are five distinct target audiences for this effort:
• Prominent, better/upscale local and national retailers - Key targets within this group are senior corporate executives involved in making or influencing market and location decisions. Specifically, these include owners, VP-level real estate and site locators, VP-level marketing and sales promotion executives and VP-level operations people (important to win over because they are often known to kill deals). National restaurant chains and local and regional restaurants - Key targets in this group are those top national chains and restaurant groups expanding (Darden Restaurant, top ranked – Long Horn, Cheesecake Factory, Olive Garden). Local restaurants that are expanding and local chefs seeking to create a name for themselves also need to be a part of this mix. • Real state professionals - Real estate brokers (local and national), owners/investors, investors and lenders, market research firms (local and national) and site location consultants.
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• Media - Local business and general market, national business and trade press including those that cover retail, real estate, lifestyle/quality of life, site location, even planning/urban design. • Consumers – Residents and workforce in the County and throughout the region, including adjacent communities and jurisdictions, all of which represent a potential customer base that could support area retail, if they are convinced to “buy in” and then motivated (by civic pride) to help spread the good word about retail opportunities.
With a closer look, Stafford‟s audience includes:
The brokerage community (regional and national) National and regional retailers and restaurants (and their representatives) Residents within Stafford County, Fredericksburg, on base at MCBQ Residents in adjacent communities Employees and business visitors (including on base at MCBQ) Employment and business centers (hospital, courthouse) Visitors and tourists to and through the market Colleges and universities (students, professors and administration) Leading industry associations: International Council of Shopping Centers, National Retail Federation, The National Restaurant Association, International Franchise Association Regional, national and local retail media and writers Regional, national and local business media and writers Investors and developers (current and potential retail/mixed use development organizations, lenders) Regional hospitality operators and destination operators (hotel, marina)
Guiding Policies Moving Forward To Help Ensure Success Focus retail attraction efforts on those areas with the most promise for success:
Priority employment and development areas (RDAs, UDAs), and those areas where the County has and is dedicating long-term resources (Boswell Corner, Courthouse Area);
Projects that have already been initiated, have dedicated funding, and present the best options for retailers entering the market (Town Center at Aquia, Quantico Corporate Center, and Courthouse Area).
Develop a proactive approach: this should include positive interest in response to all inquiries about primary retail locations and pro-active outreach to target retailers and all relevant audiences (retail brokers/representative, retailers, restaurants and developers).
Equally important is positioning Stafford as one of the primary retail destinations in the region: Washington MSA, NOVA or Mid Atlantic: As part of this, always promote the County‟s competitive business environment and tax structure, the County‟s economic strength, and the long-term potential for growth.
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Become familiar with and stay current about the industry: this includes trends, expansions, retailer requirements, key players in the industry (locally and nationally), and those retailers and investors looking at the region.
Tactics and Absolutes for Achieving Retail Attraction Goals
Short – term/Immediate – Five things that will make a difference
Establish and Increase the County’s profile in the retail industry - join ICSC - Raising the County‟s profile in the retail industry can be readily achieved through increased participation at the local levels, not just the annual convention. Ongoing participation and involvement with ICSC, including attendance at relevant local and regional programs and speaking engagements at other regional events (Bisnow Retail, Interface Retail Conference), will help spur greater awareness of and excitement about the County and will, over time, result in new relationships with retailers and their representatives and investors. Consider attending other shows attended by your primary audience including The National Restaurant Show, The National Retail Show, the International Franchise Show. Note: ICSC Mid-Atlantic, typically in February is a must. All of your competitor communities have a presence at this show. The County can participate on its own, support, or even partner with area investors and other organizations that are already participating. (ICSC with Ramco Gershenson).
Enhance Stafford County’s Data Collection Process – The County maintains a great deal of data; its breadth and depth are truly impressive. However, there must be increased focus on collecting, collating and presenting that information (updated as often as possible) that retailers seek. This includes day-time population, traffic counts, HHI, employment, recent sales figures, and leakage. Present this data in a format retailers and their representatives are comfortable with, and that is easily accessible and downloadable. This information should be updated annually.
Proactive Retail Recruitment and Prospecting – Someone needs to claim responsibility and focus efforts on retail recruitment and retail prospecting. These roles must be established early on. Consider hiring a retail recruiter, perhaps even as a part-time position or on a contractual basis (many communities have this as a part time position). Essentially a prospector, this individual should focus on outreach to retail prospects (and their representatives). The recruiter would also become a link between property owners (who want tenants, but don‟t know where/how to find them) and commercial brokers (who want transactions, but don‟t have the time to provide comprehensive, prospecting services for smaller buildings and projects). The retail recruiter‟s prospector role fills the gap between these two interests, but does not replace the broker, whose role in completing the lease transaction is still required.
Develop a target retail attraction database Develop a retail industry contact list comprised of targeted retailers and their respective space and market requirements (square footage, co- tenants, demographics, parking etc). Also include information on their representatives, local and national brokers, retail developers, industry media, and whenever possible e-mail addresses. Use this list to initiate contact, maintain a dialogue, promote available spaces and disseminate good news.
Develop a retail contact list that can be utilized for regular marketing, outreach, dissemination of data and news, invitations to local business and economic development events. Contacts should include retail writers and media, local brokers and representatives, target retailers,
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industry officials and experts (ICSC, NRF, IFA).
Ongoing/Long – Term Activities
Program marketing funds to support retail outreach and marketing activities including: o Join ICSC ($100 for public sector) o Attend ICSC Mid-Atlantic ($300 for 1 attendee, approximately $2,500 to exhibit) o Produce annual Stafford County Retail Report ($5,000 - $8,000) o Host an annual Retail Summit, which includes an update on the market and presentation of available sites ($3,500 - $5,000) o Develop a Retail Market broker road show ($1,000) and do a series of presentations to top brokerage teams in the region.
Develop and maintain an updated inventory of available sites for retail development (built and un- built), ideally located on the website. This probably can be developed using existing software. At minimum, a simple Excel format can be developed with categories by geography, size, type and asking rents. Gather this information through listing brokers and owners in the marketplace. Once one firm‟s information is available, others will eagerly provide their listings. Make it easy to use and find!
Strengthen and nurture positive awareness and presence for the County in regional and national retail arenas. Locally, this can be accomplished by communicating to and with the local retail real estate industry and media. Nationally, consider outreach to the business and industry media, national brokerage firms, and leading industry organizations. Announce all milestones, achievements and investments that might influence retail investment including new retail openings, the County‟s fiscal strength, project starts and completions, and impressive demographic data. Also enhance the County‟s retail offerings in all tourism related brochures, the website, and any other tool that reaches your audience.
Empower one person in the Department with ultimate responsibility for retail attraction decision- making and marketing leadership.
Collaborate with real estate research organizations and firms reporting on the region to assure Stafford is included in regular trend and market updates. This includes real estate brokerage and research firms such as Delta Associates, which produces quarterly reports on the regional market, Marcus & Millichap, KLNB, etc who produce quarterly market reports (office and retail), as well as institutions such as GMU and GW. Send their research teams data on Stafford County.
Develop a comprehensive, updated, retail database with retailers space needs, requirements and contacts. This would build on the contact data base. Microsoft Access is a good tool to create a data base for tracking leads and retail data. Individual retailer‟s site requirements are often available on their websites or through the broker presenting them in the market. Bring on an intern to complete this, as most of the information is public.
Establish a series of meetings with the retail real estate industry professionals working in and near the County. Perhaps, annually at first, following a retail marketing summit. Use this team to collaborate with on intelligence gathering about target retailers, which retailers are looking at the
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Attachment 4 Page 57 of 70
market, and individual requirements. Most firms have research departments that might share this, and the brokers are willing to provide information if they think it will help make a deal.
Develop an arsenal of retail-oriented, on- and offline marketing tools and information. Develop niche retail marketing fact sheets - fact sheets that are focused on target retail segments. For example, a fact sheet targeted to restaurants that includes data about the local food-oriented spending habits, gaps in the restaurant mix, demographics and marketing stats, and real estate points (average rents, competition). (See example on Kids Retail for Center City Philadelphia in Appendix).
Create a unique Retail URL. Create a new, separate County Retail portal that provides relevant market and local data, and information including traffic counts. This could be a “micro site” directly linked to the County‟s central web site, accessed by simply clicking on the URL. Encourage all those other, relevant agencies (and private entities) responsible for marketing the County and assets within the county (brokers/developers) to also include a link on their respective sites. The retail URL should include current news on County retail development and leasing activities, available tools and incentives, key points of contact at the County and other organizations (Virginia Dept. of Commerce, Permitting, and Planning), new and planned developments with potential retail space, current restaurants, and tenants, etc. Assign someone to update this information monthly (more frequently, if necessary and possible).
Develop a lead tracking system. Connect this to the retail attraction data base. Dedicate an individual to maintain this and the retail data base. The lead tracking is important to show return on investment, and can be used to enhance mailing and interest lists, target tenants and link tenants to opportunities.
Regularly communicate information about the retail market. Include relevant information in regular County communication materials, and periodically schedule economic development updates and reports (progress on infrastructure improvements, new retailers and expansion, sales information). Announce all news related to the retail market – including new leases and openings, major project starts and completions and special events, locally and nationally – to those in the industry, as well as relevant general and trade media.
Develop a retail attraction driven communications plan. The goal is to put and keep Stafford in the retail marketplace. Public Relations is an invaluable tool for “spreading the good word” about Stafford County. From the general community, current and prospective visitors, business owners and businesses targeted for tenancy, etc., people have to think nothing but the best of Stafford and all that it is and offers. A successful PR program also requires a budget and a long-term commitment to enable effective development, coordination and stewardship of a program that produces tangible, continued success. Editorial coverage is one of the best means to communicate to your target audience. Consider hiring a PR firm that specializes in retail that can help to spin the County retail story immediately, and across the long-term, in national business and industry retail press. Put Stafford “out there” and do not be afraid to talk about what measures are underway and planned for the future. Also, discuss how the County is growing and how it will support ongoing activities.
Develop a marketing/branding strategy. Set a course and stay it! “There‟s only one chance to make a good, first impression?” There‟s another that applies to Stafford: “It‟s 10 times harder to change an existing impressing than to create a new one.” Developing a strategically accurate
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positioning, an enticing and inspiring tagline, substantive primary and secondary messaging, ad templates, incisive PR tactics etc. are all the right, initial steps to take toward powerful community marketing success. But, that success is only arrived at when each step is followed by another across many months and years.
Establish a County Retail Committee: Encourage, even direct, the creation of a Retail Committee. The purpose of the committee is to maintain a pulse on the local retail market, enhance education about the market and opportunities, and help to develop a team of ambassadors to support ongoing recruitment activities. Membership should be comprised of County Economic Development team members, retail brokers and leasing personnel, property owners or their representatives, but also should include retailers, restaurants, even representatives from other business associations. Collectively, this group could become a formidable, influential force and create a powerful, cohesive voice. The retail brokers and owners on the committee can also provide counsel and support to ongoing attraction efforts including guidance at ICSC, introductions to retailers and insight on individual retailer‟s needs, requirements, and growth plans.
Strengthen Cross-Marketing Efforts: Focus on tourism and recreational and cultural-related activities (wineries, river sports, cultural, historical and artistic events and programs). Also strengthen cross-marketing efforts to business affiliates and centers (Stafford Airport, Quantico, universities and colleges, office/corporate parks).
Focus on Assemblage: If the right site does not exist, consider opportunities to assemble a site that fits within the objectives of your redevelopment plan. Focus on sites that the County may currently own, or are part or within priority development zones (RDA, UDA). Create Case Studies of Success: Develop case studies documenting local retail successes. Create a template for cataloguing “Problem…Solutions…Measured Results” and include the use of local tools, creative approaches (including assemblage, lease structures) and unique strategies for design and cost of the project, including lease rates, when possible. Three or four is all you need to start. These can be updated annually or as relevant. Put these on your website and include them in marketing and outreach.
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News December 17, 2014 Kimco Predicts Positive Retail Trends for 2015 People & Transactions By Keith Loria, Contributing Editor
Regions / Cities The National Retail Federation has predicted that purchases during the 2014 holiday shopping season SHARE THIS POST
Property Types were going to increase 4.1 percent over last year.
In response to the report, Kimco Realty further 6 30 10 0 1 Finance predicted that next year the retail market will remain strong, as retailers continue to tailor the shopping Like Tweet Share
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“We expect an increase in new store openings led by Conor Flynn, Kimco Realty Business Management major discount and off-price retailers and the fast POPULAR POSTS casual restaurants,” Conor Flynn, Kimco Realty’s president, COO & CIO, told Recent Posts Most Viewed Tags . “There will continue to be interest from traditional Business Specialties Commercial Property Executive outlet tenants that will consider relocating to power centers, which generally offer Hess Tower Designated a BOMA 360 Performance lower occupancy costs. In addition, we believe that the declining gas prices will Building Digital Magazine benefit the consumer and lead to an increase in spending which is good for retail.”
However, Kimco expects new construction in the sector to be constrained and is CPE TV Mead Johnson Moving Headquarters to West Loop looking very selectively at some ground-up development opportunities.
Webinars/Chats “We expect that for the near future, new supply will remain constrained, with some Jamestown Buys America’s Square ‘green shoots’ of new development starting to spring up over the next three years,” Flynn said. “We still see redevelopment opportunities as our best use of capital at Blog the moment. The catalyst for these new development and redevelopment projects Richman Gets Green Light for High-End Downtown are being driven by the demand from junior anchor box tenants as most public Project Slideshows strip center companies, including Kimco, are between 97-98 percent occupied in
spaces greater than 10,000 square feet.” Affordable Housing Project Advances in Chesapeake CPE Awards Turning to smaller businesses, the mom-and-pop retailer, especially those in the service sector, are forecasted to return to the open air shopping centers, Polls enhancing their abilities to connect to the local communities. SEARCH IN ARCHIVE
Select a date “This is evidenced by our Q3 results, which showed that over 50 percent of our Research Center new leases signed in that quarter were with pure mom and pop retailers,” Flynn Select month added. “We’ve found that community banks are more open to provide financing for Select a category Guest Columns small business entrepreneurs than in the past several years. In addition, as some Affiliated CRE Resources
housing markets have stabilized, there are more opportunities for business Search with Google owners to utilize home equity financing to help them fund their business.” About Us
A new trend that’s emerged of late is online retailers opening brick-and-mortar POLLS Contact CPE stores. This, according to Flynn, will create an “omni-channel” presence that’s
here to stay. How would you rate the current climate for CRE development? Editorial Calendar For example, eyeglass retailer Warby Parker opened retail locations and The time has arrived for speculative showrooms in 11 cities, men’s footwear brand Jack Erwin opened its first store in development. Advertising/Media Kit TriBeCa, and Microsoft has opened locations throughout the country to showcase its new products. Let’s stick to build-to-suits or significant pre- Attachment 4 Page 60 of 70 leasing. Manage Subscriptions “Bonobos, Rent the Runway, and Plated are three more examples. Now with Amazon opening its first brick-and-mortar store in New York City, omni-channel We’re already overdeveloped, based on what’s Back Issues retailing is showing itself as the new normal for retail,” Flynn said. “As the lines in the pipeline. blur between enclosed malls, outlet malls, power centers, grocery centers, and online and mobile channels, retailers are finding new ways to innovate and RSS Feeds engage consumers. Shoppers want the ability to buy a product online, pick it up in View Results
the store, or have their local store ship it to their house, if they so choose.” More Polls » CPN Archives As for other trends to keep an eye on for 2015, Flynn said to monitor corporate responsibility and sustainability programs, which are becoming the industry standard. INDUSTRY LINKS
American Seniors Housing Association “We have a few new programs in the works for 2015, including our Illumi-Nation lighting enhancement project, and we believe you’ll see our peers making strides Association of Foreign Investors in Real Estate (AFIRE) on this front as well, as more investors demand it, and landlords and tenants start to see the benefits,” he concluded. “Investors are not the only ones with an Building Owners and Managers Association (BOMA) increased focus on more than just the bottom line—shoppers are now increasingly International health-conscious and environmentally aware. We expect you’ll continue to see an CCIM Institute (CCIM) increase in tenants offering fitness services, specialty wellness goods, and organic foods and other products, again further enhancing the tenant mix at open air CoreNet Global centers.” CRE Financial Council Tags: Conor Flynn, Kimco, Kimco Realty CREW Network (Commercial Real Estate Women) RELATED POSTS Institute of Real Estate Management (IREM) September – Briefs/Sales & Development International Council of Shopping Centers (ICSC) Two Cincinnati-Area Retail Properties Sell; More Expected
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National Council of Real Estate Investment Fiduciaries July – Briefs/People (NCREIF) Kimco CEO Retires; Replacement Picked National Multi Housing Council (NMHC)
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Mid-Atlantic's Retail Resurgence
February 26, 2014 Published in From The Magazine
Retailers, mainly grocers, have set their sights on prime infill locations in the Mid-Atlantic to cater to an underserved retail market.
Even though the Mid-Atlantic is home to some of the country's most favorable demographics, the lack of new development Whole Foods Market has plans to open a during recession years has led to tight vacancy rates and 36,000-square-foot store in southeast staggering high levels of retail leakage. Development Washington, D.C., in early 2017. Located companies are now eager to grab hold of the opportunity to near Navy Yard and Nationals Park, this will meet this unmet demand by building projects in prime, infill be the company's fifth grocery store in the locations. District of Columbia. Whole Foods will anchor WC Smith's $443 million development. There are currently 1.7 million square feet of retail under construction in Washington, D.C., according to the Washington D.C. Economic Partnership's 2013/2014 D.C. Development Report. Approximately 767,000 square feet of that is slated for a 2014 completion.
Comparatively, more than 1 million square feet of new or rehabilitated retail space (representing $300 million in investments) will exist in metro Baltimore by the end of 2014, according to the Baltimore Development Corp. Attachment 4 Page 62 of 70 The lack of availability has also established a very competitive market for retailers looking to expand and investors wanting to grab a piece of the Mid-Atlantic pie.
"The Mid-Atlantic region benefits from an affluent, educated work force with better than average employment opportunities, which gives retailers confidence that all the right ingredients exist for their success," says Chris Weilminster, senior vice president of leasing for Federal Realty Investment Trust. The company is developing Pike & Rose in Rockville, Md., which is one of the largest projects in the Mid-Atlantic pipeline.
The Washington, D.C., metro area as a whole is one that retailers love. Eight counties in the region are among the top 15 in highest median household income in the U.S., according the U.S. Census Department's 2012 American Community Survey. Loudoun County, Va., ranks No. 1 on that list with a median income of over $117,000. Even 25 miles out from Washington, D.C., Stafford County, Va., ranks sixth in median household income at more than $97,000. Closer in counties, like Fairfax and Arlington Counties in Virginia, have median incomes north of $100,000, while Montgomery County, Md., has a median income greater than $94,000. The high levels of disposable income are causing retailers to continue to take notice of the area and rapidly expand.
Growing retail demand is driven by grocers, fitness concepts and fast-casual restaurants. There are currently eight grocery stores under development in the District of Columbia, according to the D.C. Development Report. The report also states that retail sales for food services has increased by 6.7 percent during the past year.
Experts agreed that while retailers are sticking to fool-proof locations when opening new stores, investors and pension funds alike will take more of a risk in 2014 when it comes to investing in Mid-Atlantic properties due to the shortage of supply. The coming year will be characterized by high levels of competition and a continued resurgence of retail opportunities as the Mid-Atlantic recovers nicely amidst a rebounding economy.
Grocery Wars Washington, D.C., has witnessed its population grow by 4.5 percent from July 2010 to July 2012. There is an estimated 8.1 square feet per capita of shopping center space in the District and roughly 27.9 square feet in the metro area, according to the D.C. Development Report. Many new residents in D.C. are turning to its suburbs in order to do their shopping. Grocery stores are taking note of this wide gap and rapidly planning additional stores in D.C. to capitalize on the population growth.
In 2014, D.C. will open its 28th grocery store since 2000. The supermarket category continues to grow with Whole Foods Market, Trader Joe's, Wegmans, Harris Teeter and Safeway all fighting for new development and backfill opportunities. Attachment 4 Page 63 of 70 Whole Foods Market, in partnership with real estate firm WC Smith, recently signed a lease for a new 36,000- square-foot store in southeast Washington, D.C. The store, which will be located near Navy Yard and Nationals Park at 800 New Jersey Ave., will anchor the retail portion of WC Smith's $443 million development, which the company is still in the process of branding. This will mark the fifth Whole Foods location in D.C. when it opens in early 2017.
Safeway has adopted a very similar business model to Whole Foods Market in its expansion throughout the Mid-Atlantic. According to Jason Yanushonis, leasing and brokerage representative, and Jim Farrell, senior director of leasing and brokerage, with The Rappaport Companies, Safeway focuses on remodeling older developments and building a project around its new stores. The revitalized developments usually include the new Safeway, ancillary retail offerings and either an office or multifamily component above.
"Most excitingly, retail is becoming the standard for most ground-floor space, activating our streets and neighborhoods," says Michael Smith, business development and project manager with Williams Jackson Ewing. "Developers now want to build retail, instead of being forced to, and see it as both a legitimate source of revenue and a value adder for upper floor uses." Experts also predict that other retail users will capitalize on this trend in 2014 by expanding their own grocery offerings.
George Fox, director of leasing and vice president of business development for Virginia Beach, Va.-based Wheeler Real Estate Co., explains, "In 2014, you will continue to see national dollar stores — Dollar Tree, Dollar General and Family Dollar — relocate from inline locations in grocery-anchored neighborhood centers to freestanding outparcel buildings, thereby eliminating their grocery sales lease restriction and allowing them to sell an unlimited range of grocery items."
In addition to supermarket chains and dollar stores adding grocery components, there is a strong demand from consumers for more convenience offerings. This has caused fitness concepts, especially more niche brands that rely on smaller footprints, to rapidly expand throughout the Mid-Atlantic. These include Xango, Soul Cycle, Core Power Yoga and Orange Theory Fitness to name just a few.
Upscale theater chains have also set their sights on the Mid-Atlantic. Landmark Theatres announced in early January that it was planning a six-screen cinema at Atlantic Plumbing, a new mixed-use community at 8th and V streets in D.C. The JBG Companies and Walton Street Capital are developing the 350,000-square-foot project, which will open in late 2015. This marks the second new theatre Landmark is building in the Washington, D.C., metro area, according to a press release from the company.
iPic Theaters is also opening its first location in the Mid-Atlantic in Federal Realty Investment Trust's Pike & Attachment 4 Page 64 of 70 Rose project in the White Flint district of Maryland.
The expansion of theater chains reflects a larger trend of other retail tenants rapidly expanding throughout the Mid-Atlantic to take advantage of a growing millennial culture that prefers to spend its disposable income on experiences. Pub and microbrew restaurant concepts have taken the region by storm.
Bar Louie already operates five locations in the Mid-Atlantic in Gainesville, Ashburn and Arlington, Va.; Washington, D.C.; and Rockville, Md. The restaurant chain has shown no signs of slowing down its rapid expansion plan any time soon.
Experts also cited Miller's Ale House and new-to-market retailer BJ's Restaurant and Brewhouse as other chains that plan to expand in the Mid-Atlantic. The pubs and microbreweries have grown in popularity in the region due to The JBG Companies is redeveloping an their ability to draw in a large millennial crowd that is willing to underutilized retail center into the transit- spend more income on eating out. oriented Galvan at Twinbrook. Safeway will anchor the center.
Surprisingly, Stafford County, Va., recently received its first Chipotle and the restaurant chain is considering other locations. The county is aggressively courting the fast-casual segment and has ideal locations in both the northern and southern parts of the county, says Tim Baroody, deputy county administrator and director of economic development and legislative affairs for Stafford County.
Other ideas that have garnered interest from the millennial clientele in the Mid-Atlantic are chef-driven, one-of- a-kind restaurants that provide a unique experience. Federal Realty Investment Trust's Weilminster mentions Robert Wiedmaier's Mussel Bar and Grille, and Wildwood Kitchen, as well as Michael Babin's Neighborhood Restaurant Group.
"It has been interesting to see so many top chefs who start in downtown city centers refocus their energy on securing suburban market locations," he says.
Infill Markets While chef-driven restaurant concepts are branching out to the suburbs, other retailers are focusing strictly on infill locations that have the traffic counts to be a proven success.
"Retailers are being disciplined about staying focused on securing sites in mature, infill markets that have an established and successful retail presence. Retailers are not looking to be pioneers," explains Weilminster. Attachment 4 Page 65 of 70 "They no longer want to risk opening stores in the fringe developments that are betting on housing and employment workplace growth."
"Retailers have been looking more closely at urban locations and are being more open-minded to space configuration and parking availability in favor of population density and access to mass transit," adds Smith. Kroger and Walmart are two companies that are taking advantage of infill locations with their smaller Marketplace and Neighborhood Market concepts, respectively. The businesses are adapting their footprints in order to have a presence in more high-profile locations.
"Retailers are shrinking their footprints, plain and simple. Even stores that are coming up for lease renewal will also want to shrink their footprints," says Jonathan Hipp, president and CEO with The Calkain Companies, based in Reston, Va.
Popular submarkets include the 610 Corridor in Stafford County, as well as the York Road Corridor in Baltimore County. When it comes to the District itself, Keith Sellars, president and CEO of the Washington D.C. Economic Partnership, a public/private partnership dedicated to facilitating economic development in the District of Columbia, says that a sweet spot for retailers is any location near mass transportation.
"Retailers are willing to be a bit more creative and opportunistic, and less rigid in their site selections," adds Blake Cordish, vice president of The Cordish Company, based in Baltimore.
Focus on Retail Not only do retailers want to establish themselves in prime locations, developers are also planning new projects in some of the city's most dense submarkets. While mixed-use centers continue to lead the way when it comes to ground-up development, firms are once again focusing on providing a strong mix of retail offerings to accompany office and multifamily components as well.
"You're seeing the best-in-class developments getting done," Cordish says. "They're in the strongest real estate locations with really good sponsors and developers behind them that have access to capital. The Class B spots without the strongest sponsorship just aren't getting done."
The Wharf is one of the most talked about projects in the works for the Mid-Atlantic. The $1.5 billion, 3.2 million-square-foot project is being developed by Madison Marquette and PN Hoffman along the Potomac riverfront in D.C. Phase I will be complete in 2016. Upon full build-out, The Wharf will feature 358,000 square feet of retail, 1,350 residential units, 960,000 square feet of office space and three hotels. The 27-acre development will also include a concert venue and an artisanal food market. Attachment 4 Page 66 of 70
CityCenterDC is another mixed-use project that will revolutionize downtown Washington, D.C. Hines and The TFI US Real Estate Fund are building the 10-acre, pedestrian-friendly project. Phase I includes more than 270,000 square feet of retail, 458 apartment units and 216 condominium units, as well as a public park and central plaza. Occupancy of the residential buildings occurred in December 2013, while the retail and office components will open during the first half of 2014.
Construction of Phase II of the project is expected to commence in 2015. It will consist of an approximately 370- room luxury hotel and 73,000 square feet of additional retail. Phase III of the project will be completed by another developer, Gould Property Company, and will consist of a 500,000-square-foot office building and 40,000 square feet of retail space. The project is a joint venture between Clark Construction Group, Smoot Construction of Washington, D.C., and McKissack and McKissack is the general contractor for CityCenterDC.
The Rappaport Companies is also very active in the Mid-Atlantic, focusing on developing Skyland Town Center. Construction on the project, which is located in southeast Washington, D.C., will begin during the third quarter of 2014.
Skyland Town Center will include approximately 300,000 square feet of retail and 454 residential units. The project will be built in two phases with the first phase scheduled for a 2017 completion. The D.C. Development Report says the project has an estimated value of $260 million.
According to Rappaport, it is talking with Walmart and a pharmacy to anchor the retail portion of the center and will be targeting restaurants, home furnishings and service-oriented retailers for the remaining space. The Skyland Development team includes The Rappaport Companies, WC Smith, Harrison Malone Development LLC, Marshall Heights Community Development Organization and Washington East Foundation.
"Ward 7, which is located just east of the Anacostia River, is currently underserved by retail, which is why the District government has made the development of Skyland Town Center a priority," says Sheryl Simeck, vice president of marketing and communications for The Rappaport Companies. "There are more than 35,000 residents within one mile of the project. Residents have been waiting for this project for almost 25 years, and we believe the area is overdue for quality retail and residential development."
St. John Properties, which normally concentrates on building office campuses, is building Reisterstown Crossing in Reistertown, Md., approximately 18 miles northwest of downtown Baltimore, to complement its Reisterstown Office Park. The population within five miles of the center is 66,846 with an average household income north of $92,000. The 13,000-square-foot center is targeting restaurant users to cater to an office lunch crowd and the Attachment 4 Page 67 of 70 surrounding community.
"The increased inventory of space that was generated during the recession has been eroded to the point where there are very few opportunities for larger tenants," says Alex Montague, vice president of Colliers International's Baltimore office. "Overall vacancy in the Baltimore region stands at just 5.3 percent and declined steadily throughout 2013. Developers have begun to dust off projects that have been in storage for the past few years, and they are actively seeking anchor tenants to kick the projects off."
In addition to the Atlantic Plumbing project previously mentioned, The JBG Companies is also redeveloping an underutilized center in Rockville, Md., into Galvan at Twinbrook. Located on the west side of the Twinbrook metro station, the project will feature 100,000 square feet of street-level retail that will be anchored by a 63,000- square-foot Safeway. Galvan at Twinbrook will also include 356 apartment units and two levels of underground parking. Delivery is scheduled for 2015.
Large Deals for Large Players Even though there is a large amount of new construction in the Mid-Atlantic pipeline, there continues to be a shortage of assets on the market when it comes to the investment sector. With the economy on the upswing, banks are more eager to award loans to private investors looking to enter the market. Because of the multitude of players in the game going after a constrained supply, prices are only increasing with the largest companies being the primary parties able to close deals.
"REITs, institutions, opportunity funds, private investors and foreign investment funds are all very actively looking at acquiring the limited number of retail projects that come to market. It is a very active, competitive market," says Weilminster.
Grocery-anchored centers remain the most attractive from an investment standpoint, while net lease properties are growing in popularity.
"Grocery-anchored shopping centers continue to attract the most institutional attention, and there are lots of small net lease deals circulating," says Collier International's Montague.
Similar to expanding retailers, investors are sticking to tried and true submarkets when it comes to acquiring properties.
"Investors are taking the lower risk path and staying in proven markets. Most acquisition activity centers on Attachment 4 Page 68 of 70 existing Class A properties in the strongest metropolitan statistical areas," says Geoff Glazer, vice president of acquisitions and development for the Mid-Atlantic and Northeast Regions with Kimco Realty Corp. "With competition and pricing levels high, the larger players are the ones who generally close the deals."
While there is a surplus of investors in the market, the Mid-Atlantic remains underserved from a retail standpoint even thought the region has some of the most favorable demographics in the nation. Vacancy rates will remain tight with the abundance of expanding retailers in the market until several large-profile projects come on line.
— Brittany Biddy
SIGN UP FOR OUR NEWSLETTER Attachment 4 Page 69 of 70 Attachment 4 Page 70 of 70 Attachment 5 Page 1 of 18
D R A F T
For Discussion Purposes Only
STAFFORD COUNTY, VIRGINIA
PROFFER STATEMENT
Applicant: Augustine South Associates, LLC
Property Owner: See Attached Exhibit A
Property: See Attached Exhibit A for specific parcels, all located in the County of Stafford, Virginia, Hartwood Magisterial District and consisting in the aggregate 1,051.59088 acres +/- . Collectively all parcels will be hereinafter known as the “Property”
Project Name: George Washington Village Town Center (the “Project”)
Rezoning Request: Rezoning to Planned Traditional Neighborhood Development (“P-TND”).
Date: November 13, 2014February 11, 2015
County File No. RC: 1400155
1. General Requirements.
(a) The following proffers are being made pursuant to Sections 15.2-2298 and 15.2-2303, et al. of the Code of Virginia (1950), as amended, and Section 28-161, et seq. of the Stafford County Zoning Ordinance. The proffers provided herein are the only proffered conditions offered in this rezoning application, and any prior proffers in which the Property (as generally defined above and shown on the Regulating Plan, which is defined below) may be subject to or previously offered with the Applicant’s application or otherwise previously proffered are hereby superseded by these proffers, and further said prior proffers are hereby void and of no further force and effect. In addition and notwithstanding the foregoing, the proffers provided hereunder are specifically conditioned upon and become effective only in the event the Applicant’s rezoning application No. RC 14-00155 is approved (including through applicable appeal periods) by the Stafford County Board of Supervisors (the “County”). These proffered conditions will be deemed accepted by the Board upon approval of the rezoning and the expiration of the said 30-day period following the Board's approval, and confirmation that no litigation has been filed challenging the rezoning. Whenever the terms of the Proffers refer to the affirmative obligations of the Applicant Attachment 5 Page 2 of 18 to make improvements to the Property or the public roads, the term Applicant will refer to the owner(s) of the Property at the time of the initial development of the Property, and theirits successors and assigns.
(b) Subject to the terms hereunder, the Property will be generally developed in accordance with that certain Regulating Plan entitled “Regulating Plan George Washington Village”, consisting of 4 pages, dated April 2014, as last revised November 14, 2014, February 1, 2015, and prepared by Bowman Consulting, and attached hereto as Exhibit B and made a part hereof by this reference (the “Regulating Plan”).
(c) Subject to the terms hereunder, the Property will also be developed in accordance with that certain generalized development plan entitled “General Development Plan George Washington Village” dated April 2014, as last revised February 1, 2015, and prepared by Bowman Consulting and marked as Exhibit D (the “GDP”).
(d) For purposes of the final preliminary, subdivision, construction and site plans, which will supersede the GDP, proposed parcel lines, parcel sizes, building envelopes and footprints, access points, building sizes, building locations, public road locations, private driveway, road and travel way locations, interparcel connectors, site constraints, RPAs and wetland areas, utility locations, storm water management facilities, and dimensions of undeveloped areas shown on the GDP may be relocated and/or amended from time-to-time by the Applicant to address final development, engineering, and design requirements and/or compliance with federal or state agency regulations including, but not limited to, VDOT, DEQ, Army Corps of Engineers, etc., and compliance with the requirements of the County’s applicable development regulations and design standards manual.
2. Types, Style, and Density of Development.
(a) The Applicant will develop and construct the Property utilizing the following development and construction standards:
(i) Transect Zones: The Property will be divided into transect zones T-1, T-2, T-3, T-4, T-5, T-6, and SD-C, and the density, primary roads, civic buildings uses, pedestrian sheds, and vista terminations will all be generally located in the areas provided on the attached Regulating Plan.
(ii) Neighborhood Design Standards: All residential units will be developed and constructed in general accordance with those certain neighborhood design standards, dated April 2014 as last revised October 2014, entitled “George Washington Village” prepared by Bowman Consulting, attached hereto and marked as Exhibit C (“Design Standards”).
(b) Mix of Uses.
(i) A maximum of 2,957 residential units will be developed on the Property;
Attachment 5 Page 3 of 18
(ii) There will be at least three (3) different residential unit types (single family detached, single family attached and multifamily units), all as generally depicted on the Regulating Plan and GDP (as defined below). Single family lot sizes will vary in width to accommodate differing unit sizes as shown on the GDP (as defined below). All residential units will generally conform to the Design Standards.
(iii) The non-residential useuses will consist of a maximumminimum of 1.55 million square feet of commercial usesspace at full build-out, all as generally provided on the Regulating Plan and as generally depicted on that certain generalized development plan entitled “General Development Plan George Washington Village” dated April 2014, as last revised November 14, 2014, and prepared by Bowman Consulting and marked as Exhibit D (‘GDP”)the GDP. The construction of all non-residential uses will generally conform to the Design Standards.
(iv) Notwithstanding anything to the contrary herein, the Applicant, in accordance with Section 28-56 of the County Ordinance, may relocate residential lots, commercial buildings, trails and pathways, civic uses, and/or associated infrastructure, all shown on the GDP, within other areas of the Project so long as such relocation is within the same Transact Zone provided on the Regulating Plan. By way example, if the Applicant desires to relocate residential units from the Central Village to the Northern Village (as shown on the GDP), the Applicant may do so long as such relocation is within the same Transact Zone (e.g. T4).
3. General Phasing. The Property may be developed in multiple phases, except the following shall apply:
(a) Applicant will construct no more than 750 residential single family detached units (e.g. 751st unit) before the County has issued to the Applicant building permits to construct, in the aggregate, at least thirty thousand (30,000) square feet of non-residential uses on the Property (“First Tier Phase”); and
(b) Applicant will construct no more than 1,000 residential single family detached units (e.g. 1,001 unit) before the County has issued to the Applicant building permits to construct, in the aggregate (which includes First Tier Phase non-residential uses square footage), at least seventy-five thousand (75,000) square feet of non-residential uses on the Property (“Second Tier Phase”); and
(c) Applicant will construct no more than 1,500 residential single family detached units (e.g. 1,501 unit) before the County has issued to the Applicant building permits to construct, in the aggregate (which includes First Tier Phase and Second Tier Phase non-residential uses square footage), at least one-hundred and fifty thousand (150,000) square feet of non-residential uses on the Property (“Third Tier Phase”); and Attachment 5 Page 4 of 18
(d) Applicant will construct no more than 2,000 residential single family detached units (e.g. 2,001 unit) before the County has issued to the Applicant building permits to construct, in the aggregate (which includes First Tier Phase, Second Tier Phase and Third Tier Phase non-residential uses square footage), at least two-hundred and fifty thousand (250,000) square feet of non-residential uses on the Property (“Fourth Tier Phase”).
(e) Notwithstanding anything to the contrary herein, the Applicant, during the first ten (10) years of the development of the Project after final rezoning approval (“Capacity Term”), agrees to limit the issuance of County building permits for single family detached units to no more than 150 per calendar year (“SFD Development Cap”). In the event the Applicant is issued less than 150 single family detached building permits in any year during the Capacity Term (e.g. 100 of the 150 available issuance = 50 remaining of capacity), the Applicant may roll over the available capacity units to any year thereafter. Notwithstanding the requirements of this Section 3 (e), the SFD Development Cap shall not apply and limit the Applicant’s construction of single family detached units if the Applicant has constructed at least 500,000 square feet of commercial space within the Project. The SFD Development Cap shall not apply to non-residential uses or attached single family or multifamily uses.
4. Community Development Authority.
(a) General. Notwithstanding any other provision under this proffer statement to the contrary, and recognizing the existing and future needs of certain road improvements within and outside of the impact areas of the Property and the need for new County capital improvements outside of or on portions of the Property, the Applicant agrees, pursuant to County approval, to form a community development authority (“CDA”) as defined under applicable state law and County ordinance, for purposes of participating (in a reasonable cooperative manner) with the County, the Commonwealth of Virginia and/or surrounding property owners, as all may be applicable, on a pro rata expense basis, in the design, extension, construction, acquisition, engineering, and related studies (pursuant to Applicant’s phasing of the Project) for the following capital improvements:
(i) Extension of Mine Road. The Applicant is proffering and will extend Mine Road (4 land divided) from the North Village location of the Project to Ramoth Church Road (note the Applicant will construct the extension of Mine Road from Courthouse Road to Ramoth Church Road (see also Section 5 hereof for proffer value estimate);the North Village at is sole cost). The value of the Mine Road extension from the North Village to Ramoth Church Road is $24.9 million.
(ii) General Transportation Improvements. The Applicant is proffering and will provide the following general transportation improvements:
Attachment 5 Page 5 of 18
(ii) (1) Extension and widening (and dedicate necessary right of way for future 4-lane expansion) of Woodcutters Lane formfrom the Colonial Forge subdivision to an intersection withat the proposed extension of Mine Road (see also Section 5 hereof for proffer value estimate);extension;
(2) Realignment and extension of Austin Ridge Road to the Project;
(3) Widening of Courthouse Road from the realigned Austin Ridge to Mine Road;
(4) Construction and installation of three (3) transit bus stops with dedicated stopping lanes and shelters; and
(5) The in-kind proffer value for this Section 4 (a) (ii) is $14 Million Dollars.
(iii) Construction of shared mobile use paths/trails for pedestrian and bicycle traffic (see also Section 6 hereof forthe value of this proffer value estimate)is $1 Million Dollars; and
(iv) County capital improvement (including land dedications) for parks and recreation, schools and fire and rescue, all as described more specifically herein (see also Section 6 hereof for. The value of this proffer value estimate)is $20.4 Million Dollars.
(b) County Approval. The CDA will first be authorized by the County pursuant to a separate memorandum of understanding between the Applicant, other property owner(s), as may be applicable, and the County. The CDA financing costs are estimated to be in excess of $9098.67 million (this includes all cost of financing: principal amount, interests and costs over full term). At the option of the County and/or the CDA and subject to the mutual approval of all of the same, and in accordance with applicable Virginia code requirements, additional infrastructure and public improvements may be added to the CDA to facilitate financing of the CDA public projects.
(c) Condemnation. In the event the Applicant is unable to purchase or acquire necessary right of way or easements to construct any public road improvements, the Applicant or CDA may request the County and/or the Virginia Department of Transportation (“VDOT”), as may be applicable, to acquire the necessary right of way and easements by means of its condemnation authority, all in accordance with applicable state law and County ordinance requirements, and the County or VDOT will proceed with such condemnation proceedings prior to the Applicant obtaining final design and construction plan approvals for any public road project.
(d) Construction. Notwithstanding anything to the contrary herein, the Applicant will oversee all planning, studies, phasing and construction of the infrastructure to be provided Attachment 5 Page 6 of 18
pursuant to the CDA, including the selection of contractors and commencement of construction as required in this proffer statement.
(e) Security for CDA. The CDA issued bonds will be secured by the Property, as may be apportioned thereto. In addition, the Applicant will provide substantial cash reserves in connection with the issuance of any CDA bonds in order to secure any potential short falls in timely payments of the bonds (see below Section 7).
(f) Use of CDA Funds. All CDA funds will be utilized for the purposes expressed herein and not for any other purpose.
5. Transportation. The Applicant, during various phases of the Project (“Project” being defined above in heading of proffer statement), described herein, will provide and construct the following transportation improvements and dedicate right of way as are necessary for the Project and provided herein, all in accordance with the terms and conditions of this Proffer Statement, and subject to County and VDOT approvals. Notwithstanding anything to the contrary under this proffer statement and to ensure Applicant’s maximum flexibility in developing the Project, the following proffered transportation improvements will be constructed (but may be phased or segmented pursuant to the Applicant’s development plan for the Project), subject to VDOT’s average daily traffic (“ADT”) requirements:
(a) Improvements:
(i) FullExtension and construction of full section (4-lanes) of Mine Road from Courthouse Roadthe North Village of the Project to Ramoth Church Road (or vice-versa), which improvements may initially be constructed as two (2) lanes prior to the expansion of the aforesaid planned four (4) lanes. It is anticipated that the Applicant will construct the two-lane connection of the Mine Road extension from Courthouse to the North Village within the first 5 years of the development of the Project. The remaining extension and upgrades to Mine Road will occur as the Project develops overtime with an anticipation that the Project will likely develop from the north to south over a twenty (20) year period.
(ii) Extension and construction of Woodcutters Road extension(construction of 2-lanes with dedicated right of way for 4-lane future widening) from Accokeek Furnace Road to Mine Road (or vice-versa) .
(iii) Construction of a separate westbound right turn lane at the Ramoth Church Road/Centreport Parkway/Mine Road intersection upon the connection of said roads. It is anticipated these improvements will be constructed within the first 10-15 years of the development of the Project.
(iv) Installation of a traffic signal at the Ramoth Church Road/Centreport Parkway/Mine Road intersection when warranted by VDOT. It is anticipated these improvements will be completed within the first 10-15 years of the Development of the Project. Attachment 5 Page 7 of 18
(v) At the Courthouse Road/Mine Road Intersection upon connection of said roads:
(1) Dual westbound left turn lanes. It is anticipated these improvements will be completed within the first 5 years of the development of the Project.
(vi) At the Mine Road Extended/Main Retail entrance (extension of Kelsey Roadfrom North Village as shown on GDP):
(1) Northbound right and left turn lanes upon connection of said roads
(2) Southbound right and left turn lanes upon connection of said roads
(3) Traffic signal upon warrant by VDOT
(4) It is anticipated these improvements will be completed within the first 5 years of the development of the Project.
(vii) At the Mine Road Extended/Woodcutters Road Extended:
(1) Northbound right and left turn lanes upon connection of said roads
(2) Southbound right and left turn lanes upon connection of said roads
(3) It is anticipated these improvements will be completed within the first 10 years of the development of the Project.
(viii) Realign Austin Ridge Road as initially provided in VDOT I-95 Interchange improvements plan, subject to VDOT and/or County obtaining necessary right of way, realignment of utilities and satisfying other requirements outside the control of the Applicant. It is anticipated these improvements will commence within the first 5 years of the development of the Project.
(ix) Widen (west) Courthouse Road between Austin Ridge and Mine Road as initially provided in VDOT I-95 Interchange improvements plan subject to VDOT and/or County obtaining necessary right of way, realignment of utilities and satisfying other requirements outside the control of the Applicant. It is anticipated these improvements will commence within the first 5 years of the development of the Project.
(b) Right of Way Dedication. As noted above, the Applicant will construct and dedicate within the boundaries of George Washington Village the aforesaid internal transportation network, which includes approximately 22.0 miles of public, and local roadways, all as generally shown on that generalized development plan entitled GDP. In addition, approximately 2.40 miles of the proposed extension of Woodcutter Road and 2.20 miles of Mine Road are within George Washington Village and will also be dedicated. Attachment 5 Page 8 of 18
(c) Bus Stop/Shelter Locations. The Applicant will locate and construct bus stop/shelter locations within the Project at the three (3) areas (3) generally shown on the GDP. The cost for locating and constructing this proffer is approximately $100,000.
(d) Aggregate Proffer Value. The aggregate in-kind proffer value for transportation improvements and dedications under this Section 5 are $34,485,854.39 Million . All transportation proffers provided in this proffer statement, whether in cash or in kind as provided by the Applicant or CDA, may be credited toward any future transportation impact fees applicable to the Property.
6. Dedications, Construction and Cash Proffers for Public Use.
In connection with the CDA described under Section 4 hereof, the Applicant will provide the following proffers:
(a) Recreational. The CDA will include the acquisition of a roughly 4066-acre site to be dedicated to the County, which site will be rough graded for construction of active park property to be located in the general area shown on the GDP. TheIn addition, the Applicant will utilize approximately 248 acres of the Property for use as passive park property, to include construction of interconnected trails, constructed of asphalt, woodchip or a combination of the two, in the areas as generally shown on the GDP. Much of the passive park property will be dedicated to the County when the bonds expressed herein are repaid. The aggregate value of this dedication and construction is $588,130. 9,323,000.00, which will include clearing and rough grading, trail construction, construction of shared use paths and tennis courts, along with associated development costs. The dedication to the County and clearing of the 66 acre active park area will occur prior to the certificate of occupancy permit for the 450th residential unit of the Project. Final construction of the trail system will occur prior to the issuance of the certificate of occupancy permit for the 1900th residential unit of the Project.
(b) Future School Site. The CDA will acquire and dedicate to the County approximately twenty (20) acres of land within the Project or in another location outside of the Project, but within or immediately adjacent to the George Washington Village UDA area,, as generally depicted on the GDP, for a future elementary school site, reasonably suitable for an approximately 88,000 square foot building and ancillary supporting uses for an elementary school. Site to be cleared, rough graded andThe school site will be dedicated to the County on or before the issuance of thea occupancy permit for the 1500th unit.450th residential unit. The school site dedication has an in-kind proffer value of $800,000.00, and shall be credited toward County school proffers. In addition to the foregoing, upon the issuance of Attachment 5 Page 9 of 18
the occupancy permit for the 450th residential unit, the Applicant will pay (in addition to the cash proffers in the amount of Ten Million Dollars ($10,000,000.00)collected below under Section 7) as a cash proffer toward schools the amount of $6.5 Million Dollars. Thereafter, the Applicant will pay as cash proffers the following in cash proffers from the CDA: (i) $1 Million Dollars (in addition to the cash proffers collected below under Section 7) upon the issuance of the 900th residential certificate of occupancy permit; and (ii) 2.5 Million Dollars (in addition to the cash proffers collected below under Section 7) upon the issuance of the 1400th residential certificate of occupancy permit for a total of $10 Million Dollars in cash toward the construction of the said elementary school, which cash proffer will be paid by the CDA to the County Prior to the issuance of the final certificate of occupancy permit for the 2500th residential unit. or as otherwise the County shall desire to apply these school proffers towards other school capital facility projects. The total school proffer is $10,800,000.
(c) Fire and Rescue. The CDA will acquire approximately five (5) acres of land for the dedication and use for a County fire and rescue property. In addition, the CDA will clear and rough grade the saidfire station site. The fire station will be located in the general area shown on the GDP and conveyed and transferred to the County on or before completion of the 1800th residential unit. . The Applicant will convey and transfer to the County, and further clear and rough grade the said site, upon the County’s confirmation it has the necessary funding to construct the fire station. The aggregate value of this in-kind proffer is $308,000.
7. Cash Proffers For Improvements.
TheIn the event the CDA is approved by the County, the Applicant agrees to contribute the aggregate sum of $35,245,00035,355,000 as cash voluntary proffers to the County for the sole purpose of the retirement of debt in the form of bonds associated with the total CDA issuance described in this proffer statement , subject to the following preconditions being satisfied:
(a) County approval of this rezoning application and expiration of appeal period or final resolution of any litigated appeals relating to the same; and
(b) Cash proffers will be paid per residential unit upon the completion of the final inspection and immediately prior the County’s issuance of a final certificate of occupancy for each unit or sooner in the event the Applicant desires to pay certain cash proffers earlier to facilitate the CDA bond issuance process. The County will collect the proffers described herein under this Section 7 as a cash reserve, as described above under Section 4 of this proffer statement, for purposes of repaying bonds associated with the approved CDA.
Attachment 5 Page 10 of 18
(c) Cash proffers will be fixed and will not be tied to an escalator for future increases.
(d) Cash proffers will be released to pay the CDA debt service upon Applicant’s request and pursuant to the CDA agreement between the County and Applicant.
(e) Cash Proffers will be allocated as follows:
(i) Single Family Detached: 18851907 Units will pay:
Total Cash Proffers of $28,275,00028,605,000 or $15,000per Unit
(ii) Single Family Attached: 322300 Units will pay:
Total Cash Proffers of $3,220,0003,000,000 or $10,000 per Unit
(iii) Multifamily: 750 Units will pay:
Total Cash Proffers of $3,750,000 or $5,000 per Unit
8. Private Recreational Amenities.
(a) Community Centers. The Applicant will construct three (3) Community Centers for the residential developments on the Property, each consisting of a club house and swimming pool. These amenities will be generally separate, as shown on the GDP, for different areas within the Property.
(b) Apartment Pool. The Applicant will construct a pool for use by the apartment unit residents prior to issuance of the certificate of occupancy for the 400th multi-family dwelling unit.
(c) Other Recreational Amenities. The Applicant will construct a two (2) tennis court facility (in locations designated by the Applicant) for use by County residents, which will be maintained by the Applicant or applicable homeowner’s association, unless dedicated to the County. The Applicant will provide up to four (4) tot lots in areas identified on the GDP for civic uses.
9. Additional Fire and Rescue Protection Measures.
NFPA-14 Standpipe System. The Applicant will install a NFPA-14 Standpipe System in all commercial buildings over two stories in height.
10. Entrance Features.
The Applicant agrees to construct an entrance monument out of brick or stone. Upon the County’s written request, the Applicant will provide a park entrance sign within six (6) Attachment 5 Page 11 of 18
months of completion of the tenth (10th) ball field by the County. Should the County make such request, Applicant reserves the naming rights for the park.
11. Covenants.
The Applicant, prior to developing the Property, will encumber the Property with a declaration of conditions, covenants, restrictions, and easements for the purpose of (a) protecting the value and desirability of the property; (b) facilitating the planning and development of the Project in a unified and consistent manner; (c) providing for the installation, maintenance, and repair for all landscaping, on-site amenities, open space, and other common areas; and (d) incorporating the Applicant’s Neighborhood Design Guidelines. The Applicant will also create a property or homeowner’s association as a non-stock corporation under the laws of Virginia that will provide and ensure oversight and structure for services provided, quality standards, intercampus relationships, and common area maintenance.
12. Airport Mitigation/Notice Proffers.
For purposes of ensuring that the Project will adequately address potential Stafford Regional Airport (“Airport) impacts, the Applicant will undertake the following actions:
(a) ProvideEnsure no residential homes are constructed within 3000 feet of the centerline of the Airport’s existing runway and provide noise attenuation improvements to each residential dwelling within 25003,500 feet of the centerline of the Airport’s existing runway.
(b) Prior to closing on any properties within 25003500 feet of the centerline of the Airport’s existing runway, provide each buyer disclosure statements about the existence and location of the Airport.
(c) Provide within all marketing literature pertaining to home sites within the Airport’s current approved flight pattern information pertaining to the existence and location of the Airport.
13. Private Wells.
The Applicant will not impact the private wells of any adjoining property owner of the Project and agrees to provide necessary public easements, subject to the Applicant’s approval as to location, and the County’s approval for such connections and extensions of public utilities, for purposes of extending public water and sewer lines to adjoining properties. The Applicant further agrees, upon the approval of the Applicant’s first site and construction plans for the Project, to escrow a total of $100,000, (whether cash, bond or letter of credit) (“Utility Escrow”) with the County’s Department of Utilities for purposes of addressing any direct impacts of the Project on adjoining property owners’ wells. Before any funds are disbursed from the Utility Escrow, the County shall notify the Applicant in writing and provide necessary information to the Applicant regarding any claim by Attachment 5 Page 12 of 18
adjoining property owners. To date, the County has identified 48 adjoining property owners who may be impacted. The Utility Escrow may only be utilized if said adjoining property owners’ wells are adversely and directly impacted due to the Project and actions of the Applicant or its contractors.
14. Cultural Resources.
Prior to developing the Property, the Applicant will perform a limited Phase I Archeological Study of the Property. In the event the aforesaid limited Phase I study recommends a Phase 2 Archeological Study, the Applicant will undertake a Phase 2 study, as applicable to those certain portions of the Property identified in the Phase I.
15. Exhibits.
The following exhibits are hereby incorporated into this proffer statement as material terms and conditions pertaining to the same:
(a) Exhibit A, list of parcels and property owners subject to this proffer statement.
(b) Exhibit B, “Regulating Plan George Washington Village”, dated April 2014, as last revised November, 2014, February1, 2015and prepared by Bowman Consulting.
(c) Exhibit C, Neighborhood Design Standards, prepared by Bowman Consulting, dated April 2014, as last revised October 2014, and entitled “George Washington Village”
(d) Exhibit D, “General Development Plan George Washington Village” dated April 2014, as last revised November 14, 2014, February 1, 2015and prepared by Bowman Consulting and marked as Exhibit D (“GDP”).
Attachment 5 Page 13 of 18
APPLICANT/OWNER ACKNOWLEDGMENT & CONSENT
Augustine South Associates, LLC a Virginia limited liability company
By: ______Name: ______Title: ______
STATE/COMMONWEALTH OF______, CITY/COUNTY OF ______, to wit:
The foregoing instrument was acknowledged before me this ___ day of ______, 2014,201_, by ______, ______of Augustine South Associates, LLC, on behalf of said company.
______Notary Public My Commission expires: ______Notary Registration number: ______
Attachment 5 Page 14 of 18
OWNER ACKNOWLEDGMENT & CONSENT
By: ______Thomas Metts
By: ______Judith Metts
STATE/COMMONWEALTH OF______, CITY/COUNTY OF ______, to wit:
The foregoing instrument was acknowledged before me this ___ day of ______, 2014, by Thomas and Judith Metts.
______Notary Public My Commission expires: ______Notary Registration number: ______SEAL: Attachment 5 Page 15 of 18
EXHIBIT A
LIST OF SUBJECT PARCELS AND OWNERS
1. TM Parcel 28-87, owned by Augustine South Associates, LLC 2. TM Parcel 29-32, owned by Augustine South Associates, LLC 3. TM Parcel 29-36, owned by Augustine South Associates, LLC 4. TM Parcel 29-38A, owned by Augustine South Associates, LLC 5. TM Parcel 29-39C, owned by Augustine South Associates, LLC 6. TM Parcel 29-81, owned by Augustine South Associates, LLC 7. TM Parcel 29-82, owned by Augustine South Associates, LLC 8. TM Parcel 29-83, owned by Augustine South Associates, LLC 9. TM Parcel 37-63, owned by Augustine South Associates, LLC 10. TM Parcel 38-1, owned by Augustine South Associates, LLC 11. TM Parcel 38-1A, owned by Augustine South Associates, LLC 12. TM Parcel 38-3, owned by Augustine South Associates, LLC 13. TM Parcel 38-4, owned by Augustine South Associates, LLC 14. TM Parcel 38-4C, owned by Augustine South Associates, LLC 15. TM Parcel 38-55, owned by Augustine South Associates, LLC 16. TM Parcel 38-58C, owned by Augustine South Associates, LLC 17. TM Parcel 38-58D, owned by Augustine South Associates, LLC 18. TM Parcel 38-66, owned by Augustine South Associates, LLC 19. TM Parcel 38-69, owned by Thomas & Judith Metts 20. TM Parcel 38-70, owned by Thomas & Judith Metts 21. TM Parcel 38-70A, owned by Thomas & Judith Metts 22. TM Parcel 38-71, owned by Augustine South Associates, LLC
Attachment 5 Page 16 of 18
EXHIBIT B
Regulating Plan
Attachment 5 Page 17 of 18
EXHIBIT C Neighborhood Design Standards
Attachment 5 Page 18 of 18
EXHIBIT D Generalized Development Plan
62175346316494-12 039551.00001
Attachment 6 Page 1 of 4
O15-01
PROPOSED
BOARD OF SUPERVISORS COUNTY OF STAFFORD STAFFORD, VIRGINIA
ORDINANCE
At a regular meeting of the Stafford County Board of Supervisors (the Board) held in the Board Chambers, George L. Gordon, Jr., Government Center, Stafford, Virginia, on the day of , 2015: ------MEMBERS: VOTE: Gary F. Snellings, Chairman Laura A. Sellers, Vice Chairman Meg Bohmke Jack R. Cavalier Paul V. Milde III Cord A. Sterling Robert “Bob” Thomas, Jr. ------On motion of , seconded by , which carried by a vote of , the following was adopted:
AN ORDINANCE TO AMEND AND REORDAIN THE STAFFORD COUNTY ZONING ORDINANCE BY AMENDING THE ZONING DISTRICT MAP TO RECLASSIFY FROM THE A-1, AGRICULTURAL; A-2, RURAL RESIDENTIAL; R-3, URBAN RESIDENTIAL – HIGH DENSITY; B-2, URBAN COMMERCIAL; AND M-1, LIGHT INDUSTRIAL ZONING DISTRICTS, TO THE P- TND, PLANNED – TRADITIONAL NEIGHBORHOOD DEVELOPMENT ZONING DISTRICT, ASSESSOR’S PARCELS 28- 87; 29-32, 29-36, 29-38A, 29-39C, 29-81, 29-82 AND 29-83; 37-63; AND 38-1, 38-1A, 38-3, 38-4, 38-4C, 38-55, 38-58C, 38-58D, 38-66, 38-69, 38-70, 38-70A, AND 38-71, WITHIN THE HARTWOOD ELECTION DISTRICT
WHEREAS, Augustine South Associates, LLC, applicant, submitted Application RC1400155 requesting a reclassification from the A-1, Agricultural; A-2, Rural Residential; R-3, Urban Residential – High Density; B-2, Urban Commercial; and M-1, Light Industrial Zoning Districts to the P-TND, Planned Traditional Neighborhood Development Zoning District, on Assessor’s Parcels 28-87; 29-32, 29-36, 29-38A, 29- 39C, 29-81, 29-82 and 29-83; 37-63; and 38-1, 38-1A, 38-3, 38-4, 38-4C, 38-55, 38- 58C, 38-58D, 38-66, 38-69, 38-70, 38-70A, and 38-71, located within the Hartwood Election District; and
Attachment 6 Page 2 of 4
O15-01 Page 2
WHEREAS, the Board carefully considered the recommendation of the Planning Commission and staff, and the public testimony, if any, received at the public hearing; and
WHEREAS, the Board finds that the requested zoning amendment is compatible with the surrounding land uses and zoning; and
WHEREAS, the Board finds that public necessity, convenience, general welfare, and good zoning practice require adoption of an ordinance to reclassify the subject property;
NOW, THEREFORE, BE IT ORDAINED by the Stafford County Board of Supervisors on this the day of , 2015, that the Stafford County Zoning Ordinance be and it hereby is amended and reordained by amending the Zoning District Map to reclassify from the A-1, Agricultural; A-2, Rural Residential; R-3, Urban Residential – High Density; B-2, Urban Commercial; and M-1, Light Industrial Zoning Districts to the P-TND, Planned Traditional Neighborhood Development Zoning District, on Assessor’s Parcels 28-87; 29-32, 29-36, 29-38A, 29-39C, 29-81, 29-82 and 29-83; 37-63; and 38-1, 38-1A, 38-3, 38-4, 38-4C, 38-55, 38-58C, 38-58D, 38-66, 38- 69, 38-70, 38-70A, and 38-71, in the location identified on the Zoning Plat, prepared by Bowman Consulting, dated October 20, 2014, with proffers entitled “Proffer Statement,” dated November 13, 2014.
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Attachment 6 Page 3 of 4
R15-05
PROPOSED
BOARD OF SUPERVISORS COUNTY OF STAFFORD STAFFORD, VIRGINIA
RESOLUTION
At a regular meeting of the Stafford County Board of Supervisors (the Board) held in the Board Chambers, George L. Gordon, Jr., Government Center, Stafford, Virginia, on the day of , 2015: ------MEMBERS: VOTE: Gary F. Snellings, Chairman Laura A. Sellers, Vice Chairman Meg Bohmke Jack R. Cavalier Paul V. Milde III Cord A. Sterling Robert “Bob” Thomas, Jr. ------On motion of , seconded by , which carried by a vote of , the following was adopted:
A RESOLUTION TO DENY AN APPLICATION TO AMEND AND REORDAIN THE STAFFORD COUNTY ZONING ORDINANCE BY AMENDING THE ZONING DISTRICT MAP TO RECLASSIFY FROM THE A-1, AGRICULTURAL; A-2, RURAL RESIDENTIAL; R-3, URBAN RESIDENTIAL – HIGH DENSITY; B-2, URBAN COMMERCIAL; AND M-1, LIGHT INDUSTRIAL ZONING DISTRICTS, TO THE P-TND, PLANNED – TRADITIONAL NEIGHBORHOOD DEVELOPMENT ZONING DISTRICT, ASSESSOR’S PARCELS 28-87; 29-32, 29-36, 29-38A, 29-39C, 29-81, 29-82 AND 29-83; 37-63; AND 38-1, 38-1A, 38-3, 38-4, 38-4C, 38-55, 38-58C, 38-58D, 38-66, 38-69, 38-70, 38-70A, AND 38-71, WITHIN THE HARTWOOD ELECTION DISTRICT
WHEREAS, Augustine South Associates, LLC, applicant, submitted Application RC1400155 requesting a reclassification from the A-1, Agricultural; A-2, Rural Residential; R-3, Urban Residential – High Density; B-2, Urban Commercial; and M-1, Light Industrial Zoning Districts to the P-TND, Planned Traditional Neighborhood Development Zoning District, on Assessor’s Parcels 28-87; 29-32, 29-36, 29-38A, 29- 39C, 29-81, 29-82 and 29-83; 37-63; and 38-1, 38-1A, 38-3, 38-4, 38-4C, 38-55, 38- 58C, 38-58D, 38-66, 38-69, 38-70, 38-70A, and 38-71, located within the Hartwood Election District; and
WHEREAS, the Board carefully considered the recommendation of the Planning Commission and staff, and the public testimony, if any, received at the public hearing; and Attachment 6 Page 4 of 4
R15-05 Page 2
WHEREAS, the Board finds that the requested zoning is incompatible with the surrounding land uses and zoning;
NOW, THEREFORE, BE IT RESOLVED by the Stafford County Board of Supervisors on this the day of , 2015, that application RC1400155 be and it hereby is denied.
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