RETAIL MARKET ANALYSIS CITY OF LYNDEN

PREPARED FOR: CITY OF LYNDEN AMY HARKSELL PLANNING DIRECTOR CITY OF LYNDEN 323 FRONT STREET LYNDEN, WASHINGTON 98264

PREPARED BY: PITNEY BOWES MAPINFO 24 FRANK LLOYD WRIGHT DRIVE SUITE #1700, LOBBY H ANN ARBOR, MICHIGAN 48106 (734) 930-4700

FUNDED IN PART BY THE PORT OF BELLINGHAM

AUGUST 2008

PB #B7280001 (JK)

RETAIL MARKET ANALYSIS CITY OF LYNDEN

PAGE

I. EXECUTIVE SUMMARY...... 1

II. BACKGROUND AND METHODOLOGY...... 5

III. LOCATIONAL CHARACTERISTICS ...... 9

IV. TRADE AREAS...... 23

V. CONCLUSIONS...... 27

APPENDICES A Scenario Comparison for Lynden, Washington B Local Trade Area (LTA) Map C Regional Trade Area (RTA) Map D Summary Demographic Benchmark Report (Local Trade Area) E Socioeconomic Benchmark Report (Local Trade Area) F Summary Demographic Benchmark Report (Regional Trade Area) G Socioeconomic Benchmark Report (Regional Trade Area) H Population and Demographic Characteristic Maps I Potential Additional Tenant List

I. EXECUTIVE SUMMARY

The city of Lynden is located in the northwestern corner of Washington state, approximately 12 miles north of Bellingham, Washington and 8 miles south of Aldergrove, British Columbia. This community offers its residents small-town appeal and strong regional access within Whatcom County (provided by Guide Meridian Road – a major corridor between Canada and Bellingham). Further benefiting the city is its Dutch-inspired heritage, which makes it a regional tourist destination. Lynden, therefore, has the potential to capture sales dollars that would otherwise be spent elsewhere: it is in a position to serve the retail needs of its own residents and the residents of the surrounding communities (i.e., Sumas, Nooksack, and Everson).

Because Lynden is both a tourist destination and regional hub within Whatcom County, it has the opportunity to attract consumers for non-retail reasons (e.g., banking, visiting a library, attending cultural events). Though Lynden has a comparatively vibrant downtown, Pitney Bowes MapInfo finds that the downtown area is still underutilized, and that the city can do more to capitalize on its strengths to drive retail traffic. With improved marketing, an alteration to the current hours of operation (primarily the tendency to be closed on Sundays), and better signage, Lynden has the potential to increase the number of retail dollars that are captured within the city.

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The primary purpose of this analysis is to determine the amount of retail space that Lynden can support both now and in five years. Most of the retail demand for the community will likely occur either within the city limits or just outside of them. Currently, there are four retail districts within the city: the downtown area, Fairway Center, Bender Plaza, and the Guide Meridian/Birch Bay- Lynden Road intersection. The goals of this analysis are: to evaluate the retail needs and preferences of trade area residents; and to provide a quantitative analysis of actual retail supportability in Lynden that can be used to develop a strategy for retail recruitment and retention.

Lynden has numerous advantages for retail development, including land availability, north/south regional and national accessibility, and strongly positive demographic characteristics (i.e., per capita income, medium household income, percentage of owner-occupied homes, and population and household growth rates – all above the state average). Furthermore, Lynden city officials and residents are willing to maintain and encourage retail growth and development within the city.

Several factors bolster Lynden’s retail attractiveness, but there are also challenges to retail development in this market. One of the most significant is its size: most national-chain retailers do not locate in cities with population levels that are similar to Lynden’s. Compounding this issue is Lynden’s proximity to Bellingham, which is the primary retail destination in northwestern Washington and which serves as the major retail hub between metropolitan Seattle and Vancouver, British Columbia.

During the course of our fieldwork and data collection, several local residents and business owners were interviewed and asked what, in their opinion, is needed in Lynden. These informal surveys indicated that the most sought-after retail type is apparel (women’s, men’s, children’s, and shoes). The leakage to surrounding communities – specifically Bellingham – is considerable. Lynden has the opportunity to capture more of the retail sales potential from its own residents by adding apparel shopping opportunities where feasible.

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Pitney Bowes MapInfo has prepared estimates on the amount of additional new retail square footage that Lynden can support. These estimates are broken down into three forecasts:

• 2008 Status Quo – an estimate based on the existing retail and economic conditions in 2008

• 2013 Conservative – a 2013 estimate that assumes that the existing conditions trend out normally over the next five years

• 2013 Aggressive – an estimate that assumes an improving retail climate from the addition of new retailers (who would create retail synergy) and/or an improved retail environment based on new programs or initiatives implemented by the city

The following table shows the additional supportable square footage for Lynden retail:

Additional Supportable Square Footage in Lynden

2008 2013 2013 Category Status Quo Conservative Aggressive Apparel Women’s Apparel Store 7,700 9,250 10,500 Men’s Apparel Store 6,000 7,500 8,500 Children’s/Teen’s Apparel Store 2,000 2,500 3,000 Shoe Store 3,000 4,000 5,500 Jewelry Store 500 750 1,000 Sub-Total for Apparel 19,200 24,000 28,500 Appliance/Electronics Store 2,500 3,000 3,600 Automotive Parts/Repair Shop 1,800 2,500 4,000 Book/Music Store 500 750 1,250 Computer/Software Store 1,200 1,500 2,000 Pharmacy/Drug Store 4,000 5,000 6,000 Nursery/Garden Center 2,800 4,000 6,000 Home Furnishings Store 10,500 12,750 15,000 Liquor Store 650 850 1,000 Pet/Pet Supplies Store 5,600 6,750 7,500 Sporting Goods Store 2,800 3,250 4,000 Toy/Hobby Store 1,100 1,500 2,200 Total Additional Supportable Square-Footage 52,650 65,850 81,050

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It is not recommended that all of this additional square footage be provided by new competition into the market; rather, there are certain categories in which it would be more prudent to have existing retailers expand their stores and/or merchandise lines. (For example, downtown’s Katz Coffee & Used Books could expand its bookstore.) Recommendations will be given in greater detail in Section V, Conclusions.

While Lynden’s demographic characteristics, housing and population growth, and favorable retail climate will attract additional retail development, the city must also proactively work to retain businesses. This effort may include assisting businesses with marketing and community promotions, encouraging strong building-maintenance programs (providing monetary assistance when appropriate), and continuing infrastructure improvements to enhance and beautify the existing retail districts. Additionally, a concerted effort must be made to educate residents on the city’s wide variety of quality retail offerings and on the importance of shopping where one lives. Anecdotally, many residents we spoke to mentioned that one cannot buy socks or underwear in Lynden; in actuality, The Dresser Drawer has a decent selection of both.

The city of Lynden, as well as other retail stakeholders (as defined in Section V, Conclusions), will need to work to create promotional campaigns, beautify the retail areas, and assist the retailers in attracting both local and visitor dollars.

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II. BACKGROUND AND METHODOLOGY

Background Pitney Bowes MapInfo was commissioned by the city of Lynden to develop a strategic plan for the recruitment and retention of retail within the city. Pitney Bowes MapInfo assessed the city and its surrounding market area in order to determine what, if any, new retail development would be supportable and what steps the city needs to take to make its retail (both new and extant) more viable.

The following specific issues were addressed as part of this study:

• Is additional retail development within Lynden viable?

• To whom would this retail appeal?

• What type of retail should be attracted? In particular, should the proposed retail component have a neighborhood, specialty, or regional appeal, or a mix?

• What types of retail are supportable and where in the city should they locate?

The results of this analysis are based upon the following assumptions:

• Housing and population growth will occur as projected herein.

• No new retail or commercial development will occur unless mentioned in this report.

• Infrastructure changes will be made to the relevant access routes in order to ensure ease of access and improved mobility throughout the study area.

• The retail establishments will operate in a manner consistent with successful retailing, including remaining open during hours that are convenient to potential customers, maintaining clean facilities and streetscaping, and applying visual merchandising.

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While Pitney Bowes MapInfo evaluated several different retail categories in this market analysis, certain types of retail were not addressed as part of this study. These include, but are not limited to, service retail (e.g., banks, financial planners, drycleaners), hotels and motels, and automobile dealerships. These retail types follow different site-location strategies and were beyond the scope of our analysis.

Methodology In March 2008, a detailed field evaluation of retail in the study area and major shopping centers in and surrounding the defined trade areas was conducted in an effort to address the above issues. During this evaluation, Pitney Bowes MapInfo thoroughly drove throughout the market, visiting and evaluating the major existing and planned retail concentrations.

We then defined Lynden’s trade areas based on the field evaluation and on information provided by the client. Population and demographic characteristics were collected by census tract and were updated based on Pitney Bowes MapInfo demographic data1 and on information gathered from various local sources. This study assumes that all local data are accurate and reliable.

Finally, based on the population and demographic characteristics of the trade area, known existing retail competition, and traffic and retail gravitational patterns, we developed our quantitative assessment for the retail in Lynden. To determine which retail categories are under-represented, this assessment incorporated the existing square footages for a variety of retail categories, the expenditure potential for each retail category, and the growth of the area.

The expenditure potential refers to the total dollar amount that is expected to be available for each retail category (as published by the U.S. Census Bureau; supplemented by data from Pitney Bowes MapInfo2). For any given retail category, expenditure potential will not increase as more competitors are introduced into a market; rather, the market share for each unit will be

1 Pitney Bowes MapInfo demographic, psychographic, and business data are updated annually by Pitney Bowes MapInfo demographers. All primary source data originate from U.S. Census data but are augmented with other data sources (e.g., housing statistics, post office data, consumer spending documents, financial transactions, media purchases) and are grown out to provide an accurate current-year forecast and five-year projection. 2 Pitney Bowes MapInfo demographic, psychographic, and business data are updated annually by Pitney Bowes MapInfo demographers. All primary source data originate from U.S. Census data but are augmented with other data sources (e.g., housing statistics, post office data, consumer spending documents, financial transactions, media purchases) and are grown out to provide an accurate current-year forecast and five-year projection.

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redistributed. Expenditure potential increases as population and household income levels grow. By calculating the proportion of the area’s expenditure potential that is already accounted for by existing and planned retail, the retail categories that have sufficient potential remaining can be determined. This methodology assumes that there is no “over-storing” in a market; in other words, each retail category will approach the limit of its expenditure potential but will not go beyond it.

When calculating trade area retail expenditure potential, it is assumed that there are always some sales that originate from beyond the trade area boundaries. The number of sales generated from beyond the trade area will vary between retail categories and is dependent on the drawing power of the retailer. Neighborhood- and convenience-based retail will have a greater proportion of its sales coming from within the trade area than will a larger-format operator that is capable of drawing customers from farther away. Furthermore, beyond sales potential will also vary based on the community’s visitor draw and levels of seasonal population. Ultimately, the retail potential of any category is dependent upon how much of the overall sales potential an operator in Lynden could be expected to capture, which, in turn, is dependent upon the existence and proximity of competition.

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III. LOCATIONAL CHARACTERISTICS

This section includes a description of the existing locational characteristics of Lynden. It begins with a detailed list of the existing demographic and psychographic characteristics of the city and surrounding area, and is followed by an overview of the area’s accessibility and a description of the existing retail environment. This section concludes with an examination of the existing competitive forces that surround Lynden and their effect on retail viability.

Demographic Characteristics Several factors contribute to the overall viability of retail within Lynden. Elements like demographic characteristics, shopping patterns, and history have significant roles in defining the retail environment. Of these elements, housing and demographic characteristics are the most important and are most commonly noted by national retail operators.

The table below displays a comparison of selected characteristics that are most commonly used by retailers to compare specific cities and regions. Demographic and population figures have been included for: Lynden’s local and regional trade areas (outlined in Section IV, Trade Areas); the jurisdictional boundaries of Lynden, Blaine, Birch Bay, Ferndale, and Bellingham; Whatcom County; the state of Washington; and the United States.

As indicated in the table below, Lynden has the highest medium household income of the selected cities, and its population count is second only to Bellingham’s. Additionally, Lynden has experienced a strong, 3.5% annual growth rate for the last five years (2002-2007)3. The median age is higher because an older population is purchasing many of those new homes and condos that are associated with the Homestead Farms Golf Resort. These retired or soon-to-be-retired households, with high levels of home ownership and fewer family financial obligations, often have the benefit of larger levels of disposable income. This population is currently a relatively stable one, but as it ages, disposable income levels will decrease.

3 Source: The Whatcom Council of Governments

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2007 2000 2007 Medium % Owner- 2007 2007 Per Capita Household Occupied Median Geography Population Income Income Housing Age Trade Areas Lynden LTA 17,650 $23,409 $50,118 67% 36.2 Lynden RTA 47,420 $24,342 $48,069 58% 37.4 City (Jurisdictional Boundary) Lynden 11,150* $25,638 $48,237 67% 38.5 Blaine 4,650* $23,668 $41,594 54% 39.0 Birch Bay 5,852 $28,809 $45,313 79% 44.3 Ferndale 10,540* $21,289 $41,502 66% 33.2 Bellingham 75,220* $23,218 $36,288 48% 31.5 Other Regions Whatcom County 188,300* $24,287 $43,508 63% 35.4 Washington 6,488,000* $27,910 $49,793 65% 36.7 United States 302,000,000 $27,000 $45,800 67% 36.6 Source: Pitney Bowes MapInfo data (2007), *Whatcom Council of Governments

PSYTE Cluster (Lifestyle) Data Lifestyle characteristics are a valuable source of information for projecting consumer spending habits and patterns on a block-group level. PSYTE Advantage4, a proprietary system of Pitney Bowes MapInfo, gathers data based on consumer expenditures and then determines the similarities between relevant demographic and socioeconomic characteristics and what people are buying. This methodology provides more in-depth measurement than the study of demographic characteristic data alone. For example, a $40,000 income in Lynden will provide a different lifestyle than a $40,000 income in Seattle or Spokane will. Further, two people with similar incomes who both reside in Lynden may choose different neighborhoods based on their preferences. The premise here is that people tend to reside in neighborhoods with others whom they believe are similar to them (“clusters”).

By understanding these clusters and their effects, generalizations about people’s buying habits can be developed, thus enabling retailers to target areas that will contain their best customers. PSYTE segments have been developed on national and regional bases, and while one community may include several different clusters, there is no single cluster that is specific to a

4 PSYTE Advantage clustering is a Pitney Bowes MapInfo product that sorts every neighborhood in the United States into 72 mutually exclusive categories, called “clusters.” Descriptive names and capsule summaries capture each cluster’s distinct demographic characteristics and neighborhood flavor.

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single neighborhood or community. In order to describe similar groups of people, these descriptions are, by necessity, stereotypical and do not specifically describe Lynden’s residents.

Based on the Pitney Bowes MapInfo PSYTE Advantage neighborhood clustering database, the predominant lifestyle segmentation group in the Lynden local trade area (LTA) is Family Acres (54%), followed by Cruisin’ Couples (18%), Retirement Horizons (14%), Exurban Refuge (10%), and Outback U.S.A. (4%). Descriptions of these clusters are as follows:

Family Acres – Once upon a time, the land was cheap and kids were cheaper by the dozen. The rural families in this cluster live in larger, older homes — nearly 80% in owner-occupied homes that were built in the 60s, 70s, and 80s. Most householders finished high school, and nearly 20% of women took some college courses. A high proportion (96%) is white, non-Hispanic. Householders aged 45 to 64 predominate, as younger families have most likely left for greener pastures. Family income is an average $61,000, derived primarily from manual occupations and some farming.

Cruisin’ Couples – Pre-retirement and newly retired couples can look forward to the next twenty years, thanks to better health and health care. However, this cluster’s incomes are bimodal: some have adequate finances while others will have more of a struggle. Most will try to make the best of it with their average family incomes of $79,000, but much of that is discretionary in a cluster with the second-highest index for home-ownership without a mortgage. They also index high on income from interest-bearing accounts and dividends from investments. Ethnicity is more than 90% white, non-Hispanic.

Retirement Horizons – Here are the Baby Boomers who are contemplating retirement — or perhaps not, depending on their financial resources. The older skew in this cluster takes off around age 55. These married, empty-nest couples are college-educated dual-earners who are looking forward to

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retirement, seeing as many of their neighbors are already kicking back and scaling down their spending. With a 70:30 owner-to-renter ratio, many of these couples are beginning to cut their expenses for the long term. Over 90% are white, non-Hispanic. Mean family income is $74,000. True to form, boomers are likely to set new retirement lifestyle trends. Maybe they will just fade away (but don’t bet on it).

Exurban Refuge – This "beyond suburbia" cluster represents older, non-family households beyond the towns that ring the suburban fringe. Their 65:35 owner-to-renter ratio indicates a substantial retirement segment that is contentedly aging in place. Fully 98% are native U.S. citizens and white, non- Hispanic. Their $32,000, below-average income is likely the main reason that they don't move to Florida or Arizona in the winter, though they may just be content right where they are.

Outback U.S.A. – Sometimes the most affordable housing is found in rural areas of America. Young families with and without children, as well as singles, head for Outback U.S.A., which may be near a metro area, but is more characteristically in areas that range from rural to wilderness. Primarily high- school educated with some college, members of this cluster typically work with their hands and earn a moderate, $47,000 average household income. Over 80% are white, non-Hispanic.

Access Retailing in Lynden benefits from the good north/south regional accessibility that is provided by Guide Meridian Road (State Highway 539). With a U.S. point-of-entry located where Guide Meridian Road meets the U.S.-Canadian border (approximately 4 miles north), this road also serves as a major route for Canadians who are heading south to Bellingham. Guide Meridian Road, which is a two-lane highway that connects to I-5 (approximately 12 miles south, near the Bellis Fair Mall in Bellingham) and to the Trans-Canada Highway (approximately

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11 miles north), has an average daily traffic count of 16,000 (south of Front Street)5. It is in the process of being widened to a four-lane, divided highway; construction is expected to be completed in 2009.

Lynden also has good east-west access, albeit not as strong as its north-south access. Badger Road (State Highway 546), a two-lane highway that runs from Blaine to just south of Sumas, has an average daily traffic count of 9,100 at its intersection with Guide Meridian Road6. South of Badger Road is Birch Bay-Lynden Road, a two-lane highway that connects Lynden (at Guide Meridian Road) to Birch Bay (at I-5), approximately 8 miles to the west.

Within the city itself, Lynden has a well-established road network and a gridded downtown. The streets of Lynden have been well maintained, with recent reconfigurations along Main Street to improve safety and flow. Access to downtown is provided by Front Street from the west (average daily traffic count of 10,0007) and Grover Street/Vinup Road to the east. Both streets connect directly to larger regional roads, providing good access between downtown Lynden and outside communities. With these primary access routes, the city of Lynden is in a position to serve the retail needs of not only its own residents, but also residents of the surrounding communities – especially Sumas, Nooksack, and Everson. Moreover, with its nearby access to a U.S.-Canada border point, Lynden can capture customers traveling into the United States.

Existing Retail Environment Overall, within the Lynden LTA (as defined in Section IV, Trade Areas), there are approximately 770,000 square feet of occupied retail space. This includes all the existing retail within and just beyond the city. In the regional trade area (RTA), this number increases to 1,034,000 square feet. The RTA extends west to Birch Bay and Blaine, and east to Sumas and Everson.

5 Source: State of Washington Department of Transportation, Annual Traffic Report 2006. 6 Idem. 7 Source: Whatcom Council of Governments, Traffic Data, 2007.

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Pitney Bowes MapInfo has defined five distinct retail districts in Lynden and has assigned a descriptive name for each (to be used throughout this report). While these retail districts do not account for all retail locations within the city, they are the main areas that warrant discussion.

• Downtown Lynden – This retail district incorporates retailers in and adjacent to Lynden’s downtown area.

• Fairway Center – This district refers to those retailers within the Fairway Center on Front Street, between 17th Street and 18th Street.

• Bender Plaza – This district refers to those retailers within the Bender Plaza, located at the intersection of East Badger Road and Bender Road.

• The Guide – This district refers to retail around the intersection of Guide Meridian Road and Birch Bay-Lynden Road and incorporates Lynden Towne Plaza and Market Place at Lynden.

• Cost Cutter Redevelopment (Future Lynden Market Square) – Beyond the existing (above) retail nodes, there are plans to redevelop the former Cost Cutter grocery store on Front Street. The new development will be mixed-use and will include a retail component.

Downtown Lynden Downtown Lynden incorporates the retail located between 7th Street to the west, 1st Street to the east, Judson Street Alley to the south, and Main Street to the north. This retail district also includes retailers within a quarter mile along Depot Road. Downtown Lynden is populated with a variety of locally owned stores, including Dutch Mother’s Bakery, Carol’s Hallmark, Colony House Furniture, Lynden Chocolate & Candy Shoppe, More Than Antiques, and Lynden Dutch Bakery.

The downtown district is a pedestrian-friendly retail area. During our field visit, cars were consistently parked along Front Street, their drivers using the sidewalks, despite the damp and chilly weather. The parking availability – both in front of businesses and in free parking lots –

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encouraged people to shop downtown instead of at the larger retailers with their acres of parking lots to cross. Business owners and employees, who consistently parked in the alleyways behind the stores and in other, employee-designated areas, helped to free up parking space for potential customers.

When compared to many other similarly sized communities’ downtown areas, Downtown Lynden is a rather vibrant district, well-shopped by residents and visitors alike. This district, while having a few vacancies, retains a good overall level of occupancy. The majority of downtown storefronts are attractive and well maintained; this attractiveness is further bolstered by the architectural features which carry forward the Dutch-inspired theme. The most notable Downtown Lynden building is the Dutch Village Inn, with its large windmill. The associated Dutch Village Mall emulates a Dutch streetscape, complete with canal. The former Delft Square Mall was a unique and attractive building, the loss of which occurred between our field evaluation and this report. Its loss is significant to the downtown retail district and to the city in general. The building’s renovation from a department store into a mall had allowed for a mix of retail and commercial services and had included The Loft restaurant, overlooking Front Street.

The former Delft Square Mall

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While the general impression of downtown Lynden is good, there are a few issues that require some attention. Most notably is the storefront appearance of some retailers. Many businesses have a well-maintained and welcoming appearance, but there are a few with peeling paint and worn-out signs that detract from the district’s overall appearance. This and other issues will be further discussed in Section V, Conclusions.

Fairway Center Located along Front Street, between 17th Street and 18th Street, this plaza has several national and local retailers. National retailers include True Value Hardware, Ace Hardware, RadioShack, and Little Caesar’s. Local operators include Fairway Drug, Woods Coffee, and Dave’s Sportsworld. The nicely renovated Fairway Center is in an ideal place to take advantage of traffic traveling towards downtown from Guide Meridian Road, as Front Street is the easiest and most direct route.

Fairway Center

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While the exterior of the Fairway Center is attractive and well maintained, it lacks lighting for the building-mounted store signs, making it difficult to see store names when driving past after dark.

Looking down Front Street from 6th Street

Bender Plaza Bender Plaza, which is located at the intersection of East Badger Road and Bender Road (near the Homestead Farms Golf Resort) has several restaurants, service retailers, and a gas station with a convenience store. Most of Lynden’s recent residential growth has occurred near this plaza. This convenience-oriented retail center, with its current mix of establishments and its proximity to residential growth, is well positioned to serve residents living in the northeast portion of Lynden and throughout the entire community.

Bender Plaza

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The Guide This area, at the intersection of Guide Meridian Road and Birch Bay-Lynden Road, incorporates the Market Place at Lynden (anchored by Safeway), the Lynden Towne Plaza (anchored by Food Pavilion), and several smaller retailers who are located in the immediate vicinity. Most visitors to Lynden arrive by Guide Meridian Road, where they are greeted by this retail concentration.

Marketplace at Lynden

Beyond the two grocery-anchored community shopping centers, this retail district is home to several quick-service restaurants (Subway, Starbucks, McDonald’s, Dairy Queen, Milt’s Pizza Place) and service retailers (e.g., banks, hair salons). Additionally, Rite Aid recently relocated from its in-line store in the Lynden Towne Plaza to an out-parcel store with a drive-thru pharmacy.

Lynden Towne Plaza

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The Guide has a traditional, suburban feel, catering to consumers who prefer to drive to their shopping destinations. These centers benefit from retail synergy and strong, convenient regional accessibility. While the retail in this district is well maintained and architecturally pleasant, this district does lack a sense of place: The Guide is no different from those retail districts that are found in other similarly sized communities across the country.

Cost Cutter Redevelopment (Future Lynden Market Square) This redevelopment has been proposed as a mix of retail, service, office, food service, light industrial, storage, and residential space. With approximately 40,000 square feet of retail planned for this development, a significant portion of the identified supportable square footage could be located here. Like the Fairway Center, a development here would benefit from strong local accessibility along Front Street and a location between The Guide and Downtown Lynden retail districts.

Retail Competition One of the greatest challenges for retail development in Lynden is the strong retail competition from other communities.

Bellingham Currently, Lynden’s retail sales leakage to Bellingham is considerable. Most national chain retail stores that serve the northwestern Washington market are located within Bellingham – a major retail node. The Bellis Fair Mall alone encompasses 772,400 square feet of retail space, which is more retail square footage than Lynden’s entire LTA currently occupies.

Bellis Fair Mall and several of Bellingham’s other large shopping nodes (primarily along a 1-mile stretch of Guide Meridian Road) draw retail sales out of Lynden. These competitive influences hinder Lynden’s retail sales potential on multiple levels. The next several paragraphs will provide brief descriptions and competitive highlights of these retail nodes. In addition to the centers listed below are several out-parcel buildings and smaller plazas that house retailers like Walmart, Olive Garden, and Schucks Auto Supply.

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Bellingham’s competitive retail nodes include:

• Bellis Fair Mall – This regional mall is anchored by J.C. Penney, Sears, Kohl’s, Macy’s, and Target. It serves as a primary source of competition for Lynden’s retailers. Located approximately 11 miles south of Lynden, along Guide Meridian Road, this mall has good regional access via I-5. Additionally, it is positioned along the main route used by commuters between Bellingham and Lynden.

The Bellis Fair Mall

• Meridian Village – This center is across the road from the Bellis Fair Mall. Retail tenants include The Home Depot, Circuit City, Linens ‘n Things, Ross Dress for Less, Boater’s World, Rite Aid, Joe’s Sports Outdoor & More, and several smaller retailers.

• Cordata Centre – This shopping center is proximate to the Bellis Fair Mall. It is anchored by Bed Bath & Beyond, Best Buy, Costco, Office Depot, T.J. Maxx, and several smaller retail outlets.

• Sunset Square – This is another area within Bellingham that provides Lynden retailers with strong competition. Sunset Square is located at the intersection of I-5 and Sunset Drive. This center and its surrounding area represent the second-largest concentration of national, large-format retailers within Bellingham. It is anchored by Big Kmart, Cost Cutter Foods, Jo-Ann Fabric and Crafts, OfficeMax, Rite Aid, and Sunset Cinemas; and has many smaller retailers (e.g., restaurants, service retailers, furniture stores). An adjacent Lowe’s increases the area’s retail synergy.

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• Fred Meyer – This store is beyond Sunset Square, at the Bakerview Road and I-5 intersection, approximately 15-20 minutes from Lynden.

• Downtown Bellingham – Like Downtown Lynden, this district is well maintained and offers consumers several unique shopping and dining opportunities.

Ferndale Approximately 9 miles southwest of Lynden, the city of Ferndale represents a significant source of competition. Ferndale retailers benefit from direct access with I-5; however, this city lacks the small-town appeal and attractive qualities that Lynden enjoys. The most notable shopping center here is the Ferndale Shops plaza, anchored by a Haggen supermarket. This center includes Hollywood Video, Walgreens, and Quizno’s. Although there are two grocery stores within Lynden, during our qualitative analysis, residents indicated that they often travel to Ferndale in order to shop at Haggen, and that they consequently do additional shopping while there. Beyond Ferndale Shops is an older community center, anchored by Cost Cutter, with NAPA Auto Parts, Bob’s Burgers & Brews, and Denny’s. Downtown Ferndale has a variety of shops and restaurants that also lack the charm and appeal of Lynden’s.

Downtown Ferndale

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Birch Bay Primarily a small-town vacation destination, Birch Bay is home to Birch Bay Square – a lifestyle outlet center that is currently undergoing renovations. Existing tenants include (but are not limited to) Van Heusen, Vitamin World, Bob’s Burgers & Brews, Shoe Pavilion, and Bass Outlet. With good visibility and access from I-5, this plaza, once completed, will be an attractive shopping destination. Beyond Birch Bay Square, the community is home to the well-known candy store, The C. Shop, which is one of the main competitors to Lynden Chocolate & Candy Shoppe.

Blaine This community, while not providing as significant a competitive influence as Bellingham or Ferndale, does have an influence worth mentioning. The largest notable national retailer in this community is Cost Cutter, but there are several smaller retailers in downtown Blaine that compete with Lynden for tourist dollars. Blaine’s position on I-5 at the U.S.-Canada border makes it an ideal location to intercept tourist dollars.

Everson Of the small communities east of Lynden, Everson provides the most retail competition. This community provides its residents with several basic goods and services, including grocery (Everson Market) and limited retail and dining options. Many of the residents of Everson, as well as those of Nooksack and Sumas, travel to Lynden for the purpose of shopping; however, Everson’s retailers do provide Lynden with a limited level of competition; for this reason, Everson has been excluded from Lynden’s LTA.

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IV. TRADE AREAS

The trade areas for Lynden were derived by evaluating a variety of factors, including accessibility, existing and planned competition, physical and psychological barriers, and the overall drawing power of the area. To measure competition, Pitney Bowes MapInfo conducted a field evaluation of the market. During this evaluation, we drove through the market thoroughly, visiting and evaluating the major existing and planned retail concentrations in order to develop first-hand knowledge of them.

A complete inventory was made of all retail establishments in Lynden. Additionally, a detailed inventory was conducted in the peripheral communities. Major retail nodes beyond those peripheral communities (e.g., Bellis Fair Mall, Birch Bay Square) were also recorded. These inventories were used to determine the level of retail competition, as well as those geographic break points at which customers were still more likely to shop in Lynden instead of other retail areas. This information was used to define the custom boundaries of the Lynden trade areas.

Based on the factors outlined above, two trade areas have been defined. The local trade area (LTA) refers to that area from which convenience-based retail offerings in the community (e.g., Rite Aid, Dairy Queen, Chevron) will draw approximately 75% of their business. This area includes a population base that will typically shop the area on a weekly basis, making it a primary shopping destination.

The regional trade area (RTA) represents the area from which the more regional retailers (e.g., Wal-Mart, Bed Bath & Beyond, The Home Depot) will draw approximately 70% to 75% of their business. Moreover, the RTA represents the area from which convenience-based retailers will draw an additional 10% of their customer base. This includes residents who live in the RTA but not within the LTA. These are residents who shop Lynden frequently (between one and three times a month), but not as their primary shopping destination.

Pitney Bowes MapInfo recognizes the unique product offerings and tourist appeal resulting from Lynden’s Dutch-inspired heritage; therefore, the anticipated capture rates of the trade areas have been adjusted to assume greater sales from outside the defined trade areas. These adjusted retail sales will originate either from customers beyond the defined trade area, who will

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patronize Lynden’s retail establishments only every couple of months, or from tourists, who may shop here only once every few years.

Local Trade Area (LTA)

The map above depicts the local trade area (LTA). The green line represents the LTA boundary. The broken circles represent 1- and 3-mile rings (for spatial referencing purposes only).

Because of Lynden’s size and the distance between communities in this region of Washington, the LTA incorporates only the city of Lynden and a small, surrounding area. The existing retail nodes within Lynden are primarily oriented toward the western side of the city, taking advantage of the comparatively strong regionality of Guide Meridian Road. While residents of the smaller communities to the east (Sumas, Nooksack, and Everson) will be primarily oriented to Lynden, the existing retail in these communities provides for many of their staple needs (e.g., groceries, fuel). Therefore, though these residents patronize Lynden (for those goods that are not already

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available within their communities) and Bellingham (for specialty retail needs) on a regular basis, Lynden is likely not their primary retail destination.

Regional Trade Area (RTA)

The map above depicts the regional trade area (RTA). The green line represents the RTA boundary. The broken circles represent 1- and 3-mile rings (for spatial referencing purposes only).

The RTA encompasses the communities of Sumas, Nooksack, Everson, Blaine, Birch Bay, and Custer. It extends farther west and south than it does east and north because of the proximity of the Canadian border and the Cascade Mountains – significant physical barriers. While the communities to the east of Lynden (Sumas, Nooksack, and Everson) have local retail, thus excluding them from the LTA, they will be oriented primarily to Lynden for regional retailers. The RTA is limited to the south by the strong retail presence of Bellingham. Several retail nodes, including the Bellis Fair Mall, make Bellingham a destination for many surrounding communities.

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Beyond Trade Area Potential While the described LTA and RTA account for approximately 75% of all sales for Lynden retailers, there will be sales that originate from consumers and tourists outside these trade areas. These sales may originate anywhere, but will most likely come either from residents of Ferndale and Bellingham or from tourists who are visiting Lynden for its events or unique shopping opportunities. As Guide Meridian Road leads border-crossing travelers past Lynden, the community will benefit from increased sales. Moreover, the current strength of the Canadian dollar will further drive Lynden’s retail attractiveness, as shopping in the United States is currently tantamount to shopping with a universal 20% to 30% discount. The Nooksack Northwood Casino, approximately 5 miles northeast of Lynden, will also bring tourist dollars to the city.

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V. CONCLUSIONS

Based on this analysis, Lynden can currently support an additional 52,650 to 81,050 square feet of new retail development. This potential assumes that the city, in conjunction with other retail stakeholders, will work in a progressive manner to bolster the retail image of Lynden as a desirable place to shop and dine. Retail stakeholders are defined as the City of Lynden, the Chamber of Commerce, community leaders, shopping center owners and developers, and individual store owners and managers (both independent and chain). Recommendations and guidelines for retail investment and revitalization are disclosed later in this section.

Pitney Bowes MapInfo has generated three forecast scenarios for Lynden: a current year, status quo forecast (2008); a five-year conservative (2013) forecast; and a five-year aggressive (2013) forecast. The status quo forecast assumes the existing retail environment, demographic characteristics, and retail demand. The conservative (2013) forecast assumes the projected current trends in population and income growth. The aggressive (2013) forecast assumes both a continued increase in population and income growth and the implementation and maintenance of several recommendations and guidelines outlined in this report. Estimates in this final scenario are more aggressive and assume that Lynden will be successful in securing national retailers in the years immediately following this study. Supportable-square-footage estimates for all three scenarios are displayed in the following table:

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2008 2013 2013 Category Status Quo Conservative Aggressive Apparel Women’s Apparel Store 7,700 9,250 10,500 Men’s Apparel Store 6,000 7,500 8,500 Children’s/Teen’s Apparel Store 2,000 2,500 3,000 Shoe Store 3,000 4,000 5,500 Jewelry Store 500 750 1,000 Sub-Total for Apparel 19,200 24,000 28,500 Appliance/Electronics Store 2,500 3,000 3,600 Automotive Parts/Repair Shop 1,800 2,500 4,000 Book/Music Store 500 750 1,250 Computer/Software Store 1,200 1,500 2,000 Pharmacy/Drug Store 4,000 5,000 6,000 Nursery/Garden Center 2,800 4,000 6,000 Home Furnishings Store 10,500 12,750 15,000 Liquor Store 650 850 1,000 Pet/Pet Supplies Store 5,600 6,750 7,500 Sporting Goods Store 2,800 3,250 4,000 Toy/Hobby Store 1,100 1,500 2,200 Total Additional Supportable Square Footage 52,650 65,850 81,050

Using the following criteria, Pitney Bowes MapInfo has evaluated the supportable square footage for optimal retail matches (national, regional, or local/independent operators):

• Appropriate community size and characteristics • Appropriate demographic/psychographic mix and consumer spending patterns • Current deployment patterns for suggested retailers - Similar locations (small market) - Similar store spacing (distance between stores in the same chain) - Similar accessibility and visibility characteristics - Future expansion plans (markets for future consideration)

Moreover, Pitney Bowes MapInfo has utilized its knowledge of and experience with working with the real estate and market research departments of a variety of retail and restaurant chains to recommend the most appropriate operator/operator type. Pitney Bowes MapInfo will recommend several national retail chains that are appropriate for a deployment in Lynden, but there are retail categories that should be filled by local entrepreneurs and

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operators. For example, in the jewelry store category, supportable square footage can be filled either by a new operator or by the expansion of an existing operator, like Chad’s Jewelry Design.

The following tables list the retail categories, supportable new square footage in each category, and the types of stores. The tables also depict the nearest competition or sister stores (with location) in each retail category. Pitney Bowes MapInfo provides a recommendation for the location of the retailer within the community; recommended retailers have all met the criteria outlined above.

WOMEN’S APPAREL STORE Supportable Square Footage 7,700 – 9,250 Type of Deployment 1 – 2 storefront(s) Recommended Retail Chain Dress Barn, Fashion Bug, Lane Bryant Nearest Location of Dress Barn (Burlington), Fashion Bug (Marysville), Lane Bryant Recommended Retailer (Bellingham) Existing Competition The Dresser Drawer, Wear on Earth Currently, there are limited choices for women’s apparel in Lynden. The recommended national retailers all provide a wide range of clothing options; however, the most ideal situation, Recommendation providing the best product for Lynden, is the combination of all apparel-category square footage and the recruitment of Ross Dress for Less or T.J. Maxx.

MEN’S APPAREL STORE Supportable Square Footage 6,000 – 7,500 Type of Deployment 1 – 2 storefront(s) Recommended Retail Chain Casual Male XL, Western Warehouse Nearest Location of Casual Male XL (Lynwood), Western Warehouse Recommended Retailer (Citrus Heights, CA) Existing Competition N/A

There are currently no male-specific retailers in Lynden. The national retailers listed above meet our specified criteria, but they tend to locate in areas with larger populations. As Recommendation explained above, the ideal situation would be the combination of all apparel-category square footage and the recruitment of Ross Dress for Less or T.J. Maxx.

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CHILDREN’S’/TEEN’S APPAREL STORE Supportable Square Footage 2,000 – 2,500 Type of Deployment 1 storefront Recommended Retail Chain Once Upon A Child Nearest Location of Tacoma Recommended Retailer Existing Competition N/A Because of Lynden’s size and location, there are very few national retailers that fit this category; however, Once Upon a Child, which offers a unique shopping environment, does Recommendation deploy in communities like Lynden. As explained above, the combination of all apparel-category square footage and the recruitment of Ross Dress for Less or T.J. Maxx would be ideal.

SHOE STORE Supportable Square Footage 3000 – 4,000 Type of Deployment 1 – 2 storefront(s) Recommended Retail Chain Payless ShoeSource, Naturalizer Nearest Location of Payless ShoeSource (Abbotsford, BC; Bellingham, WA), Recommended Retailer Naturalizer (Abbotsford, BC; Auburn, WA) Sportsworld (Fairway Center – mainly a sports equipment and Existing Competition apparel store) Because there are no shoe stores in Lynden, either of the above national retailers would work. They both offer a wide variety of both men’s, women’s and children’s shoes at a range Recommendation of prices. Another option for this category is the combination of all apparel-category square footage and the recruitment of Ross Dress for Less or T.J. Maxx.

JEWELRY STORE Supportable Square Footage 500 – 750 Type of Deployment Existing store expansion Recommended Retail Chain A local operator would work best in this category. Nearest Location of N/A Recommended Retailer Existing Competition Chad’s Jewelry Design Because the amount of supportability in this category is low, an expansion to an existing retailer is the best option. Another Recommendation option is incorporating this available square footage into a unified apparel category and then getting a retailer that has a jewelry/accessories department (Ross Dress for Less, T.J. Maxx).

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As previously noted in the above tables, an option that the city of Lynden may wish to pursue is the combination of all apparel-category square footage and the recruitment of Ross Dress for Less or T.J. Maxx. The benefits of such a retailer are size and merchandise variety. Additionally, a large clothing retailer like either of these would fill the needs of the apparel categories while providing the community with a large, national-chain brand, spurring additional national-chain investment. The ideal location for a large, general-apparel retailer is in The Guide retail district. One possible site is the location of the former Rite Aid.

APPLIANCE/ELECTRONICS STORE Supportable Square Footage 2,500 – 3,000 Type of Deployment 1 storefront Recommended Retail Chain A local operator would work best in this category. Nearest Location of N/A Recommended Retailer Existing Competition Lloyds Electronics, RadioShack Most national retailers in this category require more supportable space and a larger household base than Lynden can provide. RadioShack is generally the only exception to these Recommendation requirements, but one is already located in Lynden. As there is demand in this category, a local operator would be ideal. This local operator could be a franchised cell phone and accessories store.

AUTOMOTIVE PARTS/REPAIR SHOP Supportable Square Footage 1,800 – 2,500 Type of Deployment 1 outparcel/freestanding unit Recommended Retail Chain AAMCO Transmission, Midas Auto Service Experts Nearest Location of AAMCO Transmission (Surrey, BC), Midas Auto Service Recommended Retailer Experts (Bellingham) Existing Competition Carquest Auto Parts, NAPA Auto Parts, Schucks Auto Supply Although there are several auto parts places within Lynden, there is a lack of specialty automotive repair options. AAMCO Recommendation Transmissions or Midas Auto Service Experts would fill this void.

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BOOK/MUSIC STORE Supportable Square Footage 500 – 750 Type of Deployment Existing store expansion Recommended Retail Chain A local operator would work best in this category. Nearest Location of N/A Recommended Retailer Existing Competition Katz Coffee & Used Books, Family Christian Bookstore Because of the low supportability for this category, an expansion to an existing retailer is the best option. During our qualitative Recommendation analysis, residents mentioned a desire for new, non-denominational books. While a new bookstore is not likely, an expansion to Katz Coffee & Used Books could accommodate this need.

COMPUTER/SOFTWARE STORE Supportable Square Footage 1,200 – 1,500 Type of Deployment 1 storefront Recommended Retail Chain A local operator would work best in this category. Nearest Location of N/A Recommended Retailer Existing Competition N/A Currently, there are no computer stores in Lynden. With the low supportability for this category, there were no national retailers Recommendation that met our selection criteria. A local operator is the best option; another option is the combination of this category with the appliance/electronics category.

PHARMACY/DRUG STORE Supportable Square Footage 4,000 – 5,000 Type of Deployment 1 storefront Recommended Retail Chain The Medicine Shoppe International, Medicap Pharmacies Nearest Location of The Medicine Shoppe International (Bremerton), Recommended Retailer Medicap Pharmacies (Anacortes) Existing Competition Rite Aid, Fairway Drug With the presence of the existing drug stores, the supportability for this category is not large enough for another full-size drug store like CVS. A good option is a smaller store that is predominantly a pharmacy. The national chains listed above Recommendation meet the size requirements and are considering expanding in northwest Washington. One possible location may be near Bender Plaza, where it could serve Eastern Lynden as well as residents as far out as Sumas.

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NURSERY/GARDEN CENTER Supportable Square Footage 2,800 – 4,000 Type of Deployment 1 freestanding unit Recommended Retail Chain A local operator would work best in this category. Nearest Location of N/A Recommended Retailer Existing Competition Hi Hoe Nursery Because of the nature of retailers in this category, a local operator would be the best option. This supportability can be Recommendation satisfied with either a new location or an expansion to an existing location.

HOME FURNISHINGS STORE Supportable Square Footage 10,500 – 12,750 Type of Deployment 1 – 2 storefront(s) Recommended Retail Chain Anna’s Linen’s Nearest Location of Though deployed across the U.S., there are no locations in Recommended Retailer Washington. Fairway Country Furnishings, Front St. Home Furnishings, Lars Clock Shop, Kitchen Konnection, Fishtrap Creek Interiors, Existing Competition Grandiflora Home and Garden, More Than Antiques, Custom Corners Frames and Specialties Though Lynden does not lack home furnishing options, there is still more supportable space. There are already many options for antiques, lighting, clocks, and other décor items, but there Recommendation are currently no options for essentials (e.g., sheets, towels, other linens). A possible deployment site is in the former Rite Aid location.

LIQUOR STORE Supportable Square Footage 650 – 850 Type of Deployment 1 storefront or an existing store expansion Recommended Retail Chain A local operator would work best in this category. Nearest Location of N/A Recommended Retailer Existing Competition Lynden Liquor Store Because of limited supportable space in this category, either an expansion to the existing liquor store or a small deployment on Recommendation the eastern side of town would be appropriate. The grocery stores on the west side already serve Lynden’s liquor needs.

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PET/PET SUPPLIES STORE Supportable Square Footage 5,600 – 6,750 Type of Deployment 1 – 3 storefront(s) Recommended Retail Chain MudBay, Wild Birds Unlimited, Three Dog Bakery Nearest Location of MudBay (Bothell, WA), Wild Birds Unlimited (White Rock, BC; Recommended Retailer Everett, WA), Three Dog Bakery (Vancouver, BC; Seattle, WA) Existing Competition N/A Though several retailers in Lynden sell pet supplies, there are none that are dedicated solely to this category. Lynden has a relatively affluent household base and a strong tourism component to its economy, so a specialty pet supply store like Recommendation those listed above would be appropriate matches. These retailers would serve Lynden residents and tourists. Additionally, an independent specialty pet supplies operator could fill this niche demand. The most appropriate location for this type of retail is in Downtown Lynden.

SPORTING GOODS STORE Supportable Square Footage 2,800 – 3,250 Type of Deployment 1 storefront Recommended Retail Chain Play-It-Again Sports Nearest Location of Bellingham Recommended Retailer Existing Competition Dave’s Sports Shop, Sportsworld There are already sporting goods stores in Lynden, but a retailer that carries a wider range of sporting equipment would Recommendation be a good addition. Because Play-It-Again Sports sells both new and used equipment, they provide a good opportunity for people to recycle their used sports equipment.

TOY/HOBBY STORE Supportable Square Footage 1,100 – 1,500 Type of Deployment 1 storefront Recommended Retail Chain EB Games/GameStop/Electronics Boutique, Games Workshop Nearest Location of EB Games / GameStop / Electronics Boutique (Bellingham), Recommended Retailer Games Workshop (Marysville) Existing Competition Bumblebees (in the Dutch Village Mall) While Bumblebees has a great selection of classic toys and games, the above national-brand chains would offer role- Recommendation playing and video games and systems. This difference in product lines would allow both stores to prosper without much competition between them.

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In general, most national retailers will want to locate new units either within Lynden’s existing shopping centers or as out-parcel units near Guide Meridian Road. Retail deployments in the Downtown Lynden retail district will likely be made by local or independent operators.

Retail Deployment Factors There are myriad considerations that a retailer or retail developer must make when choosing to deploy a new store or retail center, including locational characteristics, real estate availability and cost, competitive positioning, and chain-expansion planning. There are several positive and negative factors that retailers must weigh when considering a deployment in Lynden, some of which the city can affect, and others that it cannot.

After completing our quantitative and qualitative assessments of the city, we have ranked the top three factors that an average retailer/retail chain would consider when evaluating a deployment opportunity in Lynden. This ranking does not include financial consideration, which is ultimately every retailer’s paramount concern.

1. Trade area demographic and psychographic composition – namely, community size 2. Existing competition (both sister-store and non-sister-store) 3. Regional accessibility and retail synergy

Item three presents two aspects of location consideration that will often go hand-in-hand in a community the size of Lynden. Retail synergy often occurs near points of strong regional accessibility.

Special Retail Consideration During our analysis, Lynden’s desire to recruit and locate a large-format, general-merchandise retailer (e.g., Walmart, Fred Meyer, Target) within the city was brought to our attention. Because this type of retailer was discussed frequently, Pitney Bowes MapInfo felt that there needed to be a special discussion regarding this retail category. Through our quantitative analysis and retail inventory, we found sufficient expenditure potential to warrant the addition of a large-format, general retailer. A general-merchandise retailer, with multiple departments that would utilize all the supportable square footage, would satisfy all merchandise lines listed above.

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This next section briefly presents the pros and cons for two general merchandise-retailer recruitment scenarios that are available to the city.

1. The city actively recruits a large-format, general-merchandise retailer, using this retailer to fill all supportable square footage within the community.

2. The city does not recruit a large-format, general-merchandise retailer, instead actively recruiting smaller retailers to fill the community’s supportable space.

Recruitment of a Large-Format, General-Merchandise Retailer Pro • It would satisfy many of the community’s retail needs within a single store. • It could spur additional retail investment – that is, it would attract other stores that prefer to co-deploy with a large, national brand (e.g., Cato Fashions, which typically co-deploys with Wal-Mart). • It would make the community slightly more attractive for residential developers, as residents want to be close to the goods and services that they require.

Con • It would limit potential for smaller-format retail development. • It would put pressure on certain existing businesses, possibly leading to retail closure. • Many large-format general-merchandise units have grocery components, and Lynden is already saturated with grocery stores. • It would require deployment along Guide Meridian Road and would not draw people to Downtown Lynden. • It may preclude retail demand that is slated for the planned redevelopment of the former Cost Cutter site.

Recruitment of Individual Retailers Pro • The city would be more directly in control of in-fill deployment opportunities. • It would allow for the redevelopment of the Cost Cutter retail space. • It would not require alteration to the city’s current square-footage cap.

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Con • Significantly more time would be consumed by recruiting retailers and filling individual retail spaces. • It would not produce as much of a drastic impact (“wow” factor) on residents or visitors. • It does not appreciably increase the retail drawing power of Lynden the same way that a large, national retailer would. • There would be no guarantee that all supportable space would be filled.

Goals, Initiatives, and Guidelines This section of the Lynden market analysis addresses the opportunities in and challenges with developing a strategic retail plan for the community. Regardless of the path chosen, the overall success of future retail in Lynden is dependent on the combined efforts of the aforementioned retail stakeholders.

Storefront Appearance Business owners must take pride in the appearance of their establishments, both inside and out. While there are several excellent examples of buildings with well-maintained storefronts, there are a number of storefronts in Downtown Lynden with broken fixtures, broken signs, peeling paint, dirty windows, or facades that are in need of pressure washing.

Several examples of attractive and well-maintained storefronts, including Lynden Chocolate & Candy Shoppe, Lynden Paint and Decorating Center, and Lynden Dutch Bakery

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These storefronts along 3rd Street are attractive, but Lynden Dutch Bakery is well maintained. they still need proper signs.

This storefront needs maintenance. Another example of a storefront needing maintenance

The city cannot be expected to maintain the individual buildings: this is the responsibility of the business owners. However, it can help: along with the Chamber of Commerce, the city can hold workshops and networking meetings to promote cooperation throughout the Downtown Lynden retail district. For example, there may be times when all the retailers could have their window displays revolve around a unified theme. (To some degree, this automatically happens during holiday seasons.)

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There should be an effort to refurbish buildings and stores that are currently vacant. Some of these may have absentee landlords, but there are still actions that can be taken to help improve their appearance. One option is having existing retailers create window displays in the empty storefront that promote their own merchandise (preferably, this would be done by retailers who are close to the vacant location; customers will not want to travel to the other end of town to buy the merchandise they see in a window). The Compass Point Survey Group, Inc. is a great example of this type of retail window display. By far, the worst option for a city is covering up the windows with unattractive boards or newspapers – it only detracts from the overall retail environment.

A good example of an existing retailer creating a window display where an inappropriate use of retail space has occurred

Hours of Operation An important factor that needs to be addressed in any retail environment is its hours of operation – especially in its downtown area. With fewer open stores, the difficulty of attracting shoppers increases. In a world of 24-hour superstores and online shopping, the typical consumer now expects to be able to purchase goods and services whenever they are needed. Typical customers understand that it is not practical for a small business to be open 24 hours a day, but they do expect to be able to shop after work, on the weekend, or on a lunch break.

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It is understandable that some retailers may not want to add staff to handle the extra hours, but they can certainly adjust their business hours slightly, opening earlier or closing later to ensure that their stores are open during the times that customers tend to shop. If customers cannot get to a store when it is convenient for them, they will simply go to another store that is open when they need it to be. Often, this means that customers will shop at the national chains – even leaving Lynden altogether to drive into Bellingham or Ferndale.

Two examples of inconsistent hours of operation for stores within Downtown Lynden

Shop owners do not need to stay open until 10 p.m. like the larger national chain stores do, but it would be beneficial for all Downtown Lynden shops to choose one or two nights a week (especially during the summer months) on which they all stay open later (at least until 7 p.m.). It may take time for the change to catch on with the customers, so it should be heavily promoted until these patrons become familiar with the hours. It is important to note that doing this for a month or so and then reverting to the old hours will only confuse customers, making the situation worse.

Because Lynden’s Dutch-inspired heritage creates a draw for tourists (many of whom are more than willing to spend money shopping when they visit Lynden), the local retailers should make

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an effort to be more accommodating with their operating hours. When speaking with residents and local retailers, we discovered that there are several bus tours that frequent Lynden, especially on Saturdays. Adjusting a shop’s open days to include Sunday (perhaps closing on a weekday instead) would encourage these bus tours to make more than just a day stop. Additionally, it would significantly increase the potential revenue for all participating Lynden retailers. If they cannot regularly stay open on weekends, retailers – especially those in Downtown Lynden – should make a concerted effort to be open for bus tours and major city events, thus maximizing sales and general exposure.

In a recent study8, weekday expenditure activity levels (separated by meal type) were studied against corresponding weekend levels. The following patterns were noted:

Weekdays • 20.2% of people dine out for breakfast • 31.9% of people dine out for lunch • 16.9% of people dine out for dinner

Weekends • 33.7% of people dine out for breakfast • 32.8% of people dine out for lunch • 35.4% of people dine out for dinner

Note that weekend restaurant business is drastically higher.

While these statistics apply only to dining out, anecdotal information implies that this trend applies (though perhaps less strongly) to traditional retail sales (weekday versus weekend).

In any city or downtown area, there may be a number of local shop owners who run their stores more as a hobby than for a living, and who do not care if their sales increase; they may not want to work more hours than they already do. In these cases, a request to alter their hours to be open an evening or two – or on Sundays – and an appeal to their pride in the city and to their

8 Source: Restaurants & Institutions, “The New American Diner: Ties That Bond,” January 2008

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desire to help their neighbors succeed may work. There will, however, be some cases in which shop owners simply will not comply; in these cases, efforts are best spent on other initiatives.

Local Retail Recruitment One of the greatest challenges that communities like Lynden currently and will continue to face is the recruitment of local entrepreneurs to open independent or franchised stores within the community. Lynden has the advantage of a strong entrepreneurial spirit among many of its existing independent retailers. Several businesses, such as Dutch Mother’s Bakery, Katz Coffee & Books, and Colony House Furniture, have achieved success in Lynden; however, there is still a significant level of unmet demand in several retail categories that is likely best-filled by independent operators. Therefore, entrepreneurship should be encouraged.

We suggest that the aforementioned retail stakeholders jointly develop a multiple-phased retail plan to attract and to retain retailers in the city. First, the city needs to answer the following questions:

• Based upon the retail market analysis, which retail voids does the city wish to fill?

• Who or what type of retailers should fill the preferred voids? (This market analysis will provide insight and direction.)

• Is there space (available square footage) to accommodate this retail? Does more retail space need to be added? Who owns the space, and what are the owner’s plans for development/redevelopment?

• What existing stores have leases up for renewal? Can any retailers be relocated to better suit each district’s development plans?

Once these questions have been answered, an entrepreneur workshop should be held to discuss the retail needs of Lynden with existing business owners and interested community leaders. This workshop should be advertised not only within the city of Lynden, but also in surrounding communities. It is not unreasonable for someone living in Sumas or Birch Bay to drive into Lynden on a daily basis to operate a business. Finally, interested parties can be shown ideal locations with the appropriate store size to meet

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supportable demand. The city can also provide resources for startup funding, facility improvements, and advertising options, thus guiding the direction of retail growth and development while fostering a strong working relationship.

Delft Square Redevelopment Because of the recent loss of the Delft Square Mall, we felt that it was necessary to discuss the potential redevelopment of the site. We are assuming that any redevelopment would be similar in size to what was destroyed (multiple stories, similar footprint). Based on these assumptions, we have come up with a generalized recommendation for the new building. It is important to note that these are guidelines, not specific plans.

The new building should have retail in the front half of the main floor and offices for services (e.g., insurance, financial, personal care) in the rear. Retail should be directly accessible from the street and may also be accessible from within the building. A central main entrance, with corresponding lobby, would allow access to the offices in the rear of the building and to the stairs and elevator to the second floor. Offices would be most appropriate for the second floor. A third floor would be for apartments (depending on residential demand) or public rental storage.

This overall plan is similar to the former building layout, but we recommend having less interior space dedicated to being a hallway and more to actual retail and office use. Additionally, the interior layout would be reorganized to make more businesses visible from the main entrance.

The most appropriate retail uses for this building are: restaurant with sidewalk patio (or, similar to the former Loft Restaurant, overlooking Front Street); home décor or furnishings stores, similar to those that were there (e.g., Lars Clock Shop, Three Corners Art and More); apparel shop; computer store; toy or hobby shop; and specialty pet supply store.

Signage During the course of our fieldwork, we noticed that there was a lack of consistent signage in and around the city of Lynden to indicate that a traveler has arrived in the community. Such signage is appropriate, especially for a community like Lynden, which generates visitor and tourist traffic, because it guides those who are unfamiliar with the area into the city and toward retail

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destinations and other attractions. A unified signage theme would additionally establish a sense of place, setting Lynden apart from the surrounding communities.

Welcome sign along Front Street Welcome sign along Hannegan Road

We only noticed two signs during our field evaluation: the “Welcome to Lynden” sign, located along Hannegan Road (South 1st Street); and a sign that reads “The Service Clubs of Lynden Welcome You” along Front Street. Neither of these signs is located along the main routes that visitors to Lynden would likely take. The third notification of having arrived in Lynden was the low brick walls with the city’s name mounted on them. These walls, at the intersection of the Guide and Front Street, are adjacent to the cemetery, and for a visitor, it may not be clear whether Lynden is the city’s name or the cemetery’s.

City sign located at the intersection of the Guide and Main Street

Retail Market Analysis Lynden, Washington Page 44

Our recommendation is consistent signage at city boundaries that intersect major travel routes, including on the Guide (both north and south of the large retail concentration), Birch Bay-Lynden Road, and Badger Road. These signs should all feature a common logo and color scheme so that they are instantly recognizable as Lynden city limit signs. The existing Hannegan Road sign is a good example of what new signage might look like, as it is easy to read and features a city logo that captures the Dutch-inspired heritage aspect. Pitney Bowes MapInfo also recommends a sign near the I-5 exit at Birch Bay to indicate the presence and direction of Lynden.

Additionally, directional signs leading visitors downtown and to other retail areas would be beneficial; currently, there is no indication of any shopping opportunities beyond those located along the Guide. These directional signs would be best located along the Guide, in the vicinity of both Front and Main Streets and at the intersection of Depot Road and East Badger Road (the most frequently used routes to downtown). Furthermore, signs indicating the location of the fairgrounds, museums, and visitor information center would be helpful for tourists; these directional signs could be similar to the small-image signs, seen in other communities, that indicate the direction to airports, libraries, and the like.

When used in conjunction with consistent hours of operation and an effective marketing scheme, new signage would significantly increase visitors’ knowledge of local attractions while enhancing their ability to get there.

Concluding Comments Lynden has the potential to support additional retail development that better serves its residents while maintaining the community’s small-town appeal. It is imperative that the city and its residents develop a plan to ensure that Lynden remains vibrant for future generations.

Lynden has several positive attributes that contribute immensely to its retail potential. These attributes include its strong sense of community pride, the growing retail environment, and its Dutch-inspired heritage that brings visitors from all over. Lynden needs to build upon these strengths while making necessary improvements. It is crucial to remember that change will not happen overnight; in most cases, the time it takes from a retailer being contacted and becoming interested in the community as a deployment opportunity to a store being opened can be several years.

Retail Market Analysis Lynden, Washington Page 45

As Lynden achieves its successes, it needs to promote each milestone – not only in the community, but also in the surrounding communities. As work is completed and excitement grows within the area, Lynden will be given increasingly more attention by national retailers who will, in turn, help make the city an even better place in which to live, shop, and dine.

Retail Market Analysis Lynden, Washington Page 46 Appendix A Scenario Comparison for Lynden, Washington Appendix A Scenario Comparison for Lynden, Washington 2008 and 2013 Total Supportable Square Feet

2008 2013 2013 Category Status Quo Conservative Aggressive Women's Apparel 7,700 9,250 10,500 Men's Apparel 6,000 7,500 8,500 Children's/Teen's Apparel 2,000 2,500 3,000 Shoes 3,000 4,000 5,500 Jewelry 500 750 1,000 Apparel Subtotal 19,200 24,000 28,500 Appliance/Electronics 2,500 3,000 3,600 Automotive Parts/Repair Shop 1,800 2,500 4,000 Book/Music Store 500 750 1,250 Computer Store 1,200 1,500 2,000 Pharmacies/Drug Stores 4,000 5,000 6,000 Nursery/Garden Centers 2,800 4,000 6,000 Home Furnishings 10,500 12,750 15,000 Liquor Store 650 850 1,000 Pet Supplies 5,600 6,750 7,500 Sporting Goods Store 2,800 3,250 4,000 Toy/Hobby Store 1,100 1,500 2,200 Total 52,650 65,850 81,050

Status Quo: The number of square feet that can be added in existing retail market place Conservative: The number of square feet that can be added, assuming no drastic changes in the retail market place (e.g., large employment-base change, drastic housing growth/decline, a new large retailer [greater than 70,000 square feet] entering Lynden) Aggressive: The number of square feet that can be added, assuming an improving retail climate from the addition of new retailers (creating retail synergy) and/or an improved retail environment based on new programs or initiatives implemented by the city Appendix B Local Trade Area (LTA) Map Appendix B Appendix C Regional Trade Area (RTA) Map Appendix C Appendix D Summary Demographic Benchmark Report (Local Trade Area) Appendix D Summary Demographic Benchmark Report (%) Local Trade Area

Demographic 2000 2007 2012 Total Population 15,568 17,650 19,023 % Group Quarters Population 0.8% 0.7% 0.6% % 2000 Population in Family Households 89.3% -- -- % 2000 Population in Non-Family Households 9.9% -- -- Total Households 5,433 6,300 6,702 % Households 1 Person 21.0% 22.5% 21.3% % Households 2 Persons 34.0% 34.2% 34.1% % Households 3 Persons 14.2% 14.2% 14.4% % Households 4 Persons 14.9% 14.2% 14.8% % Households 5 Persons 10.0% 9.2% 9.6% % Households 6 Persons 3.8% 3.6% 3.7% % Households 7+ Persons 2.1% 2.1% 2.0% Race and Ethnicity % White Population Alone 91.9% 91.1% 89.1% % Black Population Alone 0.2% 0.2% 0.3% % American Indian/Alaska Native Alone 0.5% 0.5% 0.6% % Asian/Hawaiian/Pacific Islander 1.7% 1.9% 2.3% % Other Population (Including 2+ Races) 5.6% 6.3% 7.8% % Hispanic Population 7.3% 8.6% 11.6% % Non-Hispanic Population 92.7% 91.4% 88.4% Population by Age % Age 0-5 8.7% 8.3% 7.4% % Age 6-13 13.9% 13.1% 12.7% % Age 14-17 7.6% 6.2% 6.0% % Age 18-20 4.1% 3.8% 4.1% % Age 21-24 4.2% 3.5% 4.6% % Age 25-29 5.4% 7.3% 6.8% % Age 30-34 5.9% 5.2% 5.3% % Age 35-39 7.2% 5.7% 5.1% % Age 40-44 7.7% 7.2% 6.3% % Age 45-49 7.2% 6.8% 6.5% % Age 50-54 5.4% 5.8% 6.4% % Age 55-59 4.1% 6.4% 6.7% % Age 60-64 3.5% 5.1% 5.8% % Age 65-69 3.7% 3.6% 4.2% % Age 70-74 3.6% 3.2% 3.5% % Age 75-79 3.4% 3.5% 3.1% % Age 80-84 2.2% 2.6% 2.6% % Age 85+ 2.2% 2.7% 2.6% Median Age Total Population 34.1 36.2 36.9 Median Age Adult Population 44.3 46.6 47.6

Data Source: MapInfo Corporation © 2006 MapInfo Corporation, Troy, New York. All rights reserved. 1-800-489-8829 Appendix D Summary Demographic Benchmark Report (%) Local Trade Area

Demographic 2000 2007 2012 Male Population By Age % Male Age 0-17 31.4% 30.4% 32.0% % Male Age 19-44 35.3% 30.4% 34.1% % Male Age 45-64 20.3% 24.4% 29.1% % Male Age 65-84 11.5% 12.9% 14.7% % Male Age 85+ 1.5% 2.0% 1.8% Median Age Male Population 32.5 34.8 35.1 Median Age Adult Male Population 43.4 47.2 48 Female Population By Age % Female Age 0-17 29.1% 24.9% 23.6% % Female Age 18-44 33.7% 34.9% 34.2% % Female Age 45-64 20.1% 23.8% 24.9% % Female Age 65-84 14.1% 13.0% 13.9% % Female Age 85+ 2.9% 3.3% 3.4% Median Age Female Population 35.3 37.3 38.2 Median Age Adult Female Population 45.2 45.9 47.2 Housing % 2000 Owner-Occupied Housing Units 66.9% -- -- % 2000 Renter-Occupied Housing Units 28.6% -- -- % 2000 Vacant Housing Units 4.5% -- -- 2007 Total Owner-Occupied Housing Units -- 4,367 -- 2007 Total Renter-Occupied Housing Units -- 1,955 --

Data Source: MapInfo Corporation © 2006 MapInfo Corporation, Troy, New York. All rights reserved. 1-800-489-8829 Appendix E Socioeconomic Benchmark Report (Local Trade Area) Appendix E Socioeconomic Benchmark Report (%) Local Trade Area

Demographic 2000 2007 2012 Population 15,568 17,650 19,023 % Population Change 1990-2000 31.1% -- -- % Population Change 2000-2007 -- 13.4% -- % Population Change 2007-2012 -- -- 7.8% Households 5,433 6,300 6,702 % Households Change 1990-2000 37.4% -- -- % Households Change 2000-2007 -- 16.0% -- % Households Change 2007-2012 -- -- 6.4% Average Household Size 2.8 2.7 2.8 Families % Family Households 76.1% -- -- % Non-Family Households 2.9% -- -- % Population in Family Households 89.3% -- -- % Population in Non-Family Households 9.9% -- -- Income Per Capita Income $18,985 $23,409 $26,034 Average Household Income $54,518 $65,581 $73,895 Median Household Income $44,029 $50,118 $56,253 Aggregate Income ($ Million) $296 $413 $495 Household Income % Household Income <$10,000 5.3% 4.1% 3.5% % Household Income $10,000-$14,999 6.3% 7.3% 6.8% % Household Income $15,000-$19,999 5.4% 5.3% 4.7% % Household Income $20,000-$24,999 6.1% 5.9% 5.5% % Household Income $25,000-$29,999 6.2% 5.2% 4.4% % Household Income $30,000-$34,999 7.8% 5.7% 5.2% % Household Income $35,000-$39,999 6.5% 4.8% 4.0% % Household Income $40,000-$44,999 8.0% 6.4% 4.8% % Household Income $45,000-$49,999 5.5% 5.0% 4.5% % Household Income $50,000-$59,999 10.7% 10.7% 10.6% % Household Income $60,000-$74,999 13.1% 14.0% 16.2% % Household Income $75,000-$99,999 11.9% 15.0% 17.8% % Household Income $100,000-$124,999 2.4% 4.4% 5.6% % Household Income $125,000-$149,999 1.1% 2.0% 2.4% % Household Income $150,000-$199,999 1.5% 1.7% 1.7% % Household Income $200,000+ 2.3% 2.4% 2.4% Education Total Educational Attainment Age 25+ 9,397 11,492 -- % No Schooling Completed 0.4% 0.3% -- % Nursery School through 4th Grade 0.3% 0.3% -- % 5th or 6th Grade 0.6% 0.5% -- % 7th or 8th Grade 5.8% 5.3% --

Data Source: MapInfo Corporation © 2006 MapInfo Corporation, Troy, New York. All rights reserved. 1-800-489-8829 Appendix E Socioeconomic Benchmark Report (%) Local Trade Area

Demographic 2000 2007 2012 % 9th Grade 1.9% 1.7% -- % 10th Grade 2.2% 2.1% -- % 11th Grade 2.4% 2.3% -- % 12th Grade, No Diploma 2.3% 2.1% -- % High School Graduate (Includes Equivalency) 34.1% 34.6% -- % Some College <1 Year 8.6% 7.9% -- % Some College 1+ Years, No Degree 14.6% 14.4% -- % Associate Degree 4.7% 5.1% -- % Bachelor's Degree 14.9% 15.8% -- % Master’s Degree 5.0% 0.8% -- % Doctorate Degree 0.8% 5.2% -- % Professional School Degree 1.4% 1.4% -- Marital Status Marital Status Age 15+ 11,743 13,536 -- % Never Married 21.1% 24.2% -- % Now Married 66.4% 68.8% -- % Divorced 5.1% 4.8% -- % Widowed 7.4% 2.2% -- Household by Type % Family Households 76.1% -- -- % Non-Family households 2.9% -- -- % 1 Person Households 21.0% -- -- % 2+ Person Households 79.0% -- -- % Married Couple Family 66.5% -- -- % Married Couple Family with Child <18 31.7% -- -- % Married Couple Family with No Child <18 34.9% -- -- % Male Householder 1.7% -- -- % Female Householder 1.2% -- -- Employment Status Population by Employment Status 11,410 -- -- % Employed Civilians 63.5% -- -- % in Armed Forces 0.0% -- -- % Not in Labor Force 34.4% -- -- % Unemployed Civilians 2.1% -- -- Employment by Occupation % White-Collar Occupations 54.6% 55.1% -- % Blue-Collar Occupations 45.4% 44.9% -- % Management/Professional/Related 29.6% 29.9% -- % Service Occupation 15.5% 15.6% -- % Sales/Office 24.9% 25.2% -- % Farming/Fishing/Forestry 4.6% 4.4% -- % Construction/Extraction/Maintenance 11.0% 10.9% -- % Production/Transportation/Material Moving 14.3% 14.0% -- Data Source: MapInfo Corporation © 2006 MapInfo Corporation, Troy, New York. All rights reserved. 1-800-489-8829 Appendix E Socioeconomic Benchmark Report (%) Local Trade Area

Demographic 2000 2007 2012 Vehicles Available Total Vehicles 10,536 12,210 -- % Households with No Vehicle 8.4% -- -- % Households with 1 Vehicle 25.4% -- -- % Households with 2 Vehicles 43.5% -- -- % Households with 3 Vehicles 15.4% -- -- % Households with 4 Vehicles 4.5% -- -- % Households with 5+ Vehicles 2.8% -- -- Average Vehicles per Household 1.9 1.9 --

Data Source: MapInfo Corporation © 2006 MapInfo Corporation, Troy, New York. All rights reserved. 1-800-489-8829 Appendix F Summary Demographic Benchmark Report (Regional Trade Area) Appendix F Summary Demographic Benchmark Report (%) Regional Trade Area

Demographic 2000 2007 2012 Total Population 41,985 47,420 50,495 % Group Quarters Population 0.5% 0.5% 0.4% % Population in Family Households 88.4% -- -- % Population in Non-Family Households 11.1% -- -- Total Households 15,137 17,546 18,664 % Households 1 Person 20.1% 22.1% 22.6% % Households 2 Persons 35.8% 35.9% 35.4% % Households 3 Persons 15.3% 14.9% 14.7% % Households 4 Persons 14.9% 13.9% 14.0% % Households 5 Persons 8.5% 7.8% 7.9% % Households 6 Persons 3.4% 3.2% 3.3% % Households 7+ Persons 2.0% 2.1% 2.1% Race and Ethnicity % White Population Alone 90.4% 89.8% 88.0% % Black Population Alone 0.5% 0.5% 0.6% % American Indian/Alaska Native Alone 1.3% 1.3% 1.5% % Asian/Hawaiian/Pacific Islander 1.9% 2.0% 2.5% % Other Population (Including 2+ Races) 5.8% 6.4% 7.4% % Hispanic Population 7.1% 8.3% 11.2% % Non-Hispanic Population 92.9% 91.7% 88.8% Population by Age % Age 0-5 8.4% 7.9% 7.4% % Age 6-13 13.8% 13.0% 12.4% % Age 14-17 7.1% 5.8% 5.7% % Age 18-20 3.8% 3.5% 3.8% % Age 21-24 3.9% 3.1% 4.2% % Age 25-29 5.3% 7.0% 6.4% % Age 30-34 6.2% 5.5% 5.4% % Age 35-39 7.8% 6.1% 5.5% % Age 40-44 8.0% 7.4% 6.5% % Age 45-49 7.8% 7.3% 6.8% % Age 50-54 6.6% 7.0% 7.2% % Age 55-59 4.9% 7.7% 8.0% % Age 60-64 4.0% 5.8% 6.7% % Age 65-69 3.6% 3.6% 4.4% % Age 70-74 3.2% 3.0% 3.4% % Age 75-79 2.6% 2.7% 2.6% % Age 80-84 1.6% 1.9% 1.9% % Age 85+ 1.4% 1.7% 1.7% Median Age Total Population 34.9 37.4 38.4 Median Age Adult Population 44.2 46.7 48

Data Source: MapInfo Corporation © 2006 MapInfo Corporation, Troy, New York. All rights reserved. 1-800-489-8829 Appendix F Summary Demographic Benchmark Report (%) Regional Trade Area

Demographic 2000 2007 2012 Male Population by Age % Male Age 0-17 30.1% 29.1% 30.3% % Male Age 19-44 35.1% 29.9% 32.7% % Male Age 45-64 23.3% 28.2% 32.4% % Male Age 65-84 10.5% 11.6% 13.8% % Male Age 85+ 0.9% 1.2% 1.2% Median Age Male Population 34.3 36.9 37.9 Median Age Adult Male Population 43.9 47.9 49 Female Population by Age % Female Age 0-17 28.5% 24.4% 23.3% % Female Age 18-44 34.8% 35.6% 34.2% % Female Age 45-64 23.1% 27.3% 28.2% % Female Age 65-84 11.7% 10.6% 12.0% % Female Age 85+ 1.9% 2.1% 2.2% Median Age Female Population 35.6 37.7 38.7 Median Age Adult Female Population 44.6 45.5 47 Housing % Owner-Occupied Housing Units 57.3% -- -- % Renter-Occupied Housing Units 22.4% -- -- % Vacant Housing Units 20.4% -- -- Total Owner-Occupied Housing Units -- 12,484 -- Total Renter-Occupied Housing Units -- 5,033 --

Data Source: MapInfo Corporation © 2006 MapInfo Corporation, Troy, New York. All rights reserved. 1-800-489-8829 Appendix G Socioeconomic Benchmark Report (Regional Trade Area) Appendix G Socioeconomic Benchmark Report (%) Regional Trade Area

Demographic 2000 2007 2012 Population 41,985 47,420 50,495

% Population Change 1990-2000 32.6% -- -- % Population Change 2000-2007 -- 12.9% -- % Population Change 2007-2012 -- -- 6.5% Households 15,137 17,546 18,664

% Households Change 1990-2000 35.8% -- -- % Households Change 2000-2007 -- 15.9% -- % Households Change 2007-2012 -- -- 6.4% Average Household Size 2.8 2.7 2.7 Families

% Family Households 75.3% -- -- % Non-Family Households 4.6% -- -- % Population in Family Households 88.4% -- -- % Population in Non-Family Households 11.1% -- -- Income Per Capita Income $19,706 $24,342 $27,360 Average Household Income $54,765 $65,788 $74,021 Median Household Income $43,380 $48,069 $53,385 Aggregate Income ($ Million) $827 $1,154 $1,382 Household Income % Household Income <$10,000 6.2% 4.9% 4.4% % Household Income $10,000-$14,999 5.5% 5.8% 5.3% % Household Income $15,000-$19,999 6.1% 6.3% 5.6% % Household Income $20,000-$24,999 5.8% 5.6% 5.2% % Household Income $25,000-$29,999 6.9% 6.1% 5.3% % Household Income $30,000-$34,999 6.9% 5.6% 5.3% % Household Income $35,000-$39,999 7.6% 5.8% 5.0% % Household Income $40,000-$44,999 7.1% 6.3% 5.4% % Household Income $45,000-$49,999 5.8% 5.6% 5.2% % Household Income $50,000-$59,999 10.1% 9.4% 9.8% % Household Income $60,000-$74,999 13.0% 14.0% 15.1% % Household Income $75,000-$99,999 10.6% 13.7% 16.5% % Household Income $100,000-$124,999 3.4% 4.6% 5.5% % Household Income $125,000-$149,999 1.2% 1.9% 2.2% % Household Income $150,000-$199,999 1.3% 1.6% 1.7% % Household Income $200,000+ 2.2% 2.7% 2.5% Education

Total Educational Attainment Age 25+ 26,297 31,599 -- % No Schooling Completed 0.6% 0.5% -- % Nursery School through 4th Grade 0.2% 0.2% -- % 5th or 6th Grade 1.1% 1.1% -- % 7th or 8th Grade 3.9% 3.6% -- % 9th Grade 1.9% 1.8% --

Data Source: MapInfo Corporation © 2006 MapInfo Corporation, Troy, New York. All rights reserved. 1-800-489-8829 Appendix G Socioeconomic Benchmark Report (%) Regional Trade Area

Demographic 2000 2007 2012

% 10th Grade 2.5% 2.4% -- % 11th Grade 2.4% 2.3% -- % 12th Grade, No Diploma 3.4% 3.1% -- % High School Graduate (Includes Equivalency) 33.7% 34.4% -- % Some College <1 Year 9.5% 8.8% -- % Some College 1+ Years, No Degree 16.3% 16.1% -- % Associate Degree 5.1% 5.4% -- % Bachelor's Degree 13.3% 14.0% -- % Master’s Degree 4.1% 0.8% -- % Doctorate Degree 0.8% 4.3% -- % Professional School Degree 1.2% 1.2% -- Marital Status

Marital Status Age 15+ 31,947 36,707 -- % Never Married 21.7% 24.7% -- % Now Married 64.8% 65.4% -- % Divorced 8.1% 7.9% -- % Widowed 5.4% 2.0% -- Household by Type

% Family Households 75.3% -- -- % Non-Family households 4.6% -- -- % 1 Person Households 20.1% -- -- % 2+ Person Households 79.9% -- -- % Married Couple Family 63.5% -- -- % Married Couple Family with Child <18 1.6% -- -- % Married Couple Family with No Child <18 34.6% -- -- % Male Householder 2.9% -- -- % Female Householder 28.9% -- -- Employment Status

Population by Employment Status 31,114 -- -- % Employed Civilians 62.2% -- -- % in Armed Forces 0.1% -- -- % Not in Labor Force 34.3% -- -- % Unemployed Civilians 3.4% -- -- Employment by Occupation

% White-Collar Occupations 51.5% 52.0% -- % Blue-Collar Occupations 48.5% 48.0% -- % Management/Professional/Related 26.5% 26.8% -- % Service Occupation 16.3% 16.4% -- % Sales/Office 25.0% 25.1% -- % Farming/Fishing/Forestry 4.5% 4.4% -- % Construction/Extraction/Maintenance 11.5% 11.3% -- % Production/Transportation/Material Moving 16.1% 15.9% --

Data Source: MapInfo Corporation © 2006 MapInfo Corporation, Troy, New York. All rights reserved. 1-800-489-8829 Appendix G Socioeconomic Benchmark Report (%) Regional Trade Area

Demographic 2000 2007 2012 Vehicles Available Total Vehicles 30,739 35,628 -- % Households with No Vehicle 5.5% -- -- % Households with 1 Vehicle 24.8% -- -- % Households with 2 Vehicles 44.4% -- -- % Households with 3 Vehicles 17.3% -- -- % Households with 4 Vehicles 5.2% -- -- % Households with 5+ Vehicles 2.8% -- -- Average Vehicles per Household 2.0 2.0 --

Data Source: MapInfo Corporation © 2006 MapInfo Corporation, Troy, New York. All rights reserved. 1-800-489-8829 Appendix H Population and Demographic Characteristic Maps Lynden Local Trade Area 2007 Population Density Legend Aldergrove Trade Area Boundary Abbotsford

Distance Reference Rings

Water 2007 Population Density by Block Group 1,330.1 To 3,793.6 375.3 To 1,330.1 194.9To 375.3 126.8To 194.9 31.8To 126.8 Sumas 3 MILES

&%546546 Berthusen 1 MILE Memorial Park Lynden

%&539539 Nooksack

Everson Custer

N %&544544

0 1.75 3.5 M H Park Lake Terrell Miles St Game Refuge

Ferndale Pioneer Park "!99 © 2006 MapInfo Corporation, Troy, New York. All rights reserved. 1-800-489-8829 AppendixDeming H Lynden Local Trade Area 2007 Daytime Population Legend Aldergrove Trade Area Boundary Abbotsford

Distance Reference Rings

Water 2007 Daytime Population by Block Group 2,560 To 7,900 1,890 To 2,560 1,520 To 1,890 1,050 To 1,520 380 To 1,050 Sumas 3 MILES

&%546546 Berthusen 1 MILE Memorial Park Lynden

%&539539 Nooksack

Everson Custer

N %&544544

0 1.75 3.5 M H Park Lake Terrell Miles St Game Refuge

Ferndale Pioneer Park "!99 © 2006 MapInfo Corporation, Troy, New York. All rights reserved. 1-800-489-8829 AppendixDeming H Lynden Local Trade Area 2007 Median Household Income Legend Aldergrove Trade Area Boundary Abbotsford

Distance Reference Rings

Water 2007 Median Household Income by Block Group $60,400 To $71,600 $52,500 To $60,400 $44,800 To $52,500 $39,600 To $44,800 Sumas $24,600 To $39,600 3 MILES

&%546546 Berthusen 1 MILE Memorial Park Lynden

%&539539 Nooksack

Everson Custer

N %&544544

0 1.75 3.5 M H Park Lake Terrell Miles St Game Refuge

Ferndale Pioneer Park "!99 © 2006 MapInfo Corporation, Troy, New York. All rights reserved. 1-800-489-8829 AppendixDeming H Lynden Local Trade Area 2007 Median Age Legend Aldergrove Trade Area Boundary Abbotsford

Distance Reference Rings

Water 2007 Median Age by Block Group 40.1 To 49.1 38.7 To 40.1 36.2 To 38.7 33.0 To 36.2 27.7 To 33.0 Sumas 3 MILES

&%546546 Berthusen 1 MILE Memorial Park Lynden

%&539539 Nooksack

Everson Custer

N %&544544

0 1.75 3.5 M H Park Lake Terrell Miles St Game Refuge

Ferndale Pioneer Park "!99

© 2006 MapInfo Corporation, Troy, New York. All rights reserved. 1-800-489-8829 AppendixDeming H Lynden Local Trade Area 2007 Percent College Degree Legend Aldergrove Trade Area Boundary Abbotsford

Distance Reference Rings

Water 2007 % College Degree by Block Group 33.67% To 38.98% 28.18% To 33.67% 23.39% To 28.18% 20.30% To 23.39% 12.59% To 20.30% Sumas 3 MILES

&%546546 Berthusen 1 MILE Memorial Park Lynden

%&539539 Nooksack

Everson Custer

N %&544544

0 1.75 3.5 M H Park Lake Terrell Miles St Game Refuge

Ferndale Pioneer Park "!99 © 2006 MapInfo Corporation, Troy, New York. All rights reserved. 1-800-489-8829 AppendixDeming H Appendix I Potential Additional Tenant List Appendix I Potential Additional Tenant List Lynden, Washington

Target Traffic Target GLA* Count Contact Name, Address, Category/Tenant (Square Feet) (Vehicles/Day) Phone Number, and Website General Family Apparel Ross Dress for Less 30,200 40,000 Gregg McGillis (Ross Stores, Inc.) Group Vice President, Real Estate 4440 Rosewood Avenue, Building 4 Pleasanton, California 94588 Phone: (925) 965-4400 Fax: (925) 965-4388 [email protected] www.rossstores.com

T.J. Maxx 29,000 to 65,000 N/A Eric J. Corpuz (TJX Companies, Inc.) Real Estate for OR, WA, Northern CA 1900 South Norfolk Street, Suite 350 San Mateo, California 94403 Phone: (650) 577-2316 Fax: (650) 577-2317 [email protected]

TJX Companies, Inc. 770 Cochituate Road Framingham, Massachusetts 01701 Phone: (508) 390-1000 www.tjx.com www.tjxrealestate.com

Women's Apparel The Dress Barn, Inc. 4,000 to 5,000 N/A Elise Jaffe Senior Vice President, Real Estate 30 Dunnigan Drive Suffern, New York 10901 Phone: (845) 369-4500 Fax: (845) 369-8001 [email protected] www.dressbarn.com

Fashion Bug and Lane Bryant 5,000 to 7,000 N/A Alan Bobman (Charming Shoppes, Inc.) Vice President, Real Estate 450 Winks Lane Bensalem, Pennsylvania 19020 Phone: (215) 245-9100 Fax: (215) 638-6919 [email protected] www.charmingshoppes.com

*The data presented in this table represent target ranges for each individual retailer. Target Traffic Target GLA* Count Contact Name, Address, Category/Tenant (Square Feet) (Vehicles/Day) Phone Number, and Website Men's Apparel Casual Male XL 3,500 to 4,000 40,000 Melissa S. Martin (Casual Male Retail Group, Inc.) Real Estate 555 Turnpike Street Canton, Massachusetts 02021 Phone: (781) 828-9300 Fax: (781) 821-0614 [email protected] www.casualmalexl.com

Western Warehouse 8,000 to 10,000 N/A Larry Hager (Corral West Ranchwear, Inc.) CFO/Executive Vice President – Real Estate 4519 Frontier Mall Drive Cheyenne, Wyoming 82009 Phone: (307) 632-0951 Fax: (307) 633-2631 [email protected] www.corralwest.com

Children's Apparel Once Upon a Child 2,800 to 3,200 25,000 Paola Olson (Winmark Corporation) Real Estate Manager 4200 Dahlberg Drive, Suite 100 Minneapolis, Minnesota 55422-4837 Phone: (763) 520-8500 Fax: (763) 520-8410 [email protected] www.winmarkcorporation.com

Shoe Store Payless ShoeSource 3,000 N/A Gayla Cowan Real Estate – CO, ID, MT, NV, OR, UT, WA, WY 3231 Southeast Sixth Street Topeka, Kansas 66601 Phone: (785) 270-7802 Fax: (785) 270-7879 [email protected] www.paylessshoesource.com

Naturalizer 1,200 N/A W. Bradley Adams (Naturalizer Retailer) Senior Vice President/General Manager 8300 Maryland Avenue Saint Louis, Missouri 63105 Phone: (314) 854-4000 Fax: (314) 854-4274 [email protected] www.naturalizeronline.com

*The data presented in this table represent target ranges for each individual retailer. Target Traffic Target GLA* Count Contact Name, Address, Category/Tenant (Square Feet) (Vehicles/Day) Phone Number, and Website Automotive Parts/Repair Shop AAMCO Transmission 2,500 to 5,500 20,000 Pat Drinkwater Center Development/Real Estate Manager 201 Gibraltar Road Horsham, Pennsylvania 19044 Phone: (800) 394-6116 Fax: (215) 956-0340 www.aamco.com Midas Auto Service Experts 4,500 to 5,000 N/A Alan Feldman (Midas International Corp.) Chairman/President/CEO 1300 Arlington Heights Road Itasca, Illinois 60143 Phone: (630) 438-3000 Fax: (630) 438-3880 www.midasinc.com

Pharmacy/Drug Store Medicine Shoppe International, Inc. 2,000 N/A Terry Burnside (Cardinal Health, Inc.) President One Rider Trail Plaza Drive, Suite 300 Earth City, Missouri 63045 Phone: (314) 993-6000 Fax: (314) 872-5500 [email protected] www.medshoppe.com

Medicap Pharmacies 2,500 N/A John Pittarelli (Owned by Cardinal Health, Inc. but Director, Store Development operated separately) 4350 Westown Parkway, Suite 400 West Des Moines, Iowa 50266 Phone: (515) 224-8400 Fax: (515) 224-8415 [email protected] www.medicaprx.com

Home Furnishings Store Anna's Linens 7,000 to 15,000 N/A Pat Barber Vice President, Real Estate 3550 Hyland Avenue Costa Mesa, California 92626 Phone: (714) 460-2802 Fax: (714) 460-1750 [email protected] www.annaslinens.com

*The data presented in this table represent target ranges for each individual retailer. Target Traffic Target GLA* Count Contact Name, Address, Category/Tenant (Square Feet) (Vehicles/Day) Phone Number, and Website Pet/Pet Supplies Store MudBay 3,000 to 5,000 N/A Lars and Marisa Wulff Co-CEOs 2900 37th Avenue SW Olympia, Washington 98512 Phone: (360) 709-0074 Fax: (360) 709-0083 [email protected] www.mudbay.us

Wild Birds Unlimited 1,600 to 2,400 25,000 Linda Gilkerson Franchise Development Manager 11711 North College Avenue, Suite 146 Carmel, Indiana 46032 Phone: (317) 571-7100 Fax: (317) 571-7110 [email protected] www.wbu.com

Three Dog Bakery 1,000 to 2,000 N/A Kathy Warren Vice President/Real Estate 1843 North Topping Avenue Kansas City, Missouri 64120 Phone: (816) 474-3647 Fax: (816) 474-2171 [email protected] www.threedog.com

Sporting Goods Store Play It Again Sports 2,500 to 3,500 25,000 Paola Olson (Winmark Corporation) Real Estate Manager 4200 Dahlberg Drive, Suite 100 Minneapolis, Minnesota 55422-4837 Phone: (763) 520-8500 Fax: (763) 520-8410 [email protected] www.winmarkcorporation.com

*The data presented in this table represent target ranges for each individual retailer. Target Traffic Target GLA* Count Contact Name, Address, Category/Tenant (Square Feet) (Vehicles/Day) Phone Number, and Website Toy/Hobby Store GameStop, EB Games, Electronics 1,000 to 2,000 N/A Marc Summey Boutique Senior Vice President, (GameStop Corp.) Development/Real Estate 625 Westport Parkway Grapevine, Texas 76051 Phone: (817) 424-2000 Fax: (817) 424-2002 [email protected] www.gamestop.com Gaes Workshop 1,000 N/A Tim Goins (Games Workshop Retail, Inc.) Real Estate 6711 Baymeadow Drive Glen Burnie, Maryland 21060 Phone: (410) 590-1400 Fax: (410) 590-1444 [email protected] www.games-workshop.com

*The data presented in this table represent target ranges for each individual retailer.