Retail Market Analysis City of Lynden

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Retail Market Analysis City of Lynden 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. Retail Market Analysis Lynden, Washington Page 1 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. Retail Market Analysis Lynden, Washington Page 2 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 Retail Market Analysis Lynden, Washington Page 3 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. Retail Market Analysis Lynden, Washington Page 4 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
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