Appendix A: Financing Strategies
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DOWNTOWN MARKET ANALYSIS San Marcos, Texas PREPARED AS PART OF THE DOWNTOWN MASTER PLAN FOR: The City of San Marcos PREPARED BY: JANUARY 2008 h SAN MARCOS – DOWNTOWN MARKET ANALYSIS Table of Contents Introduction ................................................................................................................................................................ 5 Planning for Success ................................................................................................................................................. 8 Downtown Market Overview ...................................................................................................................................... 9 Office Market Potential............................................................................................................................................. 12 Residential Market Potential .................................................................................................................................... 13 Retail Market Potential............................................................................................................................................. 14 Strategic Recommendations.................................................................................................................................... 15 Appendix A: Financing Strategies............................................................................................................................ 17 Appendix B: Office Demand..................................................................................................................................... 23 Appendix C: Residential Demand............................................................................................................................ 25 Appendix C: Residential Demand............................................................................................................................ 26 Appendix D: Retail Demand..................................................................................................................................... 28 T . I . P STRATEGIES Page 2 h SAN MARCOS – DOWNTOWN MARKET ANALYSIS Executive Summary Rapid growth in the Austin and San Antonio metropolitan areas will likely spillover to San Marcos. This growth should significantly increase demand for office, residential, and retail space in San Marcos. This potential growth and additional demand provides the city of San Marcos with the opportunity to re-position its downtown, re- defining its role in both the city and the region as a residential and retail destination and employment center. Downtown San Marcos’ property market values and lease rates, though rising, POTENTIAL DEMAND SUMMARY appear undervalued compared to peer markets and are still significantly Downtown San Marcos, 2007 - 2012 discounted to Austin and San Antonio. In addition, ample infill opportunities exist Regional Focus in the downtown area, although the ownership structure of parcels in downtown makes land assembly more challenging. With these favorable market conditions Low High coupled with the strong population and employment growth projected for San Marcos, the downtown market is likely to expand over the next five years. OFFICE MARKET Additional Office Workers 637 - 956 Based on the vision of downtown San Marcos becoming a regional employment Additional Office Demand (Sq. Ft) 135,378 - 203,066 center and destination, TIP estimated the potential demand for office, residential, and retail space. The results are summarized below. RESIDENTIAL (MULTIFAMILY) MARKET Total New MF Units 402 - 603 Demand for office space will increase an estimated 135,000 to 203,000 Estimate Sq. Ft (@ 700 per Unit) 281,591 - 422,387 gross square feet from 2007 to 2012. Demand for residential units will increase an estimated 282,000 to 422,000 gross square feet from 2007 to 2012. RETAIL MARKET Total Retail Demand (Sq. Ft) 39,437 - 52,638 Demand for retail space will increase an estimated 40,000 to 53,000 gross square feet from 2007 to 2012. These demand projections assume that San Marcos assumes a larger regional role. To do this, the city must actively promote opportunities in downtown through supportive policies and programs. As such, TIP recommended the following: Financing improvements. Create a financing district to provide a secure funding source. Secure available grant funding. Structure competitive incentives to promote investment in downtown. Promote transportation alternatives. Setting an example. Encourage mixed-use development through a predictable and accommodating development process. Play an active role in the redevelopment of the county-owned buildings to be vacated. T . I . P STRATEGIES Page 3 h SAN MARCOS – DOWNTOWN MARKET ANALYSIS Strategic planning. Conduct a retail recruitment analysis and devise a retail strategy. Create a city-wide economic development strategic plan. Marketing for success. Build a strong brand and well-developed products to promote downtown. Maintain an accurate database of available buildings and spaces. Direct external marketing efforts towards developers, investors and businesses. Reach out to tourists visiting the outlet malls. The following report provides an overview of the downtown real estate market. This market overview is followed by discussions of the demand potential for the office, residential, and retail market in downtown. Next, TIP provides strategic recommendations for creating a vibrant downtown. Appendix A provides a summary of financing mechanisms for downtown improvements. Appendices B through D provide more detailed information on the methodology and estimates for demand potential in each of the three market areas. T . I . P STRATEGIES Page 4 h SAN MARCOS – DOWNTOWN MARKET ANALYSIS Introduction DD DessauDessau RdRd As shown in Figure 1, San Marcos has historically been a regional commercial center for surrounding DDuuuvvvaaa 71 vvvaaall l RRddd RR ddd RRaaannnccchhh hhh RRoooaaaddd ddd 111333222333 333 183 FFmm cities, drawing people from Wimberley, Lockhart, and Seguin. For tourists along the I-35 corridor, the 111333222 16 222333 281 CameronCameron RdRd 333 333 333 77 7 77 7 77 7 224444 999 San Marcos outlet malls have become one of the state’s major attractions, located between San mm 22224444 999 FFmm 22224444 TRAVITRAVIS S 999 FFmm 22 TRAVITRAVIS S FF TRAVITRAVIS S 16 mmm mmm mmm FF F FF F GILLESPIEGILLESPIE FF F GILLESPIEGILLESPIE 222777666666 LostLost CreekCreek BlvBlv d dWW 15th15th StSt FFmm 222777 Antonio and Austin. 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