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City of Grosse Pointe Park Retail & Restaurant Market Analysis Grosse Pointe, Michigan Prepared for: City of Grosse Pointe Park Prepared by: Gibbs Planning Group 12 July 2016 TABLE OF CONTENTS INTRODUCTION .................................................................................................................. 1 Executive Summary ............................................................................................................. 1 Background .......................................................................................................................... 3 Methodology ......................................................................................................................... 4 Trade Area ........................................................................................................................... 6 Demographic Characteristics ............................................................................................... 7 Tapestry Lifestyles ............................................................................................................... 9 Employment Base ................................................................................................................ 12 TRADE AREA CHARACTERISTICS ................................................................................... 14 Location ................................................................................................................................ 14 Access .................................................................................................................................. 15 Other Shopping Areas .......................................................................................................... 16 SUMMARY OF FINDINGS .................................................................................................... 19 2019 Supportable Retail and Appropriate Tenant Discussion .............................................. 21 Retail Category Definitions ................................................................................................... 21 Shopping Center Definitions ................................................................................................. 24 Rationale ............................................................................................................................... 25 Limits of Study ....................................................................................................................... 25 APPENDIX ............................................................................................................................ 27 Exhibit A: Primary Trade Area Business Summary .............................................................. 27 Exhibit B: Primary Trade Area Community Profile ................................................................ 29 Exhibit C: Primary Trade Area Housing Profile .................................................................... 35 Exhibit D: Primary Trade Area Dominant Tapestry Map and Descriptions ........................... 37 INTRODUCTION Figure 1: Aerial photo of the Grosse Pointe Park study area and surrounding neighborhoods. The area is bordered by Detroit to the west and well connected by the surrounding street grid. Executive Summary This study finds that the Grosse Pointe Park study area can presently support up to 58,500 additional square feet (sf) of retail and restaurant development, generating over $16.0 million in new sales. By 2021, household income growth in the primary trade area could increase the total captured sales to $16.8 million. The demand could partially be absorbed by existing businesses and/or with the opening of 20 to 30 new restaurants and stores. Additional retail development in the study area can provide needed goods and services for the existing surrounding consumer base of nearby residents, employees and regional visitors, including local college students and graduates. Furthermore, adding to the critical mass of retailers and restaurants in the study area can increase the vibrancy of the study area and strengthen the pull of trade area consumers. Apart from the still evolving downtown Detroit and suburban malls in Oakland and Macomb County, the area is underserved by desirable shopping and an urban experience. The demographics of the trade area represent a pent up market for traditional main street commerce furthering the potential for sustainable retail development. The leading categories of supportable retail growth are restaurants, pharmacy and general merchandise. GPG understands the Grosse Pointe communities may be implementing a new high-speed fiber optic cable network in the near future. Similar fiber systems in Chattanooga, Tennessee and Kansas City, Kansas have generated significant booms in housing demand and have created thousands of new jobs. While there is no data to forecast the network’s potential impact on Grosse Pointe’s retail sales, new housing demand and job creation will likely generate a notable increase in Grosse Pointe retail and restaurant sales beyond the estimates of this study. With frontage on southern Lake Saint Clair, Grosse Pointe Park is the westernmost of the noted Grosse Pointe suburbs, with the oldest overall housing stock of the five cities. Grosse Pointe Park Grosse Pointe Park Retail Market Study 1. Gibbs Planning Group, Inc. 12 July 2016 borders Detroit at Alter Road to Cadieux; its desirable location only six miles east of downtown Detroit makes it a home to many who commute to the city on a daily basis. The neighborhoods in Grosse Pointe Park are built on a standard grid street pattern which flows out of Detroit, and housing ranges from tightly-packed single- and multi-family brick houses on the far west side of the Park, to rows of traditionally-styled single family homes, to multimillion-dollar mansions on the lakeshore. Many of the houses in the Park were built prior to World War II, and many of these were designed by noted architects using the finest materials. Grosse Pointe Park has a Beaumont Hospital campus which also contributes to a high quality of life for residents. The study area features mixed-use neighborhoods, where retail, schools and churches are within close walking distance. Kercheval Avenue is generally considered a dining and entertainment district with several limited-service and full-service restaurants including a number of favorable openings in recent years. Key retailers include a hardware store, a natural foods market and a few fashion boutiques. Table 1: 2016 Supportable Retail Est. 2016 Est. 2016 Number Retail Category Supportable SF Retail Sales of Stores Retail Apparel Stores 1,800 sf $393,450 1 - 2 Book & Music Stores 1,200 sf $254,100 1 Craft Beer, Spirits & Fine Wine Stores 1,200 sf $366,000 1 Department Store Merchandise 2,500 sf $451,800 1 Florists 1,500 sf $246,400 1 General Merchandise Stores 6,800 sf $1,282,500 3 - 4 Jewelry Stores 1,200 sf $402,000 1 Miscellaneous Store Retailers 5,700 sf $1,562,000 2 - 3 Office Supplies & Gift Stores 2,900 sf $643,500 2 - 3 Pharmacy 8,500 sf $2,982,000 1 - 2 Shoe Stores 1,600 sf $317,750 1 Specialty Food Stores 2,500 sf $553,500 1 - 2 Retail Totals 37,400 sf $9,455,000 16 - 22 Restaurants Bars, Breweries & Pubs 5,500 sf $1,935,500 1 - 2 Full-Service Restaurants 6,400 sf $2,564,000 1 - 2 Limited-Service Restaurants 5,600 sf $1,269,000 1 - 2 Specialty Food Stores 3,700 sf $825,750 1 - 2 Restaurant Totals 21,200 sf $6,594,250 4 - 8 Retail & Restaurant Totals 58,600 sf $16,049,250 20 - 30 This study further finds that the Grosse Pointe Park primary trade area has a population of 151,600 persons, decreasing under current trends to 149,000 persons by 2021. Median household income in the primary trade area is $50,000, which is similar to state and national figures. The average household income is higher than state and national averages at $75,800 representing the influence of high-wage earning individuals. The trade area is well-educated as 34.7 percent of adults over the age of 25 have earned a bachelor’s degree or higher. Housing favors owner-occupied units, which comprise 57.7 percent of all housing, compared to 25.2 percent renter-occupied households; the vacancy rate is 17.1 percent. The primary trade area has a labor base of 48,900 workers. 2. Grosse Pointe Park Retail Market Study Gibbs Planning Group, Inc. 12 July 2016 Figure 2: The Grosse Pointe Park neighborhood surrounding the study area is dense and well-connected. Background Gibbs Planning Group, Inc. (GPG) has been retained by the City of Grosse Pointe Park to conduct a retail feasibility analysis for a five-block section of Kercheval Avenue. The area serves as a small shopping and entertainment district for residents of Grosse Pointe Park and the surrounding cities. Despite bordering a mostly vacated but stabilized area of Detroit, the area is thriving and a number of desirable shops and restaurants have opened in recent years. Many residents and public officials instinctively see the opportunity for additional retail and restaurant development in the study area, but have often been dismissed by potential retailers due to negative perceptions of being close to Detroit and a limited market bound by Lake St. Clair (whereas other locations in the region are surrounded by neighborhoods and therefore more consumers). This study is to serve as a third-party assessment of the qualitative and quantitative characteristics of the Grosse Pointe Park retail market and to
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