Hamlet Business District Plan Town of East Hampton, New York
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May 2017 Hamlet Business District Plan Town of East Hampton, New York Prepared for: Town of East Hampton 159 Pantigo Road East Hampton, New York 11937 Prepared by: RKG Associates, Inc. Economic, Planning and Real Estate Consultants 300 Montgomery Street, Suite 203 Alexandria, Virginia 22314 Tel: 703.739.0965 Fax: 703.739.0979 www.rkgassociates.com Hamlet Business District Plan East Hampton, New York May 2017 Prepared For: Town of East Hampton, New York 159 Pantigo Road East Hampton, New York 11937 Prepared By: In Cooperation with: RKG Associates, Inc. Fine Arts & Science, LLC Economic, Planning and Real Estate Consultants Planning Consultant 300 Montgomery Street, Suite 203 Ms. Lisa Liquori, Owner Alexandria, Virginia 22314 151 Middle Highway Tel: (703) 739-0965 East Hampton, NY 11937 Website: www.rkgassociates.com Tel: (917) 656-8363 i Table of Contents Chapter 1 EXECUTIVE SUMMARY A. Introduction y.............................................................................................................................. 1-1 B. Business District Plan Contents ............................................................................................... 1-2 C. Summary of Major Findings and Implications ................................................................... 1-2 Chapter 2 DEMOGRAPHIC TREND ANALYSIS A. Methodology .............................................................................................................................. 2-1 B. Population Characteristics ...................................................................................................... 2-2 C. Implications ............................................................................................................................... 2-8 Chapter 3 ECONOMIC BASE ANALYSIS A. Methodology .............................................................................................................................. 3-1 B. East Hampton Economic Trends .............................................................................................. 3-2 C. Montauk Economic Trends ..................................................................................................... 3-11 D. Workforce Characteristics .................................................................................................... 3-16 Chapter 4 ANALYSIS OF KEY INDUSTRIESS A. Agriculture .................................................................................................................................. 4-1 B. Commercial Fishing ................................................................................................................... 4-4 C. Maritime Industry ...................................................................................................................... 4-6 D. Hospitality and Rental Properties .......................................................................................... 4-9 E. Implications .............................................................................................................................. 4-19 Chapter 5 HAMLET BUSINESS DISTRICTS AND RETAIL MARKET ANALYSIS A. East Hampton Hamlet Business Districts Analysis ................................................................. 5-1 B. Retail Market Analysis .......................................................................................................... 5-21 C. Implications .............................................................................................................................. 5-32 Chapter 6 ANALYSIS OF SECOND HOME ECONOMY A. Introduction ................................................................................................................................. 6-1 B. Measuring the Second Home Economy ................................................................................. 6-1 C. Building Permit Trends .............................................................................................................. 6-4 D. Real Estate Sales Trends .......................................................................................................... 6-4 E. Real Estate Assessed Value and Tax Revenue Contribution ............................................. 6-8 F. Implications .............................................................................................................................. 6-18 Hamlet Business District Plan May 2017 Town of East Hampton, New York 1 EXECUTIVE SUMMARY A. INTRODUCTION The Town of East Hampton retained the services of Dodson & Flinker, Inc. to prepare a hamlet plan and retained RKG Associates to conduct a business district analysis and to create an economic strategy that sustains the hamlet commercial districts in the future. The goal of the business district and economic analysis is to provide an understanding of the Town’s economic base, existing business context, as well as local and regional dynamics that drive the Town’s economy. This will lead to a series of recommendations that the Town and the business community can implement to maintain a thriving tourist economy while serving the needs of the year-round residents and preserving the unique characters of the hamlets. B. BUSINESS DISTRICT PLAN CONTENTS The following chapters contain the main findings of the business study. Chapter 2 - Demographic Trend Analysis – This section illustrates the Town’s demographic trends over the past fifteen years which provide a foundation for the Town’s economic development potential. The analysis looks at several parameters including year-round population, seasonal peak population, population age, ethnicity, and education attainment characters, household, and household income. Chapter 3 - Economic Base Analysis – The analysis analyzes the Town’s economic trends over the past ten years. It highlights the industries that have a strong local presence and drive the growth of the Town’s employment and tax revenues. The majority of these leading industries are related to the tourism economy and the second home economy. Chapter 4 – Analysis of Selected Industries - This analysis takes a closer look at the industries that contribute to the unique characteristics of the East Hampton economy. This includes agriculture, fishing, maritime, and hospitality. The analysis assesses the nature, scales, and development trends of these industries, and analyzes their roles in the Town’s long-term economic vitality. Chapter 5 Retail Market Analysis – Chapter 5 consists of a business inventory of the Town’s existing commercial districts and an assessment on the extent to which the Town’s year-round households are served by the existing retail businesses in the town. The business inventory maps the 6 major commercial clusters in the area and analyzes the business mix of each cluster. The retail analysis compares the existing businesses’ sales against the household demand to identify the retail categories in which the year-round households are likely to be under-serviced by local businesses, and based on the region’s retail context and the trend of online retail, analyzes the potential of the Town’s retail sector. Page 1-1 Hamlet Business District Plan May 2017 Town of East Hampton, New York Chapter 6 - Second Home Economy - Analysis estimates the scale and nature of the second home economy from several perspectives, including the amount of taxable sales that primarily depend on second home owners and their guests/tenants, the trends of residential development and real estate sales, the property value of second homes and their contribution to the Town’s property tax revenues. C. SUMMARY OF MAJOR FINDINGS AND IMPLICATIONS 1. Demographic Trend Analysis East Hampton Exhibiting Slow Growth Patterns The East Hampton Study Area represents 1.5% of the total population of Suffolk County. Since 2000, the local population has increased slowly from 19,719 to 21,457 in 2010, for an average annual growth rate of 0.9%. Annual population growth slowed down to 0.6% during the 2010-2015 period, and is projected to further drop to 0.4% through 2020. Limited growth in the past fifteen years may partly explain the shrinkage of businesses that primarily service year-round residents. The only exception is Springs, whose population by 3.3% annually during the 2000-2010 period, mainly due to an influx of immigrant families, particularly Hispanic families. Town is Experiencing Loss of Key Household Forming Demographic Over the 2000-2015 period, all the hamlets, except for Springs, experienced a decline in population between 25 and 54 years old. As this is the typical households forming age range, such a decline may suggest that some people were driven away by the high housing prices in these communities. This is likely to lead to a shrinkage of businesses activities that primarily serve year-around residents. In comparison, the relative lower housing prices in Springs may have helped attract families, contributing to an increase in average household size and significant growth of population under 19 years old. This provides opportunities for family- oriented businesses and services Aging of the Local Population is Driven by New Residents During the same period, the population of 55 and above age groups increased significantly in the Town of East Hampton. Communities such as Montauk and Amagansett have shown noticeable signs of aging. This suggest that older and more established second homeowners have started to gray the population. This may have implications on the demand for goods and services