City of Aurora Route 59 Corridor Market Analysis Aurora, Kane County, Illinois May 2018 www.housingtrendsllc.com 210 Cedar Ave. | St. Charles, Illinois 60174 | (630) 544-7826 Table of Contents BACKGROUND, OBJECTIVE, AND KEY ASSUMPTIONS 3 EXECUTIVE SUMMARY 5 LOCATION ANALYSIS 10 RESIDENTIAL ANALYSIS 25 RETAIL ANALYSIS 31 HOTEL ANALYSIS 44 ECONOMIC AND DEMOGRAPHIC ANALYSIS 60 APPENDIX 68 www.housingtrendsllc.com Background, Objective, and Key Assumptions 3 www.housingtrendsllc.com Background, Objective and Key Assumptions Background Housing Trends, LLC was retained by the City of Aurora to assess the viability of the Study Area and make residential, retail/restaurant and hotel/event space recommendations that will maximize the attractiveness and value of the Study Area. The Study Area is located on the far east side of Aurora and is generally bounded by Liberty St. to the north, State Highway 59 to the east, N. Commons Dr. to the west and 79th St. to the south. Objective The objective of this assignment is to work closely with the Schoppe Design Associates (SDA) and the City of Aurora staff to produce a market analysis which will become part of the report produced by SDA for consideration by the Aurora City Council for the Comprehensive Plan Revision for the Route 59 Corridor. Contact Information For questions and/or comments regarding this report, please contact: Lance Ramella, President Housing Trends, LLC 210 Cedar Avenue St. Charles, IL 60174 [email protected] 630.544.7826 4 www.housingtrendsllc.com Executive Summary 5 www.housingtrendsllc.com Executive Summary – General Observations and Recommendations • The Study Area Competitive Market Area (CMA) (5.0 Mile Radius) contains a population of nearly 273,000, with the 7.5 mile radius containing 500,000 people and the 10.0 mile radius containing a population of 807,000. This is a very densely populated suburban area with a relatively high median income level. The Study Area has an opportunity to serve this large, fairly wealthy population base with a re-invented Fox Valley Mall and surrounding area. • Regional shopping malls are either closing or being re-developed in record numbers across the country. Those that have successfully been re-developed typically have a mix of outdoor space (regardless of climate), fine and casual dining and entertainment options (movie theaters, live music venues, entertainment oriented restaurants, etc.). We have included several examples of these redeveloped malls on pages 40-43 of this report. • In our opinion, the Fox Valley Mall must be redeveloped prior to developing other areas within the Study Area as a redeveloped Fox Valley Mall will increase the property values and desirability of the rest of the study area. • One of the primary advantages of the Study Area is the Route 59 Metra Station. While the station is located outside of the Study Area, it is a primary factor in the attractiveness of the Study Area, especially for future residential development. The Route 59 Metra Station is the busiest station in the entire system, with an average of 5,700 passengers per day boarding trains. We highly recommend creating a cohesive walking/biking trail system leading to the station from all points within the Study Area. Additionally, we recommend a Pace Bus or other shuttle system to transport passengers to and from the train station. www.housingtrendsllc.com 6 Executive Summary – Residential Recommendations • Based on our For-Sale Residential Demand Analysis, there is demand for approximately 729 units per year in the CMA (5-mile radius). Currently, this demand is being filled by two- and three-story townhome product priced from the high- $200,000’s to mid-$300,000’s. • We recommend planning for high-density, for-sale housing in the Study Area with the highest density housing (condos and townhomes) located in Areas 1, 2 and 3 and lower density townhomes or even small-lot, single-family homes located in Areas 4 and 5. • There is demand for approximately 234 for-sale units targeted toward active adult (55+) buyers. This demand could be satisfied by condos, townhomes or small-lot, single-family product. • There is enough demand for a moderately sized continuing care facility within the Study Area. These facilities generally draw from a larger geographic area than other residential uses and benefit from proximity to shopping and restaurants. • The Rental Residential Demand Analysis indicates that there is demand for approximately 378 rental units per year priced above $1,900 per month. Currently, this demand is being met by Metro 59 and 500 Station Blvd. Additional rental communities similar to these two are recommended, especially in Areas 1, 2 and 3. We believe that this type of apartment community would fit well on the underutilized parking lots at the Fox Valley Mall. • There is enough demand in the CMA for approximately 254 affordable rental units (under $1,300/month). The affordable rental units could be new construction and/or existing rehabbed buildings. www.housingtrendsllc.com 7 Executive Summary – Retail and Restaurant Recommendations • Overall, the Study Area is significantly over-supplied with retail uses. As is typical with aging, large, indoor regional malls, much of the shopping activity is being satisfied online and fewer people are travelling to malls. Those malls that have been successfully redeveloped are creating shopping “experiences” that usually include a combination of outdoor space, restaurants, entertainment options and boutique retail uses. The successfully redeveloped malls also include a mix of residential, office and hotel uses. • Much of the over-supply in the CMA is due to large department stores that are struggling. These stores (Sears, Carson’s, JC Penny and Toys “R” Us) will either be closing or reducing their size in the near future. This downsizing of these retailers will bring the retail gap more in balance in the coming months and years • We highly recommend redeveloping the Fox Valley Mall prior to developing the other areas of the Study Area. With the mall as the catalyst, the rest of the Study Area will be redeveloped at higher property values. • The City of Aurora should assist the mall developer to the best of their ability with streamlined zoning and approval procedures, TIF’s if appropriate, improved infrastructure, transportation plans, cohesive signage and landscaping and public relations. • The redeveloped Fox Valley Mall should include a mix of restaurants and entertainment uses as well as open space. Based on our Retail Demand Analysis, there is enough demand for approximately 17,000 to 26,000 square feet of new restaurant demand in the Study Area. However, this demand could be much greater depending on the types of restaurants that are attracted to a redeveloped mall area. Restaurants such as Cooper’s Hawk, Maggiano’s and Rock Bottom Brewery draw customers from far distances and are typically much larger than typical neighborhood restaurants. • The Study Area is undersupplied in the Food and Beverage Store category. There is a good opportunity for a standard or boutique grocery store within the Study Area, especially since the area is likely to include a large number of new residential units. www.housingtrendsllc.com 8 Executive Summary – Hotel/Event Observations and Recommendations • In order to gauge the hotel market, we reviewed the +/- 50 nearest hotels to the Subject. The Competitive Market Area included all hotels generally west of I-355, east of Randall Road, north of State Route 34 (Ogden Ave.) and south of State Route 64 (North Ave./Main St.). • For this analysis, we used STR, Inc’s hotel categories of Economy, Midscale, Upper Midscale, Upscale and Upper Upscale. According to this research, there are 11 upscale and 8 upper upscale hotels in the CMA. • According to our research, Occupancy, ADR, RevPar and Demand have all been increasing steadily in the past six years, indicating a relatively strong and growing hotel market. • Based on this research, we believe that there is demand for more hotel rooms in the CMA. We recommend an Upscale hotel that will attract those attending events within the Study Area, business travelers and weekend travelers visiting friends and family. The average size of an Upscale hotel in the CMA is 156 rooms, with a median size of 130 rooms. We recommend an upscale hotel containing approximately 125 to 150 rooms. www.housingtrendsllc.com 9 Location Analysis 10 www.housingtrendsllc.com Location Analysis – Subject Site Location The Study Area is well located within minutes of the on/off ramp to I-88 and adjacent to the Route 59 Metra Station (which is the busiest Metra Station in the system). Additionally, the Study Area is located only 3.5 miles west of downtown Naperville. Topgolf (4.4 Miles from Study Area) I-88 On/Off Ramp (4.4 Chicago Premium Outlet Mall Miles from Study Area) (7.5 Miles from Study Area) Route 59 Metra Station (43 Min. Express to Chicago) Downtown Naperville (3.5 Miles from Study Area) Downtown Aurora (5.8 Miles from Study Area) Study Area Source: Google, Housing Trends, LLC 11 www.housingtrendsllc.com Location Analysis – City of Aurora Map The Study Area is located on the far east side of the City of Aurora, adjacent to its border with Naperville. The City of Aurora is the second largest city in the State, with a population just over 200,000 and has a diverse population in terms of demographics and economics. Source: City of Aurora, Housing Trends, LLC 12 www.housingtrendsllc.com Location Analysis – Traffic Count Map According to IDOT’s Average Daily Total Traffic Count Map, the intersection of State Route 59 and State Route 34 (Ogden Ave.) is one of the busiest intersections DuPage County with approximately 55,000 vehicles per day travelling past the Study Area on Route 59 and 26,400 vehicles per day travelling on Ogden Ave.