Downtown Development District of New Orleans Canal Street Retail Market Analysis Final Report December 4, 2013 Canal Street Retail Market Analysis – DRAFT REPORT THIS PAGE IS INTENTIONALLY LEFT BLANK Page | i Canal Street Retail Market Analysis – DRAFT REPORT Executive Summary The following table summarizes the types of retail by category with supportable square footage and number of stores for each category: The purpose of this market analysis is to evaluate the potential for a Supportable # of Retail Category 250,000 square foot retail development. The study area is a six-block Square Feet Stores stretch of Canal Street, the major thoroughfare in Downtown New Furniture & Home Furnishings Stores 9,630 1-2 Orleans, between Basin Street and Interstate 10. The area has Electronics & Appliance Stores 35,053 1-2 excellent multi-modal transportation access, strong employment and tourism populations, and a growing residential population. Building Materials, Garden Equip. & Supply Stores 4,353 1 Food & Beverage Stores 57,735 2 Significant investment is underway in the immediate area including Sporting Goods, Hobby, Book & Music Stores 13,036 1 redevelopment of Iberville Public Housing Projects into a mixed- General Merchandise Stores 274,118 2 income neighborhood, several mid- and high-rise residential Miscellaneous Store Retailers 5,030 1 conversion projects and $2 billion construction of two hospitals TOTAL 398,955 9-11 anchoring a growing medical district. GCR supportable retail and projected sales are based on estimated New Orleans hosts over nine million tourists each year, the majority of expenditures of existing 2013 population and jobs. whom visit Downtown and the adjacent French Quarter. The following table summarizes the sales and associated economic GCR analysis estimates the average weekday population of and fiscal impact of proposed and maximum supported retail at the Downtown, including residents, employees and visitors, during a study area: typical day at 134,000. 250,000 SF Max Size Metric Within a three-mile radius of the study area: Development 399,000 SF The population is 179,993 Total Estimated Sales $75.2 million $119.5 million There are 79,920 households Sales per Square Foot $301 $299 36% of households are homeowners and 62% are families New Permanent Jobs (Direct+Indirect) 104 164 The median household income is $31,483 Additional Earnings (Direct+Indirect) $2.8 million $4.4 million The average household income is $52,466 Annual City Sales Tax $3.7 million $5.9 million 20% of households have incomes over $75,000 The median age is 35 Tourists are conservatively estimated to contribute an additional $1.2 billion estimated household expenditure $11.2 million of expenditure on retail and food and beverage. There are 77,815 total employees within a one-mile radius of the GCR’s analysis indicates feasibility for a retail center with an urban study area: format and character that would be anchored by a national general 25% of those employees also live within a one-mile radius merchandise tenant. The remaining tenant mix should include local 49% of those employees live within a three-mile radius and national retailers, concentrating on brands that support the city’s status as a culturally diverse and unique destination, to maximize The study area shows strong retail demand based heavily on the neighborhood and regional demand. present-day 3-mile market area with support at the regional level. Page | ii Canal Street Retail Market Analysis – DRAFT REPORT THIS PAGE IS INTENTIONALLY LEFT BLANK Page | iii Canal Street Retail Market Analysis – DRAFT REPORT Table of Contents 4.2 Local Sales Tax Impact Potential ..................................... 29 Executive Summary ............................................................................ ii 5 | Conclusion ................................................................................ 31 1 | Introduction................................................................................. 1 5.1 SWOT Analysis ................................................................ 31 1.1 Trends in Downtown Retail ................................................ 2 5.2 Summary .......................................................................... 32 1.2 Project Approach ................................................................ 2 Appendix A: ...................................................................................... 33 2 | Existing Conditions ..................................................................... 3 History of Downtown Retail in New Orleans ................................ 33 2.1 Site Conditions ................................................................... 3 History of Canal Street ............................................................. 33 2.2 Transportation and Accessibility ........................................ 6 Canal Street & Hurricane Katrina ............................................. 34 2.2.1 Automobile Access ..................................................... 6 Canal Street Today .................................................................. 34 2.2.2 Transit Access ............................................................ 6 Case Studies in Downtown Retail Development .......................... 34 2.2.3 Pedestrian Access...................................................... 6 Downtown Pittsburgh, PA: The Golden Triangle ..................... 34 2.3 Downtown Daytime Population Estimate Update .............. 7 Downtown, Los Angeles, CA: ................................................... 35 2.4 Current Downtown Construction Activity ............................ 8 Columbia Heights, Washington, DC: DC USA ......................... 36 2.5 Competition Profiles ........................................................... 9 2.5.1 Additional Competition of Note ................................. 14 Table of Tables 3 | Market Analysis ........................................................................ 15 Table 1: Downtown Daytime Population Estimate ............................. 7 3.1 Methodology ..................................................................... 15 Table 2: One-Mile Market Area Economic-Demographic Summary 19 3.2 Market Areas .................................................................... 18 Table 3: One-Mile Market Area Capture Rates ................................ 20 3.2.1 One-Mile Market Area .............................................. 18 Table 4: Three-Mile Market Area Economic-Demographic Summary 3.2.2 Three-Mile Market Area ........................................... 20 .......................................................................................................... 20 3.2.3 30-Minute Market Area ............................................. 21 Table 5: Market Area Capture Rates ............................................... 20 3.2.4 60-Minute Market Area ............................................. 22 Table 6: 30-Minute Market Area Economic-Demographic Summary .......................................................................................................... 21 3.2.5 Tourism .................................................................... 23 Table 7: 30-Minute Market Area Capture Rates .............................. 22 3.3 Downtown Population Survey .......................................... 24 Table 8: 60-Minute Market Area Economic-Demographic Summary 3.4 Synthesis .......................................................................... 26 .......................................................................................................... 22 4 | Fiscal and Economic Impact Assessment ............................... 29 Table 9: 60-Minute Market Area Capture Rates .............................. 23 4.1 Economic Impact Estimate ............................................... 29 Page | iv Canal Street Retail Market Analysis – DRAFT REPORT Table 10: Tourism Expenditure in New Orleans .............................. 23 Figure 12: Retail Gap: 60-Minute Market Area ................................ 23 Table 11: Additional Supportable Square Feet at Subject Site Figure 13: Summary of Online and Street Survey Respondents by Generated Exclusively by Tourists ................................................... 24 Type ................................................................................................. 24 Table 12: Survey Results: Downtown Shopping Frequency by Figure 14: Survey Results: Necessary to Leave Downtown Regularly Respondent ...................................................................................... 25 To Meet Shopping Needs ................................................................ 25 Table 13: Survey Results: Where Respondents Would Spend More Time or Money Shopping Downtown by Store Type and by Respondent ...................................................................................... 25 Table 14: Demographic Summary of Market Areas ......................... 26 Table 15: Summary of Leakage by Retail Type and Market Area ... 26 Table 16: Supportable SF across Market Areas .............................. 27 Table 17: Summary of Estimated Tourism Impact ........................... 28 Table 18: Strongest Supportable Retail Mix for Study Area ............ 28 Table 19: Economic Impact Estimate Summary .............................. 29 Table 20: Estimated Sales Tax Generated ...................................... 30 Table of Figures Figure 1: Study Area in Relation to Region and Downtown ............... 1 Figure