Client: The City of Santa Rosa
The City of Santa Rosa retained Gruen Gruen + Associates (GG+A) to conduct a retail market reconnaissance and financial feasibility analysis of the site of the former White House department store in downtown Santa Rosa. The City of Santa Rosa plans to construct a 700 to 800 space parking facility with housing units above the parking facility. The City would like to include commercial space in the ground floor of the parking garage to enhance the downtown and possibly contribute to the development and operating costs of the parking garage.
GG+A inspected the site and environs, reviewed secondary data, contacted retail property representatives and economic and community development staff, explored a sample of similar parking garage developments and interviewed retail brokers and developers to gain information and insights into the relevant trade areas, potential supply competition, and whether additional retail space could be supported. GG+A forecast the demand for retail space by (a) obtaining and analyzing demographic and income data within the relevant trade areas; (b) estimating expenditure potential based on the purchasing characteristics of residents in the trade areas; (c) converting estimates of purchasing power or retail demand into estimates of the supportable amount of on-the ground retail space for the relevant trade areas (d) evaluating the relationship between the estimated demand for and supply of retail space for the relevant trade areas, and estimating the share of demand the site could potentially capture.
GG+A conducted a financial analysis of potential ground-floor commercial space development alternatives in order to identify whether potential rents for the commercial space are likely to be greater or at least equal to the costs associated with repaying the construction and paying for ongoing operations of the commercial space. GG+A synthesized the market and financial feasibility assessment into a strategic action plan. The elements of the plan include a summary of the goals and objectives for the commercial development, the demand opportunities and business targets and the primary reasons for the identification of these opportunities and targets. The recommended marketing and implementation strategy and procedures included: direct solicitation of offers; solicitation of brokerage assistance; and solicitation of master lease agent, and sale of the space to a potential residential developer of the airspace above the garage.
GG+A test marketed the identified retail opportunity with a sample of retailers and incorporated the feedback into the findings and strategic recommendations.