Client: County of Solano, City of Vallejo and Solano County Fair Association

Gruen Gruen + Associates (“GG+A”) was asked to study market conditions for retail, office, and hotel uses to reach judgments on whether sufficient obtainable demand exists to support the type and amount of land use products specified in the proposed development program based on the visioning of the Solano360 Committee. GG+A was also asked to evaluate the potential for adding significant new public exhibition and event building space to the Fairground. Under the “Solano360 Vision Plan”, the redevelopment of the Solano County Fairgrounds site was previously planned to accommodate approximately 1.6 million square feet of new public and private mixed-use building space.

To accomplish the study objectives, GG+A completed the following primary tasks:

• Conducted field research and interviews with -and obtained information and data from- commercial real estate brokers, office and retail developers, real estate executives with retailers, hotel and retail store managers, event producers, and fair and exhibition/event facility managers as well as representatives of the Solano Economic Development Corporation, Solano County, City of Vallejo Economic Development Department and City Manager’s Office, Vallejo Convention and Visitors Bureau, and Six Flags Discovery Kingdom. The interviews were directed towards gaining information and insights needed to define the relevant primary market areas and to identify: (a) the likely origins and types of prospective space users and visitors, (b) the alternative locations prospective space users and visitors will consider, and (c) the relative advantages and disadvantages of the location of the Fairgrounds for office, retail, hotel uses and exhibition and events uses and activities;

• Studied retail, office, and hotel and fair and exhibition/event space supply conditions and trends;

• Analyzed demographic, employment, and retail sales trends;

• Forecast the demand for office space by (a) analyzing historic employment trends by economic sector for Solano County, (b) reviewing forecasts of total employment growth for the County, (c) using GG+A’s SpacewalkTM model and market-based assumptions about worker-office space density ratios to convert the forecast employment growth into estimates of future building space demand, and (d) comparing the estimated supply of office space in Vallejo and other submarkets of the broader market to forecast demand potentially captured at the site of the Fairgrounds;

• Forecast potential demand for retail space at the site of the Fairgrounds based on (a) analysis of the demographic and income composition of households in the relevant market area, (b) estimates of retail expenditure patterns, (c) analysis of taxable sales trends, (d) interviews with merchants, retail brokers, developers, and property owners, (e) an identification of retail supply and sales productivity thresholds for varying types of retail space, and (f) judgments drawn from the evaluation of demand and supply conditions;

• Evaluated the potential demand for hotel space based on analysis of hotel supply and demand trends data, and interviews with representatives of the Vallejo Convention and Visitors Bureau and representatives of area hotels as well as consideration of the economic base and employment trends; and

• Evaluated the potential demand for a 100,000-square-foot exhibition building and related venues based on a review of industry supply and demand trends, evaluation of the supply of competitive facilities, interviews with managers of fairgrounds and non-fairgrounds facilities, comparison of primary market area characteristics for the proposed facilities at the Solano County Fairgrounds to market area characteristics for similarly sized facilities in other Bay Area and Sacramento locations, and interviews with producers and promoters of potential events.

In addition, GG+A analyzed the real estate economics of land uses and real estate products previously proposed in the visioning process. The findings and conclusions drawn from the real estate market research and financial feasibility analysis suggested that the mix and scale of uses envisioned to be developed over time at the Fairgrounds would not be feasibly supported. GG+A recommended a refined redevelopment program that responded more appropriately to market opportunities and would allow the Fairground to establish greater synergy with the adjacent Six Flags theme park, enhancing the location and site as a regional entertainment destination. GG+A advised Solano County, the City of Vallejo, and the Solano County Fair Association to adopt long-term view and set of expectations about the timing and scale of build-out of the Fairgrounds for the recommended uses. The County, City, and Fair Association accepted the report and recommendations made by GG+A and revised the project description to reflect the findings. The City of Vallejo approved the Specific Plan.