2006.02.21 EDA Packet - Laserfiche WebLink

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EXECUTIVE SUMMARY Retail Market Recommendations ► Downtown Hugo currently has about 132,500 square feet of retail space. Our calculations show that the Downtown can support about 40,500 square feet of additional retail space, be- tween 2005 and 2010, and up to 105,000 square feet of additional retail between 2010 and 2015. We estimate that two-thirds of the new demand will be for neighborhood retail serv- ing the local population base. ► The types of stores that will be successful in the Downtown will be those that are able to market their unique Downtown location as an experience that cannot be found at shopping centers (the most likely store type will be specialty retailers). It will be more difficult for the Downtown to attract retailers of shopping goods, which typically require either a larger size store than can be accommodated in the Downtown(such as a discount merchandise store) or which require a greater number of stores in a small area carrying similar items for which customers can comparison shop (such as apparel). ► Based on the lease rates at new competitive shopping centers in the Market Area and sur- rounding communities, we find that new space in Downtown Hugo must be priced lower than higher-profile sites closer to Interstate 35E. Therefore, we believe net lease rates of $13.00 to $15.00 per square foot should be attractive to many of the potential retail tenants. Currently, many of the Downtown's current retail tenants own their buildings outright or are paying very low rents and would not be able to afford net rents of$13.00 or more. It will be important for the Downtown to retain some lower priced space, since the Downtown would not be able to support its full potential entirely with space priced at$13.00 per square foot or more. ► Redevelopment of existing commercial properties may require a public/private partnership. The rents necessary to make redevelopment feasible would be higher than what potential re- tail and office tenants could or would be willing to pay initially. Public assistance to help reduce the cost of redevelopment to the private sector will almost certainly be necessary for the commercial portion of the redevelopment to be successful in the next five years. ► Due to the increasing traffic counts and the realignment of County Road 8, we recommend the first phase of Hugo's Downtown retail development to be located at the Highway 61 and County Road 8 intersection. Furthermore, this intersection would result in the least amount of acquisition costs and would not displace any of the existing Downtown tenants. Office Market Recommendations ► There are no actively marketing office buildings in Hugo at this time. However, the recently completed Victor Gardens Shops includes a mix of medical office and a daycare center. Victor Gardens Shops net rents average $18.00 per square foot. ► Typical tenants occupying office space in Hugo are businesses serving the local household and business base, such as dentists, chiropractors, optometrists, financial advisors, insur- MAXFIELD RESEARCH INC. 5