Presentation on theme: "Improvement Plans for H Street Retail Shops August 16, 2012 Andrew King, Talha Ocal, Mitsuru Misawa."— Presentation transcript:
Improvement Plans for H Street Retail Shops August 16, 2012 Andrew King, Talha Ocal, Mitsuru Misawa
Agenda 2 Summary Overview of Current Situation Future Timeline SWOT Analysis Store Expansion History Leakage and Surplus Factor Analysis Recommendations Increase Retail Security/Safety Sanitation/Cleanness Transportation/Accessibility
Summary 3 Current Situation H Street has great potential for retail shop owners. Customers want more shops along H Street. Restaurants have been saturated but growth continues. Issues Recognized: Security, Sanitation, and Transportation Strategies for H Street as a whole Increase retail shops Resolve three main issues Security/Safety Street Lamps, Security, Diversify businesses Sanitation/Cleanness Volunteering Transportation/Accessibility Partnership with Capital Bikeshare Parking and taxis Possible BID formation
Major Project Overview (Timeline) 4 2012 Construction of streetcar tracks from Node 1 to Benning 2013 Giant will open (in between 3 rd St and 4 th St) Streetcars will start to run from Node 1 to Benning in Summer 2013 [Long term future] H streets streetcars will reach Georgetown http://www.dcstreetcar.com/fact-sheets.html
SWOT Analysis 5 HelpfulHarmful InternalInternal Strengths Performing Arts Institutions anchor H Street economy. Node 1 is close to Union Station, the largest station in DC area. Transportation infrastructure has been established (road & sidewalk improvements); trolley starts in 2013. The street has beautiful scenery and uniformity. Many food options (i.e. American, Mediterranean, African, Asian, etc) Weaknesses Nodes 2&3 are far from Metro (around 1.5 miles or half an hour walking from corner of H St. and 15 th ). There are not enough parking lots. Hopscotch bridge hides the street view from the west, which may be a business barrier. The corridor has 13 blocks, which makes people use automobiles. Empty lots and buildings cause negative impression. Small restaurants have saturated the corridor, driving evening business only. ExternalExternal Opportunities H Street region has residential and business growth potential. Streetcar will eventually be expanded along K Street. Giant supermarket will attract people from outside the immediate H Street region. Although limited, there are available spaces for parking. Some of the retail types are not represented, there is a chance to start new businesses. Threats Large national chains may damage small businesses in the street as well as its scenery. Retail shops in Union Station, especially food shops and restaurants, are potential competitors. NoMa and Capitol Hill BIDs are very close to H Street, have been improving their business circumstances. They may be regional competitors. Lack of subsidy (ending RPAG) may lower attractiveness to entrepreneurs.
Retail Store Distribution/location 6 123 Node 1 Capitol Fine Wine & Spirits Dynamic Wellness Metro Mutts Murry's Food Store Beauty Supply Aspire Health Store Adobe Design Node 2 Fashion One J & V Pawn Family Liquor Shoe City Foot Locker Sports Zone Rite-Aid T-Mobile Z-Mart Rent-A-Center H Street Pharmacy King's Beauty Supply GameStop Boost Mobile Stan's Discount Clothing Rainbow Styles DTLR Fashion Susan Fashion Jewelry Store Men's Fashion Center PK Hardware Cricket Wireless Picture That Dana Jewelry 3 Point Teks 7-Eleven C.A.T. Boutique Super Pharmacy & Medical Equipment North East Beauty Supply Convenience Grocery Thrift Store Daily Rider Me & My Supermarket Family Dollar Jumbo Liquor Node 3 Auto Zone Atlas Vet Euro Style Thrift Store Mike's Thrift Store Rasheed Baitul Khair [This survey was done in July 2012.]
Retail Expansion 7 Overall, Retail has increased Node 1: 4 to 6 Node 2: 12 to 36 Node 3: 3 to 7 38 shops have opened 8 shops have closed Node 2 retail tripled Data Sources: 2009: WDCEP Report 2012: Direct Survey Retail Growth in the H Street Corridor, 2009-2012
Retail Store and Restaurant expansion 8 Explanation of Graph Negative (Surplus) – There is space for more customers at existing businesses. Positive (Leakage) – Insufficient businesses to meet demand. Potential customers may go elsewhere. Implications Clothing stores, restaurants, and bars are on the surplus side, which implies these categories may have been saturated. Other categories are on the leakage side, which means H Street can attract more people if it has more businesses in these categories. Leakage/Surplus Factor Analysis Source: Retail marketplace profile by ESRI and Infogroup
Retail Stores and Restaurant expansion (cont) 9 Source: http://www.clrsearch.com/Washington_Demographics/DC/20002/Quality-of-Life Zip code 20002 area has almost same index number of restaurants as those in DC, and almost twice the national average. This graph implies that 20002 area may have enough restaurants, and that it serves as a restaurant destination area.
Recent Retail Survey Results 10 This survey shows: 1. People are satisfied with entertainment and special events/festivals. 2.People want to shop more in H Street, and they want more variety of goods and services. In addition, they are satisfied with the price and ----quality of the goods and services they ----purchase. 3.More than half of the people think that the cleanliness of the street is lower than average. Cleanliness is one of the urgent issues to solve. 4.Also, about 60% of the people believe that safety in H street is lower than average. In addition, more than 60% of the people feel that shopping hours are short. Because customers may feel it is not safe around H Street at night time, store owners close early. 5.In summary, H Street has perceived safety and cleanliness issues. Source: H Street Main Street Retail Survey done by Lauren Adkins
Summary of Current Situation 11 H Street has great potential for retail shop owners and the number of retail shops has been increasing since 2009. Customers want more shops and variety along H Street. Ordinary products seem to be needed rather than expensive or luxury goods. Restaurants have been or are being saturated. Three primary issues were identified. Security/Safety Sanitation/Cleanliness Transportation
Strategies/Recommendations 12 Retail Store Strategies for H Street
Forecasting: Retail Store Increase 13 Based on the numbers of retail shops in 2009 and 2012, retail store expansion can be simply forecasted as above. Node 1: 7 (2013) to 7 (2014) Node 2: 44 (2013) to 52 (2014) Node 3: 8 (2013) to 10 (2014) In the current situation of H Street, this forecast should be realistic. However, by simply walking down H Street, it is apparent that the vast majority of new construction is restaurants. Source: http://www.mta.info/news/stories/?story=762
Issue: Security/Safety 14 Nationwide average crime numbers are indexed at 1, and compared to average levels in 20002 and DC as a whole. Crime Statistics: http://www.fbi.gov/stats-services/crimestats 20002 area has higher rates of some types of crime than DC. This data coincides with the survey. Bars on front doors may cause people to feel insecure. Gates keep the restaurant and bar crowd from recognizing retailers Possible Solutions: Increase street lamps Replace bars and gates with protective window wrap Hire private security Increase police patrols All these solutions require funding: capital improvements require large payments up front, and patrols require funding in perpetuity
Issue: Security/Safety 15 Low visibility of retailers at night is a negative – we want to capitalize on the vibrant night life of the corridor as much as possible! Expanded retail hours (The Daily Rider) Increased convenience for customers Increased visibility of business could help with growth Shared front end space / multi-use space Shared storefronts: branching out Dynamic Wellness & Raw Juice Bar Sidamos recent Lending Library Restaurant or bar hosting Trunk Sales during the daytime A vacant building could be rented out as a venue for traveling sales, suit fittings, etc
Issue: Sanitation/Cleanliness 16 Recommendation: Clean Team Volunteers Gathering volunteers to form clean teams is one solution Consistency and sustainability are a concern Volunteer labor may work better on a specific-project basis Another solution: BID formation Forming a BID may also work to address these issues The stable funding of a BID would help ensure sustainable Clean Team activity
Issue: Transportation/Accessibility 17 Recommendation: Capital Bikeshare Streetcars: Will run through H Street NE, but the west end is at 3rd St NE. Streetcars cannot pull people from downtown DC to H Street. Trains and buses: Changing and/or adding lines would be expensive and the decision making authority rests with other agencies. These alternatives are not realistic. Promoting and advertising Capital Bikeshare may be the best alternative. Already established: Numerous existing stations and aggressive expansion of the program Inexpensive fees First 30 minutes for free (for members) Popular with both tourists and locals
Issue: Transportation/Accessibility 18 Source: Capital Bikeshare 2011 Member Survey Report June 14, 2012 Recommendation: Capital Bikeshare Capital Bikeshare is not fully utilized in H Street Area even though it is difficult to access the area for people who do not have cars/automobiles. There is much space to utilize Capital Bikeshare in H Street. How to promote? Becoming a sponsor of Capital Bikeshare might not work, since only one fifth of the people are aware that the DC government and other institutions are sponsors of Capital Bikeshare. However, collaborating with Capital Bikeshare would work by, for example, 1.Giving one day pass as gifts/rewards to H Street customers. 2.Spreading ad papers for H Street around Union Station, Chinatown and elsewhere.
Issue: Transportation/Accessibility 19 Source: http://capitalbikeshare.com/stations H Street NE already has four Capital Bikeshare stations, but to increase density and convenience, one or two more stations can be added.
Issue: Transportation/Accessibility 20 Source: http://capitalbikeshare.com/stations Parking options Look into possibility of grant funding for turning vacant lots into parking areas Mixed use of the incoming Giant parking garage which will have 250 – 270 parking spots Taxi Stand For many errands, or for parents, Bikeshare wont work Partner with a private company to have a taxi stand in a central and convenient location
BID Formation 21 BID formation BID can help fund security and sanitation solutions Community support is required H Street can satisfy this requirement Assessment (funding) comes from community BID could provide services similar to Main Street Existing 8 BIDs in DC and BID Council may be informative in terms of expenses, services, and best practices
BID Formation 22 Existing 8 BIDs Financial Data H Street Area There are 8 BIDs in DC Most BIDs disclose their financial information in annual reports Some data obtained from 990s Source: http://www.dcbidcouncil.org/map/ Adams MorganCapital RiverCapitol HillDowntownGeorgetownGolden TriangleMount VernonNoMa Income BID Assessments1,572,6663,177,4754,576,979546,4131,735,134 Other33,051167,573103,79292,850227,535 Total616,4601,605,7171,309,65910,384,5233,345,0484,680,771639,2631,962,669 Expenses Administration204,382317,634882,9811,007,347542,021719,198371,953304,415 Marketing148,0591,336,918979,274435,60239,316389,075 Cleaning&Safety&Maintenance511,2495,480,131924,8801,881,126141,090742,256 Infrastructure796,165695,247403,906249,431 Community Building150,216241,424 Economic Development222,424680,335 Transportation80,309443,864 Other66,912592,855124,73997,400150,622 Total1,496,80310,337,6153,141,4223,805,995649,7591,835,799 Administration/BID Revenue Ratio 33%20%67%10%16%15%58%16% Administration/BID Expense Ratio 21%10%17%19%57%17% Blocks8.510020.2512035.5431935 Blockfaces344008148014217276140 Clean&Safety&Maint cost per blockfacen/a $1,278 n/a $11,417 $6,513 $10,937 $1,856 $5,302 Administration cost per blockface $6,011 $794 $10,901 $2,099 $3,817 $4,181 $4,894 $2,174 Administrative Staff163427926 Hospitality Staff124458 Maintenance Staff5720421240613
Limitations of Corridor Financial Analysis Data Availability Lack of historical property data means no accuracy in forecasting Lack of SF / linear frontage in OTR data Leads to use of Assessed Value model for projecting assessments Assumptions Relative stability of assessed values Same assessment method used for each corridor Costs for similar services do not vary across BIDs Future Analyses Compare multiple assessment models: LF, SF, Assessment, Hotels Different assessment models are more appropriate in different areas Always keep in mind: resident/merchant impact!
Corridor Analysis: H Street Assessed Value Model $120 per residential unit $0.15 commercial rate per $100 assessed $0.05 vacant rate per SF Land Area Data Source: 2011 OTR data Projected Annual BID Assessment: $372,450 Mean daily cost to H St restaurant: $2.30 Mean daily cost to H St retailer: $3.21
BID Formation 25 Human Resource Expense Assumption Benchmark: Mount Vernon (because of similar area and business size) 2 administrations and 6 maintenance stuffs Assume there are five positions: executive, full-time assistant, part-time assistant, cleaner, and landscaper In H Street corridor, In total 6 members should be enough for cleaners and landscapers. Total HR cost depends on how many people are needed for administrations. Also, other expenses should be considered. HR Cost Admin /HR Cost Executive $70,000 Assistant (FT) $50,000 Assistant (PT) $35,000 Cleaners $40,000 Landscapers $40,000 Mount Vernon (Benchmark) $360,00033.3%11033 Assumption 1 (No PT assistant) $360,00033.3%11042 Assumption 2 (1 PT assistant) $395,00039.2%11142 Assumption 3 (2 PT assistants) $430,00044.2%11242
26 The idea: Because BIDs cause property values to increase, set up a TIF to capture that value in order to help fund the BID The model: Low-growth or normal model for 10 years for corridor compared to Higher-growth post-BID model for same time frame and area The result: The NPV of the difference in tax revenue is the incremental gain which is then adjusted for a general fund carve-out to establish the TIF fund. This is a small TIF because the growth models are very conservative. TIF model
27 TIF Model Assumptions Growth rates are estimates, need historic data to be able to forecast Currently uses the H Street Corridor, but could be adapted to other corridors
28 TIF Subsidy Payments TIF money establishes a fund and uses an amortization table to fund BID activity during a multi-year setup period. This takes the initial burden off of their constituents and creates a funding mechanism with a definite end.
Appendix: Alcohol Moratorium One possible strategy to stabilize the number of restaurants and bars in the corridor is a moratorium on licenses to serve alcohol The procedure for this involves a petition by community organizations Covering the entire corridor would require two moratorium zones This strategy is not recommended unless restaurants and bars begin taking over the neighborhood and become a legitimate nuisance 30