Item 9B (2)fl
it
December 12, 2013
Ms. Alicia Richardson
City Secretary
CITY OF SOUTH LAKE
1400 Main Street, Suite 270
Southlake, Texas 76092
C1J Amook
Community Development Strategies
1 Dal S. Dairy Ashford, Svite 450
Houston, TX 77077
RE: RFQua11311C460KB130021- RETAIL ANALYSIS FOR THE CITY OF SOUTHLAKE
Dear Ms. Richardson:
CDS Market Research (CDS) is pleased to submit our proposal to perform market and economic research
services in response to the RFQuaI referenced above.
We understand the purpose of this Project is to evaluate the existing, near term and long term capacity
of the City of Southlake (City) to support Retail businesses. CDS is proposing a carefully thought out
approach and scope of services that will be conducted in a manner consistent with the City's
organizational values described in the City's Strategy Map on Exhibit A of the RFQuaI.
We have read and understand the goals of service listed and have specifically developed our proposal to
address each of those goals. As soon as an Agreement to proceed is finalized, CDS will arrange an initial
introductory kick-off meeting with the Director and Retail Analysis Committee (Committee) to further
discuss the Project. Prior to the meeting, the CDS team will develop a familiarization with all the
background information in the RFQuaI including transportation corridors, existing planning documents
and regulations as listed and described. During conduct of the study we will take full advantage of all
mapping and other resources to be provided by the City.
Herein, please find firm qualifications, similar work products summaries, references, team member
summaries and a detailed approach, anticipated costs, description of deliverables and a scope of
services. All terms and conditions described in the RFQuaI will be adhered to in a professional manner.
CDS is experienced in retail analyses having provided such Services in Texas markets for over 40-years.
We appreciate the opportunity to propose services to the City of Southlake and pledge our best efforts if
selected to perform this most interesting and challenging study.
Respectfully submitted,
J!�; 1�. 44�e-
Steve Spillette
President
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City of Southlake
GOALS OF THE SERVICE
The Consultant will provide an understanding of:
o The Retail currently in the City
Citywide Retail Analysis
o The trade area served by various categories of Retail
o The viability and sustainability of the ultimate retail recommendations of adopted planned
documents
o The historical and projected sales tax trends
The Consultant will summarize data, analysis and recommendations to sustain the City as a viable Retail
provider, optimizing revenues generated by Retail businesses, while paying attention to the high -quality
lifestyles standards familiar to residents of the City.
QUALIFICATIONS
CDS Market Research is an established professional consulting firm based in Houston offering marketing
research and real estate/economic analysis to a wide range of private and public clients. For over 40
years, CDS has specialized in dealing with issues pertaining to growth and development patterns
throughout Texas and many other markets. In this regard, CDS consults with retailers, builders,
developers, architects/planners, municipalities, governmental agencies, investment groups and financial
institutions. These ongoing involvements provide CDS staff members with an incisive understanding of
socioeconomic trends, demographic patterns and market dynamics that influence residential,
commercial, industrial and institutional land development/redevelopment patterns.
Our approach to this project will not rely heavily on canned statistics or pre-existing data models but
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instead focus on providing Southlake with the strategic direction that will likely result in successful
commercial development that will provide value to the city and benefits to your residents. To this end,
David Daieiden, with 36 years of shopping center development experience and dealing with major
r , retailers, has been added to the CDS team.
The firm is staffed with seasoned professionals having background and experience in marketing
principles, demographics, consumer psychology, statistical analysis, economics, feasibility and all aspects
of planning, developing and marketing of real estate products. Our functional concept is to utilize
carefully selected, solution oriented analysis teams to focus on each project assignment.
CDS has completed more than 3,500 assignments, in 30 U.S. states, Canada and Mexico since the firm
(j entered the information collection and analysis business in 1973.
H Our policy is not to undertake an assignment if we do not have the proper staff available to complete
the project on time, within budget and with exceptional results.
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City of Southlake
SIMILAR WORK PRODUCTS
Citywide Retail Analysis
CDS approaches commercial studies with a market -based approach. As each project is unique, we do
not use a "cookie cutter" approach to these engagements. We listen to the needs of the client and
prepare a methodology which will answer their questions, provide credible information on future needs
and arm the community with a strategic recommendations plan. Three projects of note related to local
retail market analysis are listed in the table below.
Project Title:
Uptown/Galleria Area
Market Surveys and Analysis
Client Contact Info:
Vollmer Public Relations /
Uptown Houston District
Mr. John R. Breeding
President, Uptown Houston
District
713-521-2011
ibreeding@uptown-houston.com
Project Title:
Sugar Land Town Square
Feasibility Study
Client Contact Info:
City of Sugar Land
Ms. Regina Morales
Director of Economic
Development
281-275-2273
ecodev@sugarlandtx.sov
Mr. Joe Esch (now Executive
Director of Economic
Development Missouri City, TX)
281-403-8594
iesch@ci. mocity.tx.us
Year Completed: 2009
Scope of Work:
• Comprehensive survey of 400
citywide households
• Inventory of existing
properties
• Telephone survey of 200
Uptown residents
• Intercept survey of 400
Uptown visitors
• Personal interviews with over
40 brokers, business leaders,
retailers, property managers
and owners
• Analyze findings and prepare
recommendations for action
plan implementation
Years Completed: 2001 and 2002
Scope of Work:
• Define market/trade area
• Assessment of growth factors
• Inventory of existing
properties and analysis of
supply characteristics
• Identify best market
opportunities
• Project demand for planned
components
• Document support for
creation ofTIRZ
• Determine market feasibility
and project absorption rates
Deliverables:
• Report detailing survey
findings, including shopping
patterns and preferences, as
well as additional retailers
desired
• PowerPoint presentation to
Uptown Houston District
board
Deliverables:
• Full market feasibility report
addressing various town
square components (2001)
• Update of initial report to
exclude school district tax
revenues from TIRZ
projections and confirm final
market feasibility (2002)
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City of Southiake
Citywide Retail Analysis
Project Title:
Baytown Retail Analysis
Years Completed: 2008 and 2013
Client Contact Info:
Scope of Work:
Deliverables:
Baytown / West Chambers
• Economic and demographic
• Phase I Report: Inventory
County Economic
analysis of local conditions to
and Base Information -- 2008
Development Foundation
support retail activity,
• Phase II Report: Commercial
Mr. B.J. Simon
including psychographic
Districts — 2008
Associate Executive Director
analysis
• Baytown Retail Analysis and
713-420-2961
• Community -wide survey on
Update - 2013
bisimon@baytownedf.orp
shopping and dining
preferences, patterns, and
additional retailers desired
(2008)
• Interviews with Baytown
officials and real estate
professionals (2008)
• Comprehensive inventory of
retail businesses
• Analysis of potential in three
older retail districts (2008)
• Retail opportunity analysis to
identify store types with
greatest potential for
investment in Baytown
PROJECT TEAM
The project team assembled for this project includes the credentials and technical competence that is
required to successfully complete a retail analysis of this nature and magnitude. Our project team was
assembled particularly to address the essential issues of the City of Southlake and includes principal
personnel who are highly experienced and qualified to resolve them. CDS principals will be responsible
for leading the project team, including "hands-on" development of project elements, as well as overall
project management, timing and sequencing of team member involvement, and providing performance
review and quality control.
Fallowing are brief summaries of the experience of the individuals on the team. Resumes are included
i A in a later section.
Steven R. Spillette, President
Steve Spillette is an Urban Development Strategist with 19 years of diverse experience in real estate and
urban planning. His experience includes positions with a national economic research firm, a
management district, and a city planning department. After starting his own firm in 2001, he has
conducted market/economic studies and financial analyses projects for over 30 clients including cities,
management districts and private real estate firms. Many of those projects were in conjunction with
CDS prior to the merger of Spillette Consulting and CDS. He earned a B.A.S. degree in Quantitative
Economics and Applied Earth Sciences from Stanford University, a Masters in City Planning at the
University of California at Berkeley, and an M.B.A. from Texas A&M University.
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City of Southlake
Brenda Persons, Vice President
Citywide Retail Analysis (l
Brenda Persons, Vice President, is a highly experienced professional with over 20 years of experience in
real estate. For CDS, Ms. Persons has conducted market studies for community retail enhancement and J
multifamily development feasibility. Most recently she managed community assessments and strategic
recommendations for Baytown and Bay City, Texas. She is also skilled at student housing market
I
analysis. She began her career at Weingarten Realty in Houston, Texas in 1985 as a Site Location l
Analyst. Previously, she was a portfolio analyst for Bank One Corporation. Ms. Persons has a Bachelor
of Business Degree in Finance/Real Estate from University of Texas in Arlington, Texas. She has held her
Texas Real Estate Salesman License since 1990 and her Appraisal License since 2004.
Ty S. Jacobsen, Market and GIS Analyst
Ty Jacobsen joined CDS in 2007 after his graduation from Baylor University. Ty is skilled in the use of
geographic information systems, demographic statistics and business inventories. Ty is a key
contributor to most studies performed by the CDS team. The nature of his work has provided him the
unique opportunity to become involved with multiple type of land use for both public and private
clients. For this project, Ty will be responsible for data development of all types as well as mapping and
presentation.
David Daleiden, Principal, Daleiden & Associates
David Daleiden has more than 42 years of experience in real estate market research specializing in
supermarket, retail and shopping center site location strategy, shopping center viability, merchandising
analysis, and asset management evaluation. He was formerly the Director of Research for Weingarten
Realty, one of the country's largest real estate investment trusts (REIT), where he worked for 36 years.
He was responsible for creating the research department and implementing new, creative, and f
customized methods to help with teasing, new development, acquisitions, asset management, and retail �.
viability and strategy. He also acted as a location consultant to many of the company's national and local
retail clients. His most recent role at the company was Senior Strategy consultant to Weingarten's top
executives. He is now an independent consultant and has done work for retail developers in Houston i
and Tyler, Texas as well as for the City of West Monroe, Louisiana. He holds a Master Degree in
Marketing Geography and a Bachelor Degree in Finance from Wayne State University. J
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City of Southlake Citywide Retail Analysis
CDS' APPROACH TO THE RETAIL MARKET ANALYSIS
Services of CDS Market Research will be rendered through performance of a customized thorough
research program, preparation of a preliminary and final market planning report and consultation with
City representatives regarding the implications of the findings and conclusions.
Example Map Retail Concentrations
!. Retail Competition
In this task, the Team will prepare an overview analysis of the
existing retail centers in a carefully defined competitive market
area (CMA).
1-1 -- Spatial Distribution of Competitive Commercial. — Team
members will collect information on retail centers in the CMA
from third party sources. Information such as detailed size,
major tenants, vacancy and lease rate data will be collected and
assessed. Primary sources of this information will be real estate
reporting services, governmental agencies, CDS data bases and
primary in the field research and observations.
1-2 — Mapping of Commercial Properties. Using the information
from subtask 1-1, the commercial developments in the CMA and
surrounding areas will be mapped and compiled by street into
driving routes for Subtask II-3.
1-3 — Driving Survey of Competitive Commercial. We will drive
primary and secondary traffic arteries in the City to gain a more
focused understanding of its submarkets, their current retail
offerings and their retail opportunities. In this field work, the
team will conduct a visual inspection and inventory of existing
shopping centers and stand alone retail facilities. During this
process, the team will determine ingress and egress to each
submarket's retail areas from population clusters, residential
neighborhoods and other communities. Additional size, tenant,
vacancy and lease rate data may be collected from this on the -
ground research.
DELIVERABLE OF TASK I
• A Retail Competition Report including:
o Maps of Significant Retail Centers around the area.
o List of Retail Centers with size, major tenants,
occupancy and rent rate information.
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City of Southlake
H. Trade Area Delineation and Analysis
Example Trade Area Determination
Citywide Retail Analysis
In this task, the team will define the retail Trade Areas and
analyze the retail market area through field research coupled
with the findings of Task I. Trade Area definition will be sensitive
to, and may vary with, the different classes of retail centers and
occupants.
II-1 — Retail Manager Interviews. The team will conduct a
series of investigations and interviews with retail store owners
or managers to determine the geographic markets for various
retail establishments (by size, category, and competition). This
subtask will include, at a minimum, interviews with 2-3 selected
retailers in each potential submarket to ascertain the areas
from which their customers are traveling to shop.
II-2 — Request for Zip Codes from Retailers. — With the support
of the City and the owners of retail centers, it might be possible
to request a list of the residence zip codes of the last month of
credit card purchases.
II-3 —Trade Area Boundary Determination. In this subtask, the
team will work with City representatives to create custom retail
trade area based on findings from the area competitive
commercial analysis of Task I and personal interviews from
Subtask II-1. The team will develop a presentation quality retail
trade area boundary map.
II-4 —Trade Area Characteristics. In this subtask, the team will
prepare information the Trade Area including a demographic
profile, a psychographic profile and a characterization of the
retail and services offerings. In addition, the recent
performance of the retail centers in the trade area, absorption,
occupancy, and rental rates will be assessed. The team will use
Nielsen/Claritas demographic information and Claritas Prizm NE
Marketing Segmentation. For retail performance, the best
available local, regional and national reporting sources will be
used.
II-5 — Trade Area Determination and Analysis Report. At the
end of this task, an interim report will be produced which
includes all of the information developed in Task II. This report
will be reviewed with City officials and will be adjusted based on
comments received.
DELIVERABLES OF TASK II
a Trade Area Determination and Analysis Report including:
o Presentation quality retail trade area boundary map
o Demographic profile of the retail trade area
o Psychographic profile of the trade area consumers
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Citywide Retail Analysis
o Drive -time Analyses, including presentation quality
maps
• Presentation to City representatives
• Agreement on Task II's market area definitions and
characteristics
Ill. Market Analysis
This task will provide an assessment the local market. We will
utilize demographic and retail performance statistics from Task I
and Task II trade area analysis and augment that with area sales
trends from the State Comptroller. This "macro to micro"
analysis will enable the team to better understand existing area
retail economic dynamics.
III-1 —Area Residential Growth Projections. In this subtask, the
team will utilize growth forecasts prepared by CDS and other
sources as available, such as those from the North Texas Council
of Governments, for the Trade Area defined in Task II and for
other communities in the area. This data will be used to
determine future population, household and income data as
related to effective buying power for:
• The City of Southlake
• Competing markets in the City's trade area
• Relevant portions of the county
• The overall region.
The demographic projections will account for current and likely
future residential growth in the city and adjacent areas,
including a review of government and CDS projections of
employment / population growth. In this subtask, the team will
capture information on existing residential development
patterns and projects, including number of units/lots and typical
pricing, through information provided by the City Planning
Department and representatives of other governments, plus
landowners and other development industry representatives.
Primary research will identify and quantify residential
development in the pipeline.
Current and expected future conditions will be thematically
mapped illustrating such characteristics as population density,
household income, and growth, and employment density. The
process identifies trends in population ethnicity that may
provide opportunities to compete in particular retail niches.
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City of Southlake Citywide Retail Analysis ( 1
These data will be summarized in a comparative evaluation that l I
assesses the city's' competitive positioning for retail attraction f 1
based on residential population and income growth trends. I
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III-2 — Other Relevant Existing Conditions. — This subtask will
address other elements of existing and future conditions that
affect the city's competitive place in the region's retail
economy. Such elements include:
• Transportation improvements and traffic patterns,
• Non-residential population that provides additional retail
demand (employment, students, tourism, pass -through
traffic),
• Other factors such as notable amenities, regional public
safety perceptions, and aesthetic qualities, and
• Existing public policies that affect retail development (for
example, sign regulations, municipal long range plans, and
zoning).
III-3 -- City wide and Surrounding Area Sales Trends. — In this
subtask, the team will collect the sales (gross and taxable)
information from the State Comptroller by City and selected Zip
Codes by three -digit NAICS codes. This data will be compiled
and analyzed to determine key sales trends by retail and
services categories by geographic area.
III-4 — Projections of Future Retail Sales, Supportable Space,
and Tax Revenue. Based on the demographic analysis,
expectations of future housing and employment growth, the
team will prepare a baseline forecast for the amount of annual
sales for retail goods and services and translate those sales into
both retail / services space needs using data from the Urban
Land Institute's Dollars and Cents of Shopping Centers or other
sources as applicable, and into sales tax revenues (general and
413). Consideration will be given to the increasing role of online
shopping and its effect on particular retail sectors.
III-5 — Area Market Analysis Report. -- At this point in the study,
an interim report will be developed which will include an overall
analysis of local area demographics, shopping center
information and overall sales trends. This interim report will be
presented to the Director and Committee for review.
DELIVERABLES OF TASK Ili
• Area Market Analysis Report
• Presentation to City representatives
• Agreement on Task I's key findings as they relate to
subsequent tasks.
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City o/ 5outhlake
Citywide Retail Analysis
IV. Retail Gap Analysis and Leakage Assessment
Typical Leakage Analysis
$77.4
$37.2
$(40.2)
$35.0
$7.4
$(27.5)
$22.6
$8.4
$(14.2)
$186.9
$64.5
$(122.4)
$237.5
$107.6
$(129.9)
$6.3
$1.9
$(4.4)
$2.6
$0.9
$(1.7)
$19.0
$1.2
$(17.8)
$51.5
$54.3
$3.8
$5.5
$9.3
$3.8
$7.4
$12.4
$5.0
$1.1 $1.6 $0.4
$1.5 $3.9 $2.3
$7.0 $1.9 $(5.1)
CQ�&
Community t)cnlopmeM Shalegias
In this task, the team will evaluate the gap and leakage from
local residents who shop in locations outside of the city. The
team will analyze actual sales figures, formulate estimated
potential sales and identify retail sales surpluses and/or
leakages for the various retail sectors. The estimated needed
retail and services businesses will be identified by discrete
sectors (5-digit NAICS code) which will identify the specific type
of business. Using this city-wide analysis, an estimate of the
needed stores and sales potential will be developed for each
identified submarket.
IV-1 - Over/Under Analysis. In this subtask, the team will
evaluate the current offerings in the city against a standard set
of businesses derived from regional pattern of retail and
services businesses. Using this analysis, specific store types
which appear to be under supplied in the market will be
identified. In addition, areas where existing stores appear to be
over supplied are also identified.
IV-2 - Leakage Analysis. In this subtask, the team will use a
combination of qualitative and quantitative analyses to arrive at
a useful analysis of the leakage. Leakage relates to the sales of
specific types of merchandize and services that are being
diverted outside of the community. The Leakage/Surplus
analysis summarizes the relationship between the demand
(consumer spending) and supply (actual retail sales) in a given
geography.
The team will determine potential leakage using common
models, as illustrated by the table on the left. That data will be
combined with the information from the Over/Under analysis to
get quantification of the types of stores needed in the
community.
However, it is important to note that quantification of leakage is
not consistent or exact. This team will use other quantitative
and qualitative analyses to evaluate both the type/amount of
leakage and the possible community strategies to reduce the
drain.
Dollar expenditures for "major" store types will be compared
with regional numbers to determine which store types are
under -performing. Leakage is a function of proximity to
available buying power as well as the quality of specific
locations and management. Some leakage can be re -directed
back into the shopping district by adding stores or repositioning
specific competitive stores or services. Some leakage can
simply be explained by the strength of competitive offerings.
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City of Southlake
Citywide Retail Analysis F1
Our customized analysis will provide more than just tables such
as the example on the on the previous page.
IV-3 — Leakage and Gap Analysis Report. At the end of this
task, an interim report will be produced which includes all of the
information developed in Task III. This report will be reviewed
with City officials and will be adjusted based on comments
received.
DELIVERABLES OF TASK IV
• Leakage and Gap Analysis Report including:
o Provide summary charts and graphs of each retail sector
illustrating potential sales versus estimated actual sales,
and
o a customizable Microsoft® PowerPoint presentation
containing retail leakage analysis summary information.
• Presentation to City representatives
• Agreement on Task IV's conclusions regarding needed
retail stores and services in the target area under study
V. Evaluation of City Land Use Strategy
Following the completion of the citywide retail analysis, CDS will
compare the findings to the locations indicated for potential i
retail uses in the Southlake 2030 Consolidated Future Land Use j
Plan and other applicable Adopted Planning Documents.
2030 Land Use Plan
V-1 — Compare Retail Quantities, Types, and Locations. CDS
will compare the quantities of retail space identified in the
analysis with the areas projected for desired retail uses in the
Adopted Planning Documents to evaluate whether the City's 1,
plans indicate an under- or over -supply of designated land area.
CDS will work with the City to develop typical retail space -to -
land -area conversion factors to perform this evaluation. Il !1
CDS will also examine the areas eligible for retail uses per
designation in the various long range plans to advise the City on
what types of retail uses are most likely at these locations. The
locations of existing types of retail (local / community /
destination etc.) will be examined to understand if locations
designated in the City's plans might be better suited for market
success and business functionality.
V-2 — Retail Long -Range Trends and Competition Evaluation.
Many factors that affect the viability of retail development and
ongoing success are beyond the control of an individual
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CONSULTANT DELIVERABLES
Citywide Retail Analysis
municipality. CDS will provide an assessment of long range
trends and risks that could fortify or challenge Southlake's retail
potential during the City's planning horizon.
V-3 — Strategic Recommendations. In this subtask, the team
will prepare a set of strategic recommendations that will assist
in preserving and enhancing the retail and services offerings in
the community and specifically for the future retail
development areas identified in the Adopted Planning
Documents. Key aspects of these recommendations could
include:
• Transportation and other infrastructure
• Land use and aesthetic policies (zoning, parking, sign
regulation, etc.)
• Community investments (event destinations, public spaces,
parking)
• Incentive policies
• Environmental management (public safety, landscaping,
social programming)
DELIVERABLES OF TASK V
• Retail Land Use Strategy Report which will detail the results
of the evaluation of the City's plans for future retail land
uses:
o Expectations of the magnitude and type of retail space
that might be captured in each area and
o Strategic recommendations for preserving and
enhancing retail uses for each of the identified areas.
• Presentation to City representatives
• Agreement on Task V's conclusions
In addition to the interim reports described above, a final summary report will be prepared. All
meetings associated with deliverable reporting will include involvement of Staff, Committee and Public
Input entities as appropriate.
ANTICIPATED COSTS
Based upon the tasks requested of the consultant in the RFQuaI, the nature of the existing city and its
retail landscape, and experience with past retail analysis projects, CDS finds that the $40,000 maximum
budget quoted in the RFQuaI is an appropriate anticipated cost for the work. CDS specifically tailored
the Approach described in this proposal to fit within this budget amount.
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