THE EFFECT OF RETAIL DEVELOPMENT: WOODLAND GATEWAY PHASE 2 MARKET AND URBAN DECAY ANLYSIS Megan Shauna Quinn B.S., California State University, Sacramento, 2006 PROJECT Submitted in partial satisfaction of the requirements for the degree of MASTER OF BUSINESS ADMINISTRATION (Urban Land Development) at CALIFORNIA STATE UNIVERSITY, SACRAMENTO SPRING 2010 THE EFFECT OF RETAIL DEVELOPMENT: WOODLAND GATEWAY PHASE 2 MARKET AND URBAN DECAY ANLYSIS A Project by Megan Shauna Quinn Approved by: __________________________________, Committee Chair Sudhir Thakur, Ph.D. ____________________________ Date ii Student: Megan Shauna Quinn I certify that this student has met the requirements for format contained in the University format manual, and that this project is suitable for shelving in the Library and credit is to be awarded for the Project. _________________________________________________ Monica Lam, Ph.D. Associate Dean for Graduate and External Programs College of Business Administration iii ___________ Date Abstract of THE EFFECT OF RETAIL DEVELOPMENT: WOODLAND GATEWAY PHASE 2 MARKET AND URBAN DECAY ANLYSIS by Megan Shauna Quinn Urban decay is caused when retail shopping centers are abandoned and become blighted. Urban decay is a problem facing the nation, which is prevalent in California. Environmental issues need to be examined when development is proposed. Urban decay, as an environmental issue, has become more prevalent in the last decade. This analysis evaluates the potential for a proposed retail development in the City of Woodland, California to cause urban decay. This analysis is based on population growth estimates from the Sacramento Area Council of Governments (SACOG), California Department of Finance (DOF), and UC Davis. Information was collected through published books, case law, journal articles, broker reports, policy documents and other materials from the City of Woodland, and interviews with individuals and brokers involved with retail development. It is also based partly on an analysis I did for a contract with the City of Woodland at my place of work, Economic and Planning Systems, Inc. iv This analysis concluded that in 2015, the first phase of development, there is a slight potential for urban decay. This analysis concludes that there are ways that this urban decay could be mitigated. By 2025, the second phase of development, is estimated to be adequate demand to fully support the project. _______________________, Committee Chair Sudhir Thakur, Ph.D. _______________________ Date v DEDICATION I would like to dedicate this paper to my parents, Sean and Jan Quinn. Their support, encouragement, guidance, love, and assistance has been invaluable to me and is one of the reasons for my success. vi ACKNOWLEDGMENTS I would like to thank and acknowledge Dr. Sudhir Thakur for all of his support and guidance throughout the years. Dr. Thakur has supported me and helped me grow since I had him as a professor in my undergraduate program. I deeply appreciate his dedication, assistance, and encouragement. I would also like to acknowledge him for his support throughout this writing process. I would also like to thank Mr. Tim Youmans, my boss, for his support over the past few years. vii TABLE OF CONTENTS Page Dedication ................................................................................................................................ vi Acknowledgments.................................................................................................................. vii List of Tables ........................................................................................................................... ix Chapter 1. INTRODUCTION ……………...………………………………………………………...1 Key Project Assumptions............................................................................................. 3 Project Character........................................................................................................... 3 Retail Market Area........................................................................................................ 4 2. CEQA AND URBAN DECAY .......................................................................................... 5 3. GATEWAY PHASE 2 PROJECT DESCRIPTION ........................................................... 8 4. NATIONAL AND REGIONAL MARKET TRENDS..................................................... 11 National Retail Performance Trends ........................................................................... 11 Sacramento Region Retail Trends .............................................................................. 12 Trends by Type of Retail Center ................................................................................. 13 Broker Insights and Other Research ........................................................................... 14 5. DEMAND AND SUPPLY ANALYSIS ........................................................................... 15 Taxable Sales Analysis ............................................................................................... 15 Demand Analysis ........................................................................................................ 15 Supply Analysis .......................................................................................................... 17 Demand and Supply Comparison Excluding the Project (Taxable Sales) .................. 18 Demand and Supply Comparison Including the Project ............................................. 19 Adjustment for Non-Taxable Retail Sales .................................................................. 19 Adjustment to Estimated Retail Sales (Supply) .......................................................... 19 Adjustment to Demand for Retail ............................................................................... 21 Demand and Supply Comparison With Approved Retail Projects ............................. 21 6. URBAN DECAY ANALYS............................................................................................. 27 Potential Impact of Project.......................................................................................... 32 Existing Conditions of Retail Centers......................................................................... 32 viii Davis ........................................................................................................................... 39 Duration and Size of Sales Shift ................................................................................. 39 Recommended Mitigation Measures .......................................................................... 40 Reuse Options ............................................................................................................. 42 Existing City Policies Related to Reuse...................................................................... 42 Appendix A. Population and Employee Estimates ............................................................... 46 Appendix B. Taxable Sales Assumptions ............................................................................. 53 Bibliography ........................................................................................................................... 56 ix LIST OF TABLES Page 1. Table 1 Gateway Phase 2 Retail Center Project Description ……...……………..…..10 2. Table 2 Potential Support for Additional Taxable Retail (Taxable Goods Only) Through -2015................................................................................................. 22 3. Table 3 Potential Support for Additional Taxable Retail (Taxable Goods Only) Buildout…...…………………….………………………………….……….. 23 4. Table 4 Taxable Sales As a Portion of Total Sales (2007$) ………………………….23 5. Table 5 Estimated Amount of Retail Supply………………………………………….24 6. Table 6 Estimated Amount of Retail Demand – All Sales (2007$)…………………..25 7. Table 7 Potential Support for Additional Retail (All Sales) - Through 2015…….…..26 8. Table 7 Potential Support for Additional Retail (All Sales) - Buildout……..………..26 9. Table 9 Estimated Market Absorption Through 2015………………………………...28 x 1 Chapter 1 INTRODUCTION This analysis is based on a proposed development project located in the City of Woodland, California. In 2006, the City of Woodland (City) approved development for Phase 1 of the Woodland Gateway Center, which comprises 49 net acres of retail development located near the intersection of Interstate 5 and Route 102. The master developer of the Phase 1 project, which is leasing out, is also planning a 2nd phase for the Woodland Gateway Center (Project or Gateway Phase 2). This analysis evaluates the market demand for the Project and the potential for urban decay in other areas of the City and region. To meet the requirements of California Environmental Quality Act (CEQA), the urban decay analysis provides an assessment of the potential for the Project to cause urban decay. Urban decay generally refers to the physical impacts resulting from prolonged vacancies or abandonment of retail centers caused by an oversupply in the market. The following findings pertain to the assessment of the potential for the proposed Project to cause urban decay on retail centers in the RMA because of the Projects initial phase of development (2015). By 2025 there is estimated to be adequate demand to fully support the project. This market analysis and urban decay analysis (cumulatively referred to as the Analysis) evaluates the level of market support for Gateway Phase 2 and the potential for the Project to cause urban decay. The market analysis evaluates the overall demand for retail space compared to the supply of retail space in 2007 for two periods: 2015 and 2025. The base year of the analysis is 2007 because that was the year that had the most consistent base line data available. The urban decay analysis assesses the potential that physical decay will occur in other retail areas as a result of prolonged and severe distress caused by development of the Project. 2 The Analysis evaluates the market support for the Project and the potential for urban decay caused by the retail component of the project. This analysis is based on the following: Dollars: All figures shown in the market analysis and urban decay analysis are in 2007 dollars. The figures are shown in 2007 dollars because the analysis is based, in part, on taxable retail sales from the California Board of Equalization (BOE). As of January 2010, the BOE had not published the 4th quarter 2008 taxable sales. 2007 is the most recent complete year of taxable sales from the BOE. 2007 was used as the base year in this analysis because it is neither a peak year (2005/2006) nor a year where retail sales hit bottom (2009). City Population Figures: City population figures for 2007 are from DOF. Population Projections: 2015 and 2025 population projections are from SACOG, DOF, and the UC Davis 2003 Long Range Development Plan Final EIR. Retail Sales Methodologies: The potential retail sales in the Project are analyzed using two different methods. Market findings are based on the results from both approaches. o Method 1—Taxable Sales: This method includes only retail space supporting taxable sales. o Method 2—All Retail Sales and Commercial Services: The method employed in this methodology adjusts the taxable sales analysis to account for both taxable and non-taxable sales and resulting space. While taxable sales data is reported on a regular basis, it does not capture all the retail business that occurs at retail centers. Many retail goods, particularly many food items, are not taxable but can account for a significant portion of retail center sales and space. 3 An evaluation of market support for the office space, three hotels, and two new auto dealerships proposed in the Project are not included in this Analysis. While these land uses are small components of the Project, they are important in the overall balance of Project land uses and should be evaluated further at a later date. These land uses are envisioned to be developed after the first construction phase of the Project (2015). Further, dynamics in these markets are subject to major changes over the next several years. Specifically, the automobile industry is undergoing an overhaul amidst decreased sales. In addition, according to the City, there are potentially three hotels proposed in the Woodland market area which, if constructed, will significantly increase the hotel room supply and decrease demand for additional hotels in the Project. Further, it is uncertain how the expansion of the Sacramento International Airport will affect the region’s hotel market. Given the distant timeline of constructing these uses and current economic uncertainties, market support for these uses should be studied closer to the commencement of constructing these uses. Key Project Assumptions The Analysis is based on several key Project assumptions. Project Character: At buildout, the Project is envisioned as an 840,000-square-foot regional retail center consisting of a combination of anchors, in-line shops, and pad spaces. In addition, the Project will contain three hotels, up to 100,000 square feet of office, and room for up to 4 auto dealerships. Because the specific tenant mix is unknown, the analysis evaluates the retail trade area’s ability to support the overall amount of retail rather than specific classes of retail goods. This analysis is divided into two time periods based on projected market demand. The phasing approach allows for the Project to minimize the potential for urban decay. 4 The first time period is based on estimated market demand in 2015. This phase includes the first 295,000 square feet of retail development and half of the auto mall (two dealerships). It is anticipated this first phase will be completed by 2015. The second time period includes the cumulative project absorption through 2025. The second phase of development, anticipated to be completed no earlier than 2025, will include the remaining 545,000 square feet of retail development, 100,000 square feet of office, hotels, and remaining auto dealership site. It is important to note that this Analysis evaluates only the proposed retail development. Retail Market Area: The retail market area (RMA) for the Project includes these areas: The Cities of Woodland and Davis. Unincorporated Yolo County (including UC Davis). The Cities of Dixon, Williams, and Colusa. Colusa County and its cities. A portion of residents in North Natomas and the Greenbriar Specific Plan. The total combined Gateway Project, including both Gateway Phase 1 and Gateway Phase 2, will include approximately 1.4 million square feet of retail. The RMA for the Project is substantially larger than the RMA for Phase 1 alone because of the large drawing power of a retail center greater than 1 million square feet. 5 Chapter 2 CEQA AND URBAN DECAY CEQA is a California statute aimed at protecting the environment that was passed in 1970, after the United States federal government passed the National Environmental Policy Act (NEPA). According to the California Natural Resources Agency, CEQA does not directly regulate land use, the basic goal of CEQA is to develop and maintain a high-quality environment now and in the future. According to the California Natural Resources Agency, The specific goals of CEQA are for California’s public agencies to: “Identify the significant environmental effects of their actions; and, either avoid those significant environmental effects, where feasible; or mitigate those significant environmental effects, where feasible.” CEQA Applies to projects that require approval by State and local government agencies (typically a city or county). The agency with the primary responsibility for approving the project is the lead agency. The lead agency must first complete an initial study to evaluate the potential environmental impacts. A project can have no environmental impacts, less than significant impacts, less than significant impacts if mitigated, or potentially significant impacts. While n Environmental Impact Report (EIR) is not required if the lead agency finds that the project could have no significant environmental impacts, the lead agency must prepare a Negative Declaration (Neg Dec) to elucidate the agency’s decision. If the project is found to have the potential for significant environmental impacts, but the project is revised to mitigate those impacts, an EIR is not required, but the lead agency must prepare a Mitigated Negative Declaration. If a Neg Dec or a Mitigated Neg Dec is not adopted, an EIR is required. An EIR analyzes the potential 6 environmental impacts that the project is likely to cause and potential ways to minimize these impacts . If a project is considered to cause urban decay, an urban decay analysis is required as a part of the CEQA process. The EIR and the urban decay analysis are both considered during the approval process. The most common type of development associated with the urban decay analysis is “big-box” retail. Consideration of urban decay has increased significantly in recent years. The increase of considering this environmental issue is the direct result of several significant court cases. The most significant court case is the Bakersfield Citizens for Local Control v. City of Bakersfield. The court’s decision for the Bakersfield case was that CEQA guidelines require the research and analysis. The court stated that “when the economic or social effects of a project cause physical change, this change is regarded as a significant effect in the same manner as any other physical change resulting from the project”. The Bakersfield case centered on a proposal for the development of two shopping centers, located 3.6 miles apart, both of which included a Wal-Mart Supercenter. According to Morrison Foester, the Fifth District Court of Appeal rejected the EIRs for both shopping centers, because, among other deficiencies, they failed to evaluate the potential urban decay impacts. There was even a professional report that was done that suggested the shopping centers would trigger the environmental effect of urban decay. The court held that when there is evidence that a project has the potential to cause urban decay, an EIR must evaluate the issue. In the context of CEQA, urban decay is considered an indirect physical impact. The development of new commercial retail space in a retail market has the potential to result in the closure of competing business, which, in turn, may result in vacant storefronts that meet the California Health and Safety Code definition of blight. Physical deterioration is defined as having one or more of the following attributes: 7 abnormally high business vacancies; abandoned buildings and commercial sites; boarded doors and windows; parked trucks and long-term unauthorized use of properties and parking lots; extensive gang or offensive graffiti painted on buildings; dumping on site; and shrubbery and uncontrolled weed growth or homeless encampments. This analysis examines the Projects potential for urban decay. Due to the large amount of retail being added, there was never a doubt that an urban decay analysis would be needed for the proposed Project. As a part of an urban decay analysis, the market support for the project is done as well. A demand and supply analysis is typically done. This report includes a demand and supply analysis, as well as the urban decay analysis. 8 Chapter 3 GATEWATY PHASE 2 PROJECT DESCRIPTION This chapter provides an overview of the Gateway Center development. It describes both Phase1 and Phase 2. As stated previously, Phase 1 of the Woodland Gateway development was approved in 2006. This project, located at the County Road 102 interchange with I-5, is located approximately 20 miles northwest of Sacramento, and 13 miles west of the Sacramento International Airport. The Gateway development is located in the City, approximately 10 miles North of Davis via State Route 113. Phase 1 comprises of 550,000 square feet of retail. The retail center is anchored by Costco and Target, both of which opened in 2008. The master developer is working to lease the remaining available space and anticipates buildout to occur by Fiscal Year (FY) 2011–12. Total sales are expected to reach approximately $212 million annually at full buildout. Estimated taxable sales are expected to amount to approximately $181 million at buildout. This is based on Table A5 and Table A-6 located in Appendix A. The tables show the estimated sales in 2009 dollars. These numbers were deflated to 2007 dollars using the Consumer Price Index (CPI) – all urban consumers for the Western region. Phase 2, the focus of the Analysis, contains a significant amount of additional development. As Table 1 shows, at buildout Phase 2 will include nearly 840,000 square feet of regional retail, including major and minor anchors, in line stores and pad space. At this time, the likely anchor tenants are unknown. As such, the Analysis evaluates the ability of the RMA to support the overall additional level of retail proposed by the Project. The synergy created by the presence of Phase 1 will expand the overall RMA to include not only Woodland, Davis and unincorporated Yolo County, but also portions of Sacramento County, Colusa County, and Solano County. 9 The Project also proposes to develop three hotels, 100,000 square feet of office space, and 32 acres of auto mall uses for up to 4 car dealerships As previously noted, this analysis is divided into two time period based on projected market demand. The first time period includes Project absorption through 2015. The second time period includes the cumulative project absorption through 2025. Phase 1 includes the first 295,000 square feet of retail development and half of the auto mall (two dealerships). The second phase of development, anticipated to be complete no earlier than 2025, will include the remaining 545,000 square feet of retail development, 100,000 square feet of office, hotels, and auto dealership site. In 2015, the retail sales for Phase 2 are approximately $84 million and taxable sales are approximately $83 million. At buildout, retail sales for Phase 2 (excluding the auto mall) are anticipated to reach approximately $240 million annually. Taxable sale are expected to amount to approximately $236 million at buildout. 10 Table 1 Woodland Gateway Phase 2 Market and Urban Decay Analysis Gateway Phase 2 Retail Center Project Description Item Unit Woodland Gateway Phase 2 2015 2025 Retail General Retail Restaurants Subtotal Retail bldg. sq. ft. bldg. sq. ft. bldg. sq. ft. 275,000 20,000 295,000 808,000 30,500 838,500 Office bldg. sq. ft. - 100,000 Auto Mall Dealerships [1] bldg. sq. ft. Dealerships 40,000 2 80,000 4 Hotel Rooms (3 Hotels) [2] rooms - 300 Anticipated Opening Date FY 2012/2013 FY 2022/2023 First Year of Stabilized Sales FY 2015/2016 FY 2025/2026 "proj_desc_2" Sources: City of Woodland, Petrovich Development Corporation, and EPS. [1] According to the project proponent the auto mall will house two existing dealerships relocating from elsewhere in Woodland and has the potential for two new dealerships. [2] Timing of the hotel development will be determined by market conditions. 11 Chapter 4 NATIONAL AND REGIONAL MARKET TRENDS This chapter evaluates performance trends for the retail sector at the national and regional levels to provide context for the Project-specific analysis. The national and regional trends are important to consider when doing an urban decay analysis. These trends can contribute to the potential for urban decay. National Retail Performance Trends Current economic conditions across the nation began to make an impact on retail activities during the second half of 2008. Retail brokerage houses pointed to these trends for 2009: Ongoing efforts by major retailers to renegotiate the terms of existing leases to cut costs and possibly prevent store closures, including significant lease-rate reductions for existing tenants in neighborhood, community, and regional retail centers. A decline in consumer spending, caused by unemployment levels that are expected to continue to rise through at least the first quarter of 2010 (Colliers 2009). As a result, there will be continuing difficulty and struggle for retailers for the next 2 to 3 years. According to Colliers International Market Research, approximately 7,000 store closures nationally during 2008. Ongoing store closures and streamlining of retail operations in 2009. Resulting negative net occupancy trends and increasing vacancy rates expected. National retail forecasts predicted dismal performance levels for 2009. Shopping centers face steep declines in demand, given the current uncertainty of economic conditions. Going forward, the overall retail market is likely to contract as consumers reduce their debt levels by cutting back on retail expenditures beyond their actual means. Existing, well-located strip centers anchored by 12 supermarket chains will likely remain stable, as consumers will probably not curtail groceryrelated expenditures. However, few new centers will be developed, as one of the major sources of financing for franchise retailers has historically been the home equity line. Big box, off-price, and discount retail venues will also likely do well and perhaps fare better as they capture a larger share of spending previously occurring at higher end retail stores. Sacramento Region Retail Trends The Sacramento Region retail market faces several challenges, with approximately one million square feet of negative absorption during the first quarter of 2009 and an average vacancy rate of 14.6 percent for retail centers during the fourth quarter 2009 (CBRE). Retail in the Sacramento Region can be characterized by the following trends: Negative net occupancy caused by major store closures (e.g., Gottschalk’s, Circuit City, Linens n’ Things, and Mervyn’s) and consolidations, resulting in excess space in many retail submarkets. Ongoing rental rate reductions, with new annual leases being achieved for a maximum of $24 to $27, compared to $36 to $39 per square foot in 2006. Rents in strip centers are dropping by 35 to 50 percent since 2006 and renegotiations are common (Colliers 2009). Very little new retail center development. There are only three major new retail center projects underway, including Woodland Gateway, Elk Grove Promenade, and Folsom Palladio. The timelines for completion of the latter two is unknown and could be delayed for quite some time. Stable or successful performance of discount retailers like Wal-mart, Dollar Tree and 99Cent Only, drug stores, fast food restaurants, and discount retail grocers (e.g., Grocery 13 Outlet). Some new stores, like Aldi’s, are expected to come online and compete with larger discount retailers, such as Wal-mart. Mixed performance for home improvement stores and restructuring of the office supply market. While Home Depot is continuing to open a limited number of new stores, it also closed it’s Expo concept, and Lowe’s is expected to reduce the number of new stores opening. Most office supply retailers are closing stores, considering consolidation options, or creating new, small-format stores of 2,000 to 5,000 square feet. Poor performance for home furnishings and book stores. Most retail brokerage firms predict that these trends will continue for the next 2 to 3 years. The outlook for 2010 is positive compared to the past 2 years. According to the fourth quarter retail report by CBRE, the vacancy rate is expected to decrease in 2010 as major retailers enter the Sacramento region, filling vacant big box locations. As vacancies are filled, small shop space will see a slight rise in activity. Absorption is expected to trend positively because of the unparalleled affordability in California. Trends by Type of Retail Center Retail centers have been impacted differently by the current economy and are anticipated to struggle, stabilize, or prosper depending on the types of retail goods offered, the trade area in which they operate, or their location and layout: Neighborhood Centers have represented the most stable type of retail center over the last year though vacancy rates have approximately doubled nationally and increased from 9 to 11 percent in the Sacramento Region. This stability owes to the ongoing performance of its anchors, which are typically grocery, drug, and discounters. 14 Community Centers have been hard hit, particularly in-line stores, which have historically relied on the home equity line to fund new franchises. Regional Centers have also undergone severe difficulties in the last year, going from the strongest retail center to the weakest type of center. The closure of many major and minor anchors (e.g., Mervyn’s) is causing distress on many power and regional centers. Urban Retail Areas have typically experienced relatively little impact, predominantly owing to the lack of available land before the downturn. While still undergoing rent reductions and increased vacancies, many downtown areas have continued to perform well, particularly related to restaurants and entertainment venues. Broker Insights and Other Research Telephone interviews with real estate professionals specializing in retail, as well as recent publications by real estate research firms provided additional insight. The retail boom of the last real estate cycle was fueled largely by leverage associated with the rise in equity of people’s homes. Consumers were able to use this equity as a source of additional discretionary income to purchase additional retail goods and services. The economic downturn subsequently removed this income stream from the market, and in many cases, created additional debt. As a result, consumers are not expected to have access to additional equity for several years. 15 Chapter 5 DEMAND AND SUPPLY ANALYSIS This chapter presents an estimate of the current and projected level of demand and supply in the RMA. As stated previously, a demand and supply analysis is typically done as a part of the urban decay analysis. Based on the demand and supply analysis, Chapter 6 contains an evaluation of the potential urban decay impacts that the Project could cause. As stated previously, this analysis evaluates two time period based on projected market demand. The first time period is based on market demand in 2015. The second time period includes the cumulative project absorption through 2025. Taxable Sales Analysis All businesses that sell retail goods report their taxable sales to the California Board of Equalization (BOE) on a quarterly basis. When this analysis was first started (January 2010), the 2008 data was not available from BOE. As stated earlier, 2007 is used as the base year for this analysis for multiple reasons. This data includes sales in retail center stores and individual retail stores, business-to-business transactions, and personal services sales. A comparison of taxable retail centers and individual retail stores sales to potential sales (based on statewide average sales figures) provides an indication of the potential level of support for additional retail in the RMA. Demand Analysis Demand for retail center space will be generated by households, employees, and businesses in different areas of the RMA. The estimated demand for the first construction phase is generated by the Adjusted Population in the RMA in 2007 and 2015, which already accounts for some reduction to reflect locational preference for retail areas outside the RMA. The estimated demand for buildout is generated by the adjusted population in the RMA in 2007, 2015, and 2025. Demand is based on these assumptions: 16 Woodland and Davis residents (excluding students). These residents are assigned the average per-capita taxable retail sales for California (as reported by BOE), which is expressed in terms of residents but actually includes demand generated by residents, employees, and businesses. UC Davis students. The University of California periodically prepares the Student Expenses and Resources Survey (SEARS), the purpose of which is to determine the actual costs associated with obtaining a postsecondary education in California. The report also contains estimates of student expenditures; based on a weighted average of commuter students (single students with no dependents who live in their parents’ or a relative’s home) and other students (married students and those living in off-campus housing units). I estimated the taxable spending power of UC Davis students in the RMA. Supporting calculations can be found in Appendix A. North Natomas residents. Residents in North Natomas patronize stores in North Natomas for their neighborhood, community center, and a portion of their regional retail needs; to account for this dynamic, only 10 percent of annual retail demand is included in the RMA. Greenbriar Specific Plan residents. Located northwest of the North Natomas Community Plan Area, recently approved Greenbriar, none of which is developed, is both closer and more accessible to the Project. As such, the market analysis assigns approximately 25 percent of annual retail demand from these residents to the RMA. This analysis assumes 40 percent of Greenbriar will be built by 2015 and Greenbriar will be completely built out by 2025. 17 Colusa County residents. Colusa County residents are expected to patronize local stores for everyday needs but may opt to purchase a substantial portion of regional retail goods outside the RMA (i.e., in Yuba City). Therefore, 80 percent of spending is included in the demand estimate for retail in the RMA. Dixon and Winters residents. These cities are roughly equal distance between Davis/Woodland, which are in the RMA, and Vacaville, which is outside of the RMA. As such, the market analysis assumes that neighborhood shopping purchases will remain in the RMA, while comparison goods purchases will probably be split between Vacaville and Woodland/Davis. As a result, the market analysis assumes that approximately 65 percent of retail demand from residents in these cities will remain in the RMA. Unincorporated County residents. The availability of a variety of retail centers in the RMA affords a variety of retail options for these residents; therefore 100 percent of their demand is included in the analysis. In 2015, the estimated demand is approximately $243.8 million and in 2025 the estimated demand is approximately $347.7. Supply Analysis The estimated retail center supply, based on taxable retail sales information from the California BOE (from data submitted in 2007) and other sources of information for these areas in the RMA, as follows: Woodland and Davis Other Areas of the RMA, including Colusa County, Dixon, and the Unincorporated County. 18 The estimated supply in 2007 is approximately $45.4 million and in 2025 it is approximately $289.3 million. Between 2007 and 2025, there are several major new retail projects that will add inventory to the RMA. The approved projects fall into two general categories: Approved Projects Under Construction/Recently Constructed. This group includes full buildout of the Woodland Gateway Phase 1, the new Target in Davis which opened in October 2009, and the recently completed Rite Aid in Woodland across from the Westgate Shopping Center. Approved Projects Not Yet Built. This group includes two approved retail projects in Dixon, as well as another drug store approved on Main Street in Downtown Woodland. None of these projects has been constructed yet. Demand and Supply Comparison Excluding the Project (Taxable Sales) Table 2 summarizes the results of a comparison of demand and supply for taxable retail goods in 2007 and 2015. The taxable sales analysis suggests that in 2015, before the Project, there is some demand for additional retail. Table 3 summarizes the results of a comparison of demand and supply for taxable retail goods in 2025. By 2025, approximately $130 million is leaking outside the RMA. 2015 By 2015, the first construction phase of Gateway Phase 2 (plus other approved projects in the RMA) is estimated to result in a slight oversupply in retail space in the RMA (approximately 3 percent). The tenant mix of the Project (which is uncertain) will influence the amount of direct competition the Project has with other Woodland retail centers. The extent that Project retailers 19 represent tenants that expand the market instead of compete with existing retailers or users that offer local/regional goods currently not provided in the RMA, the Project has the potential to generate net new retail sales. Otherwise, there would likely be a shift in sales from existing retailers. Demand and Supply Comparison Including the Project Table 2 also shows the impact of development of the first construction phase of the Project in addition to all the approved retail projects. It suggests that the market could be oversupplied by as much as 3 percent. This level of oversupply can probably be absorbed by the RMA as a whole, though retail areas in the RMA are likely to be impacted to varying degrees. The Proposed Project’s location in Woodland, combined with its relative size, has the potential to cause a disproportionate shift in sales in the City. Table 3 shows the impact of the project at Buildout. It suggests that the demand exceeds supply by as much as 6 percent. This level of leakage shows that there is demand for the Gateway Phase 2 project. Adjustment for Non-Taxable Retail Sales While taxable sales data is reported on a regular basis, it does not capture all the retail business that occurs. Many retail goods, particularly many food items, are not taxable but can account for a significant portion of retail center sales and space. The second approach employed in this analysis makes an adjustment to the taxable sales analysis to account for both taxable and non-taxable sales and resulting space. Adjustment to Estimated Retail Sales (Supply) Urban Land Institute (ULI),is a professional organization that monitors trends in the land development industry. Its annual publication, “Dollars and Cents,” tracks the composition and performance of retail centers. Based on this information, I have concluded that varying levels of 20 retail center sales, depending on the nature of a retail center, are dedicated to the sale of nontaxable goods and has estimated the portion of sales that are taxable for neighborhood, community, and retail centers. Each center type tends to contain a different mix of taxable versus non-taxable goods: Neighborhood centers usually have a grocery anchor and substantial service-oriented tenants. Based on national-level information, approximately 44 percent of retail sales in neighborhood centers are taxable. Community centers have more taxable goods compared to neighborhood centers, though their makeup varies by region. In some regions, they tend to be anchored by grocery stores, and the national average falls in the range of less than 60 percent. However, in California, community retail centers may have a grocery anchor but also tend to have one or more nonfood anchors. For this reason, I adjusted the taxable amount to 70 percent. Regional centers have the least amount of non-taxable goods. Relatively few tenants in regional centers are service or grocery oriented. The national average for taxable sales in retail centers is 98 percent. By applying the factors described above to the weighted average of retail space in Woodland, I derived an estimate that approximately 80 percent of retail sales in the RMA are taxable, as shown in Table 4. As a result, an adjustment factor of 1.25 (100% / 80% = 1.25) is applied to the taxable retail sales figure from BOE to account for the sale of non-taxable goods. Table 5 restates the 2007 taxable retail sales figures in the RMA from the California BOE, and then applies the factor of 1.25 to estimate the total retail sales in the RMA. In 21 following, all estimated sales for approved retail projects are added to estimate the total retail sales for 2015 and 2025. Adjustment to Demand for Retail I estimated the demand generated by the RMA, based on the average taxable sales per capita in California. Because the source of this estimate is based on taxable sales information, the demand must also be adjusted to account for expenditures on non-taxable goods, such as groceries and professional services that might be found in retail centers. Table 6 shows the application of the 1.25 factor to taxable demand in 2007, 2015, and 2025 to derive total retail demand in the RMA. Demand and Supply Comparison With Approved Retail Projects Table 7 shows the resulting comparison of demand and supply for all retail in the RMA. Once again, the analysis indicates that, while leakage exists in 2007, development of all major approved retail projects result in a slight leakage by 2015. Based on this analysis, about 95,000 square feet of additional retail could be supported in the RMA. Table 8 shows the resulting comparison of demand and supply for all retail in the RMA at buildout. Based on this analysis, about 1.6 million square feet of additional retail could be supported in the RMA. Table 7 also shows the net impact of development of the Project by 2015 in addition to development of all major approved retail projects. This table shows that adding the Project will create an excess retail supply in the market of approximately 2 percent. Table 8 shows that the net impact of the project at buildout would result in a leakage in the market of approximately 8 percent. 22 The manner in which this level of oversupply affects existing retailers will affect the potential for Gateway Phase 2 to cause, or not cause, urban decay. The potential impacts of the Project’s excess retail development on other retail centers in Woodland and Davis, the closest centers of competition, are evaluated in the next chapter. Table 2 Woodland Gateway Phase 2 Market and Urban Decay Analysis Potential Support for Additional Taxable Retail (Taxable Goods Only) - Through 2015 Item Formula Amount A $1,917,000,000 B C=B-A $1,627,800,000 ($289,200,000) 2015: Taxable Goods 2015 - Taxable Sales Taxable Surplus/ Sq. Ft. (Leakage) Surplus/ % Capture (Leakage) [2] Taxable Sales/ Sq. Ft. DEMAND Annual Demand for Retail Generated by RMA 6,726,000 SUPPLY Existing Supply Subtotal Annual Existing Surplus/(Leakage) [1] Additional Sources of Supply (Excl. Gateway P2) Approved Projects (Recently Constr./Under Constr.) Approved Projects (Not Yet Built) Annual Surplus/(Leakage) (Excl. Gateway P2) [1] Gateway Phase 2 (Project) Annual Surplus/(Leakage) With Project [1] D E F=C+D+E $220,050,000 $50,840,800 ($18,309,200) G $83,300,000 H=F+G $64,990,800 (15%) 5,712,000 (1,014,737) $285 (1%) 603,420 171,784 (64,243) $365 $296 $285 290,782 $286 228,038 $285 3% "m1_support" Sources: California State Board of Equalization, SACOG, City of Woodland, City of Dixon, City of Davis, and EPS. [1] Assumes sales of $285 per square foot as derived in Table 4. [2] Reflects the amount of retail surplus/leakage as a percentage of total retail demand. 23 Table 3 Woodland Gateway Phase 2 Market and Urban Decay Analysis Potential Support for Additional Taxable Retail (Taxable Goods Only) - Buildout Item Buildout (2025): Taxable Sales 2025 - Taxable Sales Taxable Surplus/ Sq. Ft. (Leakage) Surplus/ % Capture (Leakage) [2] Formula Amount A $2,264,700,000 B C=B-A $1,627,800,000 ($636,900,000) D E F=C+D+E $220,050,000 $50,840,800 ($366,009,200) G $236,200,000 H=F+G ($129,809,200) Taxable Sales/ Sq. Ft. DEMAND Annual Demand for Retail Generated by RMA 7,946,000 SUPPLY Existing Supply Subtotal Annual Existing Surplus/(Leakage) [1] Additional Sources of Supply (Excl. Gateway P2) Approved Projects (Recently Constr./Under Constr.) Approved Projects (Not Yet Built) Annual Surplus/(Leakage) (Excl. Gateway P2) [1] Gateway Phase 2 (Project) Annual Surplus/(Leakage) With Project [1] (28%) 5,712,000 (2,234,737) $285 (18%) 603,420 171,784 (1,459,532) $365 $296 $251 (6%) 826,512 $286 (455,471) $285 "m1_support_BO" Sources: California State Board of Equalization, SACOG, City of Woodland, City of Dixon, City of Davis, and EPS. [1] Assumes sales of $285 per square foot as derived in Table 4. [2] Reflects the amount of retail surplus/leakage as a percentage of total retail demand. Table 4 Woodland Gateway Phase 2 Market and Urban Decay Analysis Taxable Sales As a Portion of Total Sales (2007$) Item Total Average Sales Per Sq. Ft. [1] Formula A Sales Per Sq. Ft.-- All Goods Woodland Weighted Total % of Average Sales Sq. Ft. Total per Sq. Ft. B Woodland Weighted Average Sales per Sq. Ft Neighborhood Retail $339 352,021 Community Retail $285 480,074 Regional Retail $267 1,114,390 Total 1,946,485 C=B / Total Sq. Ft. 18% 25% 57% 100% D=A*C $61 $70 $153 $285 Factor Representing Taxable Sales as a Portion of Total Sales per Sq. Ft. Weighted Average Sales per Sq. Ft.-- All Goods Weighted Average Sales per Sq. Ft.-- Taxable Goods Only Taxable Sales per Sq. Ft. as a Portion of Total Sales per Sq. Ft. Taxable Sales Only Taxable Weighted Avg Sales % Sales per Sq. Ft. E 44% 70% 98% F=D*E $27 $49 $150 $230 $285 $230 80% "sales_sqft" Source: Urban Land Institute, EPS. [1] Figures from Dollars and Cents, published in 2008 by the Urban Land Institute. 24 Table 5 Woodland Gateway Phase 2 Market and Urban Decay Analysis Estimated Amount of Retail Supply - All Sales Item Existing 2007 Retail Sales 2007 Taxable Retail Sales Adjustment to Include Non-Taxable Retail Sales Portion of Sales Typically Dedicated to Taxable Goods Ratio to Include Non-Taxable Goods [1] Total Taxable & Non-Taxable Retail Sales Total 2007 Retail Sales (Rounded) Supply of Retail Goods $1,627,800,000 80% 1.25 $2,034,750,000 $2,034,800,000 2015 Projected Retail Sales Projection - All Sales 2007 Retail Sales and Existing Outlets Woodland Gateway Phase 1 Woodland Rite Aid - Ashley and Main Woodland Rite Aid - Downtown Davis Target Dixon Major Retail Projects Total 2015 All Retail Sales (Rounded) $2,034,800,000 $211,700,000 $1,500,000 $6,000,000 $40,000,000 $75,520,000 $2,369,520,000 Projected Retail Sales Projection - All Sales Woodland Gateway Phase 2 Through 2015 (295,000 Sq. Ft.) Total 2025 All Retail Sales (Rounded) $84,400,000 $2,453,920,000 "m2_supply" Sources: California State Board of Equalization, Petrovich Development Corporation, Urban Land Institute, and EPS. [1] Formula: 100% / 80% = 1.25. 25 Table 6 Woodland Gateway Phase 2 Market and Urban Decay Analysis Estimated Amount of Retail Demand - All Sales (2007$) Item 2007 Total Retail Demand 2007 Taxable Retail Demand Adjustment to Include Non-Taxable Retail Sales Portion of Sales Typically Dedicated to Taxable Goods Ratio to Include Non-Taxable Goods [2] Non-Taxable Retail Demand Total 2007 Retail Demand (Rounded) 2007 - 2015 Additional Retail Demand Taxable Retail Demand 2007 - 2015 Adjustment to Include Non-Taxable Retail Sales Portion of Sales Typically Dedicated to Taxable Goods Ratio to Include Non-Taxable Goods [2] Total Taxable & Non-Taxable Retail Demand - Rounded (2007-2015) Total 2015 Retail Demand (Rounded) 2015 - 2025 Additional Retail Demand Taxable Retail Demand 2015 - 2025 Adjustment to Include Non-Taxable Retail Sales Portion of Sales Typically Dedicated to Taxable Goods Ratio to Include Non-Taxable Goods [2] Total Taxable & Non-Taxable Retail Demand - Rounded (2015-2025) Total 2025 Retail Demand (Rounded) Formula Demand of Total Retail Goods [1] A $1,673,200,000 B C=A+B 80% 1.25 $418,300,000 $2,091,500,000 $243,800,000 D E=C+D 80% 1.25 $304,800,000 $2,396,300,000 $347,700,000 F G=E+F 80% 1.25 $434,600,000 $2,830,900,000 "total_demand" [1] Total retail goods includes taxable and non-taxable sales. [2] Formula: 100% / 80% = 1.25. The 80% represents the portion of sales that is typically dedicated to taxable goods. 26 Table 7 Woodland Gateway Phase 2 Market and Urban Decay Analysis Potential Support for Additional Retail (All Sales) - Through 2015 Item 2015: All Sales Formula Amount A $2,396,300,000 B C=B-A $2,034,800,000 ($361,500,000) 2015 - All Sales Total Surplus/ Sq. Ft. (Leakage) (Surplus)/ % Capture (Leakage) [2] Sales / Sq. Ft. DEMAND Annual Demand for Retail Generated by RMA 8,408,000 SUPPLY Existing Supply Subtotal Annual Existing Surplus/(Leakage) [1] Additional Sources of Supply (Excl. Gateway P2) Approved Projects (Recently Constr./Under Constr.) Approved Projects (Not Yet Built) Annual Surplus/(Leakage) (Excl. Gateway P2) [1] D E F=C+D+E $253,200,000 $81,520,000 ($26,780,000) G $84,400,000 H=F+G $57,620,000 Gateway Phase 2 (Project) Annual Surplus/(Leakage) With Project [1] (15%) 7,139,000 (1,268,421) $285 (1%) 691,431 271,532 (93,965) $366 $300 $285 295,000 $286 202,175 $285 2% "m2_capture" Sources: California State Board of Equalization, SACOG, City of Woodland, City of Dixon, City of Davis, and EPS. [1] Assumes sales of $285 per square foot as derived in Table 4. [2] Reflects the amount of retail surplus/leakage as a percentage of total retail demand. Table 8 Woodland Gateway Phase 2 Market and Urban Decay Analysis Potential Support for Additional Retail (All Sales) - Buildout Buildout: All Sales 2025 - All Sales Item Formula Amount A $2,830,900,000 B C=B-A $2,034,800,000 ($796,100,000) D E F=C+D+E $253,200,000 $81,520,000 ($461,380,000) G $239,500,000 H=F+G ($221,880,000) Surplus/ (Leakage) % Capture [2] Total Sq. Ft. (Surplus)/ (Leakage) Sales / Sq. Ft. DEMAND Annual Demand for Retail Generated by RMA 9,933,000 SUPPLY Existing Supply Subtotal Annual Existing Surplus/(Leakage) [1] Additional Sources of Supply (Excl. Gateway P2) Approved Projects (Recently Constr./Under Constr.) Approved Projects (Not Yet Built) Annual Surplus/(Leakage) (Excl. Gateway P2) [1] Gateway Phase 2 (Project) Annual Surplus/(Leakage) With Project [1] (28%) 7,140,000 (2,793,333) $285 (16%) 691,431 271,532 (1,618,877) $366 $300 $285 (8%) 838,500 $286 (778,526) $285 "m2_capture_BO" Sources: California State Board of Equalization, SACOG, City of Woodland, City of Dixon, City of Davis, and EPS. [1] Assumes sales of $285 per square foot as derived in Table 4. [2] Reflects the amount of retail surplus/leakage as a percentage of total retail demand. 27 Chapter 6 URBAN DECAY ANALYSIS The analysis in Chapter 5 suggests that development of all the major, approved retail projects, plus Gateway Phase 2, supply would slightly exceed demand in 2015 and by 2025 supply would not exceed the anticipated demand generated in the RMA. As previously noted, this analysis is divided into two time period based on anticipated market demand. The first time period is based on market demand in 2015. The second time period includes the cumulative project absorption through 2025 Woodland currently has a vacancy rate of approximately 13.1%, or over 250,000 sq. ft. of vacant retail. Development of the retail portion of Gateway Phase 2 represents approximately twelve percent of the existing retail supply in the overall RMA,1 and the following proportions of space to Woodland’s retail market. At buildout, Gateway Phase 1 would add approximately 28 percent of space to the overall existing retail market in Woodland. Gateway Phase 2 in 2015, with 295,000 retail square feet, would add about 11 percent of space to the existing retail market in Woodland, excluding Gateway Phase 1. Gateway Phase 2 at buildout, with 838,000 retail square feet, would add about 25 percent of space to the existing retail market in Woodland, excluding Gateway Phase 1. Together, Phase 1 and Phase 2 at buildout would add nearly 42 percent of space to the City’s retail inventory. This is a significant addition in retail space given the existing size of the retail market. 1 838,000 square feet of retail at Gateway Phase 2 as a percent of an estimated 7.14 million square feet of existing retail supply. 28 As the market analysis in the prior chapter showed, in 2015 about 60-70 percent of Gateway Phase 2 represents excess supply in the retail market. As Table 9 shows, it could take approximately 1.4 years of additional population growth to support the excess supply in the RMA. This level of oversupply is anticipated to disproportionately impact retailers in the Woodland, as a significant portion of demand for retail goods is derived from Woodland residents. The Project, which represents an increase in the City’s current retail inventory, will compete first with other Woodland retailers, and secondarily with retail centers in the remainder of the RMA. Table 9 Woodland Gateway Phase 2 Market and Urban Decay Analysis Estimated Market Absorption Through 2015 Item Annual Surplus Supply with Project (2015) Retail Sales Square Feet Average Annual Growth Rate (RMA) Total Population 2007 Total Population 2015 Average Annual Growth Rate Average Annual Population Growth Estimated Absorption of Surplus Retail Space Retail Sales per Person Total Population Needed to Support Addition Retail Sales Number of Years to Absorb Surplus Retail (Rounded) 2015 Formula A B C D E = (D/C)^(2015-2007))-1 F = (D - C) / 8 G H=A/G I=H/F Total $57,620,000 202,175 200,000 232,000 1.9% 4,000 $10,263 5,615 1.4 "absorb" This chapter evaluates the degree to which the estimated potential market impacts might result in the physical deterioration of the environment in the RMA. Specifically, it examines whether the Project has the potential to start an economic chain reaction that leads to physical 29 deterioration and urban decay. This evaluation is designed to comply with the requirements of CEQA and include and evaluation of economic impacts that may cause a physical change in the environment, leading to urban decay. The primary impetus of urban decay often stems from financial conditions faced by the individual property owners; if a property owner is unable to collect rent on a vacant property with minimal likelihood that it can be re-leased, s/he may lose the incentive to maintain it. The effect can spread to adjacent properties and become a self-fulfilling prophecy as customers start to avoid an area and other property owners or tenants perceive an area as no longer vital or safe. Urban decay can be reinforced by a reduction in the fiscal resources of local governing entities because of declining sales and property revenue. The urban decay process generally takes several years to fully materialize and is reinforced by declining economic conditions in a broader market area. It is generally not the result of a single property standing vacant for one or two years in an otherwise vibrant market. It is worth noting that an abandoned freestanding big box retail/power-center development, also known as a “ghost box,” or declining regional mall known as a “grayfield,” can pose a particularly high risk for urban decay if not promptly re-leased. Not only are these facilities bigger and thus generally more difficult to quickly re-lease or reuse compared to small “infill” sites, they are also more visually significant and thus provide a more widespread signal of decay and negative business climate. In contrast, several smaller parcels with varied building types often have a better chance of being adapted and re-leased. Given the many-faceted nature of urban decay, its prospects for likelihood can be difficult to predict or quantify with precision. A sensitivity array that can be used to illustrate the potential for urban decay based on two factors: 30 The amount of retail oversupply in a market trade area. As the level of retail oversupply in a given trade area becomes larger, so does the potential for urban decay. Individual retailers can sustain only a limited, short-term reduction in sales before the overall viability of their business becomes at risk. If a retail center experiences multiple tenant losses resulting from an oversupply in the market, it can become difficult to release the space to other users, thereby producing an extended period of vacancy, lost rents, and the ability to maintain the center. The concentration of retail categories in an oversupplied market. Typical vacancy levels in a healthy retail market can reach up to 10 percent to allow for changes in retail outlets with limited impacts on retail rents. To the extent that a shift in sales occurs while maintaining a healthy vacancy rate range in the overall retail market, the potential for urban decay is generally limited. However, the type of resulting vacancies must also be considered—urban decay in certain retail centers may occur even if there is not a significant oversupply in the overall retail market. If the oversupply is concentrated in a few market segments, some retail centers may go out of business without showing a significant vacancy rate in the entire retail market. These are typical examples of this market concentration: An oversupply of grocery outlets that may cause some neighborhood or community retail centers to go out of business but leave the remainder of the overall market area relatively intact. 31 Similarly, the addition of a big-box Home Improvement Center could cause smaller hardware stores and other existing home improvement stores to go out of business, but not substantially affect the rest of the market. To determine how a project would impact the market, an urban decay analysis focuses on three indicators to assess its probability: Existing Condition of Retail Centers: All other things being equal, a weak or faltering retail center will be more susceptible to urban decay. Conversely, a new competitive retail project is less likely to precipitate urban decay if existing market conditions are relatively strong. Duration and Size of Sales Shift: Urban decay is more likely if a new competitive project results in a relatively large and prolonged shift in retail sales away from existing establishments. For example, a shift in retail sales away from existing establishments of greater than approximately 10 percent (depending on the characteristics of the existing retail market) and lasting longer than 3 to 5 years may be large enough to lead to the physical abandonment of buildings. Most establishments can usually withstand a temporary sales shift of approximately 5 to 10 percent because this is equivalent to a typical business cycle downturn. Reuse Options of Affected Properties: The type, location, and parcel configuration of affected properties, as well as the range of potential reuse options, will play a role in their susceptibility to urban decay. As noted above, an abandoned “ghost box” poses a particularly strong risk for urban decay because of the difficulty in finding an appropriate replacement tenant. Given the size and configuration of the big box center, finding viable replacement uses can be difficult and prolonged. 32 Potential Impact of Project The supply and demand analysis presented in Chapter 5 suggests that there is not enough demand in the RMA to support full development of Gateway Phase 2 and all the approved (but not yet fully built or open) and major retail projects by 2015. This section identifies the retail centers most vulnerable to the occurrence of such a phenomenon. In the short term, there is a higher potential for the Project to cause urban decay. In particular, three areas are most vulnerable to the impacts of urban decay resulting from development of the Project, including these: Downtown Woodland (Area 2) The County Fair Mall (Area 4) Retail centers located east of I-5 (Area 7) Detailed findings related to these areas are described further below. In the long term, it is estimated there will be adequate demand for the entire Project and the potential for urban decay is decreased. As long as the buildout of the Project is in accordance with market demand, urban decay should not occur as a direct result of the Project. Existing Conditions of Retail Centers Downtown Woodland Downtown Woodland is continuing to evolve as an entertainment and civic node in the RMA. Since 2002, retail sales tax revenues (excluding auto sales) in Downtown Woodland have been flat, if not experiencing a slight decline; the closure of specialty retail stores has been nearly offset by the opening of a series of restaurants. Interviews suggest that revitalization and redevelopment of Downtown Woodland continues to be hampered by the lack of implementation 33 of the Downtown Specific Plan. This level of implementation would require a significant level of public or private investment for needed infrastructure improvements, and would include the addition of stores that remain open during evening hours, as well as development of the planned new Courts building, a movie complex, the relocation of the auto dealers, and the addition of residential units. Recent historical data and interviews with real estate professionals suggest that Downtown does not directly compete with Phase 1 of the Woodland Gateway project. Downtown’s smaller retail floor plates, older buildings with fewer amenities and significantly lower rents, and proximity to the Opera House, residential neighborhoods, and other civic uses appeals to a different retail operator than the Gateway project. The Gateway project (both Phase 1 and Phase 2), in contrast, is ideally positioned for larger, national tenants seeking freeway access and visibility with a much larger market area. In the short term, the potential overall retail saturation of the RMA may, however, have a direct effect of delaying investment in Downtown Woodland. With the existence of so much retail space, there may be relatively little incentive to focus resources on the redevelopment of Downtown. In the longer term, with the ability of the Project to draw more shoppers from a larger market area, Downtown Woodland would be presented with the opportunity to capture a portion of these shoppers to support increased retail activity. In addition, as described in the February 2010 Fiscal Impact Analysis prepared by Economic and Planning Systems, Inc, (EPS), development of the Project will result in an annual net fiscal surplus to the City’s General Fund. These additional annual General Fund revenues could be used to improve municipal services and invest in downtown. Finally, relocation of the two Main Street auto dealers to the Project could also help spur redevelopment Downtown by opening those sites up for the development of a Cineplex, multi- 34 story parking facility, and other uses described in the Downtown Specific Plan. The Downtown dealership sites would need to be redeveloped relatively quickly to avoid having prolonged vacant uses along Main Street. County Fair Mall The struggles of the County Fair Mall are longstanding, though past and current owners continue their efforts to reposition the mall. The current owner of the mall spent approximately $10 million in mall renovations, only to face the impacts of a major economic downturn that has disproportionately affected this retail center, national tenants, both anchor and in-line retailers, have left the mall because of larger economic issues. Discussions with the mall’s property manager indicate an ongoing effort to retain the remaining tenants and re-lease the anchor spaces. However, in contrast to previous efforts conducted in association with Phase 1 of the Gateway Retail Center, the property manager of the mall has suggested that the new strategy includes the possibility of leasing space to non-retail users, as well as retail users. Non-retail users could include private or public office or service providers. Development of the Project would likely place additional strain on the mall by providing even more new, amenitized retail space in Woodland. The mall’s new leasing strategy creates a level of flexibility that may enable the mall to re-lease a portion of its vacant space earlier than would otherwise occur. The mall’s competitive rent structure and its long-term flexibility concerning users may insulate it from experiencing long-term vacancies; if this strategy is successful, the mall’s vulnerability to the potential for urban decay may be more limited. Should the mall’s re-leasing strategy fail, however, existing retail tenants, as well as potential new anchor or in-line tenants, may prefer the amenities and location of the Project, particularly if 35 the pricing structure becomes more competitive. Should this occur, the vulnerability to urban decay would be more significant. East of Downtown The Crossroads and Sycamore Point community shopping centers have been relatively successful centers. They are anchored by national, big box tenants and occupy redeveloped or new retail space. Should Project users not be direct competitors with the retailers at these centers, competition between the Project and these centers would not be an issue. However, to the extent that regional retail users in the Project directly compete with the users at these centers (i.e., discount grocery, hardware, office supply), there may not be enough room in the market to support all of these centers. Because the locations of Crossroads, Sycamore Point, and the Project are relatively competitive, it is difficult to anticipate whether the market would be split between the centers or if one or more of the centers would take a relatively stronger hit in sales. West Woodland West Woodland has multiple neighborhood and community retail centers. The retail along this strip is markedly different from what can be expected in the Gateway Retail Center; retail here is mostly independent retail or standard commercial strip outlet (such as tire outlets, fast-food restaurants, etc.). Some of these centers, including the West Court Plaza and Westgate Shopping Center, appear to have successfully repositioned themselves as a neighborhood and community center, respectively, that appeal to the Latino market or surrounding residential areas. Anchored by a grocery store and supported by a series of active in-line stores, these centers continue to exhibit relatively little vacancy. 36 In addition, other centers, including Cottonwood Plaza, are in the process of transitioning to a new role as a service-oriented center, with office users positioned as the main anchor(s) and little retail, primarily locally owned and serving restaurants. It is likely that a new user of the main anchor space at this center will be something other than retail. However, West Woodland also has four struggling centers with a significant amount of retail vacancy: Shade Tree Plaza Marshalls Purity Plaza Woodland Center These centers are already experiencing difficulties and showing signs of prolonged vacancies and deferred maintenance. Even before the Project develops, some or all of these centers may no longer be financially viable. However, should they manage to re-lease enough space to remain open, development of Gateway Phase 2 could cause one or more of these centers to be particularly vulnerable to the excess amount of retail in the RMA. Under either scenario, they would require major reinvestment to be repositioned for alternative uses (e.g., office) or newer format retail. As a result, these centers are particularly vulnerable to potential urban decay. East Street Corridor The Fairgrounds Shopping Center is a small, older, deteriorating neighborhood center with a significant amount of vacancy. This center would be vulnerable to the excess amount of newer format retail and could be difficult to re-lease as retail uses. Other centers in this area appear to be transitioning to office/service uses or have secured a niche clientele. For example, 37 the Olive Tree Plaza is occupied by ethnic retail tenants and would not likely compete with the Project or other planned new retail centers in the RMA. Implementation of the East Street Corridor Plan, created in 1998, could help with the re-positioning or re-sizing of the Fairgrounds Shopping Center. Gibson Plaza As is a relatively modern neighborhood center, Gibson Plaza is anchored by a Raley’s grocer on Gibson Road and Pioneer Avenue and supported by in-line stores occupied by a mix of food and drink chains and local services. Over time, the residential growth south of the shopping center is expected to add more than enough localized demand to ensure viability. As a result, it is unlikely that the excess supply created by the Project would compete with Gibson Plaza. Currently approximately 25 percent of this shopping center is vacant. This is a result of numerous tenants relocating to other shopping centers in Woodland and current economic conditions. East of I-5 This regional retail area is composed of a Wal-mart, a Home Depot, a junior anchor, and some supporting fast-food and professional service retailers. Located on the north side of the freeway between the County Road 102 exit and Downtown Woodland exit, it is not quite as accessible as the Project. Additional big box retail at the Project that appeals to the same target market (such as discount department stores or Home Depot) would compete directly with these existing big box stores. If the existing stores could not compete with the Project, there could be a significant potential for one or more of these big box stores to go out of business. For example, a new big- 38 box hardware store and discount general merchandise store could choose to split the market in the hopes that the Project’s more competitive location would favor the new store. Alternatively, the existing Wal-mart or Home Depot could be motivated to re locate to the Project to prevent a competitor from entering the market. In either case, one or more vacant big box stores can be particularly difficult to re-lease and, therefore, the site would be particularly vulnerable to urban decay. As mentioned previously, this regional retail area is composed of a Wal-mart, a Home Depot, a minor anchor, and some supporting food service retailers. There are three possible scenarios that would limit this area from the potential impacts of urban decay. The first scenario is that new Project retailers do not compete with the offerings of Wal-mart or Home Depot. The second scenario is that a new user is found for an existing big box retailer that either relocates to the Project or simply leaves the market altogether. The third scenario is that one or more big box vacancies occur in this area, but because of this area’s remote location relative to residential neighborhoods and Downtown, vacancy does not translate into particularly offensive conditions for the City; surrounded by industrial users, vacancies in this area of the City may appear more on the level of an unused industrial warehouse than an abandoned retail area. Gateway Phase 1 Phase 1 of the Gateway project is owned by the Project proponent for Phase 2. Because of the common ownership, similar amenities, and same location, the developer will structure leasing to minimize competition between retailers in Phase 1 and Phase 2. Phase 2 development will likely be delayed if there are substantial vacancies in Phase 1. As such, urban decay is not expected to occur here. 39 Davis Retail stores in Downtown Davis primarily serve Davis residents and UC Davis students. Stores there are occupied by smaller format retailers (with limited representation from national tenants, like Borders) to meet neighborhood-level and community-level needs. In contrast, development of the Project is intended to accommodate large-format, big box users. Davis residents and UC Davis students will continue to prefer to patronize more proximate locations in Davis for their local needs. In addition, an increasing portion of their regional needs will be met by the new Target store on Mace Boulevard in Davis. Duration and Size of Sales Shift Project sales are estimated to reach $236 million at buildout. Because the RMA will be in equilibrium with construction of all the approved retail projects, a significant portion of the retail sales generated by the Project will represent a shift in sales in the RMA if the Project is fully built out before demand in the RMA increases. The extent of the shift in sales will depend on three major factors: The ability of the Project to attract retail users that result in an expansion of the RMA. For example, a unique regional store with a trade area of 50 to 100 miles would bring new dollars to the City and cause less of a shift in sales. Examples of this type of user are Orvis (retail sport equipment and clothing store), Cabella’s (specialty outdoor sportsmen retailer), or outlet stores. The extent to which the Project can shift sales from elsewhere in the RMA (Dixon or Davis). This is probably not a major factor because the Target store in Davis will be exerting the opposite effect, as will Dixon’s new retail projects. 40 The extent to which the Project can capture regional center shopping dollars from RMA residents currently leaving the RMA. Many Dixon residents go to Vacaville, Colusa County residents go to Yuba City, and North Natomas residents stay in Sacramento to meet their regional shopping needs. If the Project can cause these residents to shift their spending to the Project instead, it would generate net new sales to the City and consequently decrease the anticipated shift in sales. It is estimated is that between 40 to 60 percent of the Project’s sales could represent net new sales to the City. The remainder of the Project’s sales (60 to 40 percent) would represent a shift from other retailers in the RMA. This shift would likely last until demand for retail in the RMA catches up to total supply. If the RMA continues to grow at an average annual rate of about 2 percent, it could take approximately 1 year for demand for retail space to catch up to supply projected for 2015. Recommended Mitigation Measures The following recommended mitigation measures are based on the findings from the market and urban decay analysis. 1. The City should limit the amount of retail development in each phase of the project. The City should limit the first phase to approximately 250,000 to 300,000 sq. ft. Before allowing additional retail development, the City should conduct retail market research to determine the appropriate size of the next phase so that the additional phase does not lead to urban decay in the City’s retail areas. The phases need to be large enough to provide an appropriate retail mix as well as offset the cost of infrastructure and site development. 2. The City should prepare a Retail Strategic Plan. As a precursor to a General Plan update, which the City will be updating in the next few years, a retail strategic plan would determine 41 which areas should be preserved as retail and which areas should be developed as other uses. The Retail Strategic Plan will assist the City in strengthening its viable retail areas and planning for alternative uses on some of the centers that are in decline. 3. The City’s Downtown Redevelopment Agency should review the implementation measures of the Downtown Specific Plan. Over the long term, the proposed Project has the potential to help accelerate implementation of the Downtown Specific Plan by freeing up land for redevelopment of key downtown sites through the relocation of auto dealers from downtown, increasing the number of shoppers to the City through increased capture of regional sales activity, and providing the City with additional General Fund revenues to improve services and possibly invest in downtown. These long-term opportunities, coupled with short-term conditions including a continued economic decline and the Project’s potential to divert public and private investment from downtown, warrants an evaluation of the Downtown Specific Plan’s implementation actions. 4. The City should prepare a strategic land use plan for County Fair Mall to analyze alternative land uses for the site. This study would determine the viability as a retail center compared with alternative land use plans, such as mixed use. Reuse Options Retail centers most vulnerable to the impact of a significant shift in sales face three general reuse options: 1. Repositioning as a Continuing Retail Center. Under this option, a retail center can alter its market image by re-tenanting with different types of retailers or targeting a new or expanded 42 target market clientele. Some centers in Woodland are already accomplishing this by focusing on a niche market. The Crossroads center is an example of a major repositioning of a former retail center into a new retail center with different users. 2. Repositioning with Other Allowable Uses. Under this option, a retail center begins to include or significantly add non-retail uses allowed under the current zoning. Some centers in Woodland are undergoing this process by adding new space that is not retail or re-leasing retail space to office or other service users. 3. Rezoning and Redevelopment. Under this option, a retail center undergoes a planning process to obtain a change in zoning and development of an entirely new set of land uses. This process requires additional time and expense to undertake. Existing City Policies Related to Reuse The City has several policies suited to reuse efforts, most notably the City’s General Plan, last updated in 2002. It contains the following relevant policies: Policy 1.E.8 states that the City “shall consider reuse of vacant strip commercial malls with other uses (e.g., office, housing) to promote infill of commercial areas. This may include rezoning of properties for other uses.” This repositioning process is already occurring in some centers (such as Cottonwood Plaza) and could be applied to these other weaker centers. Policy 1.G.1 states that the City shall encourage improvements and the expansion of commercial development along East Street. Policy 1.G.5 states that the promotion of year-round uses at the County Fairgrounds and the possible reuse of the Fairgrounds site should the Fairgrounds relocate. 43 Policy 1.E.1 states that the City shall strive to avoid creating an oversupply of commercially designated land to prevent the dilution or deterioration of currently viable commercial areas. Policy 1.F.1 states that the City and Redevelopment Agency will promote Downtown as the City’s primary specialty retail and entertainment center. Policy 1.F.3 states that the City and Redevelopment Agency will promote the use of firstfloor space in new buildings for retail and higher levels for office/residential uses. Implementation Program 1.17 calls for the creation of a downtown parking strategy. Implementation Program 1.18 calls for the implementation of the Downtown Specific Plan. In addition to these policies, there are two area-specific policy documents that address re-use. The East Street Corridor Specific Plan, created in 1998, contains a detailed plan for revitalization of this area. Secondly, the 2003 Downtown Specific Plan contains a series of implementation actions to revitalize Woodland’s Downtown. To the extent that these policies and implementation programs can be executed, the City’s existing retail centers could be more insulated from any potential impacts associated with development of the Project. The City may want to develop reuse strategies for several of the other struggling retail centers. ULI’s publication “Revitalizing Commercial Strip Centers” provides useful guidance for the conversion of overbuilt retail areas into more productive land uses. 44 APPENDICES 45 APPENDIX A Population and Employee Assumptions Table A-1 Woodland Gateway Phase 2 Market and Urban Decay Analysis Population Projections Summary Item Retail Market Area (RMA) Woodland Residents UC Davis Students Davis Residents North Natomas Greenbriar Colusa County Dixon and Winters Unincorporated Yolo County Total RMA Existing (2007) 54,312 16,551 53,479 10,704 0 21,616 24,461 18,463 199,586 Projected (2015) 62,509 24,037 54,071 14,010 3,070 26,223 29,167 18,718 231,805 Adjusted Population Growth Projected (2007-2015) (2025) 8,197 7,486 593 3,306 3,070 4,607 4,706 255 32,219 72,518 24,037 58,125 14,010 7,675 33,385 36,344 26,987 273,081 Growth (2015-2025) 10,009 0 4,053 0 4,605 7,163 7,177 8,269 41,276 "pop_summ" Source: SACOG MTP 2035 Projections, California Department of Finance (DOF), and EPS. 46 Table A-2 Woodland Gateway Phase 2 Urban Decay Study City of Woodland Population Projections Projected Population [2] Item City of Woodland Population Existing Population [1] 54,312 2010 2015 58,093 62,509 2020 67,487 2025 72,518 pop_woodland Source: City of Woodland; California Department of Finance; and EPS. [1] Existing Population as of Jan. 1, 2007 -- from California Department of Finance Table E-5. [2] Projections from the EIR for the Surface water project in April of 2007 prepared by ESA. 47 Table A-3 Woodland Gateway Phase 2 Market and Urban Decay Analysis UC Davis Student Projections Item Growth Location Assigned by DOF [1] 2007/2008 2015/2016 Unincorporated Yolo County [2] 4,800 9,800 5,000 11,751 5,036 16,787 14,237 6,102 20,338 2,486 1,065 3,551 Students By Place of Residence Students Living On Main Campus [2] Students Living Near Main Campus Living in Davis (75%) City of Davis [3] Living Elsewhere (25%) Outside of Trade Area [4] Subtotal Students Living Near Main Campus Other Students Outside of Trade Area [5] 1,427 1,992 [4] 565 Total UC Davis Students 23,014 32,130 9,116 Students by Location Relative to RMA Students in RMA Main Campus Living in Davis Total Students in RMA 4,800 11,751 16,551 9,800 14,237 24,037 5,000 2,486 7,486 6,463 8,093 1,630 Students not in RMA All Other Students "pop_UCD" Source: UC Davis News & Information; UC Davis 2003 Long Range Development Plan Final EIR, Chapter 3. [1] For purposes of counting population. [2] Includes only central campus and Neighborhood Master Plan. DOF categorizes on-campus students as population residing in group quarters in unincorporated Yolo County. [3] Includes students living near, but not on, the main campus. For purposes of this analysis, all of these students are assigned to the City of Davis, but they could live elsewhere in the retail trade area. [4] Accounts for students at downtown Sacramento or other UC Davis campuses outside of the Retail Market Area. [5] Estimated by EPS based on proportion of Other Students in 2007/2008. 48 Table A-4 Woodland Gateway Phase 2 Market and Urban Decay Analysis Projected Population-- Select Other Jurisdictions Item 2007 SACOG Jurisdictions City of Davis Unincorporated Yolo County UC Davis Students [1] Remaining Uninc. County Winters 65,230 23,263 4,800 18,463 6,919 Other Jurisdictions Dixon Colusa County [2] Subtotal Remaining RMA 17,542 21,616 39,158 2035 76,655 47,454 n/a n/a 12,360 2020 23,500 29,588 53,088 Avg. Annual Growth Rate (2007-2035) 0.6% 2.6% n/a n/a 2.1% 2015 2025 68,308 28,518 9,800 18,718 8,167 72,361 36,787 9,800 26,987 10,047 21,000 26,223 47,223 26,297 33,385 59,682 2007-2020 2.3% 2.4% 2.4% "pop_SACOG" Source: SACOG MTP 2035 Projections, California Department of Finance (DOF), and EPS. [1] This analysis assumes that UC Davis will reach its capacity in 2015. [2] Based on DOF Population Projections by decade for California Counties, 2000-2050. 49 Table A-5 Woodland Gateway Phase 2 Market and Urban Decay Analysis Estimated Sales by Type of Store (2009$) - Through 2015 Store/Retail Category General Retail [1],[2] Costco [3] 2015 Target [4] Restaurant/ Fast Food Total/ Average (Rounded) Gateway Phase 1 Square Feet Sales per Sq. Ft. Estimated Sales (Rounded) Taxable Portion Taxable Sales (Rounded) 236,000 $350 $82,654,000 99% $81,472,271 148,000 $600 $88,800,000 68% $60,384,000 136,842 $280 $38,316,000 95% $36,400,000 29,254 $320 $9,361,000 100% $9,361,000 550,096 $398 $219,131,000 PROJECT: Gateway Phase 2 Square Feet Sales per Sq. Ft. [1] Estimated Sales (Rounded) Taxable Portion Taxable Sales (Rounded) 275,000 $295 $81,180,000 99% $80,019,000 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 20,000 $320 $6,400,000 100% $6,400,000 295,000 $297 $87,580,000 $187,617,000 $86,419,000 "gate_sales_2015" Sources: Petrovich Development Corporation, Urban Land Institute, and EPS. [1] [2] [3] [4] [5] Estimated sales per sq. ft. for Phase 1 from Petrovich Development. See Table 4 for the calculation of the estimated sales per sq. ft. for Phase 2 general retail. See Table B-3 for the taxable portion calculation. Based on internal research regarding Costco. Assumes that the store will not be a Super Target and will sell a limited amount of food. Based on EPS internal research regarding Target stores and other regional retail stores. 50 Table A-6 Woodland Gateway Phase 2 Market and Urban Decay Analysis Estimated Sales by Type of Store (2009$) - Buildout Store/Retail Category General Retail [1],[2] Costco [4] Buildout Target [5] Restaurant/ Fast Food Total/ Average (Rounded) Gateway Phase 1 [1] Square Feet Sales per Sq. Ft. Estimated Sales (Rounded) Taxable Portion [3] Taxable Sales (Rounded) 236,000 $350 $82,654,000 99% $81,472,271 148,000 $600 $88,800,000 68% $60,384,000 136,842 $280 $38,316,000 95% $36,400,000 29,254 $320 $9,361,000 100% $9,361,000 550,096 $398 $219,131,000 PROJECT: Gateway Phase 2 Square Feet Sales per Sq. Ft. [2] Estimated Sales (Rounded) Taxable Portion [3] Taxable Sales (Rounded) 808,000 $295 $238,522,000 99% $235,112,000 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 30,500 $320 $9,760,000 100% $9,760,000 838,500 $296 $248,282,000 $187,617,000 $244,872,000 "gate_sales" Sources: Petrovich Development Corporation, Urban Land Institute, and EPS. [1] [2] [3] [4] [5] Estimated sales per sq. ft. for Phase 1 from Petrovich Development. See Table 4 for the calculation of the estimated sales per sq. ft. for Phase 2 general retail. See Table B-3 for the taxable portion calculation. Based on internal research regarding Costco. Assumes that the store will not be a Super Target and will sell a limited amount of food. Based on EPS internal research regarding Target stores and other regional retail stores. 51 Table A-7 Woodland Gateway Phase 2 Market and Urban Decay Analysis UC Davis Student Expenses (2007$) Item Weighted Average Student Expenses [3] Travel Expenses [4] Medical Transportation [5] School Supply Food Total Weighted Average Student Expenses All Retail Expenditures [1] $529 $18 $52 $1,183 $194 $1,976 Taxable Portion % Amount [2] 50% 50% 25% 100% 50% $264 $9 $13 $1,183 $97 $1,566 "student_expenses" [1] Reflects a weighted average of commuter students and other students. "Commuter" includes single students with no dependents who live in their parent's or relative's home. "Other" includes all married students and those living in off-campus housing units. [2] Estimated by EPS. [3] From the 2000/01 Student Expenses and Resources Survey (SEARS), inflated to 2007 dollars. [4] Includes expenses for traveling. Reduced by 60 percent to only account for expenditures in RMA. [5] Includes expenses for transportation to and from work and school. 52 APPENDIX B Taxable Sales Assumptions Table B-1 Woodland Gateway and Auto Center Woodland and Davis Taxable Sales (2007$) Business Category Woodland 2007 Taxable Sales Davis Total Retail Outlets Apparel General Merchandise Food Stores Eating and Drinking Places Home Furnishings and Appliances Building Materials Auto Dealers and Auto Supplies Service Stations Other Retail Subtotal Retail Outlets $11,516,000 $111,414,000 $62,654,000 $54,821,000 $11,660,000 $76,516,000 $91,929,000 $58,007,000 $87,511,000 $566,000,000 $8,567,000 $24,086,000 $41,883,000 $82,137,000 $6,790,000 $21,823,000 $168,473,000 $65,901,000 $56,225,000 $475,900,000 $20,083,000 $135,500,000 $104,537,000 $136,958,000 $18,450,000 $244,989,000 $157,830,000 $79,830,000 $143,736,000 $1,041,900,000 Other Outlets (not retail) $247,571,000 $55,426,000 $302,997,000 Total $813,600,000 $531,300,000 $1,344,900,000 "taxable_sales" Sources: California State Board of Equalization and EPS. Note: All figures rounded to the nearest thousand. 53 Table B-2 Woodland Gateway Phase 2 Market and Urban Decay Analysis Remainder of RMA Taxable Sales (2007$) Item Total Taxable Sales (2007) Remainder of the RMA Dixon $202,783,000 Yolo County Winters Uninc. Yolo County Subtotal Yolo County $23,592,000 $184,590,000 $208,182,000 Colusa County Williams Colusa Uninc. Colusa County Subtotal Colusa County $47,696,000 $67,317,000 $59,875,000 $174,888,000 Total $585,900,000 "rma_taxable_sales" Sources: California State Board of Equalization and EPS. Note: All figures rounded to the nearest thousand. Only includes retail sales. 54 Table B-3 Woodland Gateway Phase 2 Market and Urban Decay Analysis Estimated National Levels of Taxable Sales Type of Center/Retailer Typical Center Estimated Typical Center [2] Total Taxable Taxable Sales Sales Sales % Taxable Space Amount % Total Neighborhood Commercial Center 50,000 Weighted Average Taxable Sales per Sq Ft $19,759,475 $395 $8,716,729 44% 23,923 48% $364 Total Community Commercial Center120,000 Weighted Average Taxable Sales per Sq Ft $46,162,949 $24,746,368 $385 54% 71,859 60% $344 Total Regional Commercial Center 200,000 Weighted Average Taxable Sales per Sq Ft $46,215,245 $45,480,723 $231 98% 197,141 99% $231 "tax_sales" 55 BIBLIOGRAPHY AndersonFirst Coalitionv.City of Anderson, 130 Cal. App. 4th 1173 (2005). BakersfieldCitizens for Local Controlv. City of Bakersfield, 124 Cal. App. 4th 1184 (2005). California Board of Equalization. California Department of Finance Demographic Research Unit. January 2010. <http://www.dof.ca.gov/research/demographic/> California Natural Resources Agency. CBRE. Market View – Sacramento Retail. First Quarter 2009. CBRE. Market View – Sacramento Retail. Fourth Quarter 2009. City of Davis. City of Dixon. City of San Rafael. Target Store Draft Environmental Impact Report. Web. September 2008. City of Woodland Economic Development Department. City of Woodland Planning Department. Colliers International Market Research. Sacramento Retail Overview. May 2009. Colliers International Market Research. Sacramento/Roseville Retail Outlook. February/ March 2009. Economic and Planning Systems, Inc. Woodland Gateway Phase 2 Fiscal Impact Analysis. February 2010. Economic and Planning Systems, Inc. Woodland Gateway Phase 2 Market and Urban Decay Analysis. February 2010. Engstrom, Mark. Telephone Interview. 25 August 2009. Morrow, Shaun .Telephone Interview. 29 September 2009. Morrison Foerster. Potential for "Urban Decay" Must Be Analyzed Under CEQA. Web.17 July 56 2006. Petrovich Development Corporation. Quinn, Sean. Personal Interview. February 2010. Ruggiero, Janet. Telephone Interview. 25 August 2009. Sacramento Area Council of Governments. Sharp, Don. Telephone Interview. September 2009. Stallard, Tom. Telephone Interview. 25 August 2009. Sterleker, Scott. Telephone Interview. 16 September 2009. UC Davis. 2003 Long Range Development Plan Final Environmental Impact Report. Web. October 2003. ULI – the Urban Land Institute and the International Council of Shopping Centers. Dollars & Cents of Shopping Centers / The Score 2008. Washington, D.C.: ULI – the Urban Land Institute and the International Council of Shopping Centers, Inc., 2008. Print. Wilkinson, David. Telephone Interview. 28 August 2009.