2012 Sycamore Road Retail Marketing and

Transcription

City of DeKalb, Illinois January 2012 Authored By: Roger Hopkins Hopkins Solutions, LLC Sycamore Road (IL 23) Retail Marketing & Development Plan Sycamore Road Retail Marketing & Development Plan
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Sycamore Road (IL 23) Retail Marketing and Development Plan January 2012 Adopted by: DeKalb City Council Prepared by: Roger Hopkins Hopkins Solutions LLC Executive Summary The Sycamore Road (IL 23) retail corridor (the Corridor) is the largest concentration of retail development in the DeKalb retail trade area. The Corridor stretches along Sycamore Road (IL 23) from 13th Street on the south to Bethany Road on the north. Retail and commercial facilities comprise 1.8 million square feet of building space. DeKalb and the Corridor serve as the key retail trade concentration in the County. DeKalb retailers primarily compete with those in the Sycamore area, and regionally with those businesses in the nearby Fox Valley area to the east, and the Rockford area to the north. There is some regional competition to the south and west. Business and population characteristics have a bearing on the capability of the Corridor to host key businesses. The DeKalb area economy is recovering from the recent recession and the area continues to encourage retention, expansion and attraction of major employers which supply the wages and spending capacity to support successful retailers. Successful retailers generate sales, property, utility and hospitality tax revenues which fund necessary local government services. The Corridor is generally well occupied and major retailers appear to be stable. Efforts Page 2
Sycamore Road Retail Marketing & Development Plan
should be sustained to assure that key retail developments continue to be successful. New development opportunities should be undertaken to strengthen the retail core of the Corridor and the community. The strongest retailers in the corridor are those in general merchandise and restaurants. Retailers that should be encouraged to locate and expand are apparel, fashion accessory, specialty and furniture stores. The City should periodically identify and develop business targeting tactics and strategies to assure a healthy mix of retailers in the Corridor. The City should use available development techniques such as accelerated permitting, sales tax sharing, infrastructure investments, and development and redevelopment programs such as tax increment financing and other tools to assure success. Programs should be available for access by both retailers and developers. The City needs to identify strategic businesses for retention, expansion and attraction. The City needs to redevelop underperforming, obsolete parcels and properties. The City needs to focus on new development of vacant land. Long term, the City should facilitate expansion of the retail clusters in the Corridor to the Peace Road corridor. Periodic monitoring of the infrastructure in the Corridor needs to be undertaken to assure reasonable traffic flow and pedestrian access, and management of water, sewer, and storm water. The DeKalb Retail Market – Regional Shopping Patterns Retail spending in the DeKalb market is driven by several components, including DeKalb’s position as the largest community in DeKalb County. DeKalb is home to many of the County’s largest employers. Both I‐88 Intestate highway exits are located in DeKalb. Employment and housing strongly influence retail spending and shopping, and are discussed later in this report. DeKalb is the largest community within 20 miles to the east and north, and 40 miles to the south. There is no large community to the west, except for the Quad Cities region, a distance of nearly 100 miles. DeKalb’s jurisdiction on Sycamore Road generates the highest traffic counts in DeKalb Sycamore Road Retail Marketing & Development Plan
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County, dominated by the traffic related to destination retailers that include the general merchandise stores in Northland Plaza, Target and the retailers in Oakland Place shopping center, and Walmart’s presence along with other retailers in the DeKalb Market Square shopping center. The Corridor in DeKalb is at the center of the community retail market which is comprised of DeKalb, Sycamore and Cortland. Together, the three communities represent most of the population estimated to live within five miles of Northland Plaza, according to the demographic profile provided by DLC Management, the shopping center owner and manager. Most regional retail trade areas are defined by the population within a distance of between 20‐40 miles and a driving time that represents 30‐40 minutes. Consequently, DeKalb falls into the regional trade areas that exist in neighboring communities such as the Fox Valley area, which includes regional malls in St. Charles, Geneva, West Dundee and Aurora. A variety of smaller lifestyle and regional shopping centers also exist in the Orchard Road, Kirk Road and Randall Road corridors that stretch from Elgin on the north and Aurora on the south. Many of the retail centers are in Elgin, South Elgin, St. Charles, Geneva, Batavia and North Aurora. To the north, DeKalb is on the fringe of the Rockford regional market, including the Cherryvale regional mall and significant regional lifestyle destination shopping on Rockford’s southeast side. South and southeast of DeKalb, there are destination regional shopping centers and retailers in Aurora and Joliet, and other community oriented shopping centers anchored by Walmart, general merchandise, grocery store and home improvement store developments. Automobile dealers are a significant presence in some of these neighboring communities. These areas attract customers from the southern parts of the DeKalb regional shopping areas, such as smaller southern DeKalb County villages and cities. West of DeKalb, there are few retailers, home improvement centers, and automobile dealers that compete for regional business. Shoppers from those areas may drive to the DeKalb/Sycamore area for some community shopping, such as Walmart, Target, Page 4
the home improvements centers, the general merchandise retailers such as Kohl’s, Carson’s, Penney’s and the automobile dealers. However, retailers such as Walmart are constructing larger stores in Rochelle to retain more of the retail spending. These shoppers may also be inclined to shop in the Rockford area, or drive past DeKalb to the Fox Valley area. Locally, the Corridor competes with retailers in neighboring communities, including several automobile dealerships, building and home improvement retailers and specialty retailers in neighboring communities. The potential of development of retail shopping centers and clusters in nearby communities needs to be assessed relative to the current and potential impact on DeKalb’s retailers. Retail Drivers: Population and Jobs Population growth has been driven by local and regional housing and local and regional employment growth in the era before 2008. Since 2008, there have been reduced housing starts both locally and regionally. Fortunately, many lost jobs have been recovered, and the area has been successful with job retention, expansion, and attraction of employers, including 3M, Sonoco (Alloyd brands), and H.A. Phillips, Kishwaukee Health Systems, Northern Illinois University, Kishwaukee College, and several other companies. Regional Population & Growth Rates County DeKalb 2000 2010 Change 88,975 105,160 18.2% McHenry 260,094 308,760 18.7% Kane 404,119 515,269 27.5% Kendall 54,563 114,736 110.3% LaSalle 111,546 113,924 2.2% Lee 36,062 36,031 ‐0.1% Ogle 51,032 53,497 4.8% 278,422 295,266 The population of the area is growing. Winnebago Following is a table showing growth of Boone 41,784 54,165 DeKalb County compared with surrounding counties. The DeKalb Region 1,326,597 1,596,808 area has generally grown at the same rate as the average in the region, State of IL 12,419,658 12,830,632 though more slowly than the fastest growing areas in nearby Boone, Source: Census Kendall and Kane Counties. 6.1% 29.6% 20.4% 3.3% The DeKalb Regional Market – Regional Employment and Commuting Patterns Employment and commuting patterns also tend to influence retail shopping patterns. Sycamore Road Retail Marketing & Development Plan
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DeKalb County has become home to more families that commute east to employment in the western suburbs, as more companies have expanded in the Kane, northwestern Cook and DuPage County areas. According to a study prepared by Northern Illinois University’s Center for Governmental Studies in 2010, 54% of DeKalb County residents live and work inside DeKalb County. The study can be interpreted to indicate that DeKalb area retail and consumer spending is driven by wages earned both inside and County Employment for the December Quarter for Private Employers and Govern‐
ment Employers covered under the Illinois Unemployment Insurance Act (Place of Work Data) % of 2006 ‐ 2008 Peak
County
2006 Q4
2007 Q4
2008 Q4
2009 Q4
2010 Q4
DeKalb
36,858
37,184
37,681
34,633
35,039
93%
McHenry
102,094
103,642
100,246
93,348
92,995
90%
Kane
210,355
212,072
203,086
190,100
191,414
90%
Kendall
21,461
23,596
24,030
22,685
23,967
99.7%
LaSalle
44,819
45,165
43,816
41,429
42,551
94%
Lee
13,524
13,230
12,759
12,783
12,732
94%
Ogle
16,790
17,104
16,887
15,796
16,074
94%
138,191
138,670
134,077
123,702
125,092
90%
15,648
16,623
11,899
12,982
12,974
78%
Winnebago
Boone
Source: Illinois Department of Employment Security, Unemployment Comp Quarterly Reports, Fourth Quarter outside DeKalb County. Local residents have jobs in Kane County (22%), followed by DuPage County (10%), and Cook County (8%). Consequently, local residents may shop in those areas near their workplace, and that tends to compete for retail spending in the City of DeKalb. Local jobs in DeKalb County area are increasingly filled by residents that commute into DeKalb County. For the City of DeKalb, those workers largely live in Kane County (6%) and Cook County (6%) to the east and northeast, and from LaSalle County (4%) and Ogle Sycamore Road Retail Marketing & Development Plan
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County (4%) to the south and west. All other locations represent a total of 24% of DeKalb County’s workers, and include McHenry, Boone, Winnebago, DuPage, Kendall, Lee, and other counties. NIU is the City’s largest employer, and a recent study, titled “NIU and DeKalb County’s Prosperity,” published in the Spring of 2011, indicated that 53% of wages went to local DeKalb County residents, giving the indication that 47% of NIU employees reside County Payroll for the December Quarter (1,000) for Private Employers and Government Employers covered under the Illinois Unemployment Insurance Act (Place of Work Data) County
DeKalb
2006 Q4
2007 Q4
$ 329,571
$ 347,117
2008 Q4
2009 Q4
2010 Q4
% of 2006 ‐ 2008 Peak
$ 361,011
$ 326,906
$ 335,498
93%
McHenry
$ 1,028,880
$ 1,063,024 $ 1,037,080
$ 967,627
$ 997,176
94%
Kane
$ 2,201,584
$ 2,269,477 $ 2,224,791
$ 2,113,615
$ 2,169,126
96%
Kendall
$ 215,509
$ 243,989
$ 248,840
$ 221,867
$ 240,992
97%
LaSalle
$ 382,603
$ 399,169
$ 405,763
$ 405,285
$ 425,787
Peak
Lee
$ 117,205
$ 118,872
$ 119,014
$ 123,285
$ 123,738
Peak
Ogle
$ 152,327
$ 173,278
$167,737
$ 165,697
$ 167,860
97%
$ 1,351,470 $ 1,359,310
$ 1,284,419
$ 1,340,116
99%
$ 136,809
$ 135,172
72%
Winnebago
Boone
$ 1,306,002
$ 187,959
$185,826
$159,485
Source: Illinois Department of Employment Security, Unemployment Comp Quarterly Reports, Fourth Quarter outside of DeKalb County. The NIU “Prosperity” study also reveals that student spending is nearly equivalent now to all the direct and indirect spending of locally residing NIU employees. Consequently, these two groups have a tremendous influence on retail behavior and the prosperity of the City’s retail, hospitality and service businesses. Sycamore Road Retail Marketing & Development Plan
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Business and Economy Following is a table comparing total companies in the Fourth Quarter in each of the surrounding counties and DeKalb County and changes in the past 5 years. Business payrolls have generally begun to recover from the recession, though the pace in DeKalb reveals a slower recovery. Following is a table showing the employment for each county surrounding DeKalb County. DeKalb County and the other surrounding counties are still about 4‐5% lower in total employment measured by unemployment taxes. County Employment (Place of Residence Data) County
DeKalb
2006 Q4
2007 Q4
2008 Q4
2009 Q4
2010 Q4
% of 2006 ‐ 2008 Peak
53,226
55,923
56,492
54,079
54,245
96%
McHenry
167,352
171,687
170,649
162,999
163,497
95%
Kane
246,893
254,121
253,725
242,645
243,387
96%
Kendall
48,018
53,489
56,332
54,121
54,287
96%
LaSalle
54,129
55,281
54,520
52,017
52,501
95%
Lee
17,573
17,552
16,976
16,337
16,462
94%
Ogle
25,780
26,278
25,785
24,003
24,137
92%
Winne‐
bago
136,199
139,258
135,286
122,769
124,134
89%
Boone
24,115
24,822
24,269
22,014
22,258
90%
Source: Illinois Department of Employment Security Page 8
The Sycamore Road Retail Corridor The Corridor contains an estimated 1.8 million square feet of retail, office and hospitality building space between 13th Street on the south and just north of Bethany Road. This does not include the Kishwaukee Health Services facilities, and retail, office and mixed use space in the vicinity of the hospital and the YMCA, nor does it include office space occupied by NIU on the ITS campus, nor retail and mixed used space in the Sycamore City limits (the Hy‐Vee development). The Corridor is focused around the four corners at the intersection of Sycamore Road and Barber Greene Road. Northland Plaza is the oldest shopping center in the County, and was last redeveloped in the early 2000’s by Joseph Freed Company, in connection with a development agreement that extended City tax increment financing assistance. Northland Plaza is now owned and managed by DLC Management Company. Northland Plaza is anchored by Carson Pirie Scott, JC Penney’s, Sears (appliances and lawn equipment), and Hobby Lobby, with total retail space of approximately 307,000 square feet, plus some outlying separately owned retail and service businesses on the perimeter. Northland Plaza contains some undeveloped land east of the Center with frontage on Barber Greene Road. Sycamore Road Retail Marketing & Development Plan
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DeKalb Market Square is a 650,000 square foot power center featuring Walmart, Lowes, Kohl’s, Best Buy, Office Max, Market Square Cinemas, and a number of other retail, hospitality and service businesses. Development of the property began in the mid‐1990’s with an intergovernmental agreement between DeKalb County, the owner of the land, and the City of DeKalb. The Target‐Oakland Place Shopping Center includes a number of apparel and specialty retailers, including a newly enlarged Target general merchandise store re‐built and opened in 2010, accompanied by an Aldi grocery store, Barnes and Noble, Pier 1 Imports, TJ Maxx, Old Navy, Michael’s and a number of other retail and hospitality businesses. A large part of the property including Target and some strip center space was developed in the original DeKalb Tax Increment Financing district, and later removed to reduce the commercial property tax base in the district. The strip center, including Barnes and Noble and TJ Maxx were developed as part of a special TIF district created to demolish the old DeKalb County Nursing Home and prepare the site as a retail center. The north end of Sycamore Road is a retail center developed by John Pappas at the intersection of Bethany Road and IL 23, Sycamore Road, and anchored by Pearle Vision, a UPS Store and Midwest Orthopeadics Institute (MOI). However, the land between Pappas/Bethany Road strip shopping center south to Oakland Drive is in the City of Sycamore or is unincorporated. Those developments outside the DeKalb part of the Corridor include the recent opening of DeKalb County’s fastest growing employment group, health and medical services, including medical offices associated with the opening of the new Kishwaukee Community Hospital and the expanded Kishwaukee Cancer Center. DeKalb Clinic has Pappas Strip Ctr. Page 10
recently expanded and relocated nearby. Hy‐Vee has recently opened a new grocery store in the former Kmart and Home Now shopping center. The south end of the Corridor is anchored by Jewel, the Parkside Shopping Center and the DeKalb Shopping Center. Jewel has occupied the south end of the Corridor since 1960’s. The DeKalb Shopping Center has been redeveloped and is occupied by Big Lots, Fit Works, and other retail, hospitality and service businesses. The Parkside Center is anchored by Aaron’s, and includes the offices of Comcast, and other service businesses and restaurants. These two shopping centers contain a number of non‐retail service businesses as the space size is smaller than the spaces occupied by national retailers. Local restaurants, restaurant chains and local professional practitioners have increasingly occupied some of the older retail spaces, while other spaces are occupied by convenience restaurant and service businesses, including financial services. The stretch of Sycamore Road between 13th Street (Jewel) and Oakland Drive carries the highest average daily traffic volumes in DeKalb County. Geographically, the Corridor sits strategically at the population center of the DeKalb‐Sycamore‐Cortland urbanized area. Consequently, it has been the focus for new locations for regional and community oriented retail and hospitality businesses that require a population of 35‐75,000 persons within 5 miles of the Corridor. Commercial vacancies are few in the Corridor. The notable vacancies include the former Borders space in Northland Plaza, along with some other inline and outlot multi‐tenant space. Still, Northland Plaza’s vacancy is 17%. Vacancy in the Oakland Place‐Target Shopping Center is only about 3% of all space. DeKalb Market Square vacancy Sycamore Road Retail Marketing & Development Plan
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includes just 11,000 square feet, developed by First Rockford Group near MC Sports, Sally Beauty Supply and Kohl’s. There are vacancies of smaller spaces in the DeKalb Shopping Center and Parkside Center, with office and inline retail vacancies. Land parcels and redevelopment parcels consist of the Small’s furniture site on IL 23 across from DeKalb Market Square. Location Finders International has a 2.5 acre site on the southwest corner of IL 23 and Oakland Drive. Buhr’s Landscaping will relocate, if a buyer can be found to redevelop its property on Barber Greene Road alongside the southerly access road into Northland Plaza. Northland Plaza has in excess of 10 acres of land off Barber Greene Road, but with limited visibility from Sycamore Road. Likewise, DeKalb County has several land parcels off County Farm Road and Greenwood Acres Drive behind DeKalb Market Square. A key small parcel is the former Nelson veterinary property on IL 23 just across from DeKalb Market Square, and adjoining the newly redeveloped Pappas‐Glasgow project that includes Advance Auto Parts, All About Eyes and the AT&T wireless store. The parcel is 2.12 acres and approximately 420 feet of Sycamore Road frontage, according to County Assessment office records. The largest parcel for future development is the Ken Klages farm that wraps around the north and east sides of Northland Plaza. The parcel contains 58.38 acres and has approximately 310 feet of frontage on Sycamore Road and approximately 630 feet of frontage on Barber Greene Road. DeKalb currently participates in a tax sharing agreement with the City of Sycamore for those properties that were unincorporated in both communities in 1995. In DeKalb, the major parcels within the tax sharing geography in the Corridor are the Ken Klages and 3M (former Barber‐Greene) properties, Competing with retail development parcels along IL 23 are several new retail strip buildings being redeveloped as part of the Hy‐Vee development in Sycamore. Other major parcels are in the development around Menard’s. Finally, several stores are planned in Sycamore, northwest of the corner of IL 23 (DeKalb Avenue) and Peace Road. Nearby are a few acres adjoining the Farm and Fleet in Sycamore. In the future, the Sycamore intersection of IL 64 and Peace Road may offer more land sites for retailers. The future opportunities for DeKalb to expand regional retail development will be along the Peace Road corridor directly east of DeKalb Market Square and Northland Plaza along Barber Greene and County Farm Roads. Access, sewer and water infrastructure, and increased traffic volumes and residential development within a Page 12
five mile perimeter of the Peace Road Corridor will be necessary to support Peace Road commercial sites. More will be discussed in the Peace Road Development plan. The City of DeKalb has had substantial success with sales and property tax sharing agreements to facilitate major developments. Examples are summarized in the following paragraphs, and the City may want to consider active use of development agreements with both shopping center developers and individual retail merchants. DeKalb Market Square was developed using development agreements with Lowe’s, Walmart, Orix‐Wilkinson Development and First Rockford Group. Participation in developer responsibilities included funding construction of street, storm water and intersection improvements, with recovery of the government investments from generation of increased sales taxes and some of the investments through the use of recapture agreements. Redevelopment of the former DeKalb County Nursing Home site was also facilitated by a special tax increment financing district to remediate site contamination and demolition of obsolete facilities in order to develop the expansion of the Oakland Place Shopping Center, south of Target’s retail store. Further evidence of participation came in the form of sales tax rebate agreements with Best Buy and Kohl’s to encourage the opening of new stores in DeKalb Market Square. The City entered into a major infrastructure redevelopment arrangement with Joseph Freed and Company to secure the expansion of the Northland Plaza Shopping Mall. The increased size of Northland Plaza has generated a dramatic expansion of sales tax revenue from general merchandise and other stores that now include Carson’s, Hobby Lobby, Bed, Bath and Beyond, Buffalo Wild Wings, Egg Haven, Kay Jewelers, and many others. The City has entered into successful agreements with John Pappas to redevelop the former DeKalb Motel into a successful strip mall at the intersection of Sycamore Road and Bethany Road. The City has also helped stimulate the redevelopment of the former DeKalb Shopping Center to expand FitWorkz, Big Lots, and other tenants. A final example is the continuing agreement with DeKalb County – to encourage the County to develop the former County Farm as DeKalb Market Square. The agreement with the County for all the sales tax at DeKalb Market Square splits the County’s 0.25% tax plus the City’s municipal tax of 1.0% and 0.75% of the City’s Home Rule tax by dividing the proceeds of that 2% tax evenly at 1% each. Later when the City added 0.5% to its Home Rule tax, the City agreed to split that revenue evenly at 0.25% each, as a way for the City to reimburse the County’s payment of the I‐88/Peace Road Sycamore Road Retail Marketing & Development Plan
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tollway interchange improvements. The City continues to receive a total of 1.75% of sales tax revenue from the retailers at DeKalb Market Square, the City’s largest shopping center. Sycamore Road Corridor and Retail Shopping Clusters The dominant theme of shopping on Sycamore Road is general merchandise, driven by the presence of Walmart, Target, and complemented by Kohl’s, Carson Pirie Scott and JC Penney. The City’s general merchandise sales are 236% of the State average, and are the highest among a peer group of university and similar sized cities (Bloomington, Normal, Urbana, Macomb, Carbondale, Crystal Lake and Carol Stream). For further information, see the “Retail Leakage Comparison Report” in an Appendix at the end of this report. General merchandise sales are more than double any of the other categories measured by the Illinois Department of Revenue (Groceries, Eating & Drinking, Apparel, Furniture/
Appliance, Building/Hardware, Auto Related, Drugs/Miscellaneous, Agriculture and Manufacturing). However, DeKalb falls behind its peer group in every other major retail sales tax category, according to a retail leakage study, except Manufacturing. The categories of Eating and Drinking, Apparel, Auto related, Furniture/Appliance and Drugs/
Miscellaneous should perform better in DeKalb. Reviewing each category, DeKalb performs poorly in Groceries, including food sales. That may be the result of those sales being reported by Walmart and Target in the General Merchandise category. Compared to the State and County per capita sales, DeKalb County had estimated leakage of $40 million countywide (that may be significantly impacted by Hy‐Vee opening in Sycamore and likely generating significant 2011 sales in this category). Apparel sales perform poorly in both DeKalb and DeKalb County. Comparable peer communities have sales of 90% of the state average, compared to DeKalb with 31% of the state average. DeKalb sales represent over 90% of the sales in the entire County. As the major regional shopping area, the Corridor should be stronger. Nearby shopping malls probably draw DeKalb shoppers, and this needs to be a focus for new retailer attraction. Capture of this retail leakage is estimated to be between $11‐27 million. Eating and Drinking sales exceed the state average, but not by the margin of the peer group communities. Casual dining continues to do well in the economy, and should locate close to destination merchants, due to its central the location in the regional marketplace (there is total DeKalb leakage of $34 million locally and another $31 Sycamore Road Retail Marketing & Development Plan
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million countywide). Furniture and Appliance sales in DeKalb have grown with the presence of Best Buy, but the market has lost Leath Furniture. Other appliance and furniture sales occur through the general merchandise, home improvement and specialty retailers, but generally there appears to be $273/per capita ($564 State Sales minus $291 DeKalb City sales) leakage from the City of DeKalb, and additional leakage from the regional Comparing Retail Sales Per Capita for DeKalb, State & County
$0
$1,000
$2,000
$3,000
$4,000
$5,000
General Merchandise
Food
Eat & Drink
Apparel
Furniture/Appliance
Lumber/Building
Auto & Filling Station
Drugs & Other
Agricultural
Manufacturing
Illinois Sales Per Capita
DeKalb City Sales Per Capita
DeKalb County Sales per captita
$6,000
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DeKalb County market ($29‐36 million annually, countywide). Drugs and Miscellaneous retail sales have a small margin of leakage in the City and the County – though countywide sales are impacted by a major taxpayer without a local market (miscellaneous fuel sales in Sycamore and Genoa). Potential leakage in the City is $6 million, and $43 million countywide (subtracting for the artificial influences). Drug/Miscellaneous sales represent the third largest category of reported sales that should be greater than all categories except Auto related and General Merchandise. Auto Related sales in DeKalb are 70% of the State per capita average, while the peer group Cities average 133% of the State average. A number of Auto dealers have consolidated along IL 23, and Sycamore is the largest regional competitor. DeKalb needs to protect its base of new and used car dealers, repair shops and parts retailers 300%
Comparison of DeKalb to State Sales Per Capita 2000‐2010
250%
200%
Variance from State Per Capita Performance is based on 100% Values below 100% illustrate sub‐standard performance. Values above 100% exceed State Per Captia Performance.
2010 DeKalb City vs. State Sales % Difference
150%
100%
50%
0%
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Peer Cities Sales Per Capita 2010
Total Retail Sales
Manufacturing
Agricultural
Carol Stream
Drugs & Other
Crystal Lake
Auto & Filling Station
Carbondale
Macomb
Lumber/Building
Urbana
Furniture/Appliance
Normal
Apparel
Bloomington
DeKalb
Eat & Drink
Food
General Merchandise
$0
$5,000
$10,000
$15,000
$20,000
$25,000
given the attraction of the Corridor in DeKalb and Sycamore for new and expanding dealerships. Few auto dealership sized parcels of land are available, and if dealers merge, there are more dealer locations and more vacant land sites in Sycamore. DeKalb leakage is potentially $61 million. Building/Hardware is also identified in some surveys as the home improvement sales tax category. Sales and tax collections in this category have fallen significantly for nearly a decade, as other home improvement centers, lumber yards, construction materials and specialty merchants have eroded DeKalb’s base. Significant merchants in this category were likely Stock Lumber, Johnson Concrete, and a variety of other building improvement stores and contractors. Sales taxes in this category were $323,000 in 2000, and had leveled out in the range of $250‐280,000, before the 2008 recession. In 2010, sales were $216,000, or 4% of DeKalb City tax revenues, down from 7.64% in Year 2000. Compared to other locations in DeKalb County, City Sycamore Road Retail Marketing & Development Plan
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collections were about 33% of taxes collected countywide compared to collecting 42% of countywide Year 2000 collections. Peer group communities were collecting sales taxes of 185% of the state Building/
Hardware per capita average, even in the recessionary period of 2010. Retaining and attracting new home improvement sales taxes could produce tax revenues up to $260,000 per year of tax revenues, if DeKalb matches the peer group by becoming a regional, countywide home improvement center Strengths, Weaknesses, Opportunities and Threats – Sycamore Road Corridor Strengths: 
Low overall retail store vacancy 
Concentrated cluster of destination retailers creates attraction to the largest retail centers 
Strong local employment by NIU, healthcare, distribution centers, and recovery of major manufacturing employers 
The Corridor has the highest traffic counts in the County 
Centrally located to the 5 mile population radius used by many retailers 
Centrally located relative to major new subdivisions that will generate future population growth 
Recognition as a major retail destination center for DeKalb, Sycamore, Cortland and neighboring communities within 10 miles north, south and west Weaknesses: 
Population and housing density, numbers and growth remain below national retailer thresholds and requirements in the City and within the critical 5 mile geographic radius 
Limited land sites for exist for major retailers, especially for store sizes of 50,000 square feet, businesses requiring 1.5 – 2 acres, and especially for retailers requiring 5 or more acres 
Land development and redevelopment costs that are viewed as being 40‐50% high for the market, due to limited choices for sites and existing locations. Opportunities: 
Key larger vacancies in Northland Plaza and DeKalb Market Square in the range of Page 18
10‐20,000 square feet (Borders, former Sears, former Leath, First Rockford) 
Redevelopment of parcels that include: 
The former Harbor Inn – LFI site (Sycamore Road and Oakland); 
Small’s Furniture and former Nelson Vet Clinic (Sycamore Road west of DeKalb Market Square); 
Klages Farm and vacant Northland Plaza Property (Sycamore Road and Barber Greene Road frontage) 
Buhr’s Landscaping and nearby DeKalb County sites off County Farm Road, Greenwood Acres Drive and Barber Greene Road 
Create incentives to overcome the weaknesses of locating on Sycamore Road, by assisting with redevelopment and development costs, and/or retail sales tax rebates Threats: 
Weak population, housing and employment growth in the City and within the 5‐10 mile radius of the development Corridor 
Retention of key automobile, home improvement, grocery/food, and general merchandise retailers 
Erosion of new retailers by development of new shopping centers in the Sycamore portion of the Corridor 
Continued domination of the Apparel, Furniture/
Appliance, Lumber/Building, and Eating and Drinking categories by neighboring regional and lifestyle shopping centers to the east (Fox Valley) and the north (Rockford) of the DeKalb regional market; and potential expansion of destination retailers like Walmart in the Rochelle area Sycamore Road Retail Marketing & Development Plan
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Proposed Sycamore Road Development Goals 
Efforts to attract retail businesses should focus on retention of the major general merchandise anchor stores, the automotive anchor dealerships, and the home improvement, furniture, appliance and office supply destination anchor stores in the Corridor. Redevelopment and assembly of strategically required land parcels may need to be facilitated by incentives to developers or undertaken by the City to be competitive with the larger and more available vacant land sites outside the City. Redevelopment of older retail sites may require use of Tax Increment Financing, similar to the manner used to develop the former Nursing home site. Consider sales tax rebates to address high acquisition and infrastructure costs to make DeKalb sites competitive. 
Undertake efforts to attract more casual dining, hospitality and similar retailers to the Corridor. The City and the market have a small number of hotel rooms, and the location that offers options for dining and banquets may be along Sycamore Road. Consider sales tax rebates to address high acquisition and infrastructure costs to make DeKalb sites competitive. 
Efforts should be strongly encouraged to attract clothing, apparel, and fashion accessory retailers to the Corridor. These are generally occupancies that accompany major general merchandise anchors. More occupancies in the range of 10,000 to 30,000 square feet are necessary since few currently exist. Only DeKalb Market Square is currently entitled for developing additional stores in this size range. 
Begin to stimulate the expansion of the Sycamore Road destination to adjoining development parcels on Peace Road for the City’s retail hub to continue to attract more destination and anchor stores. 
Retention of key anchor and destination retailers is of utmost importance. Page 20
Marketing Recommendations Marketing activities and policies should retain existing key retailers, attract new retailers, and generate enhanced retail sales. This includes recommendations for increasing population, housing and employment in the market that generates the disposable income spent in local retail and hospitality establishments. 
Continue to encourage general business retention, expansion and attraction – spending power derived from more people and households with jobs drives increases in sales tax revenue and creates general community appeal. 
Identify strategic retail businesses for retention and expansion – especially general merchandise, grocery/food, eating/drinking, auto related, and drugs/
miscellaneous retailers. Businesses to attract are apparel and fashion accessory, furniture and electronics, and home improvement retailers. 
Develop a targeted attraction and recruitment program to fill vacant retail, office, vacant land sites, and redevelop obsolete properties and other business properties. The City should use fast track permitting and government approvals. The City should create clear development responsibilities and requirements that serve to create a suitable shopping center environment that will be sustainable economically, environmentally, and operates with suitable public safety. Sycamore Road Retail Marketing & Development Plan
Page 21

Expand the City’s economic development incentive policies and programs to retain, expand and attract retail and other businesses to the Corridor. The City may need more aggressive incentive policies for targeted retailers. The City may also need to expand the geographic parameters of the Architectural Improvement Program (AIP) to assist businesses in the City’s Tax Increment Financing District. For non‐TIF business properties, the AIP program may be a 50%/50% sales tax rebate sharing arrangement for key targeted retail businesses up to reimbursement of $25,000. 
The City should undertake a periodic Customer Survey in order to determine the products and retail stores patronized by local residents to determine new businesses that should be targeted for attraction to the DeKalb area. Suitable businesses should be identified for the Corridor that may be different from other business and shopping areas in the City. The Survey should include permanent residents and student households. 
City staff should schedule annual retention visits of the major retail anchors of the Corridor, in order to assess the business climate, mix of retail and other business, the infrastructure (including traffic, signals, utilities and public services) and assess the aesthetic shopping environment (those issues that the city can influence or facilitate that make the area attractive). The City needs to continually listen to businesses, including participation in Chamber, economic development and Convention and Visitor Bureau activities, events and programs. 
The City should maintain contact with local developers and business owners, real estate brokers, and property managers to help identify new retail businesses that should be recruited to the Corridor. Tenants should be targeted based on available supply of vacant retail building space and new and redeveloped spaces that are identified in the Corridor. 
The City should prepare Quarterly Reports that assess the change in retail tax collections and spending patterns in the City and assess the implications for the Corridor. Other statistics that should be monitored include local employment trends, housing sales, vacancy and construction trends, and the status of enrollment trends at Northern Illinois University and Kishwaukee College. 
At least once per year, the City should secure updated demographic and consumer spending activity for the City and for a variety of geographies that make up neighborhood, community and regional shopping trade areas for the Corridor. Geographies that should be included are 1, 3, 5, 10, 20 and 30 mile radius; the City and the County boundaries, and 5, 10, 15, 20, and 30 minute commuting distances. Page 22

Annually, the City should update the marketing materials for the Corridor to identify key retailers and shopping center developments, identify new stores and publicize the demographic capacity for shopping that exists in the City’s regional trade area. These materials should be distributed to brokers, consultants, developers, and others that are marketing sites and buildings in the marketplace. 
The City should participate in the annual Chicago Deal Making show in order to promote the buildings and sites in the Sycamore Road and other commercial corridors. At a minimum, retailers that have the potential to locate in the City should be identified and targeted. The City may want to have a trade show booth in addition to making appointments with retail officials or their tenant representative real estate brokers. The City should also consider attending the annual International Shopping Center Conference (ICSC) in Las Vegas, with a similar purpose of scheduling meetings with retailers, tenant representatives and developers currently located in the market or identified as targets for the DeKalb location. 
Sycamore Road has limited new land sites and redevelopment sites in order to attract major retailers. Consideration should be given to the following: 
Assess undertaking and seeking out redevelopment of obsolete, vacant or underperforming properties. 
Seek long term development agreements for development of the largest remaining vacant parcel – the Klages Farm. 
Seek ways to expand the Corridor to include new destination shopping centers in the Peace Road corridor, from Greenwood Acres Drive on the south to Barber Greene Road on the north. 
Encourage adjoining residential uses that are suitable neighbors to the commercial development of the Corridor. Require the development of suitable pedestrian, bicycle, and disabled accessibility to businesses in the Corridor. 
Enact policies that assure the cleanliness and maintenance of businesses, developments, and public areas. 
Plan for the construction, reconstruction and maintenance of necessary municipal and shared infrastructure, including streets, intersections, traffic signals, sidewalks, bicycle facilities, storm water, sewer, water, and private utilities, including fiber optics and telecommunications equipment. Sycamore Road Retail Marketing & Development Plan
Page 23
Source: Illinois Department of Revenue SIC Code Municipal Retail Sales taxes for calculation of retail sales; 2010 US Census reports for calculation of per capita retail sales; and Peer cities include: Bloomington, Normal, Urbana, Carbondale, Macomb, Crystal Lake, and Carol Stream. The Shaded Columns for the City vs. State show RED to illustrate that DeKalb is Lower or Higher than Peer cities. The City vs. County Column shows that DeKalb is Higher or Lower than the County’s per capita sales. The categories for Auto and Agricultural for the City/County comparison are not colored due to the influence of the United and American fueling sales taxes collected by the County that are out of proportion to actual local consumption. Page 24
City of DeKalb vs. State of Illinois Sales
Retail Leakage Report
2008 Calendar Year
Illinois Sales
Per Capita
Category
General Merchand
1,567
Food
1,507
Eat & Drink
1,359
Apparel
441
612
Furniture/Appliance
Lumber/Building
654
Auto & Filling Stati
2,470
Drugs & Other
1,753
Agricultural
1,454
Manufacturing
285
Total Retail Sales
12,103
DeKalb
DeKalb
DeKalb
DeKalb
City vs.
City vs. DeKalb City DeKalb City
City Sales
County
State
State
vs. County
Sales vs.
Per
Sales per Sales $$ Sales %
Sales $$
County % Total DeKalb
% of Total
Capita
captita
Difference Difference Difference Difference
City Sales
DeKalb Rev.
$3,625
$1,553
$2,058
231%
$2,072
233% 1,647,363.28
27.92%
$1,337
$1,038
-$171
89%
$298
129%
607,409.00
10.29%
$1,483
$1,076
$124
109%
$407
138%
674,024.98
11.42%
$161
$78
-$279
37%
$84
208%
73,327.15
1.24%
$636
$324
$23
104%
$311
196%
288,833.33
4.90%
$539
$685
-$115
82%
-$146
79%
245,051.65
4.15%
$2,085
$9,150
-$385
84%
-$7,065
23%
947,460.90
16.06%
$1,855
$1,334
$102
106%
$522
139%
843,147.69
14.29%
$861
$8,669
-$593
59%
-$7,808
10%
391,361.95
6.63%
$401
$265
$116
141%
$136
151%
182,248.89
3.09%
$12,984
$24,173
$881
107%
-$11,190
54% 5,900,228.82
2006 Calendar Year
Illinois Sales
Per Capita
Category
General Merchand
1,552
Food
1,448
Eat & Drink
1,295
Apparel
442
691
Furniture/Appliance
Lumber/Building
758
2,698
Drugs & Other
1,639
Agricultural
1,451
Manufacturing
295
Total Retail Sales
12,268
DeKalb
DeKalb
City vs.
DeKalb
DeKalb
County
State
State
vs. County
Sales vs.
City Sales
% of Total
Per
Sales $$
Capita
captita
City Sales
DeKalb Rev.
$3,835
$1,662
$2,283
247%
$2,173
231% 1,702,257.53
29.26%
$1,063
$900
-$385
73%
$162
118%
471,703.35
8.11%
$1,372
$1,012
$78
106%
$361
136%
609,273.28
10.47%
$242
$117
-$200
55%
$126
208%
107,546.13
1.85%
$676
$374
-$16
98%
$302
181%
299,889.20
5.16%
$630
$1,172
-$127
83%
-$541
54%
279,770.40
4.81%
$2,072
$6,796
-$626
77%
-$4,724
30%
919,781.72
15.81%
$1,825
$1,306
$185
111%
$519
140%
810,065.83
13.93%
$1,097
$6,817
-$354
76%
-$5,720
16%
487,159.22
8.37%
$292
$306
-$2
99%
-$13
96%
129,751.67
2.23%
$13,104
$20,460
$836
107%
-$7,356
64% 5,817,198.33
2000 Calendar Year
Illinois Sales
Per Capita
Category
General Merchand
1,254
Food
1,378
Eat & Drink
1,079
Apparel
383
Furniture/Appliance
590
Lumber/Building
542
2,264
Drugs & Other
1,230
Agricultural
1,291
Manufacturing
267
Total Retail Sales
10,277
DeKalb
DeKalb
DeKalb
City vs.
DeKalb
Sales vs.
vs. County
County
State
State
City Sales
% of Total
Sales $$
Per
City Sales
DeKalb Rev.
captita
Capita
$2,740
$1,330
$1,486
218%
$1,410
206% 1,073,986.27
25.40%
$1,242
$1,034
-$135
90%
$208
120%
486,952.21
11.52%
$1,022
$748
-$57
95%
$274
137%
400,569.75
9.47%
$124
$77
-$260
32%
$46
160%
48,446.88
1.15%
$229
$185
-$361
39%
$43
123%
89,568.66
2.12%
$825
$864
$283
152%
-$40
95%
323,253.68
7.64%
$2,045
$2,083
-$219
90%
-$37
98%
801,618.50
18.96%
$1,356
$912
$126
110%
$443
149%
531,366.70
12.57%
$1,109
$1,060
-$182
86%
$49
105%
434,830.31
10.28%
$97
$413
-$169
36%
-$315
24%
38,112.16
0.90%
$10,789
$8,706
$511
105%
$2,082
124% 4,228,705.12

2012 Sycamore Road Retail Marketing and

Transcription

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