6. EDSR 02-13-2012Item # 6.
MEMORANDUM
ver
TO: Economic Development Authority
FROM: Annie Deckert, Director of Economic Development
DATE: February 13, 2012
SUBJECT: Restaurant Development Report
BACKGROUND
Each year, staff attends Ehlers' Public Finance Seminar in Brooklyn Center. Ehlers is an
independent financial advisory company that has serves public sector clients throughout the
Midwest and helps them by providing the financial resources they need to build the
communities they envision. This years' seminar included different areas of public finance,.
which included information regarding development and redevelopment.
Staff attended a restaurant development roundtable which featured a panel of experts
including a representative from Parasole (developed Manny's Oceanaire, Burger Jones, and
others), a real estate broker responsible for expansion strategies, site selection and lease
negotiations for PF Chang's, Crave, Olive Garden, Red Lobster and others and a developer
with restaurant development experience.
DISCUSSION
For several years, the community and Economic Development Authority has expressed a
strong interest for additional restaurants. In the past few years, staff has been proactive in
restaurant recruitment marketing efforts which include direct mails, conference and trade
show exhibit, the creation of a SAC/WAC payment program designed specifically for
restaurant recruitment and more.
As our economic climate has changed, so has the restaurant development climate. Below are
some of the comments made by the experts:
What's happening in the restaurant market?
• Restaurant business is suffering, the capital market for restaurants is in terrible shape
• Fine dining is in a "world of hurt"
• Fast casual is the new trend; consumers axe looking for better value, smaller portions
and healthy eating
• "Ma and Pa" owner-occupied restaurants are on the rise
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Pizza places are on the rise
Several familiar chains (Chili's, Outback, Timberlodge) are at the end of their
lifecycle
What kinds of demographics do restaurants look for when finding a location?
• High daytime population
• High income
• Development opportunities within other restaurant `clusters'
• Site selection is becoming more of a science. Site selectors are looking at other data
including consumer purchases (clothes, cars, etc.), interests ('I'V shows watched,
magazines/books read, etc.) and where vacation time is spent.
How important is parking and what ratios are needed?
• Critical
Needs to be convenient and easy
The West End development in St. Louis Park was a "game changer" (ample free
parking)
What can communities do (that DON'T cost money) to encourage restaurant
development?
• Streamline the development process
• Loosen controls on signage
• Positive staff culture; partnership is huge in development
• Flexibility with building official, fire marshall, etc.
• Flexibility with SAC/WAC fees
The roundtable discussion provided insight to the current climate of restaurant
development. Elk River is an example of what developers are seeing today: increased pizza
places, owner occupied restaurants and fast casual. The Micro Loan Program and creation
of the SAC/WAC payment program provide some of the tools developers are looking for
when choosing the location for their next development.
Last year staff focused on restaurant recruitment at the economic development booth at the
MNCAR Expo and promoted our financing programs through our holiday card, social
media sites and city website. Staff is continuing to explore new ideas for restaurant
recruitment.
N:\Depactments\Community Development\Economic Development\EDA to move\Agenda\Year 2012\2-13-12 EDA
Agenda\Restauxant Report.docx