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3 Item 3. • ctY of Elk+, River MEMORANDUM TO: Housing & Redevelopment Authority Planning Commission River's Edge Downtown Business Association FROM: Catherine Mehelich, Director of Economic Development DATE: May 8, 2001 SUBJECT: Downtown Redevelopment Plan —Joint Worksession The purpose of the joint meeting between the HRA, Planning Commission and River's Edge Downtown Business Association is to begin to discuss a future vision for the Downtown Central Business District. This discussion is Phase II of a three-phase workplan to establish • a long-term,implementation plan to maintain and encourage the vitality of Elk River's Downtown. Phase I included a physical inventory and market study of Downtown; Phase III will be drafting and adopting the Plan. Attachments • Conclusions &Recommendations,Maxfield Research Inc. 2001 Elk River Downtown Market Analysis • Maps &Assessment Criteria * Project Area * Building Condition * Historic Significance Project Area The redevelopment plan project area includes the area north of the railroad tracks to 5th Street, south to the Mississippi River and between Morton and Gates Avenues. Background Following a joint HRA and City Council central business district worksession, the HRA authorized staff to complete a downtown redevelopment plan. The purpose of the plan is to provide direction for redevelopment and new development activities. In the past 30-years the City and downtown community has participated in at least 6 • planning efforts that resulted in a variety of plans. Three plans specifically addressed the Riverwalk design features. Two plans proposed overall redevelopment planning and specific Downtown Redevelopment Plan Worksession May 8,2001 Page 2 of 2 • site and land use recommendations. The most recent plan, completed in 1999 byTh Washburn, was a visioning plan. • P Theresa Discussion Points Rather than recreating a large visioning process, a review of the consistent themes identified over the years will be presented,in addition to the new information gathered about building condition and market potential. Using the information gathered in Phase I that will be presented to the participants of the joint worksession, staff would like to discuss the following issues: 1) Priority projects/sites for redevelopment,rehabilitation or improvements 2) Priority land uses desired 3) Desired design elements: setbacks, building materials, etc. A follow-up worksession involving the HRA, EDA and City Council will be held to formulate and finalize the common vision and actions. • • SUMMARY OF FINDINGS • Purpose and Scope of Study Maxfield Research Inc. was retained by the City of Elk River to conduct a comprehensive analysis of the market potential for redevelopment for Elk River's Downtown. Our research included an analysis of the existing supply and market conditions of housing, retail, and office in the area. We also analyzed growth trends and demographic characteristics and the impact of these trends on the potential to develop various land uses in the Downtown redevelopment area. Based on growth trends and market conditions in Elk River, we have quantified demand for additional housing,retail and office space for the period 2000 to 2010. Moreover, in light of our analysis of the existing Downtown land uses and condition, we have forecasted the amount that is supportable in the Downtown through 2010. Our demand calculations and recommendations are intended to serve as a guide to City staff as they develop a strategic plan for this area. Downtown Overview • Elk River is the largest community and county seat of Sherburne County, one of the fastest growing counties in Minnesota. Sherburne County's rapidly �' growth is largely attributed to being located between the ra p y growing Twin Cities Metro Area and St. Cloud Metro Area. • Like many fast growing communities, the retail needs of the population have sim l • outgrown the ability of Elk River's downtown to serve them. Highwayn y nort through Elk River, about one-half mile east of the Downtown, and has attracted much of h-south of new commercial development that has occurred in Elk River during the past decade, the including retail shopping centers. Thus, the primary retail shopping area has shifted fro Downtown to Highway 169. m the • Overall, the Downtown Redevelopment Area encompasses 67 acres, not including land within right-of-ways (streets and railroads). Based on data from the City of Elk River, we calculated the mix of existing uses as retail, office, industrial, and residential (single-family and multifamily), including 151,000 square feet of space of retail and service businesses an another 67,000 square feet of office space, and 130 housing units. d • We have identified three distinct areas in the Downtown Redevelopment Area, based current land uses and physical barriers. Each area presents its own redevelopment on opportunities and challenges. Our recommendations focus on the development potential for each area and strategies to enable these areas to compliment one another. The three areas are: 1. Core Central Business District (CBD) --south of railroad, east of King Ave. 2. Northern Area—north of railroad 3. Western Transition Area—south of railroad, west of King Ave io • The Core CBD is the focal point of the Downtown and features turn-of-the-century retail buildings typical of most traditional downtowns. Its greatest amenity is beinglocated MAXFIELD RESEARCH INC. 1 SUMMARY OF FINDINGS • directly on the Mississippi River and the existing character. Redevelopment in the Core CDB is limited by lack of development sites. • The Northern Area features a mix of retail and service businesses, offices, and housing east of Jackson Avenue, and industrial uses west of Jackson Avenue. While the Northern Area can benefit from its convenient access to the Highway 169 commercial areas, redevelopment potential is limited by poor visibility from Highway 10 and no frontage along the River. • The Western Transition Area consists primarily of single-family homes with offices and some retail located adjacent to the Core CBD. It is considered a transitional area from the single-family neighborhood to the west and the Core CBD. Frontage along the River creates a great opportunity for redeveloping a portion of the Western Transition Area. Key Trends Ho— using • Elk River is projected to add 3,850 persons and 1,510 households between 2000 and 2010. This growth is greatest demographic factor affecting demand for housing in Elk River, since the influx of newcomers is creating strong demand for nearly all types of housing. • Our finding that strong housing demand exists in the Market Area is vital to the revitalization • of Downtown Elk River. Simply stated, strong population and household growth will create opportunities to enhance and expand the Downtown business base that otherwise would not exist. • Just as significant as overall housing demand to the revitalization of Downtown is that much of the demand will be for higher-density rental housing and for-sale housing. A national trend is that younger renters and also an increasing number of middle-aged households without children, empty-nesters, and independent seniors prefer maintenance free housing in unique urban environments. This is significant because efforts to create housing in the Downtown will have one of the strongest impacts on sustaining Downtown's viability over the long-term. Retail • As the Elk River area's population increased rapidly during the 1990s, so did retail sales. Retail sales increased by 178% ($191 million) in Elk River between 1990 and 1998. The development of shopping centers along Highway 169 certainly accounted for the majority of increased sales in the City(particularly Elk Park Center–with Target as an anchor). Retail sales will continue to increase rapidly, as a new Walmart and Home Depot were added in Elk River in 2001. • While new shopping centers have sprung up in Elk River during the past decade, the Downtown has lost retail stores, such as hardware and clothing. These stores have been replaced by either service businesses or specialty retail stores. MAXFIELD RESEARCH INC. 2 SUMMARY OF FINDINGS • • Downtown businesses and property owners almost all agree that the authentic character of the Downtown separates it from other retail areas and should be kept intact. Most believe that building upon the authentic character and enhancing the Downtown's position on the River will enable the Downtown to remain vital. Office • Elk River's Office Market Area added 5,400 jobs (an 80.6%percent increase) between 1990 and 2000. From 2000 to 2010, the Market Area is forecast to add another 5,200 jobs, to a total of 17,300 jobs in 2010. In 1990, 17% of the jobs in the Market Area were estimated to be jobs that required office space, or 1,140 jobs. That percentage increased to 21% in 2000 and is projected to increase to 26% in 2010. The result is that the Market Area added 1,400 office jobs during the 1990s and is projected to add 1,960 office jobs between 2000 and 2010. • Increased demand for office space in Elk River from employment developing additional office buildings, since there is virtually no vacant space nthe Market Area. • The majority of office-oriented businesses in Elk River area are those serving the local household and business base, such as attorneys, insurance agents, accountants, and finance related businesses. Most of these businesses have fewer than 10 employees and require relatively small spaces. • Demand Summary • Based on our demographic and market analysis and our assessment of the Downtown Redevelopment Area, we have calculated the amount of additional housing, office, and retail that can be supported in the Redevelopment Area over the next ten years (shown in the following table). It needs to be noted,however, that this level of development may be constrained by the ability to make sites available to accommodate new development. Demand Summary Downtown Elk River Redevelopment Area 2000 to 2010 Housing For-Sale Multifamily 95-115 units Market Rate Apartments 300-360 units Market Rate Senior Housing 60-70 units Office 19,000-39,000 sq.ft. Retail* 14,000 sq. ft. *Demand through 2005 Source: Maxfield Research Inc. MAXFIELD RESEARCH INC. 3 SUMMARY OF FINDINGS • I�ousin� • While demand should be sufficient to support the amount of housing shown in the table, it is most likely that development will be constrained by the availability of sites. Still, we believe it is reasonable to fit 300 new housing units into the Redevelopment Area. • Multi-story buildings, versus townhomes, are the appropriate form of rental and for-sale housing in the Downtown. To be successful, however, a for-sale building(such as a multi- story condominium or senior cooperative project)would have to be located on the Mississippi River. Buyers of housing are more concerned with purchasing in a "high- amenity"location, which will help to maintain their home value. Office • The Downtown can support an additional 39,000 to 59,000 square feet over the next ten years. The 20,000 square foot 1St National Financial Plaza is currently under construction and will satisfy a portion of this demand. Subtracting lst National Financial Plaza, an additional 19,000 to 39,000 square feet of office can be supported Downtown through 2010. • Most office tenants Downtown will be smaller businesses (2 to 10 employees needing 200 to 2,000 square feet, on average) serving the local population and business base, such as attorneys, accountants, insurance agents, etc. However, we believe that over the next decade, Elk River will be able to compete with other northwestern Twin Cities suburbs for larger(up to 5,000 square feet) technology based firms. These high-tech firms, along with healthcare • businesses, should create more demand for lager spaces over the next decade. Retail • The Downtown can support up to 14,000 square feet of additional retail through 2005. This is also about the maximum amount of additional space that could be developed in the Core CDB, which is the portion of the Downtown Redevelopment Area that is most suitable for additional retail. We believe that the Northern Area is more suited for service industries than retail, because of limited access and visibility. • New retail stores will predominantly offer specialty goods and be able to market their unique Downtown location as an experience that can not be found at shopping centers. Also, new housing located Downtown will increase demand for neighborhood goods and services. Recommendations The following is a summary of the overall redevelopment potential we identified in the Core CDB, Western Transition Area, and Northern Area. More detailed recommendations including redevelopment potential for specific parcels, are found in the Conclusions and Recommendatio section of this report. Redevelopment and marketing strategies are also included in the ns Conclusions and Recommendations section. • MAXFIELD RESEARCH INC. 4 SUMMARY OF FINDINGS . Core CBD • Combined with a lack of vacant parcels and the need to preserve most of the existing buildings, the Core CBD has fewer opportunities for large-scale redevelopment than the other two redevelopment areas. However, because of the existing character of the Core CBD and its location on the River, it has the greatest opportunity for a high-end development that would capitalize on these amenities. We believe that the demand for 14,000 square feet of retail space over the next five years should be located in the Core CBD. • Two areas that should be examined for development and/or redevelopment are the City parking lot on the east side of Jackson Street and the block along the south side of Main Street from the Highway 42 bridge up to and including the vacant building at 641 Main Street (including Nadeau's, US Bank, and the vacant building at 641 Main Street). These two sites present the best, and perhaps only, options for adding this space. • One of the Core CBD's greatest assets is the existing supply of older buildings, particularly the"Brick Block" (the west side of Jackson Avenue). Any new development in the Core CDB should be designed to fit-in and enhance the existing Downtown buildings character. Northern Area • The Northern Area east of Jackson Avenue has a number of properties that are potential candidates for redevelopment. We believe the Northern Area is better suited for office development and some housing than retail, since the area does not have great access and • visibility from Highway 10 and most potential retailers would likely shy away from this area, in favor of better visible shopping space in the Core CDB or along Highway 169. • We believe that a high priority of the City should be retaining the existing Post Office on Irving Avenue and 3rd Street. We believe that the three parcels to the north of the Post Office, currently developed with older single-family homes, present themselves as expansion options to the Post Office. • The Northern Area west of Jackson Avenue presents greater redevelopment challenges because of the existing industrial uses. Since most non-industrial uses prefer not to be located adjacent to industrial properties, much of the entire area would need to be redeveloped at once if the area were to be redeveloped with other uses. We believe that redevelopment of this area is a long-term planning project that should be a lower priority than the remaining Downtown Area, but still a consideration for the future. Western Transition Area • The Western Transition Area is a mix of single-family housing(to the west) and offices and limited retail (to the east). This area has easy pedestrian access to the Core CBD and a portion also has River frontage, which is a highly desirable amenity to potential residents of multifamily housing. Thus,we believe that this area has a high potential for redevelopment to multifamily housing and some additional offices. 4111 MAXFIELD RESEARCH INC. 5 SUMMARY OF FINDINGS • Maxfield Research Inc. was retained by the City of Elk River to conduct a comprehensive analysis of the market potential for redevelopment for Elk River's Downtown. Our research included an analysis of the existing supply and market conditions of housing, retail, and office in the area. We also analyzed growth trends and demographic characteristics and the impact of these trends on the potential to develop various land uses in the Downtown redevelopment area. Based on growth trends and market conditions in Elk River, we have quantified demand for additional housing, retail and office space for the period 2000 to 2010. Moreover, in light of our analysis of the existing Downtown land uses and condition, we have forecasted the amount that is supportable in the Downtown through 2010. Our demand calculations and recommendations are intended to serve as a guide to City staff as they develop a strategic plan for this area. The report includes both primary and secondary research. Primary research includes interviews with City staff, Downtown businesses and property owners, commercial brokers, homebuilders, developers, and real estate sales agents. Secondary research is credited to the source when used, and is usually data from the U.S. Census or Claritas, Inc., a nationally recognized demographics firm or is locally collected data such as building permit information or assessor's data. • • MAXFIELD RESEARCH INC. 6 CONCLUSIONS AND RECOMMENDATIONS • Introduction This section of the report outlines our recommendations and the potential for housing, retail, and office development in Elk River's Downtown Redevelopment Area. We present our recommendations and development potential for the three identified redevelopment areas; the Core CDB, Western Transition Area, and the Northern Area. Our research findings and the recommendations provided herein are intended to guide the City of Elk River in their redevelopment planning for each of these areas. Our recommendations are based on the findings from our analysis of demographic trends, the housing, retail, and office market situations, and the projected demand for new housing and commercial space, and the ability of the Downtown to accommodate new development. Today, successful redevelopment increasingly requires both public and private efforts. The public is unwilling to bear entirely the significant costs associated with providing for new development and likewise are private developers unable to undertake these projects on their own while still maintaining an appropriate profit margin. However, there are many cases where strong joint ventures have resulted in redevelopment projects that have been very successful. Demand Summary Based on our demographic and market analysis and our assessment of the Downtown Redevelopment Area, we have calculated the amount of additional housing, office, and retail that can be supported in the Redevelopment Area over the next ten years (shown in the following table). It needs to be noted, however, that this level of development may be constrained by the ability to make sites available to accommodate new development. Housing. Our analysis found that demand should be sufficient over the next ten years to support 95 to 115 for-sale multifamily units, 300 to 360 general-occupancy rental units, and 60 to 70 market rate senior housing units. While demand should be sufficient to support 300 to 360 general-occupancy rental units, it is most likely that development will be constrained by the availability of sites. We believe that it is reasonable to fit up to 200 rental units into the redevelopment area, but potentially fewer, depending on how many for-sale units are developed. Because of limited land supply, townhomes, which are a relatively low-density use, would not be appropriate in the Core CDB, but may be on the fringes of the Redevelopment Area. Multi-story elevator buildings are the appropriate form of rental and for-sale housing in the Downtown. To be successful, however, a for-sale building(such as a multi-story condominium or senior cooperative project)would have to be located on the Mississippi River. Buyers of housing are more concerned with purchasing in a"high-amenity"location, which will help to maintain their home value. 4110 CONCLUSIONS AND RECOMMENDATIONS • Demand Summary Downtown Elk River Redevelopment Area 2000 to 2010 Housing For-Sale Multifamily 95-115 units Market Rate Apartments 300-360 units Market Rate Senior Housing 60-70 units Office 19,000-39,000 sq. ft. Retail* 14,000 sq. ft. *Demand through 2005 Source: Maxfield Research Inc. Office. Based on our analysis, we find that the Downtown can support an additional 39,000 to 59,000 square feet over the next ten years. The 20,000 square foot 1St National Financial Plaza is currently under construction, and will thus, satisfy a portion of this demand. Subtracting 1St National Financial Plaza, an additional 19,000 to 39,000 square feet of office can be supported Downtown through 2010. Most office tenants Downtown will be smaller businesses (2 to 10 employees needing 200 to • 2,000 square feet, on average) serving the local population and business base, such as attorneys, accountants, insurance agents, etc. However, we believe that over the next decade, Elk River will be able to compete with other northwestern Twin Cities suburbs for larger(up to 5,000 square feet)technology based firms. These high-tech firms, along with healthcare businesses, should create more demand for lager spaces over the next decade. Retail. Our calculations show that the Downtown can support up to 14,000 square feet of additional retail through 2005. This is also about the maximum amount of additional space that could be developed in the Core CDB, which is the portion of the Downtown Redevelopment Area that is most suitable for additional retail. We believe that the Northern Area is more suited for service industries than retail,because of limited access and visibility. New retail stores will predominantly offer specialty goods and be able to market their unique Downtown location as an experience that can't be found at shopping centers. Also, new housing located Downtown will increase demand for neighborhood goods and services. Findings and Recommended Redevelopment Strategies Based on the market analysis, our assessment of the Downtown, and interviews with Downtown business owners and managers, property owners, and others familiar with or with a stake in the Downtown, we have identified redevelopment opportunities in each of the three Downtown areas: The Core CDB, Western Transition Area, and Northern Area(shown in the map on Page x). CONCLUSIONS AND RECOMMENDATIONS • Core CBD The Core CBD is the retail heart of the Downtown and is located directly on the Mississippi River. The strengths of the Core CBD are its location adjacent to the River, its convenient access and high visibility from Highway 10, and the existing inventory of turn-of-the-century buildings. While the Mississippi River and Highway 10 are strong assets, they also form a physical barrier to expanding the Downtown. This presents a significant weakness because the Core CBD is very small, making it difficult to create a critical mass of stores that would enable the Downtown to become a major draw, such as Downtown Stillwater, Minnesota. Combined with a lack of vacant parcels and the need to preserve most of the existing buildings, the Core CBD has fewer opportunities for large-scale redevelopment than the other two redevelopment areas. However, because of the existing character of the Core CBD and its location on the River, it has the greatest opportunity for a high-end development that would capitalize on these amenities. Despite the lack of space, we believe that the demand for 14,000 square feet of retail space over the next five years should be located in the Core CBD. Two areas that should be examined for development and/or redevelopment are the City parking lot on the east side of Jackson Street and the block along the south side of Main Street from the Highway 42 bridge up to and including S the vacant building at 641 Main Street(including Nadeau's, US Bank, and the vacant building at 641 Main Street). A map on page x shows the location of these two sites. These two sites present the best, and perhaps only, options for adding this space. While developing space along the east side of Jackson would be easier, because there are no acquisition, demolition, and/or relocation costs, the lost parking would have to be replaced, which presents a challenge. One potential option is creating a two-level parking garage behind the new stores on the existing Bank of Elk River parking lot. Redeveloping the block along the south side of Main Street presents its challenges because of the existing buildings. However, it also presents the greatest rewards. Being directly on the River is an amenity that would entice potential higher-end retail stores and offices to the location, who otherwise would not consider locating in Downtown. This site could support a mixed use development, with retail on the first level and office or housing located above. One of the Core CBD's greatest assets is the existing supply of older buildings,particularly the "Brick Block"(the west side of Jackson Avenue). Any new development in the Core CDB should be designed to fit-in and enhance the existing Downtown buildings character. Additionally, the City may want to consider a program for Core CBD building owners to provide low-interest loans/grants for façade and other building improvements. However, this program should be a part of an overall program that would provide design guidelines for streetscape improvements and a comprehensive vision for the visual appearance of the Downtown. • CONCLUSIONS AND RECOMMENDATIONS Retail in the Core CBD would be enhanced if a traffic generator were located Downtown. Traffic generators in many towns include such uses as government agencies, such as city hall, county administrative buildings, library, and post office. Downtown Elk River currently lacks all but the Post Office. We recommend that the City find a way to retain the Post Office in the Downtown, potentially by acquiring land to the north of the existing building. The proposed river walkway and fishing pier would also help draw people to the Downtown who would potentially patronize the businesses. Events, such as festivals and farmers market, should also be explored. Events do not substitute for daily traffic generators, but are important because they increase awareness to the Downtown. We understand that there is interest for a performing arts center from some Elk River residents. Such a center would be a great draw to the Downtown. However, because of the large amount of space required to support the center and its parking, it may be infeasible to locate this type of facility in the Downtown. The most likely location in the Downtown may be the Northern Area, near Jackson Avenue and 6th Street. A library would also be a good draw. However, the existing library at 4th Street and Proctor Avenue was expanded in 1995, and its space needs have been met for the foreseeable future. Still, Downtown businesses could benefit from programs and activities offered at the library,which is only a short distance from the Core CBD. In addition, the impact of library programs and activities on the Downtown businesses would be maximized if they were held in partnership or sponsored with the Downtown businesses. Types of retail that would be appropriate for the Downtown are listed in Table 3, along with the typical square footage for each type of store. Some of the uses, such as drugstore/pharmacy and • hair salon are already located in the Downtown. The store types in Table 3 that are bolded are those with the greatest potential for a downtown location(some of the retail types, such as drug store and tanning salon, are good types to have Downtown, but because they are already existing, the potential for addition such stores is limited). A restaurant,particularly fine dining or a family restaurant, was mentioned repeatedly during interviews as being needed in the Elk River area. We believe that an upscale restaurant(either a "cloth napkin"restaurant or a family restaurant)would be a great traffic generator to the Core CDB and would subsequently benefit other retail stores in the Core CDB. Our demand calculation was for 14,000 additional square feet in the Downtown over the next five year. This would probably accommodate fewer than 10 new stores. The example below lists a potential mix of seven new tenants to the Core CDB. The seven stores, including a larger restaurant, combine for 18,700 square feet. Restaurant with liquor 6,000 Arts & Crafts 2,200 Hobby 2,500 Sporting Goods 3,000 Sandwich Shop 1,200 Books 2,100 Decorative accessories 1,700 ID Total 18,700 CONCLUSIONS AND RECOMMENDATIONS • Although office or housing could be developed in conjunction with retail on a Core CDB redevelopment site, we believe that the Core CDB should be oriented primarily to retail. Because of poorer access and visibility, the Northern Area(north of the railroad) is not as well suited for retail as the Core CDB, and should be focused more toward service businesses. We believe that Redwing Shoes, the Bread of Life Christ Bookstore, and Elk River Floral would be good retail tenants in the Core CDB. Besides specific redevelopment projects in the Core CDB, the Downtown should capitalize on its history and promote this as a connection to the community. Downtown should be promoted as a community gathering location(i.e. special community events and functions). Gateways into the Core CDB also need to be strengthened(i.e. stronger signage) to create a greater awareness among Elk River residents (and Highway 10 traffic)that the Downtown exists. TABLE 3 RETAIL USES BY TYPICAL SQUARE FOOTAGES INDEPENDENT RETAILERS April 2000 Typical Typical Retail Uses: Sq.Ft. Retail Uses: Sq.Ft. • Ne ghborlood/Cons enieri � ., Destination-Oriented Beauty 1,250 Apparel: Family wear 5,000 Drugstore Pharmacy 8,450 * Art gallery 1,360 Floral 1,200 Arts&Crafts 2,190 Hardware 8,530 Computer/Software 1,230 Restaurant with liquor 3,000 Decorative accessories 1,670 Restaurant without liquor 2,500 Eyeglasses-optician 1,400 Sandwich Shop - 1,240 Robb 2,500 Travel agent 1,000 Home accessories 2,795 Unisex hair 1,300 Home improvement 1,200 Coffee/Tea 1,260 Photocopy/fast print 1,400 Donut/Muffin shop 1,125 Radio,Video, Stereo 2,080 Film Processing 1,000 Sporting Goods 3,090 Liquor/wine 2,440 * Books 2,080 Nail Salon 1,050 Dollar Store/Novelties 3,530 Deli/Specialty food 1,930 Telephone Store/Telecom 1,050 Tanning Salon 1,265 Sotes in bold indicate those most appropriate for the Downtown Redevelopment Area *Median Gross Leaseable Area(GLA)for national chain Sources: Urban Land Institute: Dollars and Cents of Shopping Centers: 2000 Maxfield Research Inc. • CONCLUSIONS AND RECOMMENDATIONS • Northern Area The Northern Area has a diverse mix of land uses, including industrial,public, office, service, retail, and housing. While this area also lacks vacant parcels, there are more marginal properties that are potential candidates for redevelopment. We believe that the Northern Area, east of Jackson Avenue, is better suited for redevelopment to office and services than to retail. New housing in the Northern Area would not impact retail in the Core CBD as greatly as housing in the Core CDB or Western Transition Area because Highway 10 and the railroad act as a barrier(psychological, if not physical)to pedestrian traffic to and from the Core CBD. Persons living in the Northern Area would more likely be oriented to the shopping centers along the west side of Highway 169, however, they may often-times come Downtown. We also do not believe that the Northern Area is suited for additional retail, since the area does not have great access and visibility from Highway 10 and most potential retailers would likely shy away from this area, in favor of better visible shopping space in the Core CDB or along Highway 169. Besides the focus on redeveloping this area with office space, institutional uses, and housing, we believe that a high priority of the City should be retaining the existing Post Office on Irving Avenue and 3rd Street. We believe that the three parcels to the north of the Post Office, currently developed with older single-family homes,present themselves as expansion options to the Post Office. We believe that most of the homes in the Northern Area are of marginal quality. Combined with the fact that many are located adjacent to or in between commercial uses, makes them candidates for redevelopment. Three sites that represent the best options for redevelopment to small offices are 1) the north side of 4th Street between the existing office building on Jackson Avenue and Irvine Avenue, 2) the south side of 4th Street between the existing office building on Jackson Avenue and Irvine Avenue, and 3) the west side of Gates Avenue, between Main Street and 3rd Avenue. These sites could provide office buildings with between 5,000 and 10,000 square feet, or similar in size to the newer office buildings developed along Main Street between Downtown and Highway 169. An advantage the Northern Area has over the Core CDB is easier access to the commercial areas of Highway 169,since motorists do not have to cross Highway 10, which can be difficult during peak traffic hours. Other potential redevelopment parcels are those along the west side of Gates Avenue between 3rd and 4th Streets. Besides offices, these parcels (containing five single-family homes) could be redeveloped with housing. General-occupancy rental and senior housing would be the most appropriate types for the site. Multifamily ownership housing typically requires a higher- amenity site. The Northern Area west of Jackson Avenue presents greater redevelopment challenges because of the existing industrial uses. Since most non-industrial uses prefer not to be located adjacent to industrial properties, much of the entire area would need to be redeveloped at once if the area • were to be redeveloped with other uses. While industrial uses are not ideally located adjacent to CONCLUSIONS AND RECOMMENDATIONS the Downtown, the benefits of redeveloping this area would likely not justify the high costs of acquisition, relocation, demolition, and potential land clean-up costs. We believe that redevelopment of this area is a long-term planning project that should be a lower priority than the remaining Downtown Area, but still a consideration for the future. Much of the future of the Northern Area west of Jackson Avenue depends on the long-term commitment of Elk River Machine, which occupies over seven acres and dominates the area. If Elk River Machine's long-term plans are to remain on the site, then the most appropriate uses of the surrounding parcels are light industrial. Light industrial uses can be a benefit to the Downtown because of the employee base that the existing businesses would bring to the Downtown area. If the area remains industrial, certain parcels would be considered for redevelopment; either because they are under utilized or out-of-place. The Eagles Club and the building between the Eagles Club and Arrow Lumber(former NAPA building)combined are a potential redevelopment site for light industry. Also, the County Highway building is a use that does not greatly benefit from its location near Downtown nor does it greatly benefit the surrounding businesses. Western Transition Area The Western Transition Area is a mix of single-family housing(to the west) and offices and limited retail (to the east). In addition, many of the single-family homes along Main Street have • been converted to office uses. We believe that this area has a high potential for redevelopment to multifamily housing and some additional offices. Unlike the Northern Area, the Western Transition Area has easy pedestrian access to the Core CBD. Thus, residents of new housing would more likely frequent the Downtown businesses. While employees of offices in this area also would have easy pedestrian access to the Core CBD, we believe that offices would be better located in the Northern Area because of its current business mix and easier access to both the Core CBD and Highway 169 businesses. Thus, we believe that the focus of the Western Transition Area should be multifamily housing. A portion of the Western Transition Area has River frontage, which is a highly desirable amenity to potential residents of multifamily housing. The parcels that present the greatest opportunity to increase housing-density are those along Lookout place (five single-family homes on the north) and Angel Street(two single-family homes to the west, the 24-unit Riverview apartment and three single-family homes to the east). While redevelopment would require the removal of 34 housing units, a total of 5.2 acres would become available for new housing construction. At a density of 25 units per acre, 130 additional housing units could be added. Morton Street, south of Main Street, is lined on both sides with single-family homes that are in good condition. We would not recommend redeveloping the east side of Morton Street with new multifamily housing because of the impact it would have on the single-family homes on the west side of the Street (outside of the Redevelopment Area). • CONCLUSIONS AND RECOMMENDATIONS 1111 Except for the Cretex office building and the Hitching Post condominium, Main Street between Morton and Lowell Avenues is lined with single-family homes. Many have been converted to office uses. These home offices provide a nice transition from the single-family neighborhood to the west and the Core CBD, thus we recommend maintaining these homes. In addition, the Northern Area provides a better location for offices and should receive first priority for redevelopment. Downtown Primary Redevelopment Sites The map on the following page shows the location of the sites we identified above as having the greatest potential for redevelopment within the Downtown Redevelopment Area. While these sites do not represent the only potential sites for redevelopment, they are the sites we have identified that would have the greatest positive impact on the Downtown. As such, redeveloping these properties should receive first priority. Besides the primary redevelopment sites,three other properties have land use and/or appearance issues that should be addressed in the long-term, as opportunities present themselves. These three properties are located between Highway 10 and the railroad. They are Boelter's Towing, Martin Plaza, and Hunt's Feed and Garden Center. Most people interviewed expressed a wish to preserve Hunt's Feed and Garden Center because of its history in Elk River. Martin Plaza and Boelter's Towing, however, somewhat detract from the positive visual image of the Downtown. Because they are sandwiched on narrow lots between Highway 10 and the railroad, redevelopment potential with other land uses is limited. We suggest that if the opportunity • presents itself in the future, these businesses should be relocated and their present sites razed and landscaped. CONCLUSIONS AND RECOMMENDATIONS • Redevelopment Strategies The following are strategies important to any redevelopment efforts undertaken in Downtown Elk River. These strategies are key, in fact, to Downtowns everywhere. • Create a sense of place. If any one criteria supports redevelopment efforts, it is this one. People will enthusiastically support an environment that attracts them. Many of the "places" that people mention over and over again as desirable all possess several important attributes: intimacy of scale, diversity of uses, attractive street environment, interesting architecture, individuality(strong visual merchandising and display). • Create new neighborhoods. Housing will support and enhance the retail and commercial base within the Downtown. Efforts to create housing will have the strongest impact on sustaining Downtown's viability over the long-term. • Implement a coordinating entity. It is important to have a Downtown Advisory Committee or Board who oversees the revitalization process. It is not a substitute for municipal planning or economic development efforts, but should be responsible for holding the community to the overall vision. • • Use an incremental versus catalytic approach. A Downtown plan that embraces an incremental strategy will prove most effective. An incremental strategy puts forth a number of action plans, meant to be achieved over a period of time, to accomplish a number of goals, rather than relying on a single catalytic event or project to revitalize the Downtown. An incremental strategy will take longer, but the payoff will be greater. However, a key first project can be an important component in an incremental approach to create initial momentum that will then generate additional investment in the Downtown over the long- term. Marketing Strategies Introduction In order for Downtown Elk River to present itself as a strong and active economic entity, there are several elements that must coalesce to create a more dynamic environment that will eventually result in an overall strengthening of Downtown for individual businesses and for the community. In terms of a marketing program to strengthen downtown, three elements have been identified as important. They are: organization, image and people. Today, the consumer typically has a number of other shopping options, Downtown is only one choice among others. People do not come to Downtown to shop automatically as they used to do. Downtown is not longer the only choice and Downtown retailers often find they must make • a greater effort to attract and court the consumer. However, Downtown retailers can compete CONCLUSIONS AND RECOMMENDATIONS • with the general merchandise retailer and the shopping centers by focusing on the three elements listed above, organization, image and people. Organization One of the key components of the success of shopping centers is organization. Downtown Elk River can never be and should not try to be a shopping center. Nevertheless,Downtown can learn a great deal about modern retailing methods and shopper behavior from this merchandising phenomenon. Essential among a shopping center's features is unified management and the resulting high level of organization and integration of its retailing operations. In the shopping center, each tenant's lease contains binding agreements requiring the merchants to follow explicit design standards in the finish of interior space and signage, to conform to the established hours of operation for the center(including extended weekday and weekend hours), to participate in the center's joint advertising campaigns and major promotions, to join and pay dues to the shopping center's merchants association and to pay for regular maintenance. Imposed regulations such as these go against the grain of the traditionally independent downtown merchant. But downtown merchants can improve their ability to compete with newer shopping alternatives by emulating the highly integrated organizational style of the shopping center. This is a formidable task for the downtown because it must be accomplished on a voluntary basis, but the incentives are substantial. Pooling resources for better and more widely 410 distributed advertising is a necessary element in revitalizing the downtown economy. Volume of parking is not necessarily a shopping center's greatest asset. Recent studies indicate that shopping centers have largely over-built for their parking needs and how well a shopping center operates internally is more a measure of its success. Image Image refers to the driving aim of modern product marketing: product recognition. Hundreds of millions of dollars annually are pumped in to the daily barrage of advertising that attempts to implant the identity of various products in the consumer's mind. The marketing of the a downtown can take the same approach in a lower key and capitalize on a host of built-in advantages. Every downtown is different, and each one's distinctive package is its older commercial structures and their environment. Individual business operations must also establish their own identities to draw the customers into their place of business once they have been drawn downtown. For Elk River, the challenge is to get them to go Downtown. People • People and the way they react to the downtown as customers are one of the few constants in a downtown. Business people in Downtown Elk River need to be constantly aware that all of their CONCLUSIONS AND RECOMMENDATIONS • visible actions are messages to this attentive customer, from building maintenance (or lack of it) to window displays to customer service. Every action is a gesture to the consumer. Inactivity or inattentiveness is interpreted as neglect and will be reciprocated by consumers. Downtown revitalization depends in large measure on each merchant's taking every opportunity to make positive symbolic gestures to the consuming public. Recommendations for Downtown Marketing Program Recognizing that the three elements listed above are key, the following recommendations reflect areas within those elements on which to focus. Create an active downtown business association Downtown is not just retailers. As shown on Table 2, downtown includes a variety of businesses. An active downtown business association should include representatives from all types of businesses, not just retail merchants. A retail subcommittee could be formed as well to assist with retailers special concerns regarding merchandising, special advertising and promotions. The business association should be involved in all of the activities organized for the Downtown. Professional-service businesses should also realize that they, too, have a stake in attracting • customers to the Downtown. The Downtown business association can set the tone for the focus of the Downtown to enhance the environment for all businesses. Develop An Image or Focus for Downtown Downtown must be implanted in the consumer's mind as a shopping place, much like a traditional shopping center. What is fundamentally unique about Downtown is its distinctive character(location, buildings) and its history. Downtown must capitalize on its capacity to offer consumers a different shopping environment which is much more interesting than the traditional shopping center or general merchandise chain. Downtown can provide for their buying needs in an interesting environment and can offer them customer service and value. In fact, value is created not only on the basis of price. Value is created in many ways and many retailers have proven that price is not the only issue. An awareness of Downtown as a cohesive shopping district and what Downtown has to offer must be created in consumers' minds. An ongoing advertising campaign that consistently promotes downtown as a center for shopping will eventually take hold. Promoting downtown businesses through advertising that identifies what businesses are located in Downtown will also assist individual merchants and businesses in enhancing customer awareness of their operation. Promoting Downtown to non-locals through advertising at the local hotels will also serve to 411 attract tourists and travelers to businesses Downtown for shopping. CONCLUSIONS AND RECOMMENDATIONS • Establish Downtown as the Community's Center of Activity Benefits can be derived to Downtown businesses from focusing community activities in the Downtown area. Holding events in the Downtown as a way of increasing business activity and enhancing Downtown's image as the center of community life. Creating a plaza between the Cinema Professional Plaza and Dicks Main Tap, along with a fishing pier and river walk, would provide an excellent location to hold events and other festivals. The plaza, fishing pier, and river walk would also help tie the Downtown businesses to the Mississippi River, which is one of the Downtowns greatest assets, but is currently largely under utilized. Promotions must be well-organized. It is better to hold a few, well-planned promotions for the downtown, than many promotions that do not have the potential for a significant impact. In between major promotions, downtown can have smaller ongoing advertising and individual store promotions to maintain a high level of customer awareness. Make Downtown An Attractive Place to Do Business During the interviews with Downtown businesses, several interviewees suggested there is a lack • of building maintenance. The physical appearance of buildings, along with Downtown's public spaces and streetscape, are important to attract customers to the Downtown. In a shopping center, common area spaces must be well-maintained. The same is true of the streetscape in the Downtown. It serves as an enhancement of the individual store environment and its attractiveness or unattractiveness can serve to attract or detract customers from coming to Downtown. The same is true of building exteriors. Building exteriors must present an attractive image to customers. Maintenance of buildings and upgrading of exteriors must be an ongoing practice. In many downtowns however, the economic vitality has suffered with the result that occupancy may have dropped, revenues are sluggish and building owners may be obtaining rents that will not justify substantial reinvestment in physical structures. One effort of a downtown revitalization plan can be to provide incentives for downtown building owners to maintain, renovate and/or upgrade their buildings. Low-interest loans, grants and other programs can provide small owners with the ability to reinvest in their buildings to enhance the visual attractiveness of the shopping/business environment. These recommendations represent only a few of the many activities that are involved in an ongoing downtown marketing program. However, these activities can be the foundation on which to build to improve the economic vitality of the Downtown core. • • Primary Redevelopment Sites Elk Rivet• Downtown Redevelopment Area t (-)t „ .17— _ } r - .,,,,,,,,..;,,,,/,,,,, :, Y�.,..„,t.... . . „._,' �"itit Jt 1`�51 dy i ,,,,,, 7` -r,--t�3 eF;>/s� ,t ,.<,.... , �! 1 , 1 * ,er i' Cr!1t!t ( g ii , ~ '''';'-` `‘,.<1 0 � r it 3 � • , ___ , ______, r t'S`a�T`TC 11 !1,_ir r F'(-7'5t 1 T uI�& It .1 _i �k$'�_ rd bt� �! ) ---L,_-_---_,_,--._____..,_,_,. 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C -teen Company CBIRRAL BUSMW DIBTWT BULDWQ CONDRION B (F W NG ENGNEERS Downtown Elk River Planning & Improvement History 1970-2000 1970 Elk River Central Business District Report (Mason, Wehrman, Knight & Chapman Inc., Mpls) is developed and provides general guidelines for physical appearance, movement patterns, and development potentials of the CBD for years 1970-1990. • Unify existing and new buildings for distinct unique character • Remove traffic conflicts (eg overpass between North & South Hwy 10) • Provide adequate parking (eg parking ramp) • Utilize natural setting of Mississippi River (eg restaurant) 1982 Elk River Downtown Redevelopment Plan (Zack Johnson & Associates Inc) establishes a long-range guide for evaluating physical improvements, developing zoning policies, establish priorities in capital improvements and identifying redevelopment opportunities. • Rehab buildings that City finds architecturally & historically significant (eg establish design standards) • Concentrate retail/office south of Hwy 10 • Concentrate service business north of Hwy 10 • Concentrate high-density residential west of Lowell • Priority Redevelopment Areas: - Town Square — for retail/office space and municipal parking - King & Main — for office space - Star News buildings to cinema building — for 2 -story retail/office 1986 The City and Chamber work with the Governor's Design Team to develop an overall plan for the CBD. The river is stressed as an amenity to focus on. • Promote downtown as "unique historic river town" • Link with open space & trail system • Utilize river with restaurant/hotel/community center • Consider parking ramp for heavy traffic areas 1988 The Central Business District Redevelopment Project results in a theme for CDB fixtures, trees, and sidewalks in the downtown area. The project is paid for via assessments and City, HRA, and Utility funds. 1988 Elk River Riverwalk Project (Brauer & Associates Ltd, Eden Prairie) creates riverwalk design and financial feasibility for new building proposed for Hardware store site. • Create more retail/service traffic via restaurant • Generate interest in Mississippi River via boardwalk trail • Develop design standards Downtown Elk River Improvement History 1970-2000 Page 2 of, 117 1989 Following the purchase of the Hardware store site, the EDA improves the site for use as public green space. In 2000, the EDA turns the property over the City for parkland. 1990 Riprap is installed along the riverbank in the CBD for erosion control in 1990 and again in 1995. The project is funded by a grant from the Sherburne County Soil and Water Conservation District and matched by the City and HRA. 1990 The EDA and Dr. Tony Jarmoluk redevelop the NE corner of Main St. and Lowell Ave as a new dental clinic. 1992 The city demolishes the old creamery building and then assists The chamber in 1994 in relocating their building to the site. 1992 Parking lot at Jackson Square is improved by the HRA. In 1993 the city purchases the BNRR parking lots for CBD patrons and the HRA improves one of the lots in 1994. In 1995, improvements are made to the parking lot behind Kemper Drug. 1994 A Riverwalk Corridor Committee is formed to spearhead riverwalk effort. A Riverwalk Plan (Hoisington-Koegler Group Inc.) is developed for the CBD, and is envisioned for the beginning of a trail system along the river. • Interpretive walk/bike trail depicting early transportation history of region 1996 The city applies for an ISTEA grant to fund the Riverwalk Project, but the application is rejected. Phasing of the project is considered but no action is taken. 1997 The HRA acquires the King and Main site and removes the existing structures. The proposal to immediately redevelop the site with a 12,000 commercial building falls though. A number of other concepts for the site are later proposed, but none materialize. 1998 The HRA hires Theresa Washburn to lay the foundation for developing a downtown plan master plan. Ms. Washburn submits the Central Business District Action Plan in January of 1999. Implementation of the Action Plan begins but participation levels from citizens drop. • Public Improvement Goals: plan to utilize river, art center, pedestrian pathway, beautification plan • Private Improvement Goals: sign ordinance, fascade improvements to highlight historic character, interior standards, new construction to compliment historic character • Activities & Events Goals: Heritage Festival, develop winter festival, develop mural event • Business Activity Goal: complete market analysis 1999 The EDA, Council, and HRA review the Strategic Plan for Economic Development and lower downtown's priority. Downtown Elk River Improvement History 1970-2000 Page 3 of 3 2000 King and Main is sold to the First National Bank of Elk River, which plans to construct an office building on the site. Downtown is listed as a top priority at Operation ER's October meeting. 2000 HRA authorizes staff to draft Downtown Redevelopment Plan including inventory of properties, conditions, vision and implementation plan. Consistent Themes throughout last 30 -years: • Utilize the Mississippi River • Capitalize on unique historic character • Safer pedestrian & vehicle movement s:\cda\hra\duwntown\p1an1mt.doc