6. EDSR 10-13-2008City of
Elk. .~ REQUEST FOR ACTION
River
To
Economic Develo ment Authori Item Number
6.
Agenda Section Meeting Date Prepared by
October 13, 2008 Jeff Gongoll, Community
Develo ment Director
Item Description Reviewed by
Discuss 1715[ Avenue Focused Area Study
Action Requested
Engage the Cuningham Group to perform and complete the work related to the Request For Proposals
at a fee of $33,500, focused on the Gateway Business Park and properties adjacent to and along 17151
Avenue; and, confirm the overall process with the involvement from Community Development staff to
provide compatible and reproducible land use patterns and standards to the overall study area.
Background/Discussion
The EDA and City Council has indicated its desire to conduct a study that establishes a strategy to
complement and maximize the benefits of the Northstar Commuter Rail operation on 1715` Avenue and
Twin Lakes Road. At the September 8, 2008, meeting the EDA established the study boundaries and
approved the proposed Scope of Work to perform the FAST. The FAST is intended to provide short
and long range guidelines for new development, including retail, professional and light industrial, and
possible redevelopment opportunities within the boundaries of the study. The FAST will also help
establish expectations for land uses and design guidelines in and around the Northstar Rail station.
Following additional review, the Community Development staff suggests that the study area be broken
into two parts: Gateway Business Park and the immediate surrounding developable parcels, and the
balance of the study area. Please refer to the attached aerial layout.
This two part process is suggested in order to address the strong concerns raised by the EDA in terms of
study length (e.g., time), as well as to allow for the level of detail necessary to establish reproducible
characteristics. While recognizing that this is a departure from earlier EDA direction, staff feels this is
beneficial to accomplish the EDA's long term goals for the area. This direction will focus resources on
Gateway and the adjacent parcels since it is a land use "anchor" for the area and will serve as the catalyst
for the neighborhood. Additionally, there are two distinctive development "problems" to be addressed.
Gateway is generally a greenfield development opportunity, while properties north of 173 will be
redevelopment possibilities. To complete one study to address both divergent issues would be
inconsistent with the EDA concerns of time and money. Consequently, staff developed the attached
Request For Proposals and issued it to four planning consulting firms that have developed a reputation
working with communities to prepare plans consistent with what staff believes would address the EDA's
short and long term goals.
The second part of the process involves the development of complimentary plans, after the anchor
character has been established. The consultant's work and eventual conclusions will help set the stage
and provide further direction to plan for land uses appropriate to the remaining study area. Although
there are two parts to the study, staff feels proper attention to the redevelopment aspect can be attained
after the EDA, Planning Commission and Council have agreed on a vision for Gateway Business Park.
Proposal Responses
The attached RFP was sent to four planning/land use consulting firms:
- Landform Engineering Co.
- LHB Corp.
- Cuningham Group
- Hay Dobbs
Three proposals were received in response to the RFP. They are briefly summarized below:
FIRM FEE ADD/OPTIONS MEETINGS TIMELINE
Landform $28,970
excl. ex enses $15,140
3 O tional Tasks EDA/Staff/stakeholders/
develo ers. October -February
LHB $32,600 $12,166 EDA/Planning October -January
Stage 1 Stage 2 Comte./City Council.
Ad'acent land owners
Cuningham $33,500 - - - EDA/City Council/ October -January
incl. expenses staff/developers/key
stakeholders.
All three firms responded well to the RFP and were relatively close in their pricing and suggested
timeframe. Each has performed various planning and land use studies within the metro area and have
experience in transit oriented planning.
The Cuningham Group proposal stood out due to several factors:
- their "place-based" approach that would focus on the unique aspects of the site and "consider the
area as place rather than just a collection of `captured' pads and sites."
- suggestion to offer a "solution that thrives on connecting sites and people and not disconnected
patterns."
- provide an opportunity to create an area "that responds to and exhibits commitment to principles
of sustainability and green development."
- specific and recent experience in performing and completing a transit oriented development study
for the City of Coon Rapids and their Northstar (Riverdale) Commuter Rail station.
- submit an economic component that reflects market conditions and financial feasibility related to
commercial, retail and transit uses.
Recommendation
Engage the Cuningham Group to perform and complete the work related to the Request For Proposals
at a fee of $33,500, focused on the Gateway Business Park and properties adjacent to and along 1715C
Avenue; and, confirm the overall process with the involvement from Community Development staff to
provide compatible and reproducible land use patterns and standards to the overall study area.
Financial Imuact
The study will be funded through the Professional Services category in the 2008 & 2009 EDA budget.
Attachments
Request For Proposals
Executive Summaries of each proposal (full proposals available upon request)
Action Motion by Second by Vote
Follow Up
ver
13065 Orono Parkway
Elk River, MN 55330
City of Elk River
Request for Proposals
171st Focused Area Study~F S'I~
Project Description
The Elk River Economic Development Authority (EDA) and City Council has indicated its
desire to conduct a study that establishes a strategy to complement and maximize the use
and development of certain properties that lie along the 171x` Avenue corridor, with specific
focus on the City property known as Gateway Business Park. The Gateway property will
play a significant role in any future development in this area.
Additionally, the immediate adjacent properties can be important contributors as this area
develops. The FAST will provide short and long range guidelines for new development
which could include retail, professional and light industrial, and possible redevelopment
opportunities within the boundaries of the study. The FAST will also help establish
expectations for land uses and design guidelines in the Business Park as well as in and
around the Northstar Commuter Rail station.
Scope of Work
• The study focus area is along 1715` Avenue, between Hwy. 10 and the BNSF railroad
tracks, south to 165` Avenue -highlighted by Gateway Business Park (in blue
outline on attached aerial photo).
• Determine development and redevelopment potential based on opportunities and
constraints identified by land use scenarios.
- Mixed use projects.
- Transit complementing uses.
• Gateway Business Park:
- Determine highest and best use.
- Develop design standards.
- Preparation of development concepts.
- Contact adjacent property owners to obtain input and expectations of the area's
development.
- Develop list of amenities to capture, maximize and market the unique attributes of
the site, its location within Energy City, and its link to the new Northstar Corridor
Transit station.
• Estimate timing of development based on market conditions.
• Complete review with EDA, Planning Commission and City Council.
Desired Outcomes
This study involves a key area of the City, specifically Gateway Business Park, and is viewed
as the next area for significant economic development opportunities. Therefore, the study
will need to consider and answer these questions:
- what type of land use is appropriate?
- what are we marketing?
- who do we want to market to?
Additionally, the study should provide the City with the detail, parameters, issues and
development concepts to be able to focus on the appropriate market segment{s) for eventual
development of the property.
Submittals and Requested Information
The following supporting information is requested in response to this project:
- description, qualifications and experience of the personnel working on the study.
- project schedule.
- project cost.
- suggested deliverables.
- supplemental information in support of the study.
Contacts
City of Elk River:
Jeff Gongoll
Community Development Director
763-635-1031
jgongoll ~ci.elk-river.mn.us
Attachment:
Aerial view of study area
Proposal to
CITY OF ELK RIVER
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fr)
~~
October 6, 2008
~ 7~ ST AVENUE FOCUSED AREA STUDY
1
~.
Project We've had the opportunity to meet with city staff to review the city's preliminary
goals and the outcomes anticipated from this effort. With staff, we've visited the
U
d
d study area to gain a sense of the potential of the site and the changes that might
erstan
n
ing come with the advent of commuter rail service. Based on those interactions, we
understand that:
• The Ciry of Elk River desires to conduct a focused area study of undeveloped
lands and existing developed properties along and near 171st Avenue between
TH 10 and the BNSF railroad and extending to the south to 165th Avenue,
with this area being viewed by the city as an area with significant economic
opportunity;
• The result of this effort should be an innovative approach to the development of
city-owned land that constitutes the Gateway Business Park, using sustainable
approaches to development and energy use in the buildings that will ultimately
occupy the land;
• Transportation infrastructure, including TH 10 and the Northstar commuter
rail line, make the parcel and surrounding areas potentially more attractive for
certain kinds of development;
• Development types that might be considered for the Gateway Business Park
include retail, professional office, and light industrial uses;
• The Gateway Business Park could well set the tone for the kinds of development
that might be envisioned for immediately adjacent and surrounding properties
as redevelopment occurs;
• As use and sustainability patterns are explored, a similar level of consideration
should be directed to guidelines that support those patterns-for the Gateway
Business Park and for surrounding areas (including areas around the Northstar
commuter rail station);
• While an initial development pattern might be considered, a longer term
evolution of lands within the study area might also be explored to allow the
area to develop with patterns that would ultimately be viewed as highest and
best use;
• The process of studying alternatives will be focused on interactions with staff
as patterns are explored and a preferred development direction is set, yet some
degree of engagement with adjacent landowners (and possibly a limited number
of key stakeholders) would be advantageous in building an understanding of
local concerns and engendering a broader view of the long-term potential of
the site;
• This process should result in a development strategy that the city can use to
initiate forward-looking, sustainably-oriented development in the Gateway
Business Park, with key components of that strategy including a definition of
development patterns, supporting infrastructure, relationship of development
with transit and transportation amenities available within and near the study
area, activity types and quantities, timing and phasing of development with
a focus on sequencing of development activities and some recognition of
I, the current vagaries of the market, design and sustainability guidelines, and
correlation of the development to the city's economic development goals related
to job creation, tax base, and other economic concerns.
Our proposal and work program are based on this understanding, but we will work
www.LHBcorp.com with the city to ensure that our efforts are best directed toward the city's goals.
Page 2
Work Plan LHB proposes to provide the City of Elk River with a holistic strategy for planning
and development of the Gateway Business Park site. Instead of imposing a land use
plan on the site and a set of rules on future developers, LHB will provide Elk River
with a set of tools that will attract development that fits with the city's philosophy
for the site. By engaging existing and potential stakeholders in order to assess
the potential of the area, it will be possible to imagine a cohesive development
plan that gains efficiencies by consolidating resources. Integrating sustainable
design principles into the long-term vision for the area will enable Elk River to
encourage development that is good for the community and environment today
and generations from now.
Stage 1: Development Scenazios
In order to provide Elk River with a clear picture of the opportunities present on
the site, there are several tasks that will certainly need to be completed. These
required elements form the basis for understanding the site and conditions that
will affect its development.
T_..1.
1. Assemble available base information for the site. Analyze resources such as
aerial photographs, parcel data, plat maps, surveys, wetland delineations, land
use and zoning maps, and previous studies. Review Northstar Commuter Rail
Station area plans and policies.
2. Perform akick-off meeting with representatives from the Ciry of Elk River.
The purpose of this meeting is to:
• confirm project intents, goals, and anticipated outcomes;
• review the project approach and work plan; and
• define a detailed project schedule.
3. Perform a site visit to assess physical conditions of the site and surrounding
areas.
4. Research existing models for progressive business park developments, focusing
especially on those with an emphasis on sustainable development and transit-
oriented design, in order to understand the challenges and unique strategies
employed by these developments.
5. Meet with adjacent land owners to obtain their input regarding local
development.
6. Prepaze a statement of goals for the development which summarizes the
guiding ideas and issues affecting the project. This document forms the basis
for the preparation of land use sketches and development principles.
7. Design three land use scenarios which reflect our understanding of the site's
development capacity, market opportunity, potential energy use, and unique
goals for sustainability. Develop a series of sustainability principles that will
help guide development and pose design guidelines that will further direct
development toward the city's goals.
8. Work with the City of Elk River to evaluate the scenarios and select a preferred
~, scenario for refinement; review the sustainabiliry principles and design
guidelines to ensure that they are compatible with city goals and policies.
9. Present the development scenarios to the EDA, city council, and planning
commission in a joint session.
wwwLHBeorp.ean 10. Refine the preferred scenarios to incorporate direction offered by the EDA,
city council, and planning commission and prepare a summary report.
Page 3
n _ 1. _. __,.41_,.
V
• Summary of assembled base data
• Summary of kick-off meeting
• Description of information gathered during site visit
• Brief overview of case studies of progressive business park developments
• Summary of meeting with adjacent land owners
• Statement of goals
• Drafts of three land use scenarios, preliminary sustainability principles, and
preliminary design guidelines.
• Summary report outlining findings and preferred development scenario,
sustainability principles, and design guidelines (one hard copy plus a compact
disk containing the report, full size pdf or other native format copies of all
illustrations, summaries of meetings and site visits, and drafts of land use
scenario options)
Stage 2: Development Strategies
There are several tasks which might help Elk River become better positioned to
market the project once a preferred direction for development is agreed upon.
These optional elements can be performed at the discretion of Elk River.
T G
11.KDevelop a timeline and phasing strategy for development by imagining a
20-year goal for the site and working backward through the necessary steps
to achieve that goal.
12. Create a checklist to assess the potential for projects on the site to achieve
LEED® certification.
13. Develop strategies for local or on-site energy production. Developing a
framework for providing sustainable energy to the site will significantly impact
the potential of the site.
14. Coordinate with a marketing specialist to create a brochure that can be used to
communicate the goals for the project to potential developers and tenants.
15. Present strategies for implementation based on the preferred scenario to the
EDA, city council, and planning commission.
T,_I_-~- -41 -
• Summary of timing and phasing strategy
• LEED assessment checklist
• Memorandum describing potential energy production strategies
• Graphics and other materials required by marketing specialist
The work described above is based on our current understanding of the project,
but we will modify the activities as required to more directly respond to the City
of Elk River's needs.
www.LHBcap.can
Page 4
Schedule
4,
~~
ies www.LHBcorp.com
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A schedule for performing the tasks described in the Work Plan has been developed
to demonstrate the general timing for the study. A final schedule will be developed
with city staff.
Month One Month Two Month Three Month Fora
Weeks
Task
N ~ M a vt ' ~ '; r` W O~ ~ ' ~ ~ ~ ~ ~ .~. ' `O
1 Assemble base information;
2 Kick-off meeting;
3 Site visit
4 Research existing models
for progressive business
parks
5 Meet with adjacent land
owners
6 Develop Statement of Goals
7 Design 3 land use scenarios,
sustainability principles,
and design guidelines
8 Evaluate scenarios and
select preferred scenario '
for refinement
9 Presern scenarios,
principles and guidelines in
a joint session
10 Refine preferred scenario
and prepare summary
report
11 Develop a timeline and
phasing strategy
I _
12 Create a LEED assessment , :k ~ z.I
checklist r
i
~~~ `
F:~ ~
~ ~-~
13 Develop sustainable energy ~ i
roduction strate ies
P g
"
C;
, t
t
.'3.H t ~~/v
([
'y~:. ~
14 Coordinate to create a 3
~
'
marketing brochure ^, ~' ~ ".I
15 Presern strategies in a joint ,~
?
session s ~';
Page S
Fees ~ estimate of fees has been prepared based on our proposed Work Plan.
A summary of the fees by task is as follows.
171st Focused Area Study
Estimate of Design Fees
6-Oct-08
Task Description Amount
Stage 1: Development Scenarios
1 Assemble available base information for the site. Analyze resources such as aerial photographs, parcel data, plat maps, $ g74
surveys, wetland delineations, land use and zoning maps, and previous studies. Review Northstar Commuter Rail Station
area plans and policies.
2 Perform akick-off meeting with representatives from the City of Elk River. $ 1,008
3 Perform a site visit to assess physical conditions of the site and surrounding areas. $ 1,008
4 Research existing models for progressive business park developments, focusing especially on those with an emphasis on $ 2,184
sustainable development and transit-oriented design, in order to understand the challenges and unique strategies
employed by these developments.
5 Meet with adjacent land owners to obtain their input regarding local development. $ 1,512
6 Prepare a statement of goals for the development which summarizes the guiding ideas and issues affecting the project. $ 726
This document forms the basis for the preparation of land use sketches and development principles.
7 Design three land use scenarios which reflect our understanding of the site's development capacity, market opportunity, $ 13,880
potential energy use, and unique goals for sustainability. Develop a series of sustainability principles that will help guide
development and pose design guidelines that will further direct development toward the city's goals.
8 Work with the City of Elk River to evaluate the scenarios and select a preferred scenario for refinement; review the $ 4,960
sustainability principles and design guidelines to ensure that they are compatible with city goals and policies.
9 Present the development scenarios to the EDA, city council, and planning commission in a joint session. $ 1,008
10 Refine the preferred scenarios to incorporate direction offered by the EDA, city council, and planning commission and $ 5,440
prepare a summary report.
Subtotal for Stage 1 Tasks $ 32,600
Stage 2: Development Strategies
11 Develop a timeline and phasing strategy for development by imagining a 20-year goal for the site and working backward $ 2,424
through the necessary steps to achieve that goal.
12 Create a checklist to assess the potential for projects on the site to achieve LEED certification. $ 2 ggg
13 Develop strategies for local or on-site energy production. Developing a framework for providing sustainable energy to the $ 4,032
site will significantly impact the potential of the site.
14 Coordinate with a marketing specialist to create a brochure that can be used to communicate the goals for the project to $ 1,804
potential developers and tenants.
15 Present strategies for implementaion based on the preferred scenario to the EDA, city council, and planning commission. $ 1,008
Subtotal for5tage2 Tasks $ 12,166
subtotal $ 44,766
expenses $ 1,200
M: ~08Proj~080506,DWG511A~(Elk River fee estimate 20080930.xIsJSheetl (2) total
Page 6
171't Focused Area Study
for the City of Elk River
Prepared for:
Jeff Gongoll, Community Development Director
City of Elk River
13065 Orono Parkway
Elk ~ Elk River, MN 55330
R.1Ve1' Phone:763-635-1031
Email: jgongollQci.elk-river.mn.us
Prepared by:
Kendra Lindahl, AICP
• s
Landform
L A N D F O R M 100 North 6th Street, 8000
k°ms„e`°"°~`" ~ .- . ~ Minneapolis, MN 55403
Phone: 612-252-9070
Email: klindahlQlandform.net
Landform", sensiblyGreens" and Site to Finishs"' are service marks of Landform Engineering Company.
October 6, 2008 ,
Task 1
.Preliminary existing conditions
analysis created for the Elk
River Focused Area Study to
organize project data into a
visual representation of the area
(see next page for larger study
graphic).
Our proposed work plan for this project is based on the scope of work you have
defined. Each task is outlined below with an estimated timeframe, anticipated
meetings and task deliverables. The page following this includes a larger study area
graphic of the Phase I Area. For clarity purposes-we-have divided this work into 4 .
major tasks and have included additional task options at the end of this work plan
(although some tasks will overlap):
Task 1) Study of Existing Conditions and Analysis of Opportunities and
Strengths, Establish Project Vision
Task 2) Develop Program and Land Use Scenarios for FAST
Task 3) Develop Master Plan Options for Phase I Area '
Task 4) Final Master Plan for Phase I Area
Study of Existing Conditions and Analysis of Opportunities and Strengths,
Establish Project Vision (est. 3 weeks)
Before visioning and design begins, we use our findings from the analysis to build the.
framework for creating well conceived plan options. By,~ holding a meeting with staff
and the Elk River Economic Development Authority (EDA) at the completion of the
site analysis, we will be able to define goals, objectives and to help create a vision
statement-that will articulate and guide the design towards a successful plan for the
future.
a) Conduct kick-off meeting with staff and EDA to establish work plan, set
project goals and objectives and to schedule critiques and meetings.
b) Gather and review past applicable plans and studies, recent
comprehensive plan materials, Northstar Commuter Rail planning
materials, social and physical property data (current and relevant historic
data), set up background drawings, etc.
c) Complete aphysical-visual survey (walk, photograph, map) and a
surrounding land use inventory.
d) Conduct interviews with surrounding property owners.
e) Prepare and lead presentation of analysis. to staff and establish the vision
for project.
Deliverables: Analysis Graphic (PDF format)
Interview Summary (PDF format)
5
L A. N G O R i'I _
- Work Plan
Study Area Graphic
6
L A N D F G R Nl
Task 2 Develop Program and Land Use Scenarios for FAST (est. 3 weeks)
~- Establishing the vision and is integral to the design process and your master plan
~° ~-- ~ '», r'-x~ ,. options. A well informed plan is created when a design team and project stakeholders
,~..~~~:;: ~n
;+~ ~ understand and set a vision'for the project. The main goal of this task will be to
•,~~ develop a program and Land Use Scenarios for the complete study area.
~,
~. _ ~._
This Land Use Plan and
recommendations for Highway
7 Corridor Study in Hutchinson,
MN, is relevant because of the_
similarity between Hutchinson's
antl Elk River's growth along
water.
..;
,~~
~'~
x, -. . rte.>.
~, t
Task 3
l yc~s~
{al' , ~ r
_ , ,~
~~1~+} '~
Plan options for Mississippi
Crossings Gateway Plan in
Champlin, MN, provided the
project stakeholders with various
development phasing ideas.
a) Prepare a FAST Vision Statement, documenting the process and guiding
principles.
b) Prepare a FAST Land Use Scenario for the complete study area.
c) Prepare for and lead presentation of the Land Use Scenario for the
complete study area with staff.
Deliverables: Vision Statement (PDF format)
Land Use Scenario (PDF format)
Develop Master Plan Options for Phase I Area (est. 6 weeks)
We see this task as a truly collaborative process that incorporates thoughts, ideas
and information gathered in previous tasks. Gathering input from staff, EDA and the
public will be integral to the success of the master plan concepts and, ultimately, the
final master plan for the Phase I area in Elk River. We will explore up to 4 Master Plarr
Options and create conceptual Design Standards* for the study area. These Options
and Standards will be presented at two critiques: one with a panel of developers and
brokers and one with staff and EDA. The main goal of these critiques will be to select
a preferred master plan option to further refine and document as the final master
plan.
L A
a) Complete Master Plan Options for the Phase I area (up to 4).
b) Complete conceptual Design Standards for the Phase I area.
c) Prepare for and lead critique of Options and Standards for a panel of
developers/brokers.
d) Prepare for and lead critique of Options and Standards for staff and EDA
(with comments from developers).
Deliverables: Master Plan Options for review (PDF format)
Design Standards (PDF format)
N D F G R M
7
*Design Standards are written and graphical design direction by which
future development can abide. Standards are used as loose design
framework so that area ~tision and style is appropriate to or fitting
in an area. Design Guidelines are written rules (text and graphics)
by which future development should abide and is a more stringent
version of Design Standards. Both of these documents are visual
overviews outlining and illustrating design framework and direction
to which you"r City is able to refer throughout the future phasing,
development and construction of a final master plan.
Task 4 Final Master Plan for Phase I Area (est. 4 weeds)
The final Master'Plan is rooted in a community-based approach to the design process.
Using all previously gathered information and the selection of a preferred Master Plan
Option, we will analyze the feedback received in previous critiques and create a draft
and final Master Plan, final Design Standards and final Master Plan Document for the
Phase I Area.
a) Prepare final drafts of the preferred Master Plan Options (within the
context of the Land Use Scenario) and Design Standards for the Phase I
area (up to 2).
b) Prepare for and lead presentation of the draft Master Plan to staff and
1 EDA.
c) Revise Master Plan Document (includes Master Plan for Phase 1 Area,
Land Use Scenario and Design Standards for the Phase l area).
d) Prepare for and lead presentation of the final Master Plan to staff and
EDA.
Deliverables: Draft, Preferred Options and Final Master Plan
Design Standards
Master Plan Document**
'"`The Master Plan Document will include a final Master Plan for the
Phase I Area, the Land Use Scenario and Design Standards for the
Phase I area and also will include all prior analysis graphics, interview
summaries, Vision, Statement, Master Plan Draft and Preferred Options,
Final Master Plan presentation plans (full-size boards and reductions).
The Master Plan Document will be provided in hard copy and digital
files on a CD: print-.and web-format PDFs and complete text and
graphic files.
8
L A N D F p R M
We'd like to consider some additional options-that can be added either as
independent or coupled options to the work plan outlined above,
I
Optional Task 1 Prepare Additional Master Plan Options l
Additional Master Plan Options (up to 2) would allow you to ,gain more finalized
master plans that are closer to implementation since they would be drafted after
public comment periods in the previous tasks. __
Deliverables: Final Master Plan Options (PDF format)
Optional Task 2 Prepare Draft Design Guidelines* for the Phase I Area
Deliverable: Draft Design Guidelines (PDF format)
Optional Task 3 Prepare Final Design Guidelines for the Pha"se I Area
Deliverable: Final Design Guidelines (PDF format)
"Design Standards are written and graphical design direction by which
future development can abide. Standards are used as loose design
framework so that area vision and style is appropriate to or fitting
in an area. Design Guidelines are written rules (text and graphics)
by which future development should abide and is a more stringent
version of Design Standards. Both of these documents are visual
overviews outlining and illustrating design framework and direction
to which your City is able to refer throughout the future phasing,
development and construction of a final master plan:
9
L A N D r C ~ R I"i
1
Our project schedule follows the work plan we have outlined and shows the time
required for this work based on information provided in the RFP and our past
` experience. Each task is shown with the meetings, site visits and deliverables
we want to be sure that our anticipated. We also use this timeline to determine the staff hours anticipated for
work plan meets your needs. each task, meeting and production of work product, forming the basis for our fees.
This~timeline and work plan will be reviewed at the "kick-off" of the project and
adjusted as needed to meet your goals in terms of timeline, meeting sequence and
overall work process,
Our work plan assumes the following meetings:
On-site with staff and Elk. River EDA 3
On-site with staff 2
On-site critique with developers/brokers 1
On-site critique with staff and Elk River EDA 1
Interviews with property owners 1
ask 1: 91u al Ealalln Cantlltlona end Ane la of 0 Woollies and Siren a EsMOlbh Pro n Vlalan 17 wnkel
Kbkatl Meetlng wtlh Stall and EDA ~ Establish Work Ptan, Sel Protect Goals and Ob)ectNes. 9cheArla 'kbc-a/ macaM;
~~
Workshops and Meetings.
Gather end Review Pasl Applkable Plans arld Stutlbs, Recem Comp Plan MateWals, Nonhatar RaY %annlrg
Mffieriale, Social and Physkal Property Dala (Conant and relevant hlatorlc data), Sal Up Background Drawings,
etc.
Complete PhyskaLVlsual Survey IWalk, Photograph, Map) and Sunountlirlg Ladd Use Irnentory. • ~ -
Conduet In1ervIBWa with Surrountling Property Owners. ~. Imavbwa
Pre a and Lead Presemarbn oI Anal s to 518p, Establlah Vlslon for P etf. ~ ~}
aak Z: Oevelo Pro nm and Lantl Uae 9cenaWw br FAST a wMMa) -
Prepare FAST Visbn Statement ~ Documeming Process aM GulNrlg PWrxiples.
Prepare FAST Lend Use Scenano Iw Complete Study Araa
Pre ere br orb Lead Prasentatlon of Lantl Use Scaneno for Com late SIU Area with 5tett. ~.~
evk 3: Oevslo Macler Plan O Ilona for Phaae 1 Area a wwka
Complete Master Plan Oplbns lop to 4). ~ e e ~ ;
Complete Conceptual Design Standards fw Phase I Area. ~ • • r,
Prepare for arW Lead Cntlque of Options and Standar0.s Iw Penal DevelopwYBeakers. '*'!~WUe
Prepare for and Lead Critique of Oplbns and Standards for Slan and EDA Wnh comments from Developersl. ~''c^~a
aM 4: Foal Manor Plm tar Phase I Aroa a wMka
Prepare Emal Dratls of Prelened Master Plan Oplbns (within content of Land Use Scenario) and Design a a'
Standade for Phase I Area I W !0 2).
Prepare Iw arM Lead Wesamatlon of Dratt Maslar Plan to Staa and EDA. '
Revise Master %an Dacumenl Qncludea Master %en tar Phase 1 Area, Lantl Use Scenano and Design A'
Slandartls for Please 1 Areal. i •~
Pre a tw and Lead Presentatlon of Final Master Plan to Slafl and EDA. -
orW TasMs
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Project
Timeline - ~ '
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Fee
If our plan does not meet your Our work plan shows the tasks and the estimated time required for each, based •on
goals in terms of fees and the information provided in the RFP and our past experience. Using standard, hourly
expenses, we will work with you rates (as listed), we have generated fees for each task. We propose that the work be
to make the adjustments needed performed on a fixed-fee basis. Proposed fixed fee is $28,970 as follows:
to tailor our proposal to meet
your needs.
Task 1) Study of Existing Conditions and Analysis of Opportunities and Strengths,
Billing Rates: ($/hr1 Establish Project Vision $ 4,400
Principal $ 16o Task 2) Develop Program and Land Use Scenarios for FAST $ 5,435
Associate $ tzo
Project Designer $ 115 Task 3) Develop Master Plan :Options for Phase I Area $10,035
Designer III $ so Task 4) Final Master Ptan for Phase I Area 9.100
Designer II $ 75 _ $28 970 \
Designer I $ 6~
Admin/Tech Support $ 50
Additional Services Additional services beyond the scope of this proposal or changes to the scope of
schedule which would require additional meetings or deliverables will be billed at
our customary hourly rates. Prior to performing any additional services, written
authorization will be required. Identified potential Additional Services:
Additional Final Drafts of Master Plan Options (up to 2) est. $5,500
Draft Design Guidelines for Complete Study Area est. $6,380
Final Design Guidelines for Complete Study Area est. $3,260
Reimbursable Expenses~Estimated reimbursable expenses are based on our understanding of your
requirements and our past experience with similar projects. We can provide an
Reimbursable Expenses: estimate of reimbursable expenses upon your request.
Reprographics
$0.25/sq.ft plotting on bond
$7.00/sq ft color plotting
$2.00lcolor print 8.5x11
$3.00/color print 11x17
X1.50 per scan -
$10.00 per CD
Mileage = $0.585/mile
Terms of Payment We will invoice monthly based on the tasks or percentage of-tbe work completed.
Payment is normally due 30 days from the date of invoicing, and interest accrues on
unpaid balances. However, specific terms of payment can be negotiated to meet your
needs.
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CUNINGHAM
G R O U P
2. Scope of Services
Understanding
In the 1870s railroads became the predominant method of transportation replacing the
rivers. In Elk River the area known as "Lower Town" (current Main Street District)
replaced the 'Upper Town' as the center and focus of commercial development. Now
over 130 years later Elk River is experiencing similar cycles of change. Change is a
common element in the nature of cities; habits change; development shifts; markets
form and re-form. It is somewhat ironic that the railroad, 130 years later, is playing a
role in the next series of changes in Elk River.
Elk River is a city of firsts: one of the first paved roads in Minnesota was Highway
10, then known as Jefferson Highway. It is the site of one of the first rural nuclear
power plants and is now home to the RDF facility operated by Great River Energy.
It is a unique area in the state where forest meets prairie, where the hills held coarse
materials, and at one time herds of Elk where common. Elk River is a unique and
special place with qualities and character unlike any other. These qualities should
provide the basis for new and future development patterns that clearly are of Elk
River; that communicate and reinforce what is different and special and how its built
form can express and celebrate these qualities.
We understand the Gateway Focused Area Study, situated between Hwy. 10 and the
soon-to-be operating Northstar Commuter Rail Station, can be the next new and ,
unique place in Elk River. We also understand the City is looking to better define
how this 70 acres and the larger surrounding context can be developed in a way that
supports additional commercial/retail use, mixed-use and transit-related development
(including residential).
In general we understand the scope of services you are requesting includes:
• Determining development and redevelopment potential based on opportunities
and constraints relative to mixed-use and transit complementing uses
• Determining highest and best use
• Developing design standards
• Preparing design concepts
• Contacting adjacent property owners to facilitate participation
• Developing a list of amenities associated with the site, location to Energy City,
and Northstar Rail Station
• Estimating timing of development
• Presenting and reviewing with the EDA, Planning Commission and City Council
We also understand your desired outcomes include:
• Defining appropriate land uses
• Defining what is being marketed and who is this area being marketed to
• Knowing the detail, parameters, issues and concepts required for eventual
development of the property
2-~
CUNINGHAM
G R O U P
2. Scope of Services
We understand you have contemplated development in this area for some time,
including having a market study prepared by Maxfield Research, as well as
discussions about potential uses, markets and how the property can be developed. We
know the area contains some development constraints including wetlands, a natural
gas pipe line, and limits for certain uses. Regarding market conditions we understand
the Elk River Target is closing October 7, and that you currently have approximately
56 sites/properties totaling 196+ acres, according to the 'CommerciaUIndustrial
Property for Sale/Lease' report.
The city owns one business park in the study area, the Northstar Business Park, as
well as the subject property Gateway Business Park, a 70+ acre parcel located south
of 171st Avenue. Just south of the property is the Elk River refuse-derived fuel
(RDF) waste-to-energy power plant operated by Great River Energy. Also in the area
is the Northstar Commuter rail station, currently under construction, which will
include 754 spaces and bicycle lockers. Across from the stop is a private mixed-
use/TOD development called Elk River Station that will include a variety of housing
units (total of 450), office, retail and park/open space uses.
Gateway sloe
R.O.W. /Easement
Wetlands
Tree Row /Carer
S Northstar statlon
z-z
CUNINGHAM
G R O U P
2. Scope of Services
Approach
Our approach is organized around three parts: Learning, Ideas and Deciding. Each
part includes client meetings and specific deliverables. Part 1-Learning provides the
team the opportunity to better understand the study area by collecting and reviewing
existing data and information; by meeting with the EDA, City Council and staff; and
by facilitating focus group meetings with land owners, developers and other key
stakeholders. We include akick-off workshop with the EDA and Council that focuses
on existing conditions, current market information, and trends/expectations about
transit-oriented development (TOD) and the Northstar Commuter Rail line.
Chris Brewer of ERA will participate in the workshop and share his experience with
TOD development; Andrew Dresdner of Cuningham Group will discuss case studies
and the TOD Guidelines that we prepared for the Coon Rapids Riverdale Station
Area. The workshop is intended to clarify desired goals and objectives with the study
and define a general vision for future development of the area.
Part 2-Ideas focuses on preparing a number of concept alternatives for development
of the study area and a meeting with the EDA/City Council to review and discuss.
Alternatives are communicated with plan graphics, diagrams and images as well as
numbers addressing acres, usable square feet and uses. A draft set of illustrated
design standards is prepared for review and discussion including standards for
sustainability and green building as well as how the area can connect to and benefit
from its location within Energy City.
Part 3-Deciding concludes the scope of work with a final presentation to the
EDA/City Council that summarizes development concepts, zoning implications
/requirements, market conditions and likely timing, and how the design standards
might be implemented (regulatory vs. advisory). Final deliverables include illustrated
plans and sketches that can convey to the emerging market the expected level of use,
quality and design for the study area and surrounding sites.
Proposed Work Plan
Part I: "Learning"
The purpose of Part I is to immerse the team in the project and to gather necessary
data (both soft and hard data) to understand the project area and the specific issues to be
addressed. The team gathers hard data (mapping, 3D modeling, market information, and
base mapping) and supplements our base information with precedents from other cities.
Task 1.0 Project Start Up
We work with the client group to develop a detailed work plan that defines specific
meeting and milestone dates. In addition, we work with the client group to facilitate
data transfer to the team, including GIS data, relevant reports and data. A key
component of the workshop is a review of goals and objectives, and discussion on
transit-oriented development, redevelopment market conditions and place-making.
1.1 Detailed Work Plan
1.2 Data Collection
1.3 Workshop with EDA and City Council
1.4 Coordination Meeting with Staff
2-3
CUNINGHAM
G R O U P
2. Scope of Services
Task 2.0 Review Existing Conditions
We supplement our existing knowledge with a survey of additional information as
identified in the Request for Proposal.
2.1 Summary Analysis of Existing Conditions
2.2 Precedent Study
2.3 Review of Existing Market Studies and Conditions
Task 3.0 Data Gathering Focus Group(s)
We organize one (1) focus group (additional focus groups meetings optional) with the
core client group and key stakeholders and discuss strategic questions. These meeting
set the stage for the development ideas in Part 2.
3.1 Focus Group Meeting
3.2 Coordination Meeting with Staff
Part 2: "Ideas"
Part 2 focuses on the development of alternatives that address the specific issues
raised by the existing conditions analysis in Part 1. We develop a draft set of design
standards as well as to establish frameworks and initial alternatives.
Task 4.0 Draft Deliverables
4.1 Draft Development Standards +
4.2 Development Framework and List of Amenities
4.3 Development Concept Alternatives
4.4 coordination Meeting with Staff
Part 3: Deciding
In Part 3, the team develops a desired alternative and specific recommendations for
the study area. The team produces two separate deliverables.
Task S.0 Summary Report
The final report is an illustrated document that summarizes the process, findings, and
recommendations. It also includes an Implementation Section that identifies the
regulatory tools available to the city to influence development around the station area.
5.1 Summary Report (electronic file)
5.2 Development Standards
Task 6.0 Presentation
We make a final PowerPoint presentation to the EDA and City Council.
6.1 PowerPoint Presentation (electronic file)
2-4
CUNINGHAM
G R O U P
3. Proposed Schedule and Fee Budget
Proposed Schedule
October Complete Contract and Scope Refinement
Begin Part 1 -Learning
November Complete Part 1
Begin Part 2 -Ideas
December Complete Part 2
Begin Part 3 -Deciding
January Complete Part 3
Fee Budget
Part 1 $7,500
Part 2 $18,000
Part 3 $7,000
estimated expenses 1 000
Total $33,500
3-1
~~~~ ~ News: National
" i
Real Estate Irforrrwtiun
September 10, 2008
Written by Sasha M Pardy (spardy@costar.com)
Retailers Say Developers Share Blame for PullBack in New
Store Openings
Retailers at Goldman Sachs' Conference Talk About Scaling Back New Store Pipelines,
Leveraging Their Real Estate Position, and Taking Advantage of Opportunities
Several major retailers shared their strategies and commented on recent trends in presentations at the
15th Annual Goldman Sachs Global Retailing Conference held last week in New York City. Among the
presenters were some of the nation's top retailers representing many segments, including Home Depot
(NYSE: HD), Tiffany & Co (NYSE: TIE), PetSmart (NASDAQ: PETM), Barnes & Noble (NYSE: BKS), Dick's
Sporting Goods (NYSE: DKS), Dollar Tree (NASDAQ: DLTR), Wal-Mart (NYSE: WMT), Walgreens (NYSE:
WAG), and Kohl's (NYSE: KSS).
As has been widely reported, retailers have pulled back on opening new stores originally scheduled for
2008-2010. However, many retailers said some the blame for the fall-off in projected store openings can
be placed on developers and landlords who postponed or cancelled development plans, not entirely on
falling demand from shoppers reacting to the current economy.
Barnes & Noble, which has taken its new store opening guidance for 2009 down from 30-35 stores to 20-
25 stores, attributed some of that fall-off in new store openings to the unavailability of product. "The
development pipeline is drying up," noted Joe Lombardi, CFO of the book retailer. "We see less available
locations and projects getting cancelled. So, the development of new retail space is shrinking. We are
seeing locations that we thought would happen falling off." Lombardi went on to explain that, because
Barnes & Noble only goes after the "best spots," the company would not opt to open a store in a less-than
-desirable location just for the sake of fulfilling guidance given on a new store-opening goal.
Dick's Sporting Goods has grown its store network 19% over the last five years and expects to open 43
Dick's and 10 of its Golf Galaxy stores this year, to bring its network to just under 400 stores at the close
of this year. The sporting goods chain estimates its U.S. capacity at 800 stores. Ed Stack, Dick's CEO,
chairman and president said, "There's less shopping centers coming online than there used to be. We have
the opportunity to take a look first at all of these shopping centers, as a developer is looking to tenant his
or her shopping center with the best in each category -books, sporting goods, electronics, discount, home
improvement, etc. But we're not going to rollout the number of stores we've indicated if they're not the
right stores."
Last year at the Goldman Sachs conference, Kohl's said it planned to have 1,400 stores by 2012. This
year, the company said it still has that target, but it won't necessarily be achieved in 2012. At the end of
2007, Kohl's said it would open 70-75 stores in 2008, instead of the 90 previously planned. And in 2009,
Kohl's is scaling back plans to open only 50 new stores (still a lot compared to its competitors) and is
shifting significant capital into store remodels. Larry Montgomery, chairman and CEO of Kohl's said,
"We're starting to see opportunities surface where other retailers are backing off of deals."
Home Depot dealt a blow to developers earlier this year when it said it was taking the financial hit on
backing out of 50 new stores in its pipeline, and it appears the home improvement retailer will open only a
few new stores in the near future. At the conference, Frank Blake, CEO said, "We're rationalizing our new
store opening process. We wrote off a number of stores that were in the pipeline to develop. We see a
dramatically lower capital allocation on new stores going forward. We've gone from 5%+ square footage
growth to 1% to 1.5% going forward. We look at our capital allocation now as principally going towards
our existing assets."
Copyright (c) 2008 Costar Realty Information, Inc. All rights reserved.
CONTINUED: Retailers Say Developers Share Blame for PullBack in New Store Openings
About a year ago, Wal-Mart announced an initiative to scale down the size of its new stores, as well as
significantly pullback on new store openings. Lee Scott, Wal-Mart's chairman and CEO said, "It turns out
our move to a capital efficiency focus this past year was absolutely the right thing to do. What we're
seeing worldwide is those stores closest to the customers seem to be doing the best. In the U.S., we're
finding our 100,000-square-foot supercenter in the metro areas being very successful and the 175,000-
square-foot store, versus the 190,000-square-foot store, is doing very well."
Walgreens decided to pair down its new store opening pipeline from 550 net new stores opening this year
to 360-375 new stores annually through 2011. Still a massive number and "far more openings a year than
the rest of the industry combined," said the retailer. Jeff Rein, chairman and CEO said, "Continuing to
expand our footprint and grow market share is a key strategy, but we're going to be more strategic in our
store openings as opposed to just spreading peanut butter across the U.S." While most of the stores will
likely be opened within existing markets, the drugstore retailer said it will "on occasion picking up a very
good site in a small town" -- it seeks "A locations, right on the corners, easy in, easy out, on the going
home side of the street," said Rein.
Bob Sasser, Chairman and CEO of Dollar Tree said, "This year we are a little behind on our new store
target, not because we've pulled back, but because of the state of the market and we've had some
developments that were being driven from other retailers that have fallen through that we were a part of."
Dollar Tree targets "where Middle America works and shops -- lower to midd-e income customers." Dollar
Tree currently has 3,500 stores and plans for U.S. capacity of 5,000 to 7,000 stores.
At the conference, executives of retailers that do continue to actively seek out new store locations, were
not shy to share the position of leverage they feel they have with developers and landlords.
"We're taking a very conservative approach to our real estate strategy. We're putting our real estate
development program through a more difficult filter than we've had in the past and making sure that
we've got absolutely the right piece of real estate at the right price. There's been several deals that we've
walked away from because we don't believe in the growth rate that's associated with that particular trade
area, the rent structure, or whatever issues that developer may have," said Dick's CEO.
"We're at any one time working real estate deals that are 2-3 times more than we plan on opening in an
given period -- that's just smart real estate planning. We have quite a bit of flexibility. There are not a lot
of people out there that are growing at the rate we're growing and there are not that many people out
there that can come into a developer's situation with the kind of balance sheet and credit we have. We're
not seeing a huge benefit in terms of real estate pricing because we're looking to go at the corner of main
& main in almost every location, but we're not seeing it go up," said Kohl's CEO.
Kohl's had to scale down its pipeline in choosing the 50 stores to open in 2009. "As we pick the 50 stores
we want to open out of the 120-125 we have in development, it's all about where you're going to get the
biggest market share and the best ROI -- what kind of deal you can strike and who your developer is sort
of fits into all that," said Montgomery. He added that Kohl's is being tough on stores it chooses in some
states hit hardest by the residential fallout -- AZ, CA, and NV. "Developers and landlords are looking for
somebody like Kohl's to come into their developments because of the kind of traffic we drive and the
credit we have, compared to some of these regional guys that are having issues today," said Montgomery.
"We're working really hard in this market of declining real estate prices -- at least they need to be
declining right now -- pressure is downward. So we're being more selective," said Dollar Tree's CEO.
PetSmart, currently a 1,075-store chain, recently decided to slow capital spending in 2009 and beyond
and will funnel more money into its existing asset base. The pet care retailer expects to have opened 100-
108 new stores in 2008, plans for 60-65 new stores in 2009 and 50-60 in 2010. Phil Francis, chairman &
CEO, talked about the company's process in pairing down its huge new store pipeline, "When we decided
to make a change, we had a pipeline that was too big, so we had to wash our hands. We set hurdles they
had to pass. We started saying to people [developers and landlords] 'looks like you don't make the list,
Copyright (c) 2008 Costar Realty Information, Inc. All rights reserved.
CONTINUED: Retailers Say Developers Share Blame for PuIlBack in New Store Openings
anything we can do, can you lower the rent? How much?' They usually didn't like that.. We had a call last
week from somebody we told we wouldn't open the store until 3Q09 and needed $2.75psf lower in rent
and they called back and asked if the deal was still open and we said yes. Just because everybody knows
real estate should come down doesn't mean it comes down the next day -- there's some give and take
and some time. From the big pipeline we had, we've cherry picked the list with the better returns and
probably the bottom 25% of that list will never be built."
Especially in downtimes like this, retailers are constantly evaluating the market for opportunities --
whether it's to take advantage of a competitor, or respond to the customer by developing a new format.
Lombardi said that Barnes & Noble has evolved over the last few years into a mall anchor tenant, as
opposed to the insignificant 3,000-square-foot in-line mall store it was many years ago. Now, said
Lombardi, mall landlords and developers seek out Barnes & Noble, along with common co-tenants,
Cheesecake Factory and AMC Theatres to anchor a lifestyle center or lifestyle wing of a mall. Landlords
know "what that does to the traffic in a mall and that has given us opportunities for expansion in major
projects at 50-yardline locations with terrific occupancy rates." He added that Barnes & Noble has
"become the bookstore of choice for developers."
Lombardi said Barnes & Noble has found a "sweet spot" in the mall/lifestyle center-anchor position and
that such locations make up about one-third of its new stores opened in the past few years. These stores
average about 28,0000 square feet or a little larger. One big reason for that is they serve as entrances to
malls and the retailer is doing many two-level stores. Lombardi added that Barnes & Noble typically signs
10-year leases, which allows the company to move stores "where the market moves."
Inferring possible regional chain buyouts, Montgomery said Kohl's is "keeping enough cash available to
take advantage of what we think is going to be a fairly significant consolidation amongst our competitors
over the next couple years, much like we did with Caldor and Bradlees and Clover and Main Street over
the past several years." Kohl's acquired the 260-store MainStreet chain in 1988, leased six former Clover
stores in 1996 from Kimco, acquired 32 NY Caldor stores in 1999, and bought the leases of 15 former
Bradlees stores in 2001.
Kohl's is on the lookout for opportunities from retailers falling out of the market -- like Mervyn's, Boscov's
and small department store chains like Dawahares, etc. "We're starting to see that the consolidation of
retailers over the next couple years, and probably over the next six months, is going to afford us a pretty
significant opportunity to get into trade areas much quicker than we thought we'd be able to get into by
taking an existing building. As these retailers go out of business, there's a lot up for grab in trade areas
where we already have locations," said Montgomery.
Kohl's said it is willing to shift its current off-mall real estate strategy to take advantage of acquisition or
competitor fallout opportunities that arise. "We've identified over 1,400 trade areas that we can be in.
Some of those trade areas involve a mall situation because there's just no other place for you to have a
big box store. We've experimented -- we've got 60-70 mall locations today. We have confidence that we
can get into some of the highly populated areas through regional or local mall situations and compete very
favorably against the competition. I think that you'll see us in that scenario a few times. We prefer to be
off-mall, but we definitely want to be in certain trade areas and will do what we need to get in there," said
Montgomery.
Walgreens sees opportunity in competitor acquisition, too. "The independents are wanting to get out of
the business and we are aggressively pursuing that," said Rein. "We are open to acquisitions that make
strategic sense and really started that 2-3 years ago with Happy Harry's and Option Care and so on. If it
fills in a strategic need to our company, we are open to that acquisition," added Rein.
Tiffany & Co. is banking on a smaller store format to maximize store productivity in the U.S. It currently
operates 72 stores here. James Fernandez, EVP and CFO said at the conference that the luxury jewelry
retailer sees a capacity for 170 U.S. stores -- up from a previous 100 -- and that's because of this new,
smaller format. The company is currently testing the 2,000-square-foot edited assortment concept
Copyright (c) 2008 Costar Realty Information, Inc. All rights reserved.
CONTINUED: Retailers Say Developers Share Blame for PullBack in New Store Openings
(lacking of the highest ticket items) in a New Jersey warehouse and expects the first store open in
Glendale, CA this fall.
While Tiffany's plans for 5-7 new full-line stores annually, it expects to open 3-5 small format stores,
which means it would take 8-10 years for the retailer to achieve its U.S. goal. Fernandez said of the small
format store, "The locations we'll be able to enter are either streets or malls that we could never have
justified adding a full line store to. Financially, the store has a very low breakeven level, extremely low
inventory investment and also the highest margin jewelry. There's a lot of affluent markets, some of them
even within markets we're in now, where customers are saying they'd like to have Tiffany's 20-30 minutes
away as opposed to 1-2 hours away, so convenience is part of the rationale as well." Adding these stores
should further grow Tiffany's sales productivity -- it has already increased from $1,700 sales per gross
square foot in 1007 to $2,700 in 2007.
Dollar Tree has hope beyond $1 in its Deal$ stores. The company acquired 138 of the stores from
Supervalu in 2006 to test a store where the price point is raised to $5 or less. It now expects to open 22-
24 Deal$ in the coming 12 months, primarily in new markets. "We think the Deal$ model will allow us to
do higher sales volume per store, higher leverage on fixed costs and the opportunity to go into some of
the more expensive real estate around these urban centers in the Northeast or California, etc. It expands
the growth runway for our customers."
Wal-Mart president and CEO, Lee Scott said the company is going to take opportunities to expand that are
presenting themselves now because of the weakened economy, "With prices on fuel and food going up, we
now are having an increased number of communities contacting us and asking us to build a Wal-Mart
store in their town or state and some of those are the very towns or states you would have read about
historically that are not enchanted by a beautiful Wal-Mart store."
And as Wal-Mart is opening three "Marketside" small-format grocery stores this year in Phoenix, a format
many say is designed to combat Tesco's Fresh & Easy, the retailer still has more ideas. As it adapts its
retailing strategy to international markets, it is inspired for ideas in the U.S. "I think there's lots of
opportunity for formats in the U.S A store that might remind you of a Bodega store is clearly possible." (A
Bodega is a small grocery store typically found in Spanish-speaking neighborhoods.)
(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to Costar's Retail
News Roundup, a weekly column covering retailer expansions and new concepts, store closings,
bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and
sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every
week in the national news and "> retail news sections of our web site, you may also receive the Retail
News Roundup for free via email by requesting to be added to the distribution list by contacting senior
editor, Sasha Pardy at spardy@CoStar.com Also, click here to subscribe to Costar's dedicated Retail RSS
Feed.
(c) 2008 Costar Realty Information, Inc. All rights reserved.