DOWNTOWN MARKET ANALYSIS & BUSINESS DEVELOPMENT PLAN THE CITY OF REDMOND, OREGON PREPARED BY : MARKETEK 920 S W BA RBUR BLVD. SUITE 119 -220 PORTLAND, OR 97219 MAY 2006 TABLE OF CONTENTS INTRODUCTION 3 TARGET M ARKET ANALYSIS 5 OPINION RESEA RCH 27 RETAIL MA RKET ANALYSIS 35 REDEVELOPMENT STR ATEGY 59 REPORT A PPENDICES 68 Redmond, Oregon ? May 2006 2 Downtown Business Development Plan DOWNTOWN MARKET ANALYSIS & BUSINESS DEVELOPMENT PLAN INTRODUCTION This retail market analysis and strategy development report was prepared as part of the Downtown Redmond Action Plan Update provided by the Oregon Downtown Development Association for the City of Redmond, the Downtown Urban Renewal Advisory Committee (DURAC) and the Redmond Downtown Partnership (RDP). PURPOSE The purpose of this analysis is to: ? Provide a comprehensive assessment of potential market support for retail uses in the downtown Redmond commercial district. ? Create an accurate picture of Redmond?s retail industry including the location and characterization of the existing supply of businesses; consumer preferences, needs and buying patterns; and opportunities and challenges for growth and development in the downtown. ? Provide DURAC and the RDP with a factual base for developing strategies to strengthen and diversify the downtown retail base and capture consumer dollars currently flowing out of downtown. ? Recommend business development and marketing strategies to strengthen the retail base downtown and train a team of stakeholders to carry out the strategies to ensure long term success. METHODOLOGY As downtown Redmond?s commercial redevelopment program will be phased over time, the retail market analysis considers a ten-year time period from 2005- 2015, which is a realistic projection period for retail development. The research (both primary and secondary) includes a statistical estimate of potential retail sales and supportable space, the results of a community-wide resident survey of shopping preferences, a survey of the Redmond business community, personal Redmond, Oregon ? May 2006 3 Downtown Business Development Plan interviews with local leaders, focus groups with key downtown stakeholders, in- store visits to downtown businesses and a workshop on ?Understanding Downtown Redmond?s Marketplace.? To carry out a number of these tasks, Marketek made three site visits to Redmond (August, September and October 2005). With assistance from the RDP, a downtown Business Development Team was organized to help guide the process. This report is organized into four principal sections: 1. Target Market Analysis 2. Opinion Research 3. Retail Market Analysis 4. Retail Development Strategy The final phase of the market analysis/business development component of the Downtown Action Plan will include a strategy for business retention, expansion and recruitment efforts, a generalized business clustering plan to guide downtown business location and expansion, a draft promotional piece incorporating the results of the market analysis, a business assistance and recruitment training workshop and a public presentation of findings. Redmond, Oregon ? May 2006 4 Downtown Business Development Plan TARGET MARKET ANALYSIS Downtown Redmond?s primary target customer markets for retail and services include: local resident shoppers, area employees, visitors and second home owners. This section characterizes the size and features of each market, with an in-depth look at the local resident market, which provides the shopping district with the greatest opportunity for a dependable source of year-round sales. LOCAL RESIDENT SHOPPERS: DEMOGRAPHIC PROFILE The socioeconomic characteristics of Redmond?s local shopper retail trade areas are provided in this section. A map on the following page illustrates the boundaries of the local and greater trade areas. The retail market areas are the geographic areas from which the majority of Redmond?s local customers will emanate. They are based upon drive-time estimates, the knowledge and experience of Redmond business owners and the location of existing retail competition. The Local Retail Market delineated by a 10-minute drive from downtown Redmond will look to downtown for convenience related goods and services, dining, entertainment and some specialty shopping. The Greater Retail Market is much larger and is the area from which a majority of ?destination? and comparison shoppers emanate. This boundary is very similar to a 20 to 30 minute drive time from downtown Redmond. The delineation of the retail trade areas is not meant to suggest that prospective local customers of downtown businesses will be drawn solely from these geographic areas. Because of the downtown?s central location, competitive assets and proposed redevelopment activity, prospective retail customers will also be drawn from outside of the corresponding market areas. Redmond, Oregon ? May 2006 5 Downtown Business Development Plan Redmond, Oregon Local and Greater Retail Trade Areas A. Population & Household Growth Greater Trade Area? ? Local Trade Area ? From 1990 to 2005, the population growth rate in the local Redmond trade area (6.8%) has been more than three times that of the State of Oregon, (2.0%.) Redmond?s growth is reflected in the City?s residential building permit activity totaling 2,951 from 1999-2004. This extremely rapid growth is projected to slow somewhat over the next five years, with population growth slowing to a rate of 4.41% as opposed to the 6.80% growth rate experienced from 1990-2005. However, this rate will still substantially exceed the state?s projected growth rate of 1.43%. These assumptions are generally consistent with those used as the basis of the City of Redmond?s recently completed buildable lands analysis. ? The 2005 population of the Redmond local trade area (10 minute drive time) is estimated at 27,221. For the City of Redmond proper, Portland State University?s Center for Population Research estimates the 2005 population at 20,009. ? During the 2005-2010 time period, the local market area population is expected to grow at an average of 1,200 people or 467 households per year, resulting in a 2010 population of 33,221. The City of Redmond will apply for a 2000 acre UGB expansion in 2006 in support of new residential over the next 20 years. Redmond, Oregon ? May 2006 6 Downtown Business Development Plan ? Redmond?s 2005 greater trade area population is estimated at 73,682. Over the next five years, population is projected to increase an average annual rate of 3.33% to 85,964 adding 4,734 households during that time. Geographic Area 1990 2005NumberPercent2010NumberPercent (Estimate) (Forecast) Redmond Local Population 13,471 27,221 917 6.80% 33,221 1,200 4.41% Households 5,160 10,519 357 6.92% 12,853 467 4.44% Avg. Household Size 2.59 2.58 2.57 Redmond Greater Population 42,229 73,682 2,097 4.97% 85,964 2,456 3.33% Households 16,013 28,081 805 5.02% 32,815 947 3.37% Avg. Household Size 2.61 2.61 2.61 State of Oregon Population 2,842,321 3,657,282 58,212 2.05% 3,919,026 52,349 1.43% Households 1,103,313 1,422,666 22,811 2.07% 1,524,896 20,446 1.44% Avg. Household Size 2.52 2.52 2.52 Avg. Ann. Change Avg. Ann. Change 1990-2005 2005-2010 EXHIBIT R-1 POPULATION GROWTH Redmond, Oregon Market Area 1990-2010 1990-2010, Average Annual Population Growth Rates 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% Redmond Local Redmond Greater State of Oregon 1990-2005 Avg. Ann. Change 2005-2010 Avg. Ann. Change Source: ESRI BIS, Marketek, Inc. Redmond, Oregon ? May 2006 7 Downtown Business Development Plan ? Between 2000 and 2005, population growth throughout the Central Oregon region of Crook, Deschutes and Jefferson Counties was strong, increasing from 153,558 to 183,272. Between 2005 and 2010, population growth in Central Oregon is expected to remain above state levels at 3.4% on an average annual basis, reaching 217,000 by 2010. B. Age Distribution ? The population within and immediately surrounding Redmond tends to be slightly younger relative to the greater trade area. The 2005 median age within the local trade is estimated at 37.4 years and 39.3 years within the greater trade area (Exhibit R-2). In the State of Oregon, the 2005 estimated median age is 37.3 years. ? The estimated proportion of the population under the age of 15 in 2005 is 21.4% within the local Redmond trade area, and 20.6% in the greater trade area. Both are higher than the state average of 19.5% for this age group. ? An estimated 13.7% of the local trade area population was age 15 to 24 in 2005, and just below 13% in the greater trade area. The state average is roughly in the middle, at 13.2%. ? Prime consumer age categories, ages 25 to 64 comprise approximately 52% in both trade areas, with the state?s average age in this cohort slightly higher at 53.5%. ? The share of residents age 65 years or older in 2005 was slightly higher in the greater market area (14.2%) compared to the local market (13.3%) and the State of Oregon (12.8%). Redmond, Oregon ? May 2006 8 Downtown Business Development Plan Age Category Redmond Local Redmond Greater State of Oregon Under 5 7.1% 6.7% 6.5% 5-14 14.3% 13.9% 13.0% 15-19 7.1% 7.0% 6.9% 20-24 6.6% 5.9% 7.3% 25-34 11.4% 10.9% 13.3% 35-44 15.0% 14.1% 14.0% 45-54 14.5% 15.1% 15.1% 55-64 10.7% 12.3% 11.1% 65-74 6.8% 8.0% 6.3% 75-84 4.7% 4.6% 4.6% 85 and Older 1.8% 1.6% 1.9% Total 27,221 73,682 3,657,282 Median Age 37.4 39.3 37.3 Source: ESRI BIS EXHIBIT R-2 POPULATION BY AGE Redmond Market Area 2005 2005 Age Distribution of the Population 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% Under 5 5-14 15-19 20-24 25-34 35-44 45-54 55-64 65-74 75-84 85 and Older Redmond Local Redmond Greater State of Oregon Redmond Redmond, Oregon ? May 2006 9 Downtown Business Development Plan C. Household Income Distribution ? Exhibit R-3 shows that on the whole, local and greater trade area residents are slightly less affluent than households statewide. Estimated 2005 median household income ranges from $44,375 in the local Redmond market to $44,006 in the greater market area, compared to $47,424 for the state as a whole. Income Redmond Local Redmond Greater State of Oregon Less than $15,000 11.5% 11.9% 12.6% $15,000 to $24,999 11.6% 12.0% 11.3% $25,000 to $34,999 15.4% 14.3% 11.8% $35,000 to $49,999 18.7% 19.1% 17.1% $50,000 to $74,999 21.6% 21.4% 20.4% $75,000 to $99,999 10.4% 9.9% 11.4% $100,000 to $149,999 7.5% 8.1% 10.4% $150,000 to $199,999 1.3% 1.3% 2.4% $200,000 and more 2.0% 2.1% 2.8% Median Household Income $44,375 $44,006 $47,424 Source: ESRI BIS 2005 EXHIBIT R-3 HOUSEHOLD INCOME Redmond Market Area 2005 Household Income Distribution 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Less than $15,000 $15,000 to $24,999 $25,000 to $34,999 $35,000 to $49,999 $50,000 to $74,999 $75,000 to $99,999 $100,000 to $149,999 $150,000 to $199,999 $200,000 and more Redmond Local Redmond Greater State of Oregon Redmond, Oregon ? May 2006 10 Downtown Business Development Plan D. Racial Composition ? Racial distribution (as shown in Exhibit R-4) in the local and greater Redmond trade area populations is less diverse than both the state and the greater Redmond trade area. ? An estimated 89.3% to 93.8% of greater and local trade area residents are white alone, up to 10% more than the state average of 84.9%. However, while only 5.5% of the local population is of Hispanic origin, the percentage practically doubles in the greater market area (10.1% of Hispanic origin). Race Redmond Local Redmond Greater State of Oregon White Alone 93.8% 89.3% 84.9% Black Alone 0.1% 0.1% 1.7% American Indian Alone 1.0% 1.6% 1.3% Asian/Pacific Islander 0.7% 0.6% 3.8% Some Other Race Alone 2.1% 6.0% 5.2% Two or More Races 2.2% 2.3% 3.3% Hispanic Origin (any race) 5.5% 10.1% 9.9% Total 27,221 73,682 3,657,282 Source: ESRI BIS Exhibit R-4 RACIAL COMPOSITION Redmond Market Area 2005 2005 Racial Composition Distribution 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% White Alone Black Alone American Indian Alone Asian/Pacific Islander Some Other Race Alone Two or More Races Hispanic Origin (any race) Redmond Local Redmond Greater State of Oregon Redmond, Oregon ? May 2006 11 Downtown Business Development Plan E. Community Tapestry Segments Recognizing that people who share the same demographic characteristics may have widely divergent interests and shopping preferences, Community Tapestry data (developed by ESRI Business Information Solutions) categorizes neighborhoods throughout the nation into 65 consumer groups or market segments. Neighborhoods are geographically defined by census blocks, which are analyzed and sorted by a variety of demographic and socioeconomic characteristics as well as other determinants of consumer behavior. Local and greater trade area households have been grouped into Tapestry market segments, which reveal both differences and similarities among the two areas. Both Redmond market areas are chiefly represented by the ?Midland Crowd? market segment, which represents 33% of both markets. This group is comprised of married couples with a median age of 36 and an average income of $47,000. The major difference in the two market areas is most apparent in the segment representing the second highest percentage of households. The ?Aspiring Young Families? segment (18.1%) has the greatest representation in local Redmond, with a median age of 30 and a median income of $46,400. This is substantially different than the ?Rural Resort Dwellers? market segment which ranks second (18.7%) in the greater Redmond area market. This segment is much older, with a median age of 48, and has a slightly lower median income of $43,000. Exhibit R-5 on the following page identifies the market segments that comprise at least five percent (5%) of total households in the local and greater trade areas. These groups are summarized below with detailed descriptions provided in Appendix A. Midland Crowd, 33% of Local and Greater Trade Area Households Tapestry?s largest market, Midland Crowd represents 11 million people, nearly 4 percent of the total U.S. population, in one market. As expected, this market reflects some characteristics of the U.S. population, with a median age 36 years and an average family size of 3.1 people. The median household income of $47,000 is just below the U.S. median of $48,100. These differences distinguish the Midland Crowd residents. These neighborhoods are located in mainly rural areas, which since 2000, have been growing at an annual rate of more than 2.5 percent. Approximately 40 percent of the homes were built after 1990; more than 95 percent of their homes are single-family houses or mobile homes. These do-it yourselfers take pride in their homes and vehicles. Their vehicle of choice is a used truck such as a Ford or Chevrolet. For leisure, they go fishing or hunting, listen to country music, and watch television. They are politically conservative, devoted pet lovers, and interested in domestic travel. Redmond, Oregon ? May 2006 12 Downtown Business Development Plan Market Segment Percent of Household Median Median Consumer Households Type Age Income Purchases/Preferences 1 Midland Crowd 33.0% Married couples 36 $47,000 Rural location, w/ nearly 30% in mobile homes. Do-it-yourselfers. Many w/ 3 vehicles. Strong TV watchers. Enjoy hunting, fishing, pets. 2 Aspiring Young Families 18.1% Married couples 30 $46,400 Live in start up homes or town homes, nearly half are renters, spend their discretionary income on their children and homes. Enjoy eating out, movies, and playing sports. 3 Green Acres 13.6% Married couples 39 $61,200 Pastoral setting, blue collar families w/ children 6-17, these do-it- yourselfers are not afraid to tackle home improvement projects, watch NASCAR, football and enjoy hunting and hiking 4 Midlife Junction 12.7% Married couples 44 $42,900 Approaching retirement, 1/3 already receive retirement income live quiet settled lives. Comfortable shopping online and over the phone, enjoy dining out at full service restaurants. They also enjoy gardening watching TV., books and the newspaper. 5 Great Expectations 5.5% Married couples 33 $36,000 Young singles and married couples, 1/2 own home. Enjoy a young active lifestyle, for leisure they go out to dinner and a movie, attend concerts, theme parks, zoo and the beach. 82.9% Market Segment Percent of Household Median Median Consumer Households Type Age Income Purchases/Preferences 1 Midland Crowd 33.0% Married couples 36 $47,000 Rural location, w/ nearly 30% in mobile homes. Do-it-yourselfers. Many w/ 3 vehicles. Strong TV watchers. Enjoy hunting, fishing, pets. 2 Rural Resort Dwellers 18.7% Married couples 48 $43,000 Enjoy simple life and consumer tastes describe these residents. Own domestic 4-wheel drive trucks. Lifestyle includes baking and home cooked meals, as well as participation in local civic issues. They go hunting, fishing and listen to country music. 3 Green Acres 11.7% Married couples 39 $61,200 Pastoral setting, blue collar families w/ children 6-17, these do-it- yourselfers are not afraid to tackle home improvement projects, watch NASCAR, football and enjoy hunting and hiking. 4 Home Town 9.0% Married couples 40 $42,900 Low population density, single family homes where more than 1/2 own homes. Enjoy movies, museums, zoos and indoor activities such as reading, and playing cards. Watch CNN and Fox. 5 Aspiring Young Families 6.8% Married couples 30 $46,400 Live in start up homes or town homes, nearly half are renters, spend their discretionary income on their children and homes. Enjoy eating out, movies, and playing sports. 79.2% Source: ESRI BIS Exhibit R-5 TAPESTRY/LIFESTYLE CHARACTERISTICS HOUSEHOLDS BY PRIMARY MARKET SEGMENT Redmond Market Area, Oregon Total Redmond Local 2005 Total Redmond Greater Redmond, Oregon ? May 2006 13 Downtown Business Development Plan Rural Resort Dwellers, 18.7% Greater Market Area Households Rural Resort Dwellers residents follow the scenic route. Favoring milder climates and pastoral settings, they live in rural non-farm areas throughout the United States. These small, growing communities consist of single-family or mobile homes with a significant inventory of seasonal housing. With a median age of 46 years, the population is older than the U.S. median; most residents are married with no children living at home. Although retirement officially looms for many, most are still working. Many in Rural Resort Dwellers neighborhoods are self- employed with a median household income of $43,000. Simple living and consumer tastes describe the Rural Resort Dwellers residents. They own equipment so they can work on home and garden improvement projects. Domestic four-wheel drive trucks are popular. Their lifestyle includes baking and preparing home-cooked meals as well as participation in local civic issues. They read magazines that focus on fishing, hunting, and home improvement. They go hunting, listen to country music, and zoom around in power boats. Aspiring Young Families, 18.1% Local and 6.8% Greater Market Area Households Residents of Aspiring Young Families neighborhoods are attracted to the large, growing metropolitan areas in the South and West, with the highest concentrations in California, Florida, and Texas. These residents are mainly young, start-up families, married couples, or single parents with children. Although young with a median age of 30 years, almost half of them have already purchased start-up homes, with a high percent of townhouses. Half of them are renters who live in newer multiunit buildings. Residents spend much of their discretionary income on their children and homes. They buy baby and children?s products and toys, bedroom and dining room furniture, cameras, and VHS/DVD players. F or leisure, families enjoy dining out, going to the movies, playing baseball or basketball, and visiting theme parks. They spend time online visiting chat rooms, searching for employment, playing games, researching information about real estate, and making travel plans. Green Acres, 13.6% of Local Market & 11.7% of Greater Market Area Households A ?little bit country,? Green Acres residents enjoy homes in a pastoral setting. This somewhat upscale market represents developing fringe areas, with more in the Midwest. Most families are blue-collar baby boomers, many with children aged 6-17 years. Their median household income of $61,200 and median home value of $168,000 are high compared to the U.S. as a whole. Country living describes the lifestyle of Green Acres residents. They are do-it-yourselfers and area not afraid to tackle home improvement projects ranging from painting to installing a deck. They are enthusiastic about gardens and own a separate freezer to hold the bounty. For leisure, they watch Home and Garden TV, NASCAR races and pro football games on TV. Their favorite outdoor activities include hiking, hunting and backpacking. Redmond, Oregon ? May 2006 14 Downtown Business Development Plan Midlife Junction, 12.7% Greater Market Area Households Somewhere between the child-rearing years and retirement lies Tapestry?s Midlife Junction segment. Few households still have children. Most of the labor force is still employed but approaching retirement. Approximately one-third of these residents already draw retirement income. Most still own their homes, but many have eschewed home ownership responsibilities and moved into multiunit apartments, somewhere between urban and rural. Midlife Junction residents have a median age of 40 and a median household income of $42,900. They live quiet, settled lives. They spend their money prudently and do not succumb to fads. They are comfortable shopping online or by phone. Dining out on the weekends at full-service restaurant is a favorite activity; they also patronize fast- food establishments. They enjoy gardening, watching television, and reading books and the newspaper. Home Town, 9.0% of Greater Market Area Households Home Town residents stay close to their home base. Although they move from one house to another, they rarely cross the county line. Single-family homes predominate in these suburban neighborhoods with low population density, found mainly in the Midwest and South. The median home value is $58,900; more than half of Home Town residents own their homes. The local job market offers employment primarily in the manufacturing, retail trade, and support services in industries. Residents enjoy going to the movies, museums, and zoos and indoor activities such as reading and playing cars. They like to watch CNN, Fox News, Discovery Channel, and any movie channel. Many own pets. Perhaps hindered by a lack of choice, they tend to shop for apparel at discount stores or small local malls, but they are gaining confidence in shopping online. Great Expectations, 5.5% Local Market Area Households Young singles and married-couple families dominate in this large urban market. The median age of the population is 33 years. A high proportion of Great Expectations residents are in their twenties. Labor force participation is high. They pursue a variety of careers primarily in the manufacturing, retail, and other service sectors. Home ownership is increasing; approximately half of these residents now own single-family homes with a median home value of $95,500. The rest still rent apartments in small multiunit buildings. Their neighborhoods are older suburbs, with most homes built before 1960. They are not afraid to tackle small home maintenance and improvement projects but also enjoy a young, active lifestyle. Leisure time for these residents is spent going out to dinner and a movie, attending music concerts, visiting theme parks, the zoo, and the beach. They have tried their hand at different sports such as fishing, hunting, and canoeing. Redmond, Oregon ? May 2006 15 Downtown Business Development Plan AREA EMPLOYEES Redmond?s local employees are an important captive market for downtown retail and service businesses, as they come to Redmond on a daily basis throughout the year and are in close proximity to retail, restaurant and service establishments. Market research conducted by the Building Owners and Managers Association of America demonstrated that office workers (as one segment of the workforce) spend between 10 and 15 percent of their expendable incomes in and near their places of work. Information on workday shopping behavior provided in a survey conducted by the International Council of Shopping Centers reveals that: ? The majority of downtown workers (76%) prefer to walk to lunch, up to three blocks. ? The most frequent items purchased by workers include cards, stationery, gifts, drugstore items, books and magazines. ? With lesser frequency, workers buy office supplies, jewelry, apparel, accessories, housewares, cosmetics, arts and crafts, and items found in galleries. ? Many workers (28%) will stop for ?after work? activities (drinks, dinner and shopping) when such opportunities are available. Forty-eight percent (48%) of these workers are inclined to come back to the downtown district to eat and shop on weekends. The remainder of this section highlights state and local employment trends and information on the employment base in close proximity to downtown Redmond. A. State and Region The Oregon Office of Economic Analysis September 2005 report forecasts total private non-farm employment for the state to rise by 3.0% in 2005. The Oregon Employment Department reported that in January 2005, the state reached a new high for total non-farm employment. Continued but slower job growth is anticipated for 2006 (1.5%) and 2007 (1.4%). Job gains will be strongest for the transportation equipment sector, construction and professional and business services. Overall, job levels will still be below average job levels in 2000, a peak employment year. As a whole, Oregon is expected to add nearly 240,000 jobs during the next decade for a total increase of 15%. This total job growth is slightly larger than the prior decade which resulted in the addition of 231,000 jobs statewide. Deschutes, Crook and Jefferson Counties are part of the Oregon Employment Department?s Region 10. Ten year employment forecasts (2004-2014) for the region show a total employment increase of 17,520 jobs or 24.4%, making Central Redmond, Oregon ? May 2006 16 Downtown Business Development Plan Oregon the fastest-growing region in the state, due in part to the area?s rapidly expanding population base. The total increase in the region is expected to be less than in the prior decade when 20,830 jobs were created. Non-manufacturing industries will lead Central Oregon?s growth with the greatest expansion occurring in the leisure and hospitality sector projected to add 3,690 jobs (+39.4%) by 2014; professional and business services, 2,410 jobs, (+37.7%); and retail trade, 2,980 jobs (+29.3%). The manufacturing sector will grow modestly with 400 new jobs projected for a 4.7% increase. Unemployment rates in Central Oregon continue to decline with September 2005 unemployment in Deschutes County at 4.8% compared to 5.7% in September 2004 and 5.7% for Crook County compared to 6.8% last year. Oregon unemployment was 5.5% and 6.6% for the same points in time. In the near future, new employers to the area will further stretch central Oregon?s tight labor market. The Madras minimum and medium security prison facilities will employ 400 construction workers and 100 permanent employees for Phase 1, to be completed in 2006 and 400 permanent employees for Phase 2. Two Wal-Mart super centers are proposed for the area which together would add approximately 600 net new jobs. The Redmond center is moving rapidly ahead with the proposed Bend center experiencing some public opposition. Redmond was recently announced as the site for an ODS insurance claims processing center which will bring between 100 and 125 jobs to downtown Redmond where ODS intends to locate the facility. Among other potentially significant initiatives that could expand the area?s employment base is the Juniper Ridge project. The City of Bend recently completed a master plan for the development of Juniper Ridge, a 1500-acre city-owned parcel on the north edge of Bend. A large portion of the project is slated for industrial-related development. The 500-acre Phase 1 is expected to break ground during 2007 and focus on light industrial and technology businesses. The Phase 2 area contains space for a future educational facility, including a university campus with academic programs that would support the research and development uses in Phase 1. Phase 2 also proposes a broad mix of residential, commercial, mixed-use, and open space uses. Redmond, Oregon ? May 2006 17 Downtown Business Development Plan B. Local Area Exhibit R-6 depicts the total number of employers and employees within Deschutes County and the proportionate share of Redmond and Bend. Bend dominates the county with the largest share of firms (67.4%) and employees (66.3%). Area # % of Total # % of Total Redmond 811 14.30% 8,885 15.1% Bend 3,806 67.40% 38,799 66.3% Remainder of County 1,029 18.20% 10,803 18.4% Deschutes County 5,646 100% 58,487 100% Source: Oregon Employment Department Exhibit R-6 Deschutes County Employment, 2004 Firms and Employees Firms Employees 2000 Census data reveals that the vast majority (94%) of Deschutes County residents work in the county, with 93% of all county workers residing in the county. However, the Deschutes labor market draws on surrounding counties as well with nearly 18% of Jefferson County residents and 15.4% of Crook County residents working in Deschutes County. Despite the current job differential between Bend and Redmond, Redmond has significant room to grow, boasting approximately half the landmass of Bend, but only one-fourth the population. Over 1,500 acres of industrially-zoned property are located in the Redmond city limits with approximately 300 acres still to be developed. As part of this, the City owns a 128-acre industrial parcel, Desert Rise. The City will sell large lots to industrial end users stipulating a number of conditions such as minimum lot size and minimum number of jobs created to assure economic gains for the community. Redmond?s largest employers, though relatively small in employment, represent diverse economic sectors: St. Charles Medical Center: Redmond (450), T-Mobile (325), Eagle Crest Partners: Redmond (305 employees), Wal-Mart (230), Team Millwork (228), and the Opportunity Foundation (215). Redmond?s strategic location at the geographic center of the region also makes it a current and future hub for employment activity. Employers and employees alike have identified other competitive advantages for Redmond compared to Bend, including the relatively lower cost housing in Redmond and less congestion. In addition to these factors, a central location and prime industrial land, Redmond can count a number of key assets that will help fuel and sustain growth, among these being the regional airport, regional exposition center at the new $37 million Deschutes County Fairgrounds, and the regional Technical Redmond, Oregon ? May 2006 18 Downtown Business Development Plan Training Complex/Manufacturing-Applied Technology Training Center for central Oregon Community College. Employment within a one-, two- and three-mile radius of downtown Redmond (i.e., 446 SW 7th Street) is displayed in Exhibit R-7, below. Almost 5,300 workers are employed within a one-mile radius in 667 businesses. Roughly twice that number (10,380) are employed in total within a three-mile radius by a total of 1,276 businesses, a significant market within easy reach of downtown retail and service businesses. Service jobs account for the largest share of total employment within the entire three-mile radius, comprising 3,394 or 32.6% of all jobs. Retail trade is the second largest employment sector, with 2,505 employees in the three-mile area or 24% of the total. The one-, two- and three-mile areas are shown on the map on the following page. Business Description Industries (All) 667 100.0% 5,252 100.0% 346 100.0% 3,345 100.0% 263 100.0% 1,783 100.0% Industries (Private Sector) 580 87.0% 4,047 77.1% 316 91.3% 3,003 89.8% 237 90.1% 1,585 88.9% Industries (Government and Non-Profit)* 87 13.0% 1,205 22.9% 30 8.7% 342 10.2% 26 9.9% 198 11.1% Retail (All Retail) 174 1,343 73 787 37 375 Building Matls and Garden Supply 16 9.2% 139 10.3% 8 11.0% 34 4.3% 8 21.6% 42 11.2% General Merchandise Stores 2 1.1% 64 4.8% 2 2.7% 51 6.5% 2 5.4% 201 53.6% Food Stores 19 10.9% 255 19.0% 3 4.1% 86 10.9% 2 5.4% 5 1.3% Auto Dealers and Gas Stations 23 13.2% 172 12.8% 23 31.5% 230 29.2% 1 2.7% 1 0.3% Apparel and Accessory Stores 9 5.2% 27 2.0% 1 1.4% 1 0.1% Home Furniture, Furnishings and Equipment 14 8.0% 50 3.7% 12 16.4% 64 8.1% 5 13.5% 21 5.6% Eating and Drinking Places 43 24.7% 501 37.3% 13 17.8% 271 34.4% 5 13.5% 59 15.7% Miscellaneous Retail Stores 48 27.6% 135 10.1% 11 15.1% 50 6.4% 14 37.8% 46 12.3% Finance (All) 83 458 28 219 21 108 Bank, Savings and Lending Institutions 26 31.3% 185 40.4% 8 28.6% 97 44.3% 5 23.8% 38 35.2% Security and Commodity Brokers 4 4.8% 17 3.7% 5 17.9% 21 9.6% 3 14.3% 24 22.2% Insurance Carriers and Agencies 19 22.9% 77 16.8% 1 3.6% 3 1.4% 2 9.5% 4 3.7% Real Estate, Trusts, Holdings and Other 34 41.0% 179 39.1% 14 50.0% 98 44.7% 11 52.4% 42 38.9% Service (All) 264 1,874 120 946 91 574 Hotel and Other Lodging 4 2.0% 21 1.4% 3 3.0% 27 3.2% 3 4.2% 25 5.5% Personal Services 74 36.5% 246 16.8% 27 27.3% 111 13.2% 30 41.7% 82 18.0% Business Services 46 22.7% 240 16.4% 28 28.3% 118 14.0% 24 33.3% 114 25.1% Entertainment/ Recreation Services 11 5.4% 132 9.0% 7 7.1% 19 2.3% 5 6.9% 33 7.3% Health Services 50 24.6% 269 18.4% 28 28.3% 436 51.7% 6 8.3% 186 40.9% Legal Services 5 2.5% 25 1.7% 1 1.0% 4 0.5% Educational Services 13 6.4% 529 36.2% 5 5.1% 128 15.2% 4 5.6% 15 3.3% Source: Claritas 2005 Exhibit R-7 Business Establishments and Employment by Major Industrial Sector 1-Mile, 2-Mile and 3-Mile Radius of 446 SW 7th St, Redmond 3-Mile Radius Businesses Employees Redmond, Oregon ? May 2006 19 Downtown Business Development Plan Map Showing Distance from Downtown Redmond in 1-, 2-, & 3-Mile Rings Redmond, Oregon ? May 2006 20 Downtown Business Development Plan VISITOR MARKET Central Oregon?s natural and recreational amenities and numerous resorts make the area a significant visitor destination for the Pacific Northwest and beyond. The central Oregon visitor region is comprised of Crook, Deschutes, Jefferson and South Wasco Counties. The visitor industry is integral to the central Oregon economy generating nearly 7,200 jobs and $463.4 million in visitor spending in 2003, with approximately 83% emanating from Deschutes County. (Source: Dean Runyan Associates.) Exhibit R-8 depicts the number of beds at hotels, lodges and resorts by community or major facility to help gauge the distribution of the visitor spending throughout Deschutes County. The Bend/Sun River area dominates the market with 79% of the total number of beds in Deschutes County. The current number in the Redmond/Eagle Crest area amounts to 11% of the total. The bed tax revenues associated with those beds is approximately $647,000 or 10.3% of total bed tax revenue in Deschutes County (04-05). Exhibit R-8 Deschutes County Lodging 2005 Area # of Beds % of Total Bend 2,988 52% Sun River Resort 1,527 27% Redmond 484 8% Eagle Crest Resort 170 3% Sisters/Black Butte Area 385 7% Deschutes County: Balance 174 3% TOTAL 5,728 100% Redmond, Oregon ? May 2006 21 Downtown Business Development Plan In the immediate Redmond area are several significant visitor attractions which provide the opportunity for capturing additional retail, restaurant and entertainment spending by this market. Visitor counts for area facilities and draws appear in Exhibit R-9, below. 430,000 (04-05) 300 annual events Eagle Crest TBD Smith Rock 700,000 annual Roberts Airfield Highway 97 13,500-14,000 ADT each direction, downtown Redmond Source: Marketek, Inc. 2005 Exhibit R-9 Redmond Area Visitor Counts Visitor Characteristics/Trends/Impacts Deschutes County Fair and Expo Center Facility/Attraction Visitor/User Counts Families, professionals, retirees 50% is estimated as pass-through traffic j() Pacific NW; $44 mil. In direct economic impact (04-05) 147,105 passenger enplanements in 2003 181,100 (projected 2008); 213,200 (projected 2013) Includes many 'regular' day trippers As downtown Redmond progresses with its physical improvements and related business development and promotional activities, it should be able to draw an increasing number of visitors from throughout the region. Additional visitor information appears in the Retail Demand Analysis. Redmond, Oregon ? May 2006 22 Downtown Business Development Plan SECOND HOME BUYER MARKET A. National Trends A new study by the National Association of Realtors shows sales of second homes surged in 2004, and that investment property and vacation homes make up a significant portion of the overall housing market, accounting for more than one- third of residential transactions. The study, based on two surveys, shows that 23 percent of all homes purchased in 2004 were for investment, while another 13 percent were vacation homes. In addition, there was a record of 2.82 million second home sales in 2004, up 16.3 percent from 2.42 million 2003. The investment-home component rose 14.4 percent to 1.80 million sales in 2004 from 1.57 million in 2003, while vacation-home sales rose 19.8 percent to 1.02 million in 2004 from 850,000 in 2003. Whether used as a vacation home, an investment vehicle, or both, second homes have become increasingly popular and have helped fuel the growth of the housing market. The U.S. Census reports that there were a total of 3.6 million vacant seasonal homes in the third quarter of 2002, up from 3.1 million 1990 and only 1.7 million in 1980. The category ?vacant seasonal homes? is often cited as the total number of vacation homes. However, this assumption does not account for many recreational properties that are not vacant. In addition, other Census data estimates that there are 9.2 million homes held by owners besides their primary residences. While there is no data on what proportion of these homes are held for recreational or vacation use, it appears that the second home market is larger than the 3.6 million units cited above. In the greater Redmond market area, approximately 1,500 or six percent of all homes are ?seasonal? properties. This figure is anticipated to grow nearly four fold by 2015 with the number of new resorts coming online, making it all the more important to understand the dynamics of this market. A 2002 survey completed by the National Association of Realtors (NAR) and escapehomes.com provides insights into the motivations and characteristics of second homeowners nationally. Motivations ? Most second homes are purchased for recreational use with only modest interest in renting. Thus, most second homeowners never rent their homes. ? Fifty-one percent (51%) of participants in the NAR survey said that they bought or kept a second home to use for a vacation home, 18% were planning for retirement and 15% sought some income from renting the property. Most investment homeowners never use their homes. ? Recent buyers of second homes are more interested in diversifying their investment portfolios than they were prior to 2000. The majority of second Redmond, Oregon ? May 2006 23 Downtown Business Development Plan homebuyers interviewed for this research reported that the stock market slump of the last few years has made them more likely to buy a second, or even third, home. ? For most people, buying a second home is very much a lifestyle choice, but the investment potential has increased given strong price appreciation. ? The idea of a family retreat is important to more than one-half of (57%) second homeowners. ? One in six second home buyers over 55 plans to make their second home their primary residence after retirement. Characteristics ? Today the typical second-homeowner is 61 years old, has owned the property for 9 years, has annual household income of $76,000, is married and purchased the property for recreational use. ? During the next decade, the typical second homebuyer will be younger. The second home market will be driven by middle-class baby-boomers entering their prime years for buying recreational and investment property. Median age of people buying a second home is 46. ? Vacation-homeowners spent a median of 8 weeks per year at their property, while over one-half of all investment owners never used their property. Almost 55% of investment owners rented to others for at least six months a year. These properties tend to be in resort areas. B. Redmond, Oregon Trends The census shows that in the year 2000, of the 2,794 vacant units in the greater Redmond trade area, 54% or 1,498 were ?units for seasonal, recreational, or occasional use.? This compares to 31% of all vacant units for the state as a whole. See Exhibit R-10, next page, for a summary of the market area?s housing tenure patterns. Redmond, Oregon ? May 2006 24 Downtown Business Development Plan Tenure Number Percent Number Percent Number Percent Owner-occupied 5,872 65.6% 17,496 65.8% 856,951 61.0% Renter-occupied 2,515 28.1% 6,302 23.7% 476,772 29.0% Vacant 562 6.3% 2,794 10.5% 118,986 10.0% Total 8,949 100% 26,592 100% 1,452,709 100% Vacant Units For Rent 162 29% 445 16% 37,482 31.5% For Sale 138 25% 377 14% 20,349 17.1% Rented or Sold, Not Occupied 40 7% 127 5% 7,158 6.0% Seasonal, Recreational, Occasional 127 23% 1,498 54% 36,850 31.0% For Migrant Workers 0 0% 8 0% 333 0.3% Other Vacant 94 17% 339 12% 16,814 14.1% Total Vacant Units 561 100% 2,794 100% 118,986 100% Source: 2000 Census, Marketek, Inc. Exhibit R-10 Redmond Greater Redmond State of Oregon Local Housing Units TOTAL HOUSING UNITS BY TENURE Local & Greater Redmond Trade Area, State of Oregon 2000 The Redmond second home market is anticipating rapid expansion with several new resort projects in various phases of development. Exhibit R-10 on the next page summarizes the status of key resort developments and other significant housing projects in the greater Redmond market area. During the 2000-2015 timeframe, nearly 4,500 second home units are anticipated to come on the market. Redmond, Oregon ? May 2006 25 Downtown Business Development Plan Name/Location Acres Lots/units Ave. Price Target Market Timing Resort Development Brasada Ranch, Powell Butte, Crook County 1,800 900 lots $350,000 Middle-to- upper income professionals 202 lots @ $360ksold in 2 days; 80 ranch home sites ($300-$600k) sold in Oct. 05 Eagle Crest Resort, Redmond: Overview 2,372 units total, 1,419 built. $300,000- $1.5 mil Retirees and professionals, age 45+ 60% built-out, 204 units under construction; 10 yr. horizon Eagle Crest Resort: Eagle Ridge 990 units; 717 constructed Mid-to-upper income vacationers; pt- time residents 1 phase remains to be completed in 5-10 yrs Eagle Crest Resort: Highlands 823 units. 385 lots, 30 constructed. 216 condos, 100 constructed. 222 detached, 13 constructed Retirees and professionals 5-10 years Thornburgh Resort, Overview near Smith Rock 1,980 1000 total NA -The Tribute at Thornburgh 1,250 650 NA -The Pinnacle at Thornburgh 730 350 NA Pronghorn Resort, Deschutes County 640 289 home sites; 190 condos >$325,000 High income golfers, retirees Under construction Ranch at the Canyons, Smith Rock, Terrebonne, Deschutes County 1,700 60 >$750,000 High end market Under construction Brooks Resources Development, Prineville 1000 acre PUD 2,951 total, w/ est'd. 15% 2nd homeowners $230- $250,000 Entry level to high end Phase 1, 5 years: 100- 140 units a year; 15-20 year build out Prineville Subdivisions: est'd 1,800 units total -Colson & Colson 300 1000 $200,000 Middle income Pre-development -Mayberry South 150 300 $225,000 Middle income Pre-development -Mayberry/Smith North 200 500 $200,000 Middle income Pre-development Madras Land Development Co. Madras 800 acre PUD NA NA Mostly middle market; mixed densities Break ground, spring 2006 on 180 ac in UGB Source: Marketek, Inc. Pre-development; water requirements in dispute 1,700 Selected Residential Developments Exhibit R-11 Selected Destination Resorts/Major Residential Developments in the Redmond Area Nov-05 Redmond, Oregon ? May 2006 26 Downtown Business Development Plan OPINION RESEARCH In September 2005, two surveys were prepared and conducted to reach target audiences key to strengthening the retail base of the downtown business district: area residents/employees and business owners/operators. Area residents, employees and businesses were urged via newspaper feature stories and chamber of commerce publicity to help shape the future of downtown Redmond by completing an on-line survey. In addition, hard-copy surveys were delivered in-person to downtown businesses, many of whom requested that their employees fill out on-line surveys. Shopper surveys were available at city hall, the chamber of commerce and selected downtown business locations. The primary objective of this research is to gain an understanding of the perceptions, needs and motivations of local shoppers and businesses. Surveys were augmented with three downtown business and stakeholder focus groups during the September site visit, over 20 in-store visits/interviews with business owners and an interactive retail marketplace workshop held during the October site visit. Approximately 60 persons participated in all. Detailed results of the surveys are provided in Appendices B and C. Survey, interview and focus group findings are summarized below. A. Shopper Survey ? 263 people participated in the survey. ? 167 (64.2%) reported doing most of their non-grocery shopping in Bend, while 64 (24.6%) do most of their non-grocery shopping in Redmond. When shopping in Bend, big box stores were the most popular destination. ? By far the most common reason cited for shopping choice was the availability of a wide selection of goods. Price was the second most important factor influencing shopping preference. ? When people chose to shop in Redmond, their primary reasons were to support local businesses and the convenient location. The major disadvantages of shopping in Redmond were poor selection of goods/services, traffic, and lack of parking. Respondents also felt stores would benefit from improving their appearance and expanding hours of operation. ? The kinds of merchandise most frequently cited as being needed in Redmond were women?s casual apparel, shoes, books, and linens and towels. ? The kinds of leisure/ entertainments services that topped the list were restaurants, tailoring and alterations, a copy center, and vision care. Redmond, Oregon ? May 2006 27 Downtown Business Development Plan ? By far the most frequently type of restaurant cited was seafood, followed in demand by fine dining, a steakhouse, family restaurants, and a bakery. ? When respondents were asked if they would consider living in high quality housing if it were available in downtown Redmond, almost 2/3 of the 212 people who responded to the question said ?No.? Of those who answered yes, the vast majority preferred to own their homes. ? The qualities of Redmond dearest to its residents are its small-town atmosphere and the attractiveness of its original historic buildings. B. Business Owner Survey ? The survey generated responses from 42 Redmond business owners, over 33% of whom have been in business for more than ten years. ? No uniform business hours can be identified from the survey. More than 43% of the businesses operate from Monday-Saturday, while 35% are open only Monday-Friday. ? More than half (55%) of the estimated customer base is comprised of Redmond residents. The balance of customers was broken down as follows: 36 % from Deschutes County, 31% from the tri-county area and 14% from travelers/tourists. ? Improvements to businesses during the last two year were made by 34 respondents (80%). Of these, 24 (56%) involved financial investment. The amount of investment varied widely, ranging from $1,000 to $2.5 million. The median investment was $25,000. ? Almost 2/3 of the business reported moderate growth in their business. Not a single business was experiencing a decline in sales. The remaining businesses were evenly divided between rapid growth and no growth. ? Eighteen businesses expressed the intention to expand their business during the next year, with the same number planning to operate on the same level. None of the businesses intended to reduce operations. ? The factors cited by more than 30% of the respondents as most effecting the success and expansion of their businesses were qualified labor, foot traffic, and public access. The three greatest obstacles to success were current economic conditions, competition, and skill level of employees. ? The kind of assistance most desired by business to improve their success was in marketing and advertising. Almost two-thirds of those responding indicated interest in participating in a joint marketing program. ? Thirty businesses said they invested in their business. The investments ranged from $1,000 to $4 million, and totaled $4.7 million. Physical improvements Redmond, Oregon ? May 2006 28 Downtown Business Development Plan were made by 40% of the businesses, and 40% invested in marketing, advertising and promotion. ? When asked what qualities of downtown Redmond should be maintained in the face of change, the most overall consensus was to keep a friendly, small- town atmosphere. Also of notable interest were the following: ?the old town look of downtown; smaller, individually owned businesses/no chains; and free parking.? ? Businesses identified what they most would like to change in downtown as being: traffic, building conditions and the lack of retail variety. ? The future image seen as most desirable was of a downtown that had ample parking, was pedestrian friendly, and offered a diverse range of shopping choices. When asked about shopping needs and interests, business owners expressed an interest in: ? Restaurants (especially middle to upper end), night clubs, and boutique/specialty stores ? More shoe stores, children?s clothes, men?s clothes, etc. ? Multi-plex cinema/theater ? McMenamin's or Deschutes Brewery ? Retail business and office buildings Exhibit R-11 on the following page identifies goods and services for which 30% or more of residents and a significant number of businesses expressed an interest. Redmond, Oregon ? May 2006 29 Downtown Business Development Plan EXHIBIT R-11 SUMMARY OF TOP RANKED SHOPPING NEEDS AND INTERESTS Business Type Resident Survey Business Survey Books X X Music/CDs X X Sporting Goods Gifts & Cards X X Pet Supplies X Arts & Crafts Supplies X X Computers & Accessories X Electronics X Linens & Towels X X Furniture X Garden Supplies X x Appliances X Antiques Jewelry X Women?s Casual Apparel X Women?s Business Apparel X Women?s Specialty Apparel X X Men?s Casual Apparel X X Men?s Business Apparel X Men?s Specialty Apparel Children?s & Infant?s Apparel X X Athletic Apparel X X Teen & Young Adult Apparel X X Boutiques X Shoes X X Bakery X X Hardware X X Groceries X Trader Joe style store X Pharmacy X Concerts/Live Music X X Art galleries X Movie Theater X X Live Theater X Dinner Theater X Bowling X Swimming Pool X Exercise Studio/Gym X Mini Golf X Outdoor Recreation Video/ DVD Rental X Day Care Car Wash/Detailing Tailor/Alterations X Dry Cleaner/Laundry X Computer Repair X Hair/Beauty X Pack & Mail X Copy Center X Coffee House X X Seafood Restaurant X X Steakhouse X X Fine Dining X X Deli X Family Restaurant X X Brewpub/Grille X X Pizza/Italian Restaurant X Healthy/Natural Restaurant X Redmond, Oregon ? May 2006 30 Downtown Business Development Plan C. Focus Groups Participants were asked to rate the current status/health of downtown Redmond on a scale of 1 to 10 with 10 being, ?the picture of success,? and 1 being, ?in serious trouble.? The average rating was a 4, with recognition that there are many positive initiatives underway today. A couple of individuals noted that there has never been more momentum around downtown revitalization than there is today. The groups were asked to identify key opportunities or strengths that downtown Redmond should build upon toward future success, issues and challenges it must address and a series of questions regarding future vision and interests for downtown. Downtown opportunities and current strengths ? Assets: political will for change, $, energy, redevelopment occurring ? Hotel redevelopment still on the table; many interested parties; an important asset to develop ? Multi-plex movie theatre proposed by local developer ? Possible redevelopment of older downtown motel site for mixed-use ? RDP will hire executive director by February; City will pay for position for 2 years ? ODS insurance company leaning toward Redmond (over Medford) to locate back office operation (120 jobs) and possible dental hygiene school. Would possibly locate on Evergreen & 7th. ? Couplet completion 2005-06 ? By pass completion 2007 ? Play on the ?ring? of resorts in the area?new household formation ? Redmond has a very engaged local team?both city and volunteer leaders ? Skybox Sports Bar renovation has had a positive impact on foot traffic for nearby businesses ? Connect Sam Johnson Park and the ?canyon? to downtown w/ walking/biking trails ? Better connect downtown to Smith Rock---guides, trails, rock climbing/sports shop ? Promote historic assets ? Owner/ operator of Eagle Crest offering $100,000 matching grant over 2 years for downtown ? building facades ? Tourists are stopping downtown where enticed. The Gathering reports 3/4s of the customer traffic in recent months is visitor-related ? Historic church is serving as downtown event center ? New property owners planning to make property improvements to the vacant, historic bank, corner of Evergreen & 5th ? Urban renewal agency offers low interest loan program for property improvement ? Local ownership of businesses and customer service are especially key downtown Redmond, Oregon ? May 2006 31 Downtown Business Development Plan CHALLENGES / ISSUES FOR DOWNTOWN ? Downtown very long and narrow. Expand the energy east-west, particularly toward 7th St?area around the Plaza and down the street. Local Grounds has nice outdoor eating space; use as catalyst ? Significant new retail development in town (out Highland and south) and adjacent to Fred Meyer?80,000 SF Nolan?s Town Center?will challenge downtown to perform ? Retail sprawl stretches 3 miles south to the airport interchange ? Discounters/big boxers are growing in Redmond: Super Wal-Mart, Home Depot, eventually ? Possible lifestyle center out by Wal-mart (Desertscape developer) ? Numerous vacancies on Main Street ? Core retail area is Forest to Black Butte; 5th to 8th St. ? Many blank spaces/walls; many parking lots; many institutional uses ? Business health a concern: ?Half the businesses don?t go out of business, they just don?t do anything!? ? Several business owners expressed concern about developers/investors buying downtown properties, making improvements and significantly raising rents that will seriously challenge small business. ? Downtown needs to be visually attractive?need energy around clean up Downtown business mix observations ? Highly eclectic mix serving diverse markets (matte, western shop, pet store, medical supply/tattoo, shoes, arcade, tobacco shop) ? A few boutique-type businesses that the business development group seems to desire more of (Gathering, Clothes Encounter, art gallery/jewelry) ? Several marginal businesses ? Several new, start-up businesses (matte, Beyond Shadows, jewelry/gallery, etc) ? Several businesses serving lower-income market (2nd hand kids clothing/baby supplies; pawn shop, consignment) ? 4-5 antique stores; 10+ salons; 6+ banks ? Several youth-oriented businesses: Goth store, arcade/teen center, skate shop, clothing store (Erickson mall) ? Several convenience: grocery, 2 hardware, lumber, liquor ? No dinner places except Sully?s ? No place for breakfast downtown ? Several destination downtown businesses such as sporting goods store? highly unique merchandise mix and draw from throughout Central Oregon and well beyond. ? Estimated 1/4 of ground floor space is occupied by office users Redmond, Oregon ? May 2006 32 Downtown Business Development Plan KEYS TO DOWNTOWN SUCCESS ? Reduce truck traffic ? Develop entertainment venue for foot traffic ? More retail & retail on ground floor ? Expand activity-alive after 5 ? A ?draw? is crucial ? Want more events, special activities downtown ? Night time activity and entertainment really needed ? Deschutes Brewery-type bar ? Leisure place?places w/ ambiance ? Improved plaza?add water feature and grass/greenery ? Mix of uses highly desirable?residential and office ? Downtown hotel highly desired ? Extend business hours ? Encourage more residential ? Concentrate retail in a 3 block area DOWNTOWN?S UNIQUE MARKET POSITION ? Encourage ?rural western? theme?authentic and down home??Rope ?em in!? ? More unique development and unique business like Dawson Station ? craftsman style ? More upscale one of a kind boutiques ? Offer things you can?t find in other places ? Specialty ? Arts and entertainment ? Locally owned and operated, not ?anywhere USA? ? Serve variety of income levels ? Authentic western town/cowboy town?western wear, home furnishings ? Western-oriented artisans and crafts people ? Must focus on aesthetics Redmond, Oregon ? May 2006 33 Downtown Business Development Plan Geographic market area ? Sisters, Prineville, Madras, to Tumalo (toward Bend); 25 mi east, 30 mi north Market needs ? More food and entertainment ? Music store ? Consider national retailers as anchors ? Athletic/recreation apparel and accessories ? Accommodate both middle and high income targets Redmond, Oregon ? May 2006 34 Downtown Business Development Plan RETAIL MARKET ANALYSIS RETAIL SUPPLY The retail supply section examines the type and characteristics of the existing retail base in the Redmond market area and evaluates downtown Redmond as a retail shopping district. % Chg % Chg Area Establishments Sales ($Mil) Establishments Sales ($Mil) Estab. Sales Redmond 100 $185.7 112 $249.5 12.0% 34.4% Bend 391 $848.5 498 $1,380.3 27.4% 62.7% Deschutes County 687 $1,297.3 763 $1,863.4 11.1% 43.6% Madras 39 $62.8 36 $84.3 -7.7% 34.2% Prineville 53 $88.1 47 $72.6 -11.3% -17.6% Source: Census of Retail Trade, Marketek, Inc. Exhibit RS-1 1997 2002 Retail Sales Trends (1997-2002) Redmond Market Area and Deschutes County A. Existing and Planned Retail Development To gain insight into the retail sector throughout the greater Redmond area, Exhibit RS-1 compares growth in the retail establishments and sales in Redmond, Bend, Madras, Prineville and Deschutes County during the 1997-2002 timeframe. Not surprisingly, growth in Bend outpaced all local areas with sales in 2002 ($1.38 billion) comprising 74% of the Deschutes County total ($1.86 billion). Redmond experienced a healthy increase in retail sales during that time, from $185.7 million to $249.5 million, owing in large part to the location of Fred Meyer and Safeway in 1999. As another indicator of recent local commercial expansion, commercial building permits totaled 562 during the1999-2004 time period or 94 a year. During the 1997-2002 timeframe, retail expansion in Bend and Redmond negatively impacted the local commercial base of both Prineville and Madras. The addition of large discounters such as Wal-Mart and Fred Meyer in Redmond and Costco in Bend has pulled sales out of the smaller outlying communities. Other factors also affected the decline, such as the closing of the last sawmill, Ochoco Mill in Prineville during that time period and a large flood in downtown Prineville in 1998. Redmond, Oregon ? May 2006 35 Downtown Business Development Plan The downtown districts and organized shopping centers within the greater Redmond retail market area were inventoried to provide an understanding of the retail context that downtown Redmond operates within and the status of the retail industry as a whole. Exhibit RS-2 provides a snapshot of market area retail centers. Within each community, commercial development has grown up around the major highways that bisect the towns and as a result, all of the towns except Sisters have a preponderance of free standing highway-oriented commercial development spread out from one end of town to other. Redmond, Oregon ? May 2006 36 Downtown Business Development Plan City/Shopping Center Name Size Anchor Businesses Vacancies/Comments Palisades Shopping Center 35,000 SF Bi-Mart, Burger King No vacancy 5th Street Strip Center <10,000 SF Radio Shack No vacancy Downtown <100,000 SF Black Bear Diner No vacancy. Great Earth Natural Foods moving to larger, more prominent downtown location Safeway Shopping Center N/A No other businesses Erickson?s Sentry N/A No other businesses Ochoco Plaza Aspen Park Center N/A Papa Murphy?s Vacancy (>3,000 SF) behind main strip Fred Meyer Shopping Center & adjacent strip 190,000 SF estimated F.M., Blockbuster, Baskin- Robbins, Super Cuts, NY City Sub, Cellular One No vacancy; $1.5 SF (NNN) for small pad Hwy 97 Strip Center 40,000 SF estimated Dollar Tree, Hunan Chinese Restaurant 1 vacancy Redmond Plaza N/A Domino?s Pizza, Hollywood Video No vacancy Veteran's Way Retail Center 6,000 SF Pho Saigon, Nails, Coffee, Office $1.25-$1.34 SF (NNN) Wagner?s Square 100,000 SF Albertson?s, Rite Aid, Bi- Mart, Burger King, Shari?s No vacancy Downtown 484,460 SF groundfloor commercial Cent Wise Sporting Goods/Hardware, Sully?s, Sky Box, Parr Lumber 8 vacancies; 35,690 SF estimated; Av rents: $1.00/SF Ray?s Food Place 20,000 SF Ray's grocery expanding 2006; adding bank kiosk 5 Pines Development N/A Cinema, athletic club, spa Downtown 200,000 SF estimated Stitching Post, restaurants 95% occupancy; lease rates $0.90-$1.20 (gross) Source: Marketek, Inc. 2 Main Street vacancies Prineville Men's Store Sisters Redmond Wal-Mart Center & adjacent commercial 115,000 SF 1 building under construction Mexican, Color Tile, BedMart, Depot Prineville 82,000 SF Ray?s Food, Sears, Rite Aid, Pizza Hut 2 small vacancies Exhibit RS-2 Existing Retail Development: November 2005 Redmond Market Area Madras Redmond, Oregon ? May 2006 37 Downtown Business Development Plan The majority of retail in the market area can be characterized as convenience goods and services meeting local market needs. Downtown Sisters, known as a successful specialty shopping district is the exception, offering selected shoppers goods and unique merchandise that principally serves the visitor market. Sisters? retail businesses have until recently located almost exclusively on the downtown blocks, which may be one reason for the shopping district?s overall success. The cinema complex on the western edge is creating a new, though small, retail focal point. Grocery-anchored strip centers along the highway are prevalent with accompanying restaurant and commercial service tenants. Older single story detached commercial structures?many with limited street appeal?dot the highways between the strip centers and downtown districts. The quality of retail uses on Highway 97 varies considerably from unattractive, run-down commercial buildings to newer structures of quality materials?all generally occupied by destination businesses. The traditional downtown districts in Prineville and Madras appear to be ?holding their own? at this point in time with few or no vacancies. However, they struggle with a wide spectrum of tenants in terms of quality, market appeal and staying power. Redmond?s downtown district is particularly large by comparison to the other downtowns within the market area, which is a factor in the relatively higher number of vacancies. Exhibit RS-3 summarizes new and proposed major projects and developments including retail throughout the greater Redmond market area as of mid- November 2005. With the exception of Madras, every community has new retail in pre-construction or under construction, a response in part to their growing local markets. Redmond?s retail expansion leads with the addition of 80,000 square feet at Nolan Town Center, the proposed Super Wal-Mart and a number of other proposed or planned projects that incorporate retail. At present, throughout the market area, there is approximately 314,000 square feet of new retail, restaurant and related space planned or under construction to be absorbed over the next few years. This figure includes the possibility of a Super Wal-Mart in Redmond adding 130,000 SF of space (net), assuming the existing Wal-Mart (100,000 SF est?d) closes. Redmond, Oregon ? May 2006 38 Downtown Business Development Plan City Size/price range Timing/Comments 3rd St. strip center 15,000 SF retail; anchors: Dollar Tree, Starbucks, bank 2006 Ochoco Mill Property Master Plan 55.8 acres In planning phase. One large commercial anchor (Safeway, Fred Meyer) is anticipated Downtown property redevelopment w/ urban renewal funds Ongoing Other commercial New office building; motel chain interest Nolan Town Center 80,000 SF, Anchors: Ray?s Grocery , Mc Donald?s, Starbucks 2005-06 opening Super Wal-Mart, Canal & Maple Sts 230,000 SF; general merchandise, plants, groceries, auto lube, tires, garden products and furniture Pre application Chelsey Square 13,180 SF; Izzys Restaurant, Dentist, First American Title Under construction Highland Marketplace, Highland Avenue 5 acres Pre-construction, $1.66 SF Frank?s Landing , nearby existing Wal-Mart 25-acres mixed use project with up to 20,000 SF retail, restaurants Under construction 5 Pines Development 2 new restaurants, conference ctr 2005-2006 Westside commercial Mc Donalds/Chevron/Conv. Grocery; + 20,000 SF (4 pads) 2005-2006 Eastside commercial Ray?s Grocery expansion from 20,000 to 42,000 SF+ bank, small retail/restaurant 2005-2006 U.S. Forest Service Property 50-80 acres; mixed-used 2006-2010 Source: Marketek, Inc. Sisters Redmond Madras RS-3 New/Proposed Retail Development: November 2005 Redmond Market Area Prineville Redmond, Oregon ? May 2006 39 Downtown Business Development Plan B. Downtown Redmond?s Retail Base Exhibit RS-4, below, provides an approximate distribution of ground floor commercial uses in the core downtown Redmond area depicted on the map on the following page. The core area is defined as from Cedar to Highland (north ? south) and from 9th to 4th Streets (east - west). Square Feet % of Total Retail 200,456 41% Office 114,886 23% Service commercial* 87,017 18% Restaurant & Entertainment 51,449 11% Vacant commercial 35,690 7% Total 489,498 100% *hair salon, gym, bowling, spa Exhibit RS-4 Downtown Redmond Ground Floor Commercial Uses: November 2005 Source: City of Redmond, Marketek, Inc. SERA Architects, Inc. Downtown Redmond has approximately 489,498 square feet of ground floor commercial space within the business district, exclusive of gas stations and institutional uses such as banks. This is roughly the size of a regional shopping center and about one-third the size of a super-regional mall such as Washington Square in Tigard, Oregon. By far, downtown is the largest shopping district in the Redmond market area. Based upon the City?s current tax lot data base and Marketek?s inventory of downtown businesses, retail occupants comprise 41% of the ground floor space, followed by office users (23%), service commercial (18%), and restaurant/entertainment users (11%). Vacant ground floor space is estimated at seven percent (7%). The map identifies retail uses in red, with the greatest concentration located on 6th Street in a four block area between Black Butte and Forest Streets. Among the largest occupants in this area are: Erickson?s Sentry Supermarket, Cent Wise Sporting Goods and Sky Box sports bar. The majority of tenants are local, owner-occupied, small businesses offering a range of unique merchandise from books and gifts to apparel and antiques. In the near term, these four blocks will provide the foundation for strengthening the overall business mix and appeal of the downtown shopping district. Redmond, Oregon ? May 2006 40 Downtown Business Development Plan MAP OF DOWNTOWN REDMOND?S GROUND FLOOR COMMERCIAL SPACE Redmond, Oregon ? May 2006 41 Downtown Business Development Plan Redmond, Oregon ? May 2006 41 Downtown Business Development Plan C. Downtown Redmond?s Competitive Position Successful downtown districts of any size have a healthy business climate and a pro-active marketing program. Key amenities and characteristics to draw customers and/or business prospects to neighborhood or community shopping center are presented in Exhibit RS-5. These are particularly critical for older commercial districts seeking to compete with new shopping malls, lifestyle centers and big box retailers. Although many of these challenges have already been identified, they are listed here to portray a composite picture and to evaluate the downtown Redmond commercial district from two key perspectives: 1. What customers want from a shopping experience; and 2. Business climate and marketing factors that affect business decision-makers seeking a profitable location. Key for Rating S = Strength W= Weakness N = Neutral Exhibit RS-5 Downtown Redmond Analysis ? Strengths & Weaknesses Critical Success Factors Rating What Redmond Offers Retail Marketplace Growing population base S Over 27,000 people live in the greater Redmond market area. In the next 5 years, rapid population growth is expected to continue with a 4.4% increase on an average annual basis, compared to 1.04% for Oregon as a whole. Average or above average incomes N Median household income of over $44,000 for Redmond?s market areas is somewhat lower than Oregon?s at $47,424 for 2005. However, the attraction of higher end households to resorts and new housing developments will favorably impact median incomes. Strong visitor market S Redmond has a diverse and growing visitor market to draw upon from outdoor enthusiasts to golfers. With over $367 million in county wide visitor spending (2003), 5.5% av. annual growth and numerous visitor venues, tourism is an important industry. Business growth/expansion S Over a dozen new businesses have opened downtown in the last 2 years with 43% of business owner survey respondents planning expansions in the year ahead. Available shopping ? a selection of quality shopping for a range of incomes available W As a whole, downtown Redmond is a pass through business district for Highway 97 travelers. Redmond, Oregon ? May 2006 42 Downtown Business Development Plan Exhibit RS-5 Downtown Redmond Analysis ? Strengths & Weaknesses Critical Success Factors Rating What Redmond Offers The existing shopping does serve multiple markets, but with limited selection. Business anchors/attractors bringing repeat shoppers to town. N Downtown has numerous destination businesses (EX: Sky Box, Clothes Encounters, Pure Skate Shop, Cent Wise Sporting Goods, etc) and several convenience anchors: gas/auto service, hardware (2), grocery. Cross-over shopping is reportedly limited. Real Estate High occupancy rate N Downtown?s ground floor vacancy rate is moderate, estimated at 7%. The larger concerns are the significant vacant land ideally utilized for infill development and a number of potential retail properties occupied with offices. Quality commercial space available with good signage, parking, accessibility and small flexible space options. N Downtown has a handful of retail-oriented vacancies in the core retail area, enough to offer a small selection. Downtown lease rates are generally lower than strip centers or malls ($1/SF). Small spaces for business incubation or an incubator (reduces cost through shared expenses, and access to expertise) W There does not appear to be a suitable space downtown to encourage home-based businesses and start-ups to move to a storefront location. Real estate investment is occurring S Local private investment appears to be strong. 16 downtown properties on 6th Street alone have sold in the last 3 years, with significant property improvement occurring. An up-to-date inventory of available commercial buildings and sites for sale and for lease W There is no current, centralized inventory of available downtown properties for lease or sale with price and basic property data. Some sites with development potential have no signage for sale or lease. Attractive Shopping Environment Inviting, landscaped, well signed and appealing shopping environment that entices auto travelers to stop and shop N Downtown Redmond is eager to enhance its ?curb appeal? through more green space in the downtown area. The rotating banners help identify the district. Quality built environment creating interest and appeal W Redmond has a small but valuable concentration of historic buildings that are an asset and should be used as the basis for complementary new construction. Overall, the built environment offers limited appeal as the building character is uneven. Attractive city entrances with good signage to downtown N Signage to downtown is limited without gateways. Shoppers need clear, consistent directional signage to the shopping district. This would help slow fast driving traffic as well. Redmond, Oregon ? May 2006 43 Downtown Business Development Plan Exhibit RS-5 Downtown Redmond Analysis ? Strengths & Weaknesses Critical Success Factors Rating What Redmond Offers Storefronts reflect pride and ownership N A few businesses are working hard to create inviting storefronts. Many more would benefit from help with their storefront image and merchandising. Concentrated nodes or linkages of development creating a critical mass or dense shopping environment, attracting more shoppers. W As a whole, the retail energy of downtown Redmond is spread out among 16 blocks on the 5th & 6th St. couplet. At present, drivers and pedestrians cannot identify the heart of downtown. Accessibility Parking to support stores and services. N The parking assessment revealed good availability of parking, however, shoppers & businesses noted ?parking safety? as a big concern with traffic pressures. Signage to parking is needed. Walkable shopping district to encourage browsing and impulse shopping. W Intense truck & auto traffic through downtown make for an uncomfortable walking environment. Incentives Financial assistance (revolving or low- interest loans, etc.) S Urban renewal agency offers low interest loans for property improvement. Fa?ade improvement/sign assistance S Program is being revamped to encourage greater participation; Eagle Crest has matching grant fund. Landscape design/ assistance W No known incentive. Business Environment Local entrepreneurship S On the rise. Several new businesses have opened in the last year or so with most businesses reportedly reinvesting. Several property owners have or are making improvements. A streamlined, one-stop regulatory process that is clearly articulated in planning documents and that is consistently administered. S The city permitting process appears to be efficient. No noted business complaints. Growing, diversified economic base S Within a 3-mile radius of downtown are 10,380 employees and 1,276 establishments. Redmond is well positioned with land, location and other assets to grow commercial and industrial businesses. A coordinated network of organizations or resource providers that provide a comprehensive array of technical assistance and financing for business. N Many organizations in Deschutes County offer assistance to small businesses, but are not directly linked to the Redmond Downtown Partnership at this time. Redmond, Oregon ? May 2006 44 Downtown Business Development Plan Exhibit RS-5 Downtown Redmond Analysis ? Strengths & Weaknesses Critical Success Factors Rating What Redmond Offers Networking S A very strong local chamber, together with a growing downtown organization, are significant assets. Ongoing Business Recognition Program W Not occurring as of yet, but a good potential activity for the Redmond Downtown Partnership (RDP). Business District Marketing Special Events: frequency, mix N Sunfest and Art Beat are strong, but many businesses want more events to draw attention to downtown. Business Promotions S RDP sponsors 4 promotions a year. Good base to expand from with more joint retail promotions. Public Relations N At present, RDP capacity is limited for ongoing promotion of downtown?s many great initiatives and changes. The chamber picks up the ball for promotion of business members. Positive Community Outlook & Salesmanship S There?s a good ?vibe? in Redmond today among business owners and residents alike. This energy should be channeled around marketing and business development. Web site W No downtown website at present. Community Newsletter/Newspaper S The Redmond Spokesman, a weekly publication, is a positive partner for downtown. Design, logo, slogans W Downtown Redmond lacks a distinct identity and message. No identifiable image. Business Attraction/Lead Generation Activities Specific types of businesses &/or merchandise identified to target N Not established, but will be guided by the Downtown Master Plan. Business recruitment campaign/ lead- generating activities N Business Development Team will be trained as part of downtown plan update. Success will be dictated by follow-through. Redmond, Oregon ? May 2006 45 Downtown Business Development Plan RETAIL MARKET DEMAND This section provides estimates of existing retail leakage and future potential market demand for retail uses in the Redmond market area. Retail demand is considered from both the local shopper and visitor target markets. A. Existing Retail Balance Retail market activity can be measured by the supply of existing retail and potential demand from the consumer marketplace. Exhibit RD-1 provides a general snapshot of current retail activity in the greater Redmond market area using the industry sectors defined by the North American Industry Classification System (NAICS), comparing supply and demand estimates and the resulting leakage or surplus of sales. Retail ?supply? is based on estimates of actual retail sales for Redmond trade area businesses from ESRI Business Information Solutions, using the Census of Retail Trade and a variety of other business and government data bases. ESRI also estimates consumer demand or retail potential. Retail ?demand? represents the expected amount spent by residents of the defined trade area for various retail goods and services, based upon consumer expenditure patterns derived from the U.S. Consumer Expenditure Survey. Bear in mind this data only reflects potential spending from local shoppers and does not include spending from visitors, second home owners and employees working in the greater Redmond market area but living elsewhere. Retail leakage or conversely, surplus is estimated by measuring the difference between Supply and Demand. The difference is either a leakage of sales out of the trade area, where retailers outside the trade area are filling demand for retail product, or a surplus of sales, meaning that certain business categories are ?importing? sales from shoppers who live outside the trade area. In reality, the consumer marketplace is quite fluid. Even if goods are locally available, priced appropriately and of good value, local shoppers will always do a certain amount of shopping away from home. Certain businesses such as restaurants are often dependent on drawing customers from beyond the local residential population. However, the estimate of sales leakage and surplus provides a reasonable indication of the availability of goods in the local market. Redmond, Oregon ? May 2006 46 Downtown Business Development Plan NAICS Supply Difference (Retail Sales) Leakage/(Surplus) 442: Furniture & Home Furnishings Stores $12,591,924 $14,805,125 $2,213,201 443 Electronics & Appliance Stores $4,783,171 $9,166,578 $4,383,407 444: Bldg Materials, Garden Equip. & Supply Stores $19,878,308 $30,605,883 $10,727,575 445: Food & Beverage Stores $95,153,148 $113,090,563 $17,937,415 446 Health & Personal Care Stores $19,361,432 $14,863,069 -$4,498,363 448: Clothing & Clothing Accessories Stores $13,182,553 $12,655,272 -$527,281 451: Sporting Goods, Hobby, Book, & Music Stores $15,445,750 $12,593,049 -$2,852,701 452: General Merchandise Stores $95,744,471 $93,679,281 -$2,065,190 453: Miscellaneous Store Retailers $20,825,936 $17,247,639 -$3,578,297 722: Food Services & Drinking Places $83,297,982 $95,488,056 $12,190,074 Source: ESRI BIS, Marketek, Inc florist, office supplies (Spending Potential) Exhibit RD-1 Existing Retail Supply/Demand Balance: Selected Categories Greater Redmond Retail Trade Area, 2005 Demand Exhibit RD-1 depicts a leakage of sales occurring in five out of ten of the retail categories included, with the largest leakage or gap occurring with Food & Beverage stores at $17.9 million, followed by Food & Drinking Places ($12.1 million), and Building Materials, Garden Equipment & Supply ($10.7 million.) One interpretation of this data is that there are insufficient retail offerings in the categories where leakage is occurring. Since this data only includes potential spending by market area residents and does not incorporate spending by visitors and the workforce, leakage in certain categories may actually be higher. While several categories appear to have a surplus of sales, the most significant relative to the size of existing and potential sales are Health & Personal Care (-$4.4 mil), Sporting Goods, Hobby, etc (-$2.8 mil), and Miscellaneous Store Retailers (-$3.5 mil.). In the case of health/personal care or drugstore-related goods, the greater Redmond market area offers consumers numerous choices among chain stores alone, including two Rite-Aids, Walgreen?s, three Bi-marts, Fred Meyer and other grocery drugstore departments. Regarding NAICS 451 which includes sporting goods and other retail sub-categories, shopping selection is strong with sporting goods departments within area chain stores, Redmond?s Big R store and Cent-wise Sporting Goods in downtown. Again, these figures only reflect the difference in actual and potential sales for the greater Redmond resident market area. In selected segments of these retail categories, it is possible that additional retail sales may be supported. Redmond, Oregon ? May 2006 47 Downtown Business Development Plan Using the data presented in Exhibit RD-1, a very approximate summary of the existing retail supply and demand balance indicates that there is net unmet spending potential of $33.9 million in the greater trade area. Using an average target sales per square foot figure of $225, this translates to 150,799 square feet of supportable retail space. B. Retail Sales Potential and Supportable Space The methodology for estimating statistical market support for retail space in the local and greater trade areas is displayed in Exhibits RD-2 through RD-6. This methodology applies expenditure potential1 by type of merchandise to local and greater trade area population figures in order to obtain potential sales volume for trade area residents. Potential sales are divided among five merchandise and service categories: shopper?s goods, convenience goods, food & beverages, personal services and other retail expenditures. Note that gas and auto-related sales and service are not included, as these are not retail sales typically desired in the downtown business district. Exhibit RD-2 defines the types of goods and services within several of these categories. For instance, ?apparel? includes women?s apparel, men?s apparel, children?s apparel, footwear, watches and jewelry. Merchandise/Service Category Types of Goods/Services Apparel Women's Apparel, Men's Apparel, Children's, Footwear, Watches & Jewelry Home Furnishings Furniture, Floor Coverings, Major and Small Appliances, Household Textiles, Floor Coverings, PC Software and Hardware, Housewares, Dinnerware, Telephones Home Improvement Maintenance and Remodeling Materials, Lawn & Garden Misc. Specialty Retail Pet Care, Books & Periodicals, Sporting Equipment, Toys & Hobbies, Video Cassettes & Games, TV/VCR/Cameras, Audio Equipment, Luggage, Eyeglasses Groceries Food at Home, Nonalcoholic Beverages at Home, Alcoholic Beverages, Smoking Products, Housekeeping Supplies Restaurants Food Away From Home, Alcoholic Beverages Entertainment/Recreation Admission to Movie/Theater/Opera/Ballet, Recreational Lessons, Participation in Clubs, Video Rental, RV Services Personal Services Shoe Repair, Laundry & Dry Cleaning, Alterations, Clothing Rental & Storage, Watch & Jewelry Repair, Photo Processing & Supplies, Child Care Source: ESRI BIS Exhibit RD-2 SUMMARY OF MERCHANDISE AND SERVICE CATEGORIES 1 Consumer spending is estimated from the Bureau of Labor Statistics? Consumer Expenditure (CEX) Surveys. The CEX surveys have been used for over a century to provide data to study consumer spending and its effect on gross domestic product. Redmond, Oregon ? May 2006 48 Downtown Business Development Plan Exhibits RD-3 and RD-4 depict potential retail sales for the local and greater Redmond trade areas (see map on page 6), respectively for the 2005-2015 time frame. Estimates of sales per square foot of store space, derived from the Urban Land Institute?s Dollars and Cents of Shopping Centers, are used to convert adjusted potential sales to supportable space estimates. In Exhibit RD-3, for example, in the case of apparel, potential sales of $24,246,295 in the local trade area at sales per square foot of $209 will support 116,011 square feet devoted to this type of merchandise. Exhibit RD-3 shows that in 2005, there is the potential for approximately 811,583 square feet of retail space based on potential expenditures of residents who reside full-time in the local trade area (a ten minute drive time from downtown). In the greater trade area (which encompasses the local area and also includes Madras, Prineville and Sisters), there is the potential for 2.1 million square feet of retail space (2005) based on resident expenditure potential. That is, greater trade area residents have the potential to generate sales demand that will support 2.1 million square feet of retail space, 811,583 square feet of which is supported by local trade area residents. However, these potential expenditures by residents may occur outside of the local or greater trade areas if desirable goods and services are not available locally. Exhibits RD-3 and RD-4 also convey the same analysis for the 2010 and 2015 time periods. By 2010, potential local trade area sales of $231.3 million will support 991,660 of retail space, growing to $282.2 million by 2015 with 1.2 million square feet in retail space potential. Exhibit RD-4 shows that retail spending potential in the greater trade area will increase from $512.7 million to nearly $701 million, resulting in supportable square feet of 2.9 million by 2015. The net gain in both potential sales and square feet from 2005-2015 for the two trade areas appears in five year increments in the last row of each exhibit. Using the local trade area as an illustration (Exhibit RD-3), by 2010, growth in the local residential population could support an increase of 180,077 square feet in retail space demand. By 2015 an additional 218,114 square feet of retail space potentially can be supported. Redmond, Oregon ? May 2006 49 Downtown Business Development Plan Per *Target Merchandise or Household Sales Service Category Expenditure ($/SF) Sales Space (SF) Sales Space (SF) Sales Space (SF) Apparel $2,305 $209 $24,246,295 116,011 $29,626,165 141,752 $36,142,400 172,930 Home Furnishings $1,336 $199 $14,053,384 70,620 $17,171,608 86,289 $20,948,480 105,269 Home Improvement $1,055 $140 $11,097,545 79,268 $13,559,915 96,857 $16,542,400 118,160 Misc. Specialty Retail $1,893 $216 $19,912,467 92,187 $24,330,729 112,642 $29,682,240 137,418 Shoppers Goods $69,309,691 358,087 $84,688,417 437,540 $103,315,520 533,777 Grocery $5,766 $390 $60,652,554 155,519 $74,110,398 190,027 $90,410,880 231,823 Health & Personal Care $1,176 $365 $12,370,344 33,891 $15,115,128 41,411 $18,439,680 50,520 Convenience Goods $73,022,898 189,411 $89,225,526 231,438 $108,850,560 282,342 Restaurants $2,985 $263 $31,399,215 119,389 $38,366,205 145,879 $46,804,800 177,965 Entertainment $881 $90 $9,267,239 102,969 $11,323,493 125,817 $13,814,080 153,490 Personal Services $599 $151 $6,300,881 41,728 $7,698,947 50,986 $9,392,320 62,201 Total $189,299,924 811,583 $231,302,588 991,660 $282,177,280 1,209,775 Five Year Net Gain $42,002,664 180,077 $50,874,692 218,114 * Target sales are based on the Urban Land Institute, "Dollars and Cents of Shopping Centers." Sources: ESRI BIS; Urban Land Institute; Marketek, Inc. ? 2005 by Marketek, Inc. 2015 Retail Potential Exhibit RD-3 RETAIL EXPENDITURE POTENTIAL Redmond Local Retail Market Area 2005-2015 Retail Potential 2005 2010 Retail Potential Per *Target Merchandise or Household Sales Service Category Expenditure ($/SF) Sales Space (SF) Sales Space (SF) Sales Space (SF) Apparel $2,219 $209 $62,311,739 298,142 $72,816,485 348,404 $85,196,286 407,638 Home Furnishings $1,329 $199 $37,319,649 187,536 $43,611,135 219,151 $51,025,626 256,410 Home Improvement $1,066 $140 $29,934,346 213,817 $34,980,790 249,863 $40,928,004 292,343 Misc. Specialty Retail $1,857 $216 $52,146,417 241,419 $60,937,455 282,118 $71,297,658 330,082 Shoppers Goods $181,712,151 940,914 $212,345,865 1,099,536 $248,447,574 1,286,473 Grocery $5,802 $390 $162,925,962 417,759 $190,392,630 488,186 $222,761,988 571,185 Health & Personal Care $1,192 $365 $33,472,552 91,706 $39,115,480 107,166 $45,765,648 125,385 Convenience Goods $196,398,514 509,464 $229,508,110 595,352 $268,527,636 696,570 Restaurants $3,344 $263 $93,902,864 357,045 $109,733,360 417,237 $128,389,536 488,173 Entertainment $860 $90 $24,149,660 268,330 $28,220,900 313,566 $33,018,840 366,876 Personal Services $589 $151 $16,539,709 109,534 $19,328,035 128,000 $22,614,066 149,762 Total $512,702,898 2,185,287 $599,136,270 2,553,691 $700,997,652 2,987,854 Five Year Net Gain $86,433,372 368,404 $101,861,382 434,163 * Target sales are based on the Urban Land Institute, "Dollars and Cents of Shopping Centers." Sources: ESRI BIS; Urban Land Institute; Marketek, Inc. ? 2005 by Marketek, Inc. Retail Potential Retail Potential Retail Potential 2005 2010 2015 Exhibit RD-4 RETAIL EXPENDITURE POTENTIAL Redmond Greater Retail Market Area 2005-2015 Redmond, Oregon ? May 2006 50 Downtown Business Development Plan Exhibit RD-5 distributes increases in supportable retail space in the local and greater retail market areas among various retail categories for the years 2010 and 2015. The exhibit also provides estimates of the downtown Redmond shopping district?s potential capture of this space. Estimates of demand account for downtown?s promise as a shopping district and assume that a comprehensive redevelopment program is underway. In other words, a passive approach to economic revitalization would likely result in downtown achieving only a fraction of its estimated potential. Capture rates--or the amount of space that is expected to be absorbed--are primarily based on Marketek?s experience in similar shopping districts throughout the nation, the downtown?s retail potential relative to the market area and the potential for infill and redevelopment opportunities. The captures assume that local area shoppers will have a greater propensity to spend more locally than shoppers in the greater trade area, if goods and services are available. They also assume that over time as downtown turns around, it will be able to attract more of the area?s potential retail spending and space. Over the next ten years, Exhibit RD-5 shows downtown Redmond capturing up to 27% of the increase in potential local retail market area retail expenditures, translating into 104,339 square feet of retail space. In addition, Marketek estimates that downtown Redmond has the potential to capture up to 7% of the increase in greater retail market area expenditures over the next ten years, representing a total of 51,367 square feet of retail space. It should also be noted the assigned captures assume that downtown Redmond will focus business development efforts on unique specialty merchandise including home furnishings and apparel and will significantly expand its role as an entertainment/restaurant destination in the future. Over time as housing is more fully incorporated into the downtown mix, the business district should offer and be able to support more convenience goods and services than is factored into the capture rates shown on the next page. More information on the distribution of space among shopper?s goods, convenience goods, restaurant, entertainment and personal service retail categories will be provided in the Retail Strategy section of this report. The estimate for potential retail space in the downtown should be considered conservative based on the fact that existing retail spending gaps and expenditures of three key target markets ? visitors, seasonal residents and employees commuting into Redmond from outside the trade area ? are not factored into estimates. . Redmond, Oregon ? May 2006 51 Downtown Business Development Plan Merchandise/Service Category Supported Supported By Local By Greater Capture Sq Ft Capture Sq Ft Capture Sq Ft Capture Sq Ft Area Area Shoppers Goods Apparel 22% 5,739 7% 3,591 26% 8,021 8% 4,837 13,761 8,428 Home Furnishings 38% 6,028 7% 2,155 44% 8,424 8% 2,903 14,452 5,058 Home Improvement 13% 2,285 6% 2,298 15% 3,193 7% 3,094 5,478 5,392 Misc. Specialty Retail 29% 5,924 7% 2,978 33% 8,279 8% 4,011 14,202 6,990 Subtotal 25% 19,976 7% 11,022 30% 27,917 8% 14,845 47,893 25,867 Convenience Goods Grocery 15% 5,297 4% 2,547 16% 6,793 5% 3,752 12,090 6,299 Health & Personal Care 25% 1,887 6% 907 27% 2,420 7% 1,336 4,306 2,243 Subtotal 17% 7,184 4% 3,454 18% 9,213 5% 5,088 16,396 8,542 Restaurants 25% 6,623 7% 4,213 30% 9,626 8% 5,675 16,248 9,888 Entertainment 40% 9,139 5% 2,262 40% 11,069 6% 3,199 20,208 5,460 Personal Services 17% 1,574 4% 739 18% 2,019 4% 870 3,593 1,609 Total 25% 44,495 6% 21,690 27% 59,844 7% 29,677 104,339 51,367 Source: Marketek, Inc. ? 2005 by Marketek, Inc. Supported by Supported by Local Retail Area Greater Retail Area Supported by Local Retail Area 2010 Supported by Greater Retail Area Study Area New Supportable Retail Space 2015 Total Study Area New Supportable Retail Space Exhibit RD-5 SUMMARY OF NEW POTENTIAL SUPPORTABLE RETAIL SPACE IN THE STUDY AREA 2010-2015 In an effort to put the demand estimates into context, Exhibit RD-6 (next page) shows the average size of several types of businesses that may be appropriate for the study area. In addition to the median size of all businesses within a particular business category, the median size of national, local chain and independent retailers is also shown. Redmond, Oregon ? May 2006 52 Downtown Business Development Plan Merchandise or Service Category/Busines Median National Local Chain Independent Specialty Retail Appliances 5,956 6,292 5,911 ~ Art Gallery 1,802 ~ 1,802 1,907 Arts/Crafts Supplies 8,928 20,957 ~ 3,070 Beauty Supplies 1,807 1,634 2,450 1,829 Bike Shop 3,440 ~ ~ 2,596 Bookstore 10,09323,0009,9902,740 Cameras 2,000 2,000 ~ ~ Children's Wear 3,913 4,879 3,054 2,105 Family Shoe Store 4,000 4,113 5,100 2,460 Family Wear 8,000 8,500 3,474 5,132 Gift/Cards 4,200 4,900 3,780 1,653 Hardware 13,200 13,900 ~ ~ Home Accessories 7,595 10,215 5,365 2,462 Jewelry 1,500 1,610 1,968 1,200 Luggage 2,500 2,499 ~ ~ Men's Clothing Store 3,500 4,319 3,065 2,750 Pet Supplies 7,995 17,600 3,201 3,200 Record/Tapes 4,464 6,178 ~ 2,017 Sporting Goods 8,465 22,000 4,980 2,995 Toys 7,855 12,000 ~ 3,344 Women's Ready to Wear 4,400 4,503 3,960 2,145 Convenience Drugstore/Pharmacy 10,920 10,860 16,668 4,977 Supermarket 50,420 49,071 51,495 23,300 Bakery 1,9904,000 ~ 1,700 Gourmet Grocery 18,000 ~ ~ ~ Wine/Liquor 3,440 ~ 6,237 2,920 Personal Services Day Spa 2,875 ~ 2,563 3,060 Women's Hair Salon 1,400 1,450 1,250 1,361 Nail Salon 1,200 ~ 1,200 1,200 Picture Framing 1,600 1,703 ~ 1,588 Health Club 10,249 9,548 5,508 10,249 Mail/Packaging/Photocopying 1,278 1,240 ~ 1,236 Tailor/Alteration 950 ~ 900 1,035 Video Rental 6,000 6,333 4,240 4,733 Shoe Repair 855 ~ ~ 795 Drycleaners 1,800 ~ 1,800 1,649 Film Processing 1,252 1,600 1,304 1,150 Day Care 4,000 ~ ~ 3,901 Laundry 2,114 ~ 2,150 1,955 Restaurants Restaurant with Liquor 5,204 6,669 5,600 3,362 Restaurant without Liquor 3,581 6,500 3,025 2,625 Bar/Cocktail Lounge 3,821 ~ ~ 3,821 Ice Cream Parlor 1,137 1,144 1,137 1,116 Coffee/Tea 1,578 1,650 1,624 1,400 Entertainment Cinema 35,022 37,161 35,022 21,250 Source: Urban Land Institute, "Dollars and Cents of Shopping Centers" Exhibit RD-6 TYPICAL SIZE OF SELECTED BUSINESSES Redmond, Oregon ? May 2006 53 Downtown Business Development Plan Market area expenditure data can also be utilized to reveal what prices residents will pay and/or the level of their discretionary income they are willing to devote to various goods or services. The Spending Potential Index (SPI) is a measure of market activity that denotes actual dollars spent on certain goods and services. An SPI equal to 100 indicates that consumers are buying or spending at a rate equal to the national average; a SPI greater or less than 100 indicates that consumers are buying/spending above or below the national average, respectively. Exhibit RD-7 shows that households in Redmond?s greater market area overall spend at a rate somewhat below the national average, reflecting the area?s below average incomes (Exhibit R-3). Spending is highest for satellite dishes, recreational vehicles and fees, pets/supplies, auto loans, prescription drugs, lawn and garden supplies, insurance and smoking products. The message for retailers focusing on local market sales is to emphasize value and worth for their cost- conscious shoppers, but not at the risk of reduced quality. Redmond, Oregon ? May 2006 54 Downtown Business Development Plan Merchandise/ Spending Merchandise/ Spendi Service Category Potential Index Service Category Potential Index Trade Trade Area Area Apparel 80 Financial Services Men's 81 Investments 60 Women's 79 Auto Loans 92 Children's 82 Health Footwear 79 Nonprescription Drugs 88 Watches & Jewelry 81 Prescription Drugs 97 Apparel Products and Services 77 Eyeglasses and Contact Lenses 86 Computer Home Computer/Hardware for Home 80 Home Improvement Software/Accessories for Home 80 Mortgage Payment/Basics 81 Entertainment & Recreation 84 Maintenance/Remodeling Serv 82 Entertainment Fees & Admissions 75 Maintenance/Remodeling Supp 91 Membership Fees 78 Utilities/Fuel/Public Service 87 Sports Participation 77 Household Furnishings Theater/Movies/Ballet/Opera 72 Household Textiles 80 Sporting Events 78 Furniture 79 Recreational Lessons 72 Floor Coverings 79 Television & Sound Equipment 83 Major Appliances 86 Cable Television 85 Housewares 84 Color Television 80 Small Appliances 83 VCR/Video Camera/DVD Player 78 Luggage 75 Video Cassettes and DVDs 82 Telephone & Accessories 82 Video Game Hardware/Software 79 Household Operations Satellite Dishes 92 Child Care 74 Video/DVD Rental 80 Lawn & Garden 92 Sound Equipment 82 Moving/Storage 78 Rental & Repair of TV/Sound 81 Housekeeping Supplies 85 Pets & Supplies 90 Insurance Toys & Games 80 Homeowners/Renters 92 Recreational Vehicles & Fees 98 Vehicle 85 Sports/Exercise Equipment & Supplies 84 Life 90 Photo Equipment & Supplies 81 Health 92 Books/Magazines/Subscriptions 80 Personal Care Products 84 Food & Beverages 83 School Books & Supplies 81 Groceries 84 Smoking Products 91 Bakery & Cereal Products 83 Transportation Meats, Poultry, Fish & Eggs 84 Vehicle Purchases 90 Dairy Products 84 Gas & Oil 90 Fruits & Vegetables 82 Vehicle Maintenance & Repair 84 Other Foods at Home 85 Travel Meals at Restaurants 82 Air Fare 76 Alcoholic Beverages 78 Hotels/Motels 82 Nonalcoholic Beverages at Home 86 Rental Cars 76 Food/Drink 82 Source: ESRI BIS Exhibit RD-7 SPENDING POTENTIAL INDEX OF SELECTED GOODS AND SERVICES Redmond Greater Trade Area ng Redmond, Oregon ? May 2006 55 Downtown Business Development Plan C. Visitor Market Demand Within Deschutes County, visitor spending has grown steadily from $307 million in 1999 to $374 million in 2003. From 1991 to 2003, visitor spending increased 5.5% on an average annual basis, tracking the growth at the state level of 5.6%. Exhibit RD-8 presents a straight line projection of visitor spending using the 5.5% rate of growth and with that assumption indicates that in 2005, county wide spending should reach nearly $408 million, growing to $520 million by 2010 and $663 million by 2015. Exhibit RD-8 Total Visitor Spending Deschutes County, 1999-2015 300 350 400 450 500 550 600 650 700 1999 2001 2003 2005 2010 2015 To t a l S p e n ding ( $ M i llion ) Actual Projected Source: Dean Runyan Associates, Marketek, Inc. Exhibit RD-9 on the next page depicts the distribution of visitor spending by commodity purchased for 2003 (actual) and beyond (projected). Based upon actual 2003 figures, the proportion of spending by purchase and projections of future spending (Exhibit RD-8), spending by commodity type is projected for the years 2005, 2010 and 2015. The projections utilize the 2003 ratio of spending. The last three columns summarize the increase in spending by commodity and total increase over the 2005-2015 time frame. Redmond, Oregon ? May 2006 56 Downtown Business Development Plan 2003 (Actual) % of Total 2005 (Estimated) 2010 (Estimated) 2015 (Estimated) Increase 2005-2010 Increase 2010-2015 Total Increase 2005-15 Accommodations $88.6 24.1% $98.3 $125.4 $159.9 $27.0 $34.5 $61.5 Food & Beverage Services $95.9 26.1% $106.4 $135.7 $173.0 $29.3 $37.3 $66.6 Food Stores $38.3 10.4% $42.5 $54.2 $69.1 $11.7 $14.9 $26.6 Ground Transp. & Motor Fuel $38.9 10.6% $43.2 $55.1 $70.2 $11.9 $15.1 $27.0 Art, Entertainment & Recreation $51.5 14.0% $57.2 $72.9 $92.9 $15.7 $20.0 $35.8 Retail Sales $50.9 13.9% $56.5 $72.0 $91.8 $15.5 $19.8 $35.3 Air Transportation $3.1 0.8% $3.4 $4.4 $5.6 $0.9 $1.2 $2.2 Total $367.2 100.0% $407.6 $519.7 $662.6 $112.1 $142.9 $255.0 Source: Dean Runyan Associates, Marketek, Inc. $ (Millions) Exhibit RD-9 Deschutes County Visitor Spending by Commodity Purchased 2003-2015 These figures allow a broad estimation of retail demand generated by the visitor market in the Redmond area. Excluding non-retail spending categories (transportation and lodging), total potential retail and restaurant spending by overnight visitors in 2005 in Deschutes County is estimated to be $262.7 million. Using the Redmond/Eagle Crest area?s share of Deschutes County bed tax revenues as a basis (Exhibit R-8), Redmond area was assigned a conservative 10.3% capture of county-wide visitor spending, estimated at $27.1 million in 2005. This spending in turn could potentially support approximately 136,000 square feet of additional retail, restaurant and entertainment space. With the total projected increase in county-wide visitor spending identified in RD-9, by 2010, the Redmond area visitor spending could grow to $34.5 million supporting 172,500 square feet. By 2015 with Redmond?s capture of visitor spending estimated at $44 million, 220,000 square feet of retail and related space could be supported. Downtown is well positioned to capture a large share of this spending as visitors are constantly on the lookout for unique shopping, dining and entertainment experiences they cannot find at home. Bear in mind these figures assume that Redmond will have sufficient appeal to visitors and the product?ie, restaurants, specialty goods and entertainment?to prevent visitor expenditures from flowing outside of the community. D. Area Employees As discussed in the Demographic Profile, over 10,000 employees of Redmond area businesses work within a three-mile radius of downtown (Exhibit RD-10), many of whom live outside of the local or greater trade area (in Bend or elsewhere) and are not included in the retail demand analysis. Consider, for instance, if each of the 10,000 employees ate out at Redmond area restaurants only once per week, spending an average of $7. Revenue generated of over $3.5 million annually would support almost 14,000 square feet of restaurant space Redmond, Oregon ? May 2006 57 Downtown Business Development Plan alone. In addition to area workers, commuters and passers-through along Highway 97 inevitably look to study area businesses to satisfy a portion of their shopping needs (e.g., take-home food, drycleaner/tailor) if quality businesses are present. Geography Businesses Employees Top Employer One-Mile Radius 667 5,252 Services (36% of Jobs) Two-Mile Radius 1,013 8,597 Services (28% of Jobs) Three-Mile Radius 1,276 10,380 Services (32% of Jobs) Note: Radius center point is 446 SW 7th St, Downtown Redmond Sources: ESRI BIS; Claritas REDMOND EMPLOYMENT SNAPSHOT One-, Two-and Three-Mile Radius 2005 cumulative Exhibit RD-10 This market assessment demonstrates that retail development potential in the greater Redmond area is relatively strong and growing, fueled by population and visitor growth. With consideration for existing retail supply, new/planned retail development, and projected growth in the local and visitor markets, it is estimated that over the 2005-2015 time period, approximately 781,800 in added supportable retail space potential is achievable within the greater Redmond trade area. Downtown Redmond?s success in capturing new and expanding retail development and its long term viability will be strongly influenced by a number of factors including the community?s willingness and desire to urge new development to locate in the urban core and to limit development on the edges of the City. Critical strategies include property redevelopment and aggressive marketing to fill downtown?s 36,000 square feet of vacant space and steps to influence the business mix as new retail space becomes available. These will be explored more fully in Section IV, Redevelopment Strategy. Redmond, Oregon ? May 2006 58 Downtown Business Development Plan REDEVELOPMENT STRATEGY The following section is intended to provide guidelines on how the downtown Redmond should position itself to capture potential demand for retail space and propose next steps to achieve this potential. A. Key Guidelines Implementing a successful economic development program will center on downtown Redmond?s ability to offer businesses, residents and visitors an environment different from and more inspiring than what they can find elsewhere. The following guiding principles should be considered throughout the redevelopment process: ? Brand Yourself. Downtown Redmond must perceive itself as a product and market itself to compete with other nearby business districts. Developing a brand theme or an identity upon which all other initiatives are based ? e.g., logo, urban design, signage, advertising, marketing collateral, website, etc. ? is a key step in the marketing process. Business districts and communities that win in the long run are those that create brand personalities that connect with people, that share values and that build long term relationships. The bottom line is that downtown Redmond needs aggressive marketing to residents, visitors and quality retailers promoting downtown as a first choice for shopping and business location. ? Looks Count. Downtown Redmond must recreate itself as a vibrant, clean and safe business district in the eyes of prospective businesses and target markets, Implementing consistent design standards/signage, promoting infill development and eliminating unattractive/obsolete structures are just a few remedies. The bypass and reduction in traffic will positively affect the feeling of safety, but the physical enhancements should begin now. ? Housing Link. A critical strategy in support of retail vitality in the downtown core is to encourage the addition of a substantial number of housing units, especially market rate. Housing will contribute to demand for additional shops, services and home-oriented products and food facilities. ? Cluster and Focus. A critical component of retail development is the creation of a compact, unified district with complementary businesses that benefit from each other?s sales, customers and markets. The primary vehicle for developing unified groups of stores and businesses is clustering ? creating mutual advantages in terms of pedestrian flow and shared markets between businesses. Successful clustering is dependent on having the appropriate mix of businesses that generate market synergies and an uninterrupted grouping of retail businesses that draw customers to and through the entire business Redmond, Oregon ? May 2006 59 Downtown Business Development Plan district. Educating business owners, property owners and real estate professionals about the importance of using this business development tool is critical. The city may want to consider zoning and regulatory measures to encourage contiguous retail frontage and discourage office users in core downtown blocks ? Walkable Core Area. To overcome existing negative perceptions of downtown Redmond, creating a safe, pleasant and convenient atmosphere for pedestrians should be a priority redevelopment initiative. The relatively large scale of downtown Redmond will make it important to encourage pedestrian activity initially in a particularly node or core area, which as earlier noted is about four blocks in length on Sixth Street from Black Butte to Forest Streets. Over time, this area will spread out to include more blocks in all directions. This guideline is directly linked to branding and clustering and speaks to the need to call out in all possible ways Sixth Street as the retail focus, i.e., this is ?the place? to shop in downtown Redmond. ? Clear Location Strategy. Related to the concept of clustering is the need to follow a few basic rules of thumb regarding successful business location in downtowns. These include: o Scatter restaurants to help generate customer traffic in hotspots throughout the district o Build on key anchors or traffic generators to attract complementary businesses nearby o Group stores appealing to same sub-market and stores with competitive merchandise o Use secondary locations for personal & professional services?side streets or upper stories o Intersperse stores with complementary goods: e.g., shoes, apparel, jewelry ? Strive to be Different. While national retailers will appeal to a wide market and demonstrate that the downtown district is economically viable, they also mimic what can be found in shopping districts throughout the nation. Downtown Redmond?s historic character combined with unique local merchants set it apart from nearby malls and shopping districts. One-of-a- kind unique specialty stores and restaurants initially should be the focus of business recruitment efforts. This tactic does not preclude encouraging existing successful operations in the region such as a Deschutes Brewery or Newport Market in Bend to open additional locations. ? Know What You Have to Offer. One of the best strategies for recruiting business prospects and developers is to be able to provide an inventory of available real estate, and better yet, be in the position to bring key properties to the table. Redevelopment opportunity properties should be ranked according to their potential for redevelopment, or locational, importance, categorized as a short-term or long-term potential initiative and marketed via collateral specification sheets. Redmond, Oregon ? May 2006 60 Downtown Business Development Plan ? Get the Word Out. Working with the local media to highlight success stories and monitor new business and construction/redevelopment throughout the downtown Redmond will help convince target markets that the downtown Redmond is an attractive and unique place to live/work/play. Other effective forms of communication include newsletters, websites that keep potential residents up-to-date on special events, and organizing a speaker?s bureau. Maintaining strong lines of communication with area residents and businesses will also be important. B. Market Position For a recruitment program to be successful, a clear market position statement must be articulated for the district. Downtown?s market position statement describes the type of retail mix, the shopping environment, and the target customer market. The statement distinguishes downtown Redmond from surrounding shopping districts. Focus groups and business interviews emphasized several core values that will form the basis for downtown?s market position: ? Serve multiple markets?not just upscale shoppers?friendly hometown appeal ? Locally owned and operated businesses?real people ? Emphasis on specialty retail, restaurants and entertainment ? Authentic western flavor?real West Potential Market Position ?Downtown Redmond is a historic mixed-used business district with one-of-a-kind specialty shopping, entertainment, restaurants and housing options serving area residents and visitors.? Potential Tagline ?Homespun businesses with authentic western hospitality.? C. Business Mix A successful business district in virtually any size community will have a balance and mix of uses that includes retail shopping, professional, financial and government services, entertainment, housing and personal services. Downtown Redmond already exists as a mixed-use center bringing residents, businesses and employees to the business district for many purposes. At present, downtown Redmond?s business base includes all of the uses noted above but with limited and highly dispersed retail selection. A critical goal over the next five years and longer will be to increase the number of retail businesses in the core downtown area and maintain ground floor space for retail businesses. Category descriptions are provided below. Redmond, Oregon ? May 2006 61 Downtown Business Development Plan 1. Retail The retail category includes grocery, pharmaceuticals, apparel, dry goods, hardware, cards and gifts, home furnishings, and any other category that provides goods with or without services. Successful small downtowns offer a mix of largely convenience and specialty goods, with a good selection of restaurant venues. The most likely retailer for the Redmond downtown core will be a locally owned proprietorships, regional chains, franchises, or small local corporations. National corporate chains prefer mall locations though are increasingly seeking alternative sites in successful and emerging downtown districts. If large development sites can be packaged, downtown Redmond may interest larger format retailers. 2. Professional and Financial Services This category includes banks, savings & loans, physicians, insurance agencies, financial advisors, attorneys, certified public accountants, home designers, and any other office situation that provides professional services. The function of this category is to provide downtown with employees that will use, and are able to pay for, other available services. This category tends to pay higher rents and have fewer turnovers than the retail and entertainment categories. 3. Entertainment This category is closely related to retail except that businesses function as attractors for customers seeking entertainment venues. Entertainment establishments include restaurants, movie theatres, live performance spaces, galleries, bars and taverns, coffee shops and any other business that attracts customers for social or entertainment purposes. The potential availability of large development sites that can accommodate multi-level formats may be particularly appropriate for entertainment anchors. 4. Government Services Downtown has been the traditional location for government offices and services such as the post office, fire hall and library. Government offices, such as the post office are essential in developing the personality of a community through their scale, character and design. They too are meeting places for local residents to gather and exchange information. Downtown Redmond has the capability to serve local residents, area workers, visitors and seasonal residents with a wide range of goods and services. The keys to downtown?s business development success are to: ? Offer unique, quality merchandise, restaurant and entertainment outlets ? Target high dollar volumes per square foot for a business to succeed. IE, smaller spaces, in-depth merchandise and high turnover inventory. ? Focus on the ?middle market? with moderately priced goods ? Work with downtown?s existing business anchors to provide complementary product lines and encourage cross-over sales. Redmond, Oregon ? May 2006 62 Downtown Business Development Plan The results of the statistical market analysis as well as the opinion research indicate that Redmond has ample opportunity to grow its retail base and fill niches and voids in the local marketplace. Identifying the most appropriate business mix for Redmond, as earlier noted, is a function of demographics and lifestyle characteristics, spending potential, survey research, the existing business base and retail trends. Success will be achieved in downtown Redmond with business owners dedicated to: ? Providing a good quality product at a fair price ? Providing exceptional customer service ? Responding to the changing needs of both trade area customers and visitors ? Aggressively marketing to these target customer groups ? Offering multiple, complementary product lines ? Filling specific, unique niches ? Having focus, imagination and a deep desire to meet the needs of the customer Downtown Redmond?s best business opportunities are for specialty retail, restaurants and entertainment-type businesses. Attraction of additional anchors?particularly restaurant and entertainment?that will animate downtown in the late day and evening hours is critically important. The following list of business and merchandise opportunities can be supported based upon the market analysis, support the goal of concentrating on specialty goods and entertainment, and were identified as priorities by shoppers and business owners. The significant expansion of the Redmond area housing market calls attention to the need for more home furnishings products and services of all kinds. Combinations of the goods and services as well as many others that have unique appeal to area markets should be considered for business development efforts. The City and the downtown Redmond business development team should keep in mind that even as downtown works to attract specialty, lifestyle-type retail goods, it is in direct competition with other existing and planned retail centers throughout the market area. The competition includes other downtowns and strip centers that may attract businesses suitable to downtown Redmond, as well. The absorption and distribution of retail demand into the marketplace is a highly dynamic and fluid process, influenced by factors ranging from the timing and availability of quality space and existing business anchors to district marketing and incentives. All ?smart? shopping districts, or centers, strive to offer the marketplace a diversity of quality businesses, including specialty goods that are so prevalent in today?s consumer market. Additionally, Redmond area shoppers (local residents and visitors) will follow the retail energy to any hot new spots offering something different or a known desirable product, such as Starbucks. Each of Redmond?s shopping centers will capture spending from a variety of target markets, though grocery-anchored centers will draw more heavily from Redmond, Oregon ? May 2006 63 Downtown Business Development Plan area residents. In the short term, to overcome its physical impediments (traffic, physical condition, etc) downtown Redmond will need to work hard and smart to encourage quality businesses to locate there over newer shopping centers or attractive freestanding commercial space. Combinations of these goods and services as well as many others that have unique appeal to area markets should be considered for business development efforts. The location of specific business types will be considered in the business clustering strategy. Exhibit S-1 TARGET BUSINESS OPPORTUNITIES Downtown Redmond Merchandise Unique apparel & accessories for all ages Western wear Outdoor gear: climber Casual men?s & women?s apparel, including golf Books/cards/music Bed & bath linens/accessories Kitchen accessories shop Furniture-locally made & other Specialty grocery: wines, fresh meats/cheese, baked goods Garden & outdoor accessories Drapery/home decor Art?locally produced Made in Deschutes County Art?Native American/western Jewelry Music/CD shop Lighting Home accessories Decorating center/interior design Unique gifts (more!) Gifts/home accessories Photography-art Restaurants/Food Breakfast/lunch Deli/yogurt/ice cream Steakhouse/seafood Olive Garden-like Bakery/chocolate shop Ethnic Fine dining Other family dining Entertainment Movie theatre Live entertainment @ restaurant, pub, coffee house Brewpub Community Art Center Personal care Vision care Naturopathic/homeopathic/alternative health Tailoring/alterations Redmond, Oregon ? May 2006 64 Downtown Business Development Plan D. Business Development Strategy This section provides an overview of key business development strategies and next steps for successfully promoting and capitalizing on the market opportunities identified in the market analysis. These will be further defined together with the Redmond Downtown Partnership, the City of Redmond and the Downtown Business Development Team in the upcoming team/staff training in the final phase of this project. Exhibit S-2 BUSINESS DEVELOPMENT PROGRAM Downtown Redmond Primary Program Goals ? Increase local spending by trade area shopper and visitor target markets ? Retain, strengthen and expand the existing business base in downtown Redmond ? Recruit or encourage businesses that will complement and improve the existing commercial mix and will enhance downtown?s attractiveness to its target markets. Program Elements Customer Attraction and Expansion Business Retention and Expansion Business Attraction Core Strategies ? Develop positive downtown image through branding and marketing ? Encourage residents, businesses, visitors, and area employees to shop in downtown Redmond ? Encourage, support, and assist existing businesses. ? Incubate, support, and grow new businesses. ? Target new businesses to add to the business mix and strengthen the overall economic base. ? Create vacant property improvement program E. Next Steps Selected ?next steps? in successfully promoting and capitalizing on the market opportunities identified in the market analysis are outlined in the chart that follows. These steps should form the basis for RDP?s Economic Restructuring and Promotion Committee workplans and also help focus the work of the RDP executive director, once onboard. In the immediate future (6-12 months), the emphasis should be on working with existing businesses, implementing the Business Retention and Expansion strategies. Redmond, Oregon ? May 2006 65 Downtown Business Development Plan Next Steps: Business Retention and Expansion ? Promote the findings of the Retail Market Analysis through the media and in business networking meetings. Help existing businesses expand and diversify their merchandise mix based upon the opportunities identified. ? Through RDP, institute a monthly Business Recognition or Kudos Program to celebrate downtown businesses for their exceptional service, business improvements, community service, new initiatives and other positive endeavors. ? Respond to the top needs identified by businesses in the business owner survey-- marketing?with a series of workshops and one-on-one technical assistance visits ranging from merchandising and window displays to target marketing and retail promotions. ? Investigate possible incentives and technical assistance to help ?home-grown? businesses and entrepreneurs locate in the downtown. The Western Ranch Leather & Woodwork business on 6th Street is an example of a local home business that took the leap to a storefront location. ? Organize a formal business assistance/advisory program where a local Business Assistance Team is in regular contact with downtown businesses and helps identify and respond to critical issues in timely manner. Tap the business development services of Central Oregon Community College. Next Steps: Customer Attraction & Expansion ? Create a brand identity for the downtown Redmond to be incorporated in all marketing and development initiatives (key messages, district name, logos, brochures, website, etc.). ? Develop collaborative marketing initiatives and joint/cross promotions between RDP and the Redmond Chamber, the Deschutes County Expo Center, Eagle Crest, Smith Rock State Park, Central Oregon Visitor?s Association and other key organizations promoting the Redmond area. ? Invest in a website specific to the downtown Redmond district that communicates its identity to existing and prospective businesses, residents and customers. Next Steps: Business Attraction ? Focus first on filling existing vacancies within the core retail area using the target business list and clustering/locational strategies. ? Develop target recruitment campaigns for up to three key business opportunities, to include mailings, one-on-one contact, third-party outreach, targeted collateral material and related activities. ? Create a list of and maintain referral networks with leading realtors/brokers, economic development agencies, developers and business leaders and educate them regarding the types of businesses most appropriate for the downtown Redmond. Develop a schedule of communications and events to keep the group informed about downtown initiatives and opportunities. ? Enable developers and prospective businesses to access downloadable marketplace data, maps, leading downtown businesses, current and future planning projects and other pertinent recruitment material and applications online. ? Create a comprehensive database of key economic indicators to track and promote downtown Redmond?s vitality and overall progress. Data should include: vacancy rate, jobs, employment, private/public investment, businesses recruited/retained, special event/promotion traffic counts and retail impact, etc. Redmond, Oregon ? May 2006 66 Downtown Business Development Plan CONCLUSION With the retail market analysis completed, downtown Redmond has a valuable and factual foundation for promoting its significant business opportunities and implementing customized district strategies. Whether targeting local or visiting shoppers for increased spending, promoting business opportunities or improving the image of downtown Redmond, a clear marketing goal, well organized action plan and commitment to implementation are imperative. In order for community and commercial revitalization to be truly successful in downtown Redmond, it is critical that partnerships and collaborations be strengthened to tap market opportunities and move the ?economic? vision forward. While the Redmond Downtown Partnership should lead revitalization activities, Redmond?s business and community leaders as well as other stakeholders must sit at the table. A sustainable revitalization effort requires that a wide variety of groups ?take on? appropriate pieces of marketing and development efforts. The more groups and people involved in the process, the more pride and local ownership will be evident in the results. Downtown Redmond?s success is truly a community project. The final phase of this component of the project ? business development training and more detailed action planning ? will help ensure that downtown marketing and development plans are implemented. Downtown Redmond can become the revitalized traditional downtown shopping district envisioned. It will take cooperation, focus, and using the information and recommendations developed through this project to move the district toward a more successful future. Redmond, Oregon ? May 2006 67 Downtown Business Development Plan Downtown Market Analysis & Business Development Plan Appendices Redmond, Oregon ? May 2006 Downtown Business Development Plan 68 Table of Contents Appendix A: Opinion Survey Summary of Redmond Area Shoppers ?????????.???????.. 70 Appendix C: Opinion Survey Summary of Redmond Business Owners???????????????.. 89 Redmond, Oregon ? May 2006 Downtown Business Development Plan 69 APPENDIX A Opinion Survey Summary: Redmond Area Shoppers 263 people participated in the survey as of 9/30/05. Q: Where do you do most of your non-grocery shopping (e.g., apparel, home furnishings, sporting goods, etc.)? ? 167 (64.2%) reported doing most of their non-grocery shopping in Bend. Redmond and other places were also identified as popular places to do non-grocery shopping. ? 15 (5.8%) reported other for their non-grocery shopping which included Portland, Salem and either Bend or Redmond depending on what they needed. Most Common Places for Non-Grocery Shopping 64.2% 24.6% 5.8% 3.1% 2.3% Bend Redmond Other Internet Mail Order ? Only 5% of the residents preferred to do their non-grocery shopping on the internet or order through mail. Q: If you shop regularly in Bend, where do you do most of your shopping? ? 237 people responded to this question. ? Of those shopping in Bend, 91 (38.4%) reported that the most common place they shop is at Big Box Stores. Redmond, Oregon ? May 2006 Downtown Business Development Plan 70 Response Total Response Percent Bend 167 64.2% Redmond 64 24.6% Other 15 5.8% Internet 8 3.1% Mail Order 6 2.3% ? Shopping at other places ranked second and included large discounters such Costco, Target, Wal Mart and other department stores. ? Many of those that fall under the other category commented that they shop at all of the above and couldn?t choose from the options. Primary Reason for Shopping 75.2% 60.7%37.4% 37.0% 28.2% 18.3% 8.0% 7.6% Selection Price Convenience Quality Familiarity/Habit Service Other Loyalty Most Common Place to Shop in Bend 020406080100 Downtown Boutiques Bend Factory Stores Bend River Mall Shop at the Old Mill Other Big Boxes ? 12.2 % shopped in downtown Bend. Q: What are the primary reasons for shopping where you do? ? 262 people replied to the question. ? The most common reason cited for shopping choice was the availability of a wide selection of goods. Price was the second most important factor influencing shopping preference. ? Many commented on the availability factor. The stores that they would like to shop at are unavailable in Redmond or near their home and so they have to go to Bend. ? Convenience and quality ranked evenly among the primary reasons, but were not the top two choices. Redmond, Oregon ? May 2006 Downtown Business Development Plan 71 Merchandise Needs in Redmond Q: What kinds of apparel and accessory stores are needed and would be supported in Redmond if they existed? Apparel & Accessory Needed in Redmond 0 20406080100120140160 Jewelry Other Men?s Business Women?s Specialty Children & Infants Teen/Young Adult Women?s Business Athletic Apparel Men?s Casual Shoes Women?s Casual ? 229 people participated in the survey. ? 156 (68.1%) reported that women?s casual clothing is something that is needed and would be supported if the stores in Redmond carried it. ? Next to women?s casuals, shoes was the second choice reported by 146 (63.8%) people ? Several made a comment that they feel the need for a store catering to oversized people. One quoted, ?There are no plus size stores in Central Oregon, you have to go to the valley, this would pull from all Central Oregon residents.? ? Others said that they would prefer more choices of similar stores, such as different department store, bookstores, auto parts store, etc. ? There was a range of opinion about shopping needs. While some say that there needs to be more quality and appealing stores, others say that they have plenty store and don?t need anymore. Redmond, Oregon ? May 2006 Downtown Business Development Plan 72 Q: What types of specialty/merchandise do you think are needed and would be supported in Redmond if they existed? Specialty/Merchandise Needed in Redmond 3.5%9.6% 19.2% 20.1% 20.1% 25.8% 30.6% 32.3% 34.9% 36.7% 41.0% 41.9% 43.2% 48.5% 63.3% Books Sporting Goods Music & CD?s Electronics Art & Craft Supplies Pet Supplies Computers & Accessories Toys & Hobbies Gifts & Cards Beauty Supplies Cameras & Supplies Glasses & Sunglasses Quality Consignment Art & Framing Other Luggage ? 229 people responded to this question. ? Books were reported most often (63.3%) as a needed specialty shop/merchandise in Redmond. Sporting goods, music and CD?s, electronics, and gifts and cards were reported almost equally (48%-41%). ? Again among the other category, stores for over sized people seemed to be a top choice as well as food stores such as Wild Oats and bakery and also restaurants such as Olive Garden. Redmond, Oregon ? May 2006 Downtown Business Development Plan 73 Q: What kinds of household furnishings and accessories are needed and would be supported in Redmond if they existed? Household Furnishings & Accessories Needed in Redmond 0 20 40 60 80 100 120 140 160 Other Antiques Lighting Appliances Furniture Garden Supplies Linens & Towels ? 213 people answered the question. ? 140 (65.7%) reported linens and towels as the most needed household accessories in Redmond, followed by garden supplies, (59.2%.) ? Several reported quality stores with good supplies as very important. Others commented on the desire for plumbing and hardware stores such as Home Depot and Lowes and perhaps furniture stores such as Levitz Response Percent Response Total Linens & Towels 65.7% 140 Garden Supplies 59.2% 126 Furniture 53.5% 114 Appliances 50.7% 108 Lighting 41.3% 88 Antiques 13.6% 29 Other 6.6% 14 Redmond, Oregon ? May 2006 Downtown Business Development Plan 74 Q: What kinds of convenience merchandise are needed and would be supported in Redmond if they existed? Convenience Merchandise Needed in Redmond 64.4% 54.1% 46.4% 44.3% 31.4% 11.9% Bakery Building Supplies Hardware Groceries Pharmacy Other ? 194 people responded to the question. ? Bakery was reported as the most needed convenience good/service in Redmond by 125 (64.4%) people. Building supplies was the second most needed convenience merchandise noted. ? The need for hardware and groceries was reported fairly equally (44%-46%). ? The desire for ?Good Food? was frequently noted. Stores with good quality and health food, organic grocery store, sandwich/deli shops, bagel shops, coffee shops were highly desirable. Also having a variety of both sit down and fast food restaurants is important. ? A few people commented, ?We have all the above, but don't have many choices on where to shop.? When asked to explain why shoppers may not be buying these products locally, even if some of this merchandise is available locally, many said they need more selections and convenience. Competitive pricing and a better selection of goods are highly desirable; many also addressed the issue of traffic and parking problems. ?Parking and shopping on 5th or 6th (especially 6th) Streets is hazardous to my health! Having semi-trucks roar by, spewing exhaust and making noise does not make for a peaceful shopping experience. Getting my child out of a car seat while parked downtown is frightening. Getting myself out of the car is scary!? Price also seems to be a factor. ?If things are not Redmond, Oregon ? May 2006 Downtown Business Development Plan 75 too expensive then the quality is poor and for good quality, it cost too much for many to afford.? ?Selection and price are the biggest factor. A lot of people in Redmond do not have the money to afford some of these specialty stores that have good quality products but are highly expensive.? Lastly, many are unsatisfied with the quality of customer service as they commented that at many stores there is ??rude customer service.? The lack of customer service is a concern but with the limitations people don?t have a choice but to go to the stores and deal with the poor service. Service Needs in Redmond Leisure/Entertainment Services Needed in Redmond 0 20 40 60 80 100 120 140 160 180 Outdoor Recreation Indoor Recreation Mini-golf Exercise Studio/Gym Bowling Other Swimming Pool Live Theater Movie Theater Concerts/Live Music Restaurants What kinds of leisure/entertainment services are needed and would be supported in Redmond if they existed? ? 205 people responded. ? By far, 165 (80.5%) people reported restaurants as the most needed leisure/entertainment service in Redmond. ? Live music/concert and movie theater were reported as the next entertainment services needed. Redmond, Oregon ? May 2006 Downtown Business Development Plan 76 ? More affordable community programs (athletic club, dance, gymnastics, karate, theater, etc.) seem to be of a high interest. Many noted a Y.M.C.A. as an option that felt should be considered. ? A wide range of things were commented upon from restaurants to health/sports clubs, to movie theaters/night clubs. More indoor sports seem to be of an interest as well. ? Some noted that many services are already there, but people would like to have a better quality and more affordable things and more choices such as different places for swimming, tennis, indoor soccer, basket ball, etc. ? One noted, ?There is an increase in children in the area. We need safe, affordable, accessible activities for our children.? Q: What kinds of general services are needed and would be supported in Redmond if they existed? General Services Needed in Redmond 42.5% 42.5% 41.8%37.9% 28.1% 26.8% 22.9% Appliance Repair Day Care Computer Repair Computer Training Video/DVD Rental 1-Hour Photo Dev. Other ? 153 people replied to the question. ? Appliance repair (42.5%), day care (425%) and computer repair (41.8%) were reported fairly equally in terms of the general services needed. ? Video/DVD rental (26.1%) and 1-hour photo (26.8%) were identified equally as well in terms of the number reported. Redmond, Oregon ? May 2006 Downtown Business Development Plan 77 ? Others commented that they have everything they need and don?t feel like there is a need for anything else. Many others feel the need for a ?handyman:? someone for auto repair, electronics repair, shoe repair, plumbing/home repair. Q: What kinds of personal services are needed and would be supported in Redmond if they existed? Personal Services Needed in Redmond 21.0% 50.7% 52.9% 56.5% Other Dry Cleaner/Laundry Hair/Beauty Tailoring/Alterations ? 138 people participated in the question. ? 78 (56.5%) reported tailoring/alterations is the most need personal service in Redmond. ? Hair/beauty (52.9) and dry cleaner/laundry (50.7%) were reported fairly equally after the tailoring/alterations. ? Many people say that they already have all of these things and some even think that there is more then enough of these services in Redmond and don?t need any more. ? Others say that although these things are in Redmond, they would like to have them in a better location providing better quality. Redmond, Oregon ? May 2006 Downtown Business Development Plan 78 Q: What business/professional services do you think are needed and would be supported in Redmond if they existed? Business/Professional services Needed in Redmond 58.6% 50.0% 45.7% 33.6% 31.9% 22.4% Copy Center Bank/Financial Advice Pack & Mail Insurance Legal/Accounting Other ? 116 people answered. ? 68 (58.6%) reported that a copy center is the most needed business/professional service in Redmond. ? Insurance (33.6%) and legal/accounting (31.9%) were reported about the same. ? Many feel that these services already exist in Redmond, but they need to improve on quality and service. ? One commented, ?We have all those businesses just wrong locations?not convenient.? Redmond, Oregon ? May 2006 Downtown Business Development Plan 79 Q: What health services do you think are needed and would be supported in Redmond if they existed? Health Services Needed in Redmond 56.3% 51.9% 48.1%44.4% 40.0% 31.9% 17.0% Vision Care Homeopathic/Naturopathic General Health Care Dental Chiropractic Hospice Other ? 135 people answered the question. ? 76 (56.3%) reported vision care was needed as a health service in Redmond. The need for Homeopathic/naturopathic (51.9%) and general health care (46.1%) were reported fairly equally. ? Many feel that Redmond already has all the health services needed. ? Others feel the need for more alternative medicine such as acupuncture, yoga, etc. Many also feel that there should be more physicians available and that too many special treatment trips have to be made to Bend or Portland and feel that the treatment should be provided there. Redmond, Oregon ? May 2006 Downtown Business Development Plan 80 Q: In your opinion, what types of restaurant and eating places are needed in Redmond and would be supported if they existed? Restaurants & Eating Places Needed in Redmond 0 20 40 60 80 100 120 140 160 Tea Room Cafeteria Fast Food Mexican Chinese Other Coffee House Deli Pizza/Italian Dinner Theater Grille Healthy/Natural Bakery Family Steakhouse Fine Dining Seafood ? 215 people replied. ? Seafood is by for the most needed type of restaurant needed in Redmond, reported by 150 (74%) people. ? Fine dining (48.8%) is the second most desired type of restaurant. ? Fast food and cafeteria are among the least wanted dining options. ? A Thai restaurant seemed to be in high demand or any nice Asian/ethnic places. ? Olive Garden, Red Lobster, Applebee?s, Chilis, and other chain restaurants were noted as highly desirable. ? Many say there are more than enough Mexican and Chinese restaurants and feel like they need a variety of other choices. ? One quoted, ?All of the above, we do not have a lot of selection, Redmond is rundown.? ? When asked, ?When some of these services may be available locally and you are aware of them, why you may not choosing local service providers?? Answers included: ?Local services, although present, often are lacking in selection and price. The quality, price and overall appearances make one want to turn away as well as the poor customer service?. Many expressed the traffic, parking and location issue; if businesses were easier to get to, it would be useful. Redmond, Oregon ? May 2006 Downtown Business Development Plan 81 Shopping/Personal Business Preferences Q: Currently, what are the major advantages of shopping or doing personal business (e.g. banking) in downtown Redmond? Advantages of shopping or Doing Personal Business in Downtown Redmond 0 20 40 60 80 100 120 140 160 Selection of goods/services Other Fair prices Easy to find parking Within walking distance Know the store employees Less traffic & crowds Friendly service Convenient location Support local businesses The greatest advantage of shopping in Redmond is to support local business and the least is selection of goods and services. Many people commented that they don?t find any advantages of shopping in Redmond, ?none right now the parking is horrible and the traffic makes it miserable, I avoid it at all costs.? Redmond, Oregon ? May 2006 Downtown Business Development Plan 82 Q: Currently, what are the major disadvantages of shopping or doing personal business (e.g. banking) in downtown Redmond? Disadvantages of Shopping or Doing Personal Business in Downtown Redmond 0 20406080100120140160 Other Unfriendly/poor service Inconvenient location High prices Poor appearance Limited hours Lack of parking Traffic Poor selection of goods/services ? The greatest disadvantage of shopping in Redmond is poor selection of goods/services and traffic as well as parking. One quoted, ?Gas stations with neon signs 30 ft. high, restaurants and businesses painted like gas stations, dirty, noisy, Uncross-able streets, junky shops with junky merchandise, tacky storefronts.? Many others really stressed the traffic and parking issues as well as limited selection and overpriced items. Lack of public transportation, pollution and overall appearance were also mentioned. Redmond, Oregon ? May 2006 Downtown Business Development Plan 83 Q: What can local merchants do to improve their stores? Improvement in Local Merchants 0 20 40 60 80 100 120 140 Other Be friendlier Improve safe access Advertise and promote Expand store hours Improve appearance Improve selection ? 205 answered this question. ? 136 (66.3%) reported an improvement in selections should be done as local stores. ? Appearances (59%) and extend hours (58.5%) were reported almost equally. ? Prices are an issue. Many expressed the need to have reasonable/completive price on items rather then paying so much. ? Customer service again was noted as needing improvement. Q: What are the best times for you to shop during the week (Monday-Friday)? Best Time to Shop on Weekdays 25.4% 74.6% 8:30-5:00 After 5:00 ? 213 people responded to the question. ? About 75% reported that the best time for them to shop is after 5:00 pm on the weekdays. Redmond, Oregon ? May 2006 Downtown Business Development Plan 84 Q: When are the best times for you to shop on the weekend? Best Times to Shop on Weekend 42.3% 24.5% 22.1% 11.1% Saturday afternoon Saturday morning Sunday afternoon Other ? The best time to shop on the weekends is on Saturday afternoons. ? Many don?t have a special time to shop on the weekend thought do feel that it would be nice if the stores were open till later. Q: Would you consider living in downtown Redmond if high quality new or renovated units were available? Renting or Owning Home in Redmond 78.9% 21.1% Owning Renting Consider Living in Downtown Redmond 62.7% 23.1% 14.2% No Yes Not Sure ? 212 people replied to the question. ? 133 (62.7%) reported they would not want to live in downtown Redmond if high quality and renovated units were available. ? Among this who answered Yes they would live in downtown, 78.9% would prefer to own their homes. Redmond, Oregon ? May 2006 Downtown Business Development Plan 85 Your Thoughts about Downtown Redmond When asked, as downtown Redmond continues to redevelop and change, if you could keep one thing the same what would it be, many said to keep the small town feel and the old town look with a modern touch to it. ?The old buildings; maintain a classy "old town" feel vs. the strip mall/plastic sign character so prevalent in most of the new development in Redmond (Fred Meyer mall, Fisher's Landing, Ray's Food Place development, Wal-Mart area, etc.)? Many people like the small community feeling and would like to keep that as the town expands. They would also like to keep the original buildings such as the hotels and historic buildings but just spruce it up and make it look attractive. Several said that they really enjoy the friendly atmosphere and would like to keep that. When asked, if you could change one thing about the downtown Redmond what would it be, people said traffic and parking (finding). These issues were repeatedly identified as huge problems. Others feel that there needs to be more selection in terms of the stores for shopping. Along with traffic, parking and selection, the appearance of the stores, buildings and the overall town is something many felt should be changed. O ne comment sums up the feelings expressed by many: ?When the trucks and traffic are less, it will be less dirty but we need to keep the streets and sidewalks clean and put some new paint on the buildings to freshen the image. Stores can be old but they don't have to look old.? When asked what identity or image would you like to see downtown Redmond develop for itself as a unique shopping/business district, many people said they would like the clean attractive appearance with a Victorian/old image to the town. Many people like the friendly community and the feeling of family in the town and would like to see that. ?A family-friendly place to shop and dine, with a lot of variety and choices. Not just antique shops and Mexican restaurants.? noted one of the participants. Redmond, Oregon ? May 2006 Downtown Business Development Plan 86 General Information Population Age 0 102030405060708090100 14-18 19-24 65 or over 45-64 25-44 ? 202 people reported their age. ? 96 (47.5%) reported to be between the age of 25-44 years old ? The second highest age group of 44.1% was between 45-64 years old. Zip codes reported Home Zip Code 72% 8% 8% 12% 97756 97701 97760 Other ? 202 people participated in this survey question. ? Majority of the people (72%) reported they live in 97756 zip code, Redmond. ? 12% reported to live in zip codes such as 97759, 97754, 97753, 97213, etc. Redmond, Oregon ? May 2006 Downtown Business Development Plan 87 General comments Other comments made by the survey participants were that Redmond has the potential to change into a better place but the community needs to work together especially since everyone wants to see a change. ?Central Oregon is changing every year, Redmond needs to keep up with the demand. Its difficult to park downtown and the shops are not worth it.? Many people have lived in Redmond for a long time and would like to continue to live there but other places are becoming cheaper and perception is that Redmond goods and services are overpriced. ?I would really like to stay in Redmond but Bend is becoming cheaper in taxes, houses, food, gas, and just all around activities that you can do with family and friends? Several people live in Redmond because they enjoy the small town but strongly feel that it needs to be a little more developed with things such as chain restaurants like Olive Garden, a 24 Hour Fitness Club and a quality department store so that Redmond residents don?t have to go to Bend, Salem or Portland to enjoy these things. Overall people enjoy living in Redmond because of the small town atmosphere, the feeling of community, the shops and stores, the old look, etc. but repeatedly express the desire to overcome the traffic and parking problems. ?I'm glad to see that someone is attempting to help downtown Redmond. Over the last 10 years we've seen it spiral downward. 10 years ago we frequented many of the businesses downtown, but it now so dingy and run down and full of changing or vacant store fronts, we've shifted our buying to Fred Meyer, etc. Traffic has also been a major deterrent from going downtown.? People generally expressed hope that things will change in Redmond, making it a better, safer and a friendlier place to live. Redmond, Oregon ? May 2006 Downtown Business Development Plan 88 APPENDIX B Option Survey Summary: Downtown Redmond Business Owners 42 businesses responded to this survey Q: What is the nature of your business? Nature of Business 0 2 4 6 8 10 12 Re t a i l Ot h e r F i nance/ I n sur a nce/ R e a l E s tate Se r v i c e s R est a u ran t P r of ess i onal P ubl i c A d m i n i s t r a tio n C onst r uct i on T r anspor t a t i on/ U t i li tie s ? 26.2% said that retail and other no listed on the survey is the nature of their business ? 21.4% said that finance/insurance/real estate is the nature of their business Other Comments: ? Human Resources ? Commercial Printing ? Coffee Cart ? Publishing ? Consulting ? Redmond Family Fun Center Redmond, Oregon ? May 2006 Downtown Business Development Plan 89 Q: How long have you been operating this business in Redmond? Number of Years Operating Business 0 2 4 6 8 10 12 14 16 10 years or more < 1 year 5-9 years 1-4 years ? 35.7% of the survey respondents operating business in Redmond have been operating it for 10 years or more. ? 26.2% have been operating it for less than one year ? 38.1% have been operating it for about 1-9 years Name up to 3 advantages or strengths you associate with doing business in Redmond. ? Good and growing community ? Trust of clients and community ? Up and coming communities with a lot of potential ? Locally owned and operated ? Strong community commitment ? Networking opportunities ? Know customers personally ? Friendly people and positive attitude of town ? Vibrant chamber of commerce ? Centrally located in county ? Limited competition ? Keeping the money local Redmond, Oregon ? May 2006 Downtown Business Development Plan 90 Q: How many employees does your company have including yourself? ? 57.5% of those responded said that they have part time employees at their company ? 87.5% of those responded said that they have full time employees at their company including themselves Q: What are your business days and hours? Business Hours 24 hours 2% Other 51%8:00-5:00 20% 8:30-5:30 12% 9:00-5:00 10% 10:00-6:00 5% Business Days Monday-Friday 43% Monday- Saturday 35% Other 12% 7 days a week 10% ? 43% operate their business from Monday through Friday ? 35 % operate their business from Monday through Saturday ? 12% responded other ? 10% operate their business seven days a week ? Others said from Tuesday- Saturday, also Monday - Thursday ? 20% operate their business from 8:00 - 5:00 ? 12% operate their business from 8:30 - 5:30 ? 10% operate their business from 9:00 - 5:00 ? 5% operate their business from 10:00 - 6:00 ? 2% operate their business 24 hours ? 51% responded other ? Others said different times for the weekdays and different times for the weekends Q: Do you own or lease your space? Redmond, Oregon ? May 2006 Downtown Business Development Plan 91 Own or Lease Their Space Lease/rent 56% Own 44% ? 56% lease or rent their space ? 44% own their space Q: If you lease, what is the rate you are paying? ? $1,800 per mo, approx 1600 sq. ft ? 850 sq. ft/$550 per month ? $850, $1 per sq. ft ? $1,350 for 2000 sq. ft. ? $517.65 for 665 sq. ft ? $500 for 400 sq. ft Q: How would you characterize your current business? activity level (i.e. last 24 months of operation)? Characteristics of Current Business' Activity Level 0 5 10 15 20 25 30 Declining business activity (fewer clients, fewer sales, less income) Holding our own (same level of business, fairly steady) Business is rapidly expanding Business is moderately growing, increasing ? 65.9% characterize their current business activity level as moderately growing and increasing ? 17.1% characterize their current business activity level as rapidly expanding and ?holding our own? ? 0% reported that their business is declining in activity level Redmond, Oregon ? May 2006 Downtown Business Development Plan 92 Q: Which description below best characterizes your plans to expand or reduce your operations in the next one-two years? Characteristics of Plans to Expand or Reduce Operations in Next 1-2 Years 0 5 10 15 20 Plan to reduce operations Plan to sell business Plan to relocate Uncertain Plan to expand operations No plans to change ? 42.9% have either no plans to change their operation in the next one-two years or have a plan to expand their operation ? 9.5% are uncertain about expanding or reducing their operation in the next one-two years ? 2.4% have plans to relocate or to sell their business in the next one-two years Please check any type of investment or improvement you have made in your business in the last two years: ? 50% respond that physical improvements such as store design/layout, interior/exterior remodeling are the type of investments or improvement they have made in their business in the last two years ? 40 % respond that new/expanded products, services, inventory are the type of investments or improvement they have made in their business in the last two years ? 27.5% respond that new/additional employees are the type of investments or improvement they have made in their business in the last two years ? 22.5% respond that new/expanded marketing/promotional activities are the type of investments or improvement they have made in their business in the last two years ? 17.5% respond that systems improvements are the type of investments or improvement they have made in their business in the last two years The estimated dollar value for each investment/improvement checked in previous question: ? Office build out cost about $15,000 ? Physical renovation = $75,000 ? $15000/physical $5000/marketing ? To complex to define ? $20,000 - $50,000 ? New POS system = $55,000, 8% increase in advertising budget Redmond, Oregon ? May 2006 Downtown Business Development Plan 93 Investment or Improvement Making in the Next 1-2 Years 0 24 68 1012 1416 18 P hysi cal im p r o v e m e n ts (s to r e desi gn / l a yo ut , i n t e r i or or ext e r i o r r e m o del i n g) N e w / expanded m a r k e t i n g / pr om ot i onal a c t i v it ie s N e w / a d di t i on a l em pl oyees N e w / expand e d pr odu c t s , s e r v i c es, i n vent o r y No n e S y st em s i m pr ov e m e n t s Ot h e r Please check any type of investment or improvement you plan on making in the next one-to-two years. ? 40% responded that physical improvements such as store design/layout, interior or exterior remodeling and new/expanded marketing/promotional activities are the types of investment or improvement they plans on making in one-two years ? 35% responded that new/additional employees are the types of investment or improvement they plans on making in one-two years ? 30% responded that new/expanded products, services, inventory are the types of investment or improvement they plans on making in one-two years ? 25% responded that no types of investment or improvement they plans on making in one-two years ? 17.5% responded that systems improvements the types of investment or improvement they plans on making in one-two years ? Other commented of moving to a new location in a new building end of 2005 Redmond, Oregon ? May 2006 Downtown Business Development Plan 94 Q: What is the primary market area from which the majority of your sales are derived? Primary Market Area 0 5 10 15 20 25 Internet Other Travelers/Tourists Tri-county area Deschutes County Redmond ? 54.8% said that Redmond is the primary market area from which the majority of their sales are derived ? 35.7% said that Deschutes County is the primary market area from which the majority of their sales are derived ? 31% said that Tri-county area is the primary market area from which the majority of their sales are derived ? 14.3% said that travelers/tourists is the primary market area from which the majority of their sales are derived ? Those reported travelers/tourists commented: ? ?We cater to antique enthusiasts? ? ?We capture people passing through who want to get a cup of coffee without having to stop and get out.? ? ?Our publication will appeal to locals and will be of general interest to visitors.? Redmond, Oregon ? May 2006 Downtown Business Development Plan 95 Q: In addition to a strong economy, what are the critical factors for the success and expansion of your business? Critical Factors for the Success & Expansion of Business 0 4 8 12 16 20 Q u a lifie d la b o r F oot t r af f i c P ubl i c access T our i s m C u r r e nt i nvent or y U p - t o- dat e equi pm ent / t echnol ogy F i nanci ng Ot h e r ? 40% reported that qualified labor is a critical factor for the success and expansion of their business ? 35.% reported that foot traffic is a critical factor for the success and expansion of their business ? 32.5% reported that public access is a critical factor for the success and expansion of their business ? 25% reported that tourism and current inventory are critical factors for the success and expansion of their business ? Others commented the advertising and marketing are critical factors for the success and expansion of their business Redmond, Oregon ? May 2006 Downtown Business Development Plan 96 Q: What are some of the major issues or obstacles facing your business today? Major Issues or Obstacles Facing the Business 0 2 4 6 8 10 12 14 16 Availability of telecom services Outdated machinery Other Public safety/crime Computer/technology issues Property improvements (fa?ade, etc) Cost of rent/property Payroll costs City/County/State codes or regulations Availability of employees Customer traffic (not enough/shrinking) Parking Insurance costs General operating costs Skill level/preparation of employees Competition Cash flow/working capital Current economic conditions ? 35% reported that current economic conditions and cash flow/working capital are some of the major issues or obstacles facing their business today ? 32.5% reported that competition is a major issue or obstacle facing their business today ? 30% reported that skill level/preparation of employees and general operating costs are some of the major issues or obstacles facing their business today ? 27.5% reported that insurance costs, parking & customer traffic are some of the major issues or obstacles facing them. ? Some of the other issues are availability of employees, payroll costs, city regulations, public safety/crime, etc. ? Others commented: o ?Oregon tax laws, codes & administrative rulings tend to be unhealthy for business? o ?Downtown access & parking regulations are too much. Business owners should have parking passes at least one per business. Customers do not have much SAFE parking either.? Redmond, Oregon ? May 2006 Downtown Business Development Plan 97 Q: To keep your business healthy and competitive, which of the following types of assistance are important to your company?s growth? Assistances Important to Company's Growth 0 5 10 15 20 25 30 M a r k et i n g/ A dver t i s i n g pr ogr am s P r oper t y and f a?ade i m pr ov em ent s M a r k et i d ent i f i cat i on B u sin e ss p l an n i n g an d cas h f l ow B u sin e ss expans i on/ r e l o cat i o n i n fo rm a t io n Em p l o y e e hi r i n g / s ki l l s t r ai ni ng U s in g th e In te rn e t fo r E - com m er ce B u s i nes s m a nagem e nt t r ai ni ng A s si st ance w i t h l o an pr epar at i on C o m put er / t echno l o g y assi stan ce Ot h e r ? 73.5% reported that to keep their business healthy &competitive marketing/adv. programs are important for their company?s growth ? 38.2% reported that to keep their business healthy and competitive property and fa?ade improvement are the type of assistance that are important ? Others reported business planning and cash flow, expansion/relocation information, etc. are important for company?s growth Q: Are you interested in participating in a cooperative business marketing effort to attract customers to Redmond or to encourage residents to shop locally? ? 62.2% reported ?yes? they would be interested in participating in a cooperative business marketing effort to attract customers to Redmond or to encourage residents to shop locally ? 37.8% reported ?no? they would not be interested in participating in a cooperative business marketing effort to attract customers to Redmond or to encourage residents to shop locally Redmond, Oregon ? May 2006 Downtown Business Development Plan 98 The Future of Redmond and Doing Business in Downtown Redmond Q: As downtown Redmond continues to grow and change, if you could keep one thing the same about the shopping/business district what would it be? ? Small town atmosphere ? Free parking ? Local flavor of the downtown ? Pedestrian friendly ? Keep heavy traffic out & easy access ? The ?old town? look of downtown ? Local ownership of small businesses ? Positive personal, welcoming style ? Keeping the mix of businesses Q: If you could change one thing about downtown Redmond, what would it be? ? Easier access and parking ? Streets in poor condition ? Less big truck traffic/noise ? More housing opportunities, with a park ? More pedestrian friendly ? Provide entertainment- retail ? No pawn shop or fun center right downtown ? Clean up old and vacant lots and buildings ? Signage restrictions ? Hometown environment Q: What identity or image would you like to see downtown Redmond develop for itself as a unique shopping district attractive to residents and visitors alike? Q: How would you rate your overall confidence in the economic future or vitality of downtown Redmond? ? Small personal service oriented ? Quaint, peaceful, green and accessible ? Family oriented. ? Historic image ? Beautiful, charming, diverse, affordable ? Great restaurants, with boutique type shops. ? We grow, but not too fast ? Fun living and shopping and working pretty quiet ? High class specialty shops, unique store fronts and signage ? 47.1% rated high and moderate overall confidence in the economic future or vitality of downtown Redmond ? 5.9% rated overall confidence in the economic future or vitality of downtown Redmond low Redmond, Oregon ? May 2006 Downtown Business Development Plan 99 Q: In your opinion, what types of retail, restaurant and/or service businesses are needed in the downtown Redmond area and would be supported? ? Restaurants boutique/specialty stores ? We could use more evening eateries. a men?s apparel store would be welcome ? Middle to upper end restaurants and specialty shops ? More shoe stores, children?s clothes, men?s clothes, etc. ? Multi-plex cinema/theater ? A variety of restaurants and night clubs ? Mcmenamin's or Deschutes Brewery ? Retail business and office buildings Q: Are there products or services that your business currently purchases out of town that you would purchase in town if they were available? ? 68.8% reported ?no? there are no products or services that their business currently purchases out of town that they would purchase in town if they were available ? 31.2% reported ?yes? there are products or services that their business currently purchases out of town that they would purchase in town if they were available Those reporting yes commented: ? We try to purchase all of our Marketing, promotional, and office supplies from Redmond businesses. If Redmond doesn't carry it we may go to Bend but rarely do any internet purchases. ? All our retail products are purchased from either Portland or Bend. ? Event furniture - had to purchase at Costco bulk food at good prices. ? Make parking more comfortable-- easier access nicer surroundings ? Advertise inform residents of parking availability tidy sidewalks and shops ? Provide a much broader array of products and services. We are too limited in general retail ? A central, diverse core that includes unique dining ? Better hours. At 5pm most shops close ? Promotional activities to get more people to come into downtown Q: In your opinion, what could local businesses do to attract more local residents who are currently shopping in other areas? Redmond, Oregon ? May 2006 Downtown Business Development Plan 100 Q: What could local businesses do to attract more visitors and other shoppers who live out of the area? ? Advertise more--unify advertising campaign ? Create more festivals and events ? Work with the chamber, have a web site to promote their business ? Be part of a pleasant, pedestrian friendly downtown ? Organize, and market the downtown experience in artistic and compelling ways ? Keep store fronts clean and interesting Redmond, Oregon ? May 2006 Downtown Business Development Plan 101