Posts tagged with Retail
Menard’s project highlights city rule on vacant space; a look at how Lawrence ranks in state retail report
Build it, and it will be empty. That's the motto of Lawrence, at least in one way.
City planners will be reminded of that tonight. The Lawrence-Douglas County Planning Commission will consider a proposal by Menard's, the large home improvement chain, to build a 190,000-square-foot store just east of 31st and Iowa streets. As we previously reported, the city's planning staff is recommending denial of the proposal.
But you may not be aware of one of the reasons the project has received a negative recommendation: When large retail projects are proposed in the city, planners are required to look at a retail market analysis to determine what the city's retail vacancy rate will be after the project is built. The way the rules are written, the vacancy rate is to be calculated by assuming the new project will be 100 percent vacant.
So when city officials do the calculations for this project, they put aside the fact that Menard's has no plans to build a 190,000-square-foot building and then leave it empty. Instead, the city adds the 190,000 square feet of the new store onto the city's estimated amount of vacant square footage, which stood at 643,000 square feet the last time it was calculated, in 2010.
When the city planners add on the 190,000 square feet, that pushes the city's supposed vacancy rate to 8.4 percent from 7 percent — which is just above the 8 percent total that is supposed to be a red flag when it comes to vacancy rates. According to a planning staff report, if you add in the approximately 65,000 square feet of smaller retail space proposed to be built along the outer edges of the Menard's project, the vacancy rate would jump to 9.6 percent.
But the city's planning rules also suggest planners go a step further. The city staff looked at all the retail zoning that currently is in place in the city, but doesn't yet have any buildings on it. That totals about 932,000 additional square feet. The city then makes the assumption that all of that will be built, and then be completely empty. That produces a frightening vacancy rate of 17.8 percent.
Planners, of course, don't think people are going to build large retail buildings without first having a tenant to occupy them. The city's planners understand the city's building market better than most because they are on the front lines of development proposals. But already I have heard people complaining about the city's Planning Department and why it would make this type of assumption. Well, city planners get the thankless job of being a referee in the city's politically charged development arena.
In other words, the job of a planner is to apply the rules to the project — not to rewrite the rules. Rewriting the rules is the job of city commissioners, and the rule that requires the city to assume large new retail buildings are going to be vacant has been on the city's books for at least the past decade.
Its days may be numbered, though. Scott McCullough, the city's planning director, told me the process has begun to change the rule. But it won't reach the City Commission in time to be considered for the Menard's proposal.
The rule change probably will get some opposition as well. There is certainly a group of local citizens that is very convinced the city's retail scene is overbuilt. They argue that even though a new Menard's building won't be empty, the addition of that much retail space in the city will cause an approximate amount of retail square footage elsewhere in the community to go vacant. That theory is how the rule got put in place to begin with.
In other words, the way the city's rules are written right now, retail is assumed to be a zero-sum game. For every one square foot of new retail space that comes into town, you must assume one square foot elsewhere will become vacant. Maybe that is the case in some economic climates. But maybe it isn't the case in other economic conditions.
What's certain is that retail zoning requests are a judgment call. The first round of judging will begin tonight at 6:30 p.m. at City Hall, when the Planning Commission meets. Ultimately, city commissioners will make the final decision on the Menard's request.
• One other piece of information that was included in the city staff's report was a mention of a state report that ranks how Lawrence's retail scene is doing compared to other Kansas cities. It is called a “pull factor” report, and it is basically a look at how Lawrence's per capita sales tax collections compared to the statewide average. It is called a pull factor because it is assumed that cities with averages much higher than the state are “pulling” customers from other communities to shop.
It is a perfect statistic for retail developers because it can be manipulated to fit the situation. When the pull factor is low, it can be argued that more retail development is needed in order to stop the amount of Lawrence residents who go outside of the city to shop. When the number is high, it can be presented as evidence that retail demand is high and the market can support additional retail development.
But the numbers are interesting because they do a good job of showing how Lawrence's per capita spending stacks up against other cities. The most recent report, which is for the state's 2012 fiscal year, shows Lawrence's numbers have rebounded. The city's pull factor was 1.07, which means it is 7 percent higher than the statewide average. As recently as 2000, the city's pull factor was .99. Going back farther, the city hit a high-water mark of 1.13 in 2000. So, we're somewhere in the middle of the range but trending upward.
Here's a look at how other large towns in the state fared. I'll leave the analysis up to you: Lenexa: 1.52 Overland Park: 1.51 Salina: 1.47 Garden City: 1.47 Manhattan: 1.40 Leawood: 1.40 Topeka: 1.37 Hutchinson: 1.27 Liberal: 1.23 Dodge City: 1.22 Olathe: 1.18 Pittsburg: 1.13 Junction City: 1.12 Wichita: 1.11 Fort Scott: 1.09 Coffeyville: 1.08 Emporia: 1.08 Lawrence: 1.07 Parsons: 1.05 Shawnee: .93 Atchison: .89 Kansas City: .86 Newton: .87 Leavenworth; .73 Prairie Village: .64
Business prepares to move to make way for South Lawrence Trafficway; details and speculation about what else the SLT may bring
Construction on the South Lawrence Trafficway is still at least six months away from getting started, but signs of the coming changes already are starting to show up.
The one known business that will have to relocate due to the SLT recently has signed a deal for a new southeast Lawrence location. The business formerly known as RSC Equipment Rental will move to 930 E. 30th St., which is the space that used to be the parking lot and maintenance facility for the city’s public transit buses.
RSC Equipment Rental now goes by the name of United Rentals, after the RSC chain of stores was purchased by United recently. The company rents aerial lifts and other types of construction equipment.
The company plans to use the existing 5,000-square-foot building on the site, but it will undergo about $250,000 worth of remodeling, according to plans filed at City Hall. An employee at United told me the move is likely to happen in the next month.
The business now is at the southeast corner of 31st and Haskell. But soon enough, a new road will run through that location. No, the new road won’t be the South Lawrence Trafficway. It will be the new road called 32nd Street, which will be the local road that will run just north of the SLT. It will replace the thinly paved joy of driving that we currently know as 31st Street.
If you have forgotten about that new street, you probably have forgotten about several others. The South Lawrence Trafficway project likely will produce the most change in the city’s street network of any project in decades. Take a look at the map on this page to see the details. Here’s a reminder of what you are looking at:
• A portion of Haskell Avenue will move about 1,000 feet east of where it is today. Haskell will start making its shift to the east at about the point where it intersects with 29th Street today. In other words, right near where Hiper Technologies is located, or — if you are an old timer — where the Honeywell avionics plant used to be. Haskell will shift back to its current alignment before it reaches the Wakarusa River bridge. (At that point the road is actually called County Route 1055 because it is outside the city limits, for all you geography sticklers.)
• The existing portion of Haskell Avenue between 29th Street and the current 31st Street will remain in place to serve as a frontage road for the businesses — such as the new United Rentals building — that are just west of the existing Haskell Avenue.
• The existing 31st Street between Haskell and Louisiana will be removed and the property will be converted back to wetlands. The new 32nd Street — which will be four lanes — will be the local route through the wetlands.
• Louisiana Street south of 31st Street will undergo major changes. The road will be moved a half-mile to the west, in order to get the road farther away from the Baker Wetlands. In other words, if you are driving on Louisiana Street north of 31st Street and want to continue south, you are going to have to turn west onto the new 32nd Street. You’ll take that new road — which turns into the existing portion of 31st Street in the city — for a half-mile. Then you can turn back south onto the new Louisiana Street. The new Louisiana Street eventually will curve back to the east and connect with the existing Louisiana Street (technically E 1400 Road outside the city limits) before it crosses the Wakarusa River. If you are trying to picture where the new Louisiana Street will intersect with 31st Street, it will be just east of the large apartment complex at 31st and Ousdahl.
The state plans to accept bids on the SLT project in September, and construction in the wetlands could be begin this fall. Work on the Haskell and Louisiana parts of the project wouldn’t begin until 2014.
All of these new roads — with the largest, of course, being the new four-lane SLT — will create a lot of question both in the business community and at City Hall. The best way to get a feel for some of them is to go to Google Maps and type in the area of 31st and Louisiana. Zoom in several clicks, and the map will show you the route of the SLT and of the new 32nd, Haskell and Louisiana streets. That map does a good job of highlighting several pieces of property that seemingly will have a lot more development pressure in the near future.
Some properties and questions that jumped out at me include:
• The former Gaslight Mobile Home Park just east of Home Depot. As we have reported, Menards has filed a plan to build a new store on the property, plus have lots for several smaller retailers or restaurants. This is going to be an issue very soon. The Planning Commission is tentatively scheduled to review the plans in April. In order for the project to be approved, the city is going to have to change its planning documents. The city’s planning documents call for the property to be developed as apartments.
Here’s the question: Will the city stick to those plans when a major retailer clearly wants to be on the site? Now that a new 32nd Street is going to be built just east of the site, the property will be on one of the most highly improved roads in the city. That’s generally where most cities want their retail.
The more political question is whether the City Commission will do everything it can to steer all new retail development to Sixth Street and the South Lawrence Trafficway in northwest Lawrence? After all, that is where the city will be investing $25 million for a new recreation center. But Menards has had plenty of opportunities to sign a deal to locate in the existing — and vacant — Mercato development at Sixth and the SLT. Company officials have told the city the site doesn’t meet their current needs. Will the city hold its ground on steering development to Sixth and the SLT, or will it blink?
• The former E&E Display building at 29th and Haskell. That’s a decent size manufacturing/warehouse building with some vacant/underutilized ground near it. When the SLT is built, it really will only be about a minute away from the freeway. I’ll keep my eyes open for some sort of jobs producing deal for that location. If one doesn’t materialize, given its location, economic developers should be asking what’s wrong with our community?
• The vacant ground directly behind Wal-Mart at 33rd and Iowa streets. Until you look on the Google Maps, it is easy to forget about that piece of property. But the map makes it clear that it is one to remember. The ground stretches all the way from the Walmart/Crown Toyota area on the west to the former Printing Solutions building at 31st and Louisiana on the east. The entire piece of property will have great visibility from the South Lawrence Trafficway. As a bonus, the new Louisiana Street will cut through the property as well.
City commissioners talk about the need for planning, but what is the plan for that area? I’m sure there is something in a plan somewhere about that area, but it is an area that hasn’t been talked about by city commissioners for awhile. It would seem — given its location next to major retailers such as Wal-Mart, Kohl’s and others — that the market may have an interest in putting some retail there. Will the city share that interest?
It will be interesting to watch, and I’m pretty sure I won’t be the only one watching. In fact, if you see a tent staked up on that vacant property, that’s my wife. She wants to make sure she doesn’t miss out on any early-bird specials.
Home sales up in January; new numbers on county’s property tax base; median home values fall sharply in Baldwin, Eudora, rural areas; weekly land transfers
The signs of spring are starting to show up: morning sunlight and chirping birds, an article in the newspaper about crabgrass prevention, and me looking for my hidey-hole when my wife starts talking about the spring cleaning of the garage.
Of course, one other sign of spring soon will be the banners, balloons, pyrotechnic displays and whatever else real estate agents are using these days to attract attention to the large number of spring open houses. So, with that, how about some real estate news today? There are a few new reports of interest out.
• Lawrence home sales in January continued to show signs of improvement. A new report from the Lawrence Board of Realtors found home sales in January were up 44 percent compared to January 2012, rising to 36 from 25. It continues a multimonth streak of sales increases on a year-over-year basis, which has given real estate professionals cautious optimism that a recovery is starting to take hold in Lawrence.
One of the more interesting numbers in the report is that there has been a significant decline in the number of homes on the market, which real estate agents say is a sign the market is starting to get more balanced between buyers and sellers. In January, there were 380 homes on the market, down from 460 during the same period a year ago.
The number of days a home is sitting on the market, though, hasn’t yet started to show that trend. The median days on market: 81, up from 72 a year ago.
• The Douglas County Appraiser’s office has new information out about the county’s real estate tax base. It appears Douglas County and the city of Lawrence once will again will avoid a major hit to their property tax bases.
The numbers aren’t final yet because property owners can still file appeals related to their properties’ assessed values, but the appraiser’s office shows a decline of 0.29 percent for 2013. The total assessed valuation — remember, assessed value is the taxable value, not the market value — checks in at $1.024 billion in 2013, down from $1.027 billion in 2012.
The county is not used to declines but it has avoided the 5 percent or more declines in values that many other markets across the country have experienced.
Just for some historical perspective, I looked up some past numbers. Since 2008, the county’s tax base has grown just 1.3 percent during the tough economic times. Since 2003, the county’s tax base has grown 36.7 percent. To put an even finer point on how the last decade has been a tale of two halves, the numbers show that in the last half of the decade, the county’s tax base has grown by less than 2 percent total. For the first half of the decade, the numbers show that from 2003 to 2008, the tax base grew by 35.8 percent. In case you are wondering, the rate of inflation for that time period was about 17 percent, according to the Consumer Price Index.
The housing bubble was fun for governments who rely on property tax dollars. Now, the question they’re all still trying to figure out: What is the new normal?
• The appraiser’s office hasn’t provided a report that shows the assessed valuation by community yet, but normally Lawrence tracks closely with the overall county total — since Lawrence has most of the county’s tax base within its boundaries.
But there may be real questions about what happens to the tax base in some of the smaller communities and townships in Douglas County.
The appraiser’s office has put together a report estimating the median market values for residential property in each city in the county. The report shows significant drops everywhere but Lawrence. The median value in Lawrence in 2013 is $159,625, down 0.6 percent from the median of 2012.
That’s nothing compared with what the report shows for the other areas of Douglas County. Here’s a look:
• Eudora: the median market value has dropped 10.2 percent to $125,600, down from $140,000. • Baldwin City: Down 7.4 percent to $132,700 from $143,400. • Lecompton: Down 16.6 percent to $83,950 from $100,670 • Rural Douglas County: Down 22.8 percent to $153,400 from $198,805.
I haven’t had a chance to talk to the appraiser yet about these numbers, but it seems to indicate the real estate market outside of Lawrence hasn’t held up as well as the market inside of Lawrence.
• Finally, I have fallen behind on our weekly updates of land transfers and property sales as recorded by the Douglas County Register of Deeds. Click here to see listings for the last couple of weeks.
Lawrence’s latest retail chain store is about to make its debut.
Officials with Ross Dress for Less have confirmed that they will hold their grand opening celebration at 9 a.m. on Saturday. The store is going into the location at 3234 Iowa Street that previously was occupied by Old Navy. In other words, it will be in the building right next to Kohl’s department store near 33rd and Iowa.
It looks to me, though, that shoppers will get their first chance at the new retailer on Friday. I drove by the location yesterday. (I bought a $4 tie at Kohl’s after a Sertoma club luncheon created a battle between some pasta salad and the tie I wore to the event. The pasta salad won.) There was a sign on the Ross building that said the store was opening Friday.
I never have been successful in actually talking with a Ross official on the phone, so I don’t know much about why the retailer chose to come to the Lawrence market or why it took it almost a year to open the store once it filed its plans with City Hall.
But they are here now, and according to a release from the company, this will be its third new store in the “Kansas City area” since October 2012. It is opening 20 other stores, in addition to the Lawrence store, this week. Overall, the company has about 1,000 stores across the country, and it bills itself as the “nation’s largest off-price apparel and home fashion chain.”
I don’t know exactly what that means, other than I can probably expect to see a new addition to my monthly credit card bill. But according to the company’s Web site, it carries a large line of women’s clothing, in addition to some clothing or men and children, plus some shoes, accessories and home decor items.
We’ll see whether it carries $4 ties because I’m pretty sure my battles with pasta salad aren’t done. Or with BBQ sauce or with grape jelly or with chocolate pudding or with . . .
A home improvement center battle in Lawrence is about to begin.
Menards has filed plans at Lawrence City Hall to build a large home improvement center right next to Home Depot near 31st and Iowa streets.
The company — as was previously speculated — wants to locate in the former Gaslight Mobile Home Village.
The retailer has opened new stores in Topeka and Manhattan in recent months. Menards officials said in their application that significant numbers of Lawrence residents have been driving to the Topeka Menards. The retailer sells home improvement items — much like Home Depot or Lowes — but it also has a broader offerings that include home goods and other items.
The plans call for the 41.5 acres to be rezoned from an apartment/multi-family zoning designation to a Planned Commercial Development designation.
Documents included in the submittal indicate Menards is looking to build a 162,340 square foot store, although it isn’t clear whether that number is the size of the building or also includes outdoor storage yards and such.
Either way, it appears the store would be significantly larger than the Home Depot store, which is just west of the proposed site.
The proposal will create a major retail question at City Hall. The city’s long-range planning documents don’t call for the former Gaslight Mobile Home Village to become a retail development. The plans call for it to become an apartment development. (You may remember a Texas-based company proposed a large student apartment complex for the site last year, but then pulled out when it determined the Lawrence market couldn’t support it.) City commissioners will have to decide how much they want to stick to their previous statements that indicated the next area for big box store development should be the intersection of Sixth Street and the SLT, which not coincidentally is where the city and KU are working to build the new Rock Chalk Park sports village.
But Menards officials, in a letter to the city, made it clear they have no interest in that site.
“This site (Sixth and SLT) is very removed from the city’s rooftops and is surrounded by vacant ground on three sides for many miles,” Menards real estate representative Tyler Edwards wrote. “Additionally this site is not visible from the existing retail on Sixth Street due to a large hill. The amount of commercially oriented traffic that would pass by the store on Sixth Street or K-10 would be close to none and not enough to make a successful store.”
The area around the Sixth and SLT site is obviously developing with the Rock Chalk Park project and just last night the city approved the preliminary development plan for The Links, a 630 unit apartment complex that will surround a private nine-hole golf course.
But none of that has been enough to convince Menards that the area will be viable for their store in the near future.
In the past — when Home Depot and Best Buy were built at the 31st and Iowa intersection more than a decade ago — neighbors expressed concern that retail shouldn’t stretch east down 31st Street because of traffic and other issues that could impact nearby neighborhoods.
But with the South Lawrence Trafficway scheduled to start construction later this year, 31st Street will undergo major changes. An entirely new high-capacity street, dubbed 32nd Street, will be built through the nearby Baker Wetlands and connect with the existing 31st Street just east of the proposed Menards site.
This project may be the first one that causes people in the community to realize how much the completion of the SLT and the new U.S. Highway 59 is going to change south Lawrence. In addition to the Menards, the development plan also has room for another 65,000 square feet of retail space spread out over six lots on the site. But documents in the plan indicated those would be part of a Phase II that likely would not begin until a few years after Menards opens.
Menards confirmed it looked at creating a new retail site south of the SLT — basically between the SLT’s Iowa Street bridge and the Wakarusa River — but determined the cost of dealing with the floodplain on the site was prohibitive. But I wouldn’t be surprised to see other retailers look strongly at that site in the future.
In the meantime, expect a lot of discussion about Menards at City Hall. The earliest the development proposal could make it to the Planning Commission is in late April, meaning it will be the next City Commission that decides this issue.
There’s a trade in the works that sounds mighty familiar from my youth: Trading books for bats and balls.
I have received confirmation that University Book Shop, 1116 W. 23rd St., is on the way out, and Jock’s Nitch sporting goods is on the way in.
Scott Ozier, a store manager for Jock’s Nitch, told me the company will be vacating its space at 916 Massachusetts St. in order to offer a more full-line sporting goods store in the much larger space on 23rd Street.
“This will allow us to carry a lot more sporting goods,” said Ryan Boler, another manager at the company, which has eight stores in eastern and central Kansas and another five in Missouri and Oklahoma. “There is a need for it in Lawrence. There are not a lot of options in Lawrence right now, and we think the location on 23rd Street will make it easier for people to get to.”
The Jock’s Nitch store at 837 Massachusetts St. will remain open. That store serves as the company’s KU fan shop store, focusing on apparel and other team merchandise rather than sporting goods.
The new store on 23rd Street will be more than twice as large as the company’s store on Massachusetts Street.
Ozier said the new store can handle a larger line of products in all categories, but he said the soccer section is expected to expand significantly, and more football gear is expected during season as well. In addition, the company will start running a team center out of the store, selling custom apparel to youth and high school teams.
Ozier said he hopes the store can be open by April 1. The company’s store at 916 Massachusetts has been closed all week, but reopened today to begin a moving liquidation sale. The store is marking down items 25 percent to 75 percent in an effort to reduce the amount of merchandise that the company will have to move. Ozier said the store will be open through the holidays, but likely would close in early 2013, and then reopen a few months later on 23rd Street.
No word yet on when the last day for the University Book Shop will be. It does not come as a surprise that UBS is leaving the location. We reported earlier this year that the building was on the market. Plus, the owners of UBS also own Jayhawk Bookstore, which has a prime textbook selling location right on the edge of the KU campus.
• I know talk of a sporting goods store will cause people to wonder about whether one of the big box retailers, like a Dick’s Sporting Goods Store, is eyeing Lawrence.
That rumor certainly has been around for awhile, but so far it has remained just that — a rumor. The former Sears building at 27th and Iowa has been a rumor hub for such developments. Dick’s has been mentioned as a possible tenant for that location, but my understanding is that the long-term future of the Sears building is uncertain because Sears’ parent company and the Los Angeles real estate company that owns the building haven’t yet agreed how to dispose of the remaining time left on the building’s lease.
The latest rumor I’ve heard — and I haven’t yet confirmed it — is that a local car dealership plans to move into a portion of the building while it does major work on one of its dealership buildings. I’ll check on that and see if there is any truth there.
As for big box stores, though, I’m pretty certain Lawrence is getting some serious looks from a few. I don’t know all the names yet, but Menards sure seems to be mentioned a lot these days. We had reported there may be some interest in converting the former Gaslight Mobile Home Village into retail space, now that a deal for an apartment complex has fallen through at that location. But I’m pretty certain there are other locations Menards and other big box stores are looking at.
Certainly, there is the retail area the Schawda’s are trying to develop at Sixth and the South Lawrence Trafficway, which they hope will get a boost from the proposed KU/city sports park. But I’m going to be keeping a close eye on the South Iowa Street corridor. I think there is a lot of momentum building in the southern Lawrence area.
Do you think it is coincidence that it is building about the same time folks think the South Lawrence Trafficway will be completed?
I’ll let you know when I hear more solid details.