Downtown Zoning Code Amendments

Context

Goals of downtown zoning changes

• Accommodate population growth• Generate sales tax revenue for city

Population growth Q: Do you want the downtown to grow

higher?A: No.

Q: If Woodinville needs to grow, where would you put the new population?

A: Downtown.

Why grow downtown?

• Current citizens prefer height downtown to upzoning in neighborhoods.

• Meeting assigned growth targets (3000 additional dwelling units by 2031) is required for eligibility for all state and federal grants.

• Growth concentrated in a small area is cheaper for a city than sprawl.

• Much of Woodinville’s downtown is ripe for redevelopment.

High-level growth planning for the downtown

• Set building heights• Designate grid roads• Provide parking• Meet but not exceed growth targets

Counter-proposal

• The city needs revenue.

• Sales taxes are the source of revenue over which we have the most control.

• We’ve been asked to seriously consider big-box chain stores as the largest and surest source of sales tax revenue.

This is a testable hypothesis.

So what’s wrong withbig-box chain stores?

• Woodinville’s citizens don’t want downtown Woodinville to be filled with “Anywhere USA” chain stores.

Do the economic benefits compensate for the “Anywhere USA” sacrifices?

Andersonville, Illinois

“$100 spent at one of the independent businesses created $68 in additional economic activity in the city, while spending the same amount at a chain only generated $43 worth of local impact.”

Santa Barbara, California

Santa Barbara County Agricultural Production Report, 2008:

“For every dollar spent at a locally-owned store in Santa Barbara, 45 percent is retained by the community, as opposed to only a 15 percent retention for the same dollar spent a chain store.”

Austin, Texas

But isn’t this disappointing economic multiplier effect just a smaller

percentage of a bigger revenue pie?

No.

“One study of 116 cities in California found that, in all but two cases, the presence of a big-box store did not correspond to increased sales tax revenue.” (Bay Area Economic Forum, Supercenters and the Transformation of the Bay Area Grocery Industry: Issues, Trends, and Impacts, 2004, 74-81)

But more stores mean more jobs, right?

No.

Iowa study: “New Wal-Mart stores derive on average of 84 percent of their sales from existing businesses within the community ... The 177 jobs expected to be gained by the Wal-Mart would be offset by the loss of 148 jobs at other businesses. ”

Yeah, but that’s just one study, right?

No.

“A recent study examined 3,094 counties across the U.S., tracking the arrival of new Wal-Mart stores between 1977 and 2002. The study, conducted by Univ. of California economist David Neumark, found that opening a Wal-Mart store led to a net loss of 150 retail jobs on average, suggesting that a new Wal-Mart job replaces approximately 1.4 workers at other stores.”(The Effects of Wal-Mart on Local Labor Markets, January 2007)

But big box stores last longer, right?

“Small, independent stores … are firmly rooted in the community. They are unlikely to move and will do their best to weather economic hard times. Chain stores, by contrast, tend to be fair-weather friends. They are highly mobile and will abandon a location if profit margins do not meet their expectations.”-- Institute for Local Self-Reliance, at American Planning Association, 2000

What happens to the spaces?

Current 5.7% vacancy rate for big-box spaces in Los Angeles is similar to nationwide vacancy rate, but replacement with another big-box retailer often takes years if it happens at all.

Federal Reserve Bank of Atlanta explains:“Wal-Mart’s website cites that it recycled over 15 million square feet of space last year and contends that in doing so it has developed another business opportunity. When retail business isn’t the most effective use for vacant big boxes, communities must explore other creative strategies for the space. For example, big boxes have been converted to government complexes, call centers, schools, churches, auto dealerships, storage facilities, medical facilities, museums, recreational facilities, and office space.”

Vacancy rates for big-box chain stores

Federal Reserve Bank of Atlanta:“Wal-Mart currently has 350 buildings available for sale or lease. According to its website, the company is planning to continue its aggressive growth and expects to open 530 new stores in the coming year. Of these new stores, 160 will involve expansion or relocation of existing stores, thus ensuring continuous generation of Wal-Mart ghost boxes.”

Occupancy and Vacancy

• Concern that smaller retail will be lean toward non-tax-revenue-generating uses like professional offices and services.

Can be addressed through permitted uses.

Redmond Towne Centre: 6 miles

Alderwood:

7 miles

Totem Lake: 11 miles

The upsides of mixed-use

• New residents within walking distance are new customers for downtown businesses (that is, new demand, not just new supply).

• New residents near transportation routes give Woodinville more leverage for attracting commuter rail, trails, and bus routes.

• The 30,000 jobs already in Woodinville, and more that will come to town as the General Business District, are also sources of demand, and also help us increase sales tax revenues and increase transportation options.

General recommendations

• Accommodate our growth targets with mixed-use, but don’t overshoot.

• Don’t go the big-box chain store route.• Do pass a downtown zoning plan that enhances

Woodinville’s livability for residents, and attractiveness to visitors.

• Do pay attention to sales tax revenues, but plan that CBD will be the main location of retail redevelopment.

• Realize that new grid roads create new frontage and viable business opportunities.

More specific recommendations

• Assess the amount of new retail space likely to be generated. Compare with our 250,000 square foot target.

• Send design standards to Planning Commission for 2010 docket.

• Work on first-floor permitted uses table, either now in Council, or send to Planning Commission, or both.

• Accommodate Molbak’s in a way that doesn’t convert more acreage to big-box format.

Specifically for Molbak’s

Options that have been suggested:• Increase big-box acreage• Exempt un-walled space from “Gross Floor

Area”• Exempt plant sales area from “Gross Floor

Area”• Exempt businesses that are dominantly wine

or plants from floor area maxima.