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As noted previously, although Downtown residents appreciate the areas many amenities,the lack of shopping options is an often-cited concern. When asked specifically aboutDowntown retail, residents mentioned a total number of 1,112 stores or types of storesthat they would like to have open in the near future. The most frequently cited types ofstores included grocery stores (80%), high-end retail/chain/department stores (41%),restaurants/bars (25%), home improvement/hardware stores (18%), movie theatres(15%), and clothing stores (15%) (see Table 35). Examples of grocery stores includedTrader Joes, Giant, and Whole Foods. Examples of retail stores included Nordstrom,Target, and Wal Mart. Examples of home improvement/hardware stores included HomeDepot and Lowes and examples of clothing stores included the Gap and Banana Republic.

Number of Percent

Responses of Total

Total Responses 470

No Response 34 7%

Total Valid Responses 436

Grocery Stores 347 80%

Retail/Chain/Department Stores 178 41%

Restaurants/Bars 109 25%

Home Improvement/Hardware Stores 78 18%

Movie Theaters 66 15%

Clothing Stores 66 15%

Coffee Shops 41 9%

Small Specialty Stores 24 6%

Boutiques 18 4%

Book Stores 17 4%

Bakeries 15 3%

Furniture/Home Goods 14 3%

Other 139 32%

What Type of Businesses You Would Like to SeeLocated Within Downtown Baltimore?

Table 35

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Downtown Baltimore Retail Assessment

BackgroundDowntown Partnership of Baltimore in conjunction with the Baltimore DevelopmentCorporation (BDC), Baltimore City Department of Planning (DOP), and the Charles StreetDevelopment Corporation, formed a Strategy Team to develop a comprehensive retailstrategy and marketing program. While the plan would serve all of Baltimore, its mainfocus areas will be Downtown and select neighborhood retail districts.

To develop the report, t he Strategy Team required a comprehensive understanding of thenational retail marketplace and Baltimores positioning within it. Accordingly, this retail

market assessment was developed and will serve as the foundation for the retail strategyby enabling intelligent and creative decisions based on data, information, and marketrealities.

Key TakeawaysThe U.S. Urban Retail Market

Demographics Drive Retail Location Decisions: While retailers consider a widevariety of factors in making location decisions, decisions are driven primarily bydemographics, population, employment, and income. If the demographic dataand trends in a location do not meet predetermined requirements, retailers are notas likely to give the location further consideration, no matter how strong its othercharacteristics.

Different Location Factors for Different Retail Types: Within cities, high-endretailers are typically attracted to areas in and near downtowns since this is wherethe greatest number of high-income residents, employees, and visitors are on aday-to-day basis. However, when mid-level and big box retailers, such as Target,Marshalls, and Home Depot, locate in cities, they tend to locate outside the centercity in less expensive areas that offer easy access to a broad range of residents.These areas often provide easy parking and/or mass transportation linkages.Home Depot, Toys R Us, and Target (among others) have opened prototypestores in Manhattan, however, this is more of an urban experiment than a trend.

National Retail is Limited in Center Cities: Typical location models for majornational retail chains do not favor center cities. Suburban areas continue to be the

preferred location for most national retail chains. While the argument could bemade that many major cities are under-retailed by national chains based onpopulation, most cities do not have the other critical demographic criteria andattributes that retailers believe they need to be successful.

Of the 40 national chains studied for this project, about half have locations in the

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top 8 retail cities identified below. For cities below the top 8, the presence ofhigh-end and other national chains is much more limited. The mid-tier cities tend tohave stores such as Gap, Banana Republic, Talbots, Barnes & Noble, Borders, andperhaps one department store.

National Retailers Cluster Together: Whether in suburban or central city areas,national retailers cluster near one another and other high-end local retailers inenclosed malls, open air malls, or designated shopping districts. Many nationalretailers have a pre-determined list of other retailers with whom they prefer to co-locate.

Changing Urban Malls: While most cities in the top 25 metro areas have a majorshopping mall of 400,000 square feet or more, many of these are in decline, suchas Philadelphias Gallery (1 million square feet) and St. Louis City Centre(900,000 square feet). Popular, newer developments in central cities are quitedifferent from traditional enclosed malls and may include: mixed-use facilities,open-air malls, and street-level storefronts in neighborhood-type shoppingdistricts. Louisville recently converted its former Galleria Mall into an outdoorUrban Entertainment Center similar to Baltimores Power Plant. Examples of newerurban shopping districts or open-air malls include Philadelphias Walnut Street,Minneapolis Nicollet Mall, and Atlantas Atlantic Station (a 138-acre mixed-useproject on the site of a former midtown steel mill).

Top U.S. Retail Cities: Among major U.S. metro areas, there are only about 8strong retail center cities (based on high retail sales, high consumer spending, high

retail employment and/or a large presence of major national chains in the centercity): New York, Chicago, San Francisco, Boston, Seattle, Washington, D.C.,Philadelphia, and Portland, OR. While other cities, such as Minneapolis, Denver,and San Diego, are improving their retail bases, most cities in the top 25 metroareas are struggling to retain and attract national retail chains.

What Top Cities Have in Common : Most of the cities listed above have a numberof commonalities: 1) large metro area populations; 2) high center city populationdensities; 3) high center city daytime employment; 4) high center city averageincomes; 5) at least one large mall or shopping district (400,000 to 1.5 millionsquare feet) in the center city; 6) good public transportation; 7) good publicsafety either real or perceived. It is the combination of all of these traits togetherin a core area that seems to drive success, as opposed to having only one or twotraits.

Experience and Authenticity: In urban areas, national retail (and high-endlocally-owned stores) tends to locate in neighborhoods or areas that offer aunique experience relative to typical suburban neighborhoods. This includes the

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presence of small parks and squares, sidewalk cafes, clustered amenities, and apedestrian-friendly non auto-dominated environment that encourages people tolinger. Urban areas are also capitalizing on their authenticity by using historicassets, architecture, cultural offerings, and unique urban settings to create adesirable environment for residents, employers, and visitors. Rittenhouse Square(Philadelphia), Magnificent Mile (Chicago), and Newbury Street/Public Garden(Boston) are all areas that pull these traits together.

Department Stores: With retail trends favoring big box stores, low-pricewarehouses, and open-air or main street malls, department stores have beenlosing their long-held anchor position in the retail market. Department stores arebeing forced to re-invent themselves (Sears, JC Penney), consolidate with otherstores (the Federated takeover of May), eliminate stores (Federated, Lord &Taylor) or go out of business (Wards, Bradlees, Caldor). However, among the 25largest metro areas, 18 have at least one department store in or near downtown.Six of the eight top tier retail cities listed above have at least 4 or moredepartment stores, with only Philadelphia (2 stores) and Washington, D.C. (1 store)lagging the group. The department stores that are located in these center citiestend to be higher-end, including Nordstrom, Neiman Marcus, Macys, Saks FifthAvenue, Barneys, Lord & Taylor, and Bloomingdales.

Pittsburgh provides a sobering example of the difficulty of to secure a departmentstore to spur high-end retail growth. The city was successful in using incentives tolure high-end Lazarus and Lord & Taylor stores to serve as anchors for a plannedshopping avenue. However, both stores closed within 2 years of opening, citing

sales figures that fell below 50% of projections.

Incentives: While a handful of cities have created incentive programs to attractretail, research on this project was unable to find any significant and successfulretail incentive programs in major cities. Pittsburgh, as discussed above, provided$50 million for new Lazarus and Lord & Taylor stores, only to see both downtownstores close within two years of opening. The city is now responsible for payingoff that debt. Washington, D.C. has enabled TIF legislation for retail, however, ithas produced no favorable results. Only one small store has taken advantage ofDetroits retail grants incentive. Buffalo used significant state and local grants toattract Bass Pro Shops to anchor a downtown redevelopment project, however, thisis viewed largely as an act of desperation by a city in need of an economic spark.

Research and many retail development professionals conclude that incentives forretail are bad policy not only because they tend to be risky, but also because theydo not seem to produce desired results. The best incentive for retail appears to bethe creation of a city environment that supports retail through infrastructure,amenities, government support and incentives targeted to the project developer

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for the overall project, as opposed to potential project tenants. In other words, anabundance of public incentives is not enough to compensate for a weakmarketplace.

Retail as Economic Development Effort: Historically, most cities have taken theposition that retail is a follower of other economic activity. Therefore, cities andregions have not considered attracting and supporting retail to be an economicdevelopment priority. However, recent trends, such as renewal of center cities andthe quest for improved amenities, have driven a new focus on retail as a keyamenity in supporting quality of life.

Few cities, however, have placed much in the way of resources towards a retailattraction and support effort. Some cities have created retail incentives (see

above) with minimal results. San Jose, Austin, and Portland have each developedretail strategies while Philadelphia has pieced together highly professionalmarketing materials to promote its retail neighborhoods. But none of these citieshas a program, staff, or organization that is dedicated t o retail attraction andsupport.

Transportation and Parking: While parking for retail is viewed as a must in thesuburbs, it plays a different role in urban centers. The top 8 retail cities each havegood public transportation systems (including subway and light rail) and a daytimepopulation base that is already downtown for other reasons (e.g., residents,employees, visitors). Philadelphia representatives stated that their retailers do notcomplain about the lack of parking nearby because they recognize that theirbusiness will come from people who are in town for other reasons and will shopwhile they are there. If people do come downtown to shop, it is for the experienceor a unique item, not for convenience. This is why the existing demographics are soimportant. Cheap, easy parking is not typically a necessary part of the successfulurban retail district.

General Retail Development Trends: Current retail developments tend to revolvearound mixed-use, lifestyle centers (often open-air main street malls), and urbanentertainment centers (UEC). Few traditional enclosed malls are being developedtoday, although many argue the existing ones still have a place in the market.

Mixed-use developments are those that include office, retail and residential space.

They often entail pedestrian-friendly environments, lifestyle-orientedmerchandising, main street ambience, convenient access, and scaled-down big-boxstores.

According to the International Council of Shopping Centers (ICSC), lifestyle centerstypically have an open-air configuration and 150,000 to 500,000 square feet of

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retail space, with at least 50,000 square feet occupied by upscale national chains.The tenant types are typically apparel, home goods, and books and music.Restaurants, entertainment, and design ambience (including sidewalk cafes, openspace, and other desirable settings) also make the complex a destination for morethan just shopping. Many of these main street projects are anchored by mega-plex movie theaters and offer outdoor dining, fountains and park benchesdesigned to replicate the environment of old time city shopping districts.

Urban Entertainment Centers (UEC) are developments that mix destination,entertainment, and retail. These projects bring together unique tenants and senseof place to encourage visitors to extend their stay. They are often theatrical, withone developer describing them as, Disneyland without the rides. To becomesuccessful, UECs require a strong tourist and local market. They also need some

type of over-arching theme. The Cordish Company in Baltimore has become asignature developer of downtown UECs, with Baltimores Power Plant, Louisvilles4th Street Live, Kansas Citys Power and Light District, as well as projects inOrlando, Norfolk, and other cities.

The Baltimore City Market and Retail Potential

Demographic Power in 1-Mile Radius of Core : Baltimore arguably has oneof the nations top center cities. The mix of residents, employers, tourists, andamenities supports its emergence as a top-tier downtown. Among the top 25U.S. metro areas, Baltimore ranks 8th for population (36,980) and 8th for thenumber of households earning $75,000 or more.

Demographic Decline in 3- and 5-Mile Radius: Like many major U.S. cities,Baltimore has a solid Downtown at its core, surrounded by struggling areas.While Baltimores population in a 3- and 5-mile radius remains among the top10 cities nationally, income, growth, and other critical measures fall-offdramatically. Like Baltimore, most major metro areas used to resemble adoughnut, with the entire city in decline and the surrounding suburbs showinggreat strength and growth. Today, large metro areas are starting to resemblebullseyes, with redevelopment and a rising middle- and upper-class in thecenter city and outer suburban areas, but with continued decline in other cityareas and inner-ring suburbs.

Underserved by National Retail Chains? Yes and No: Given its improving

demographics in the city center and in demographic comparison with citycenters in other metro areas, it could be argued that Baltimore is underservedby national retail chains. However, like most cities, Baltimores city center stilldoes not fare well when compared to surrounding suburban jurisdictions giventheir strong demographics, flexible real estate, and parking access. Theoverall retail market in Greater Baltimore and nearby Washington is very well

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served by national retail chains.

Of the 40 national retail chains evaluated for this project, only 8 havelocations within 1 mile of Baltimores city center. They are: Banana Republic,Barnes & Noble, ESPNZone, Gap, Office Depot, Safeway, Talbots, and WholeFoods. Most of the other chains have multiple locations in suburban Maryland,however, some have no Maryland locations, including Barneys, Cole Haan,Marshall Fields, Neiman Marcus, and West Elm.

Characterized by Small, Local Retail: While the presence of high-endnational chains is fairly limited in Baltimores Downtown area, the city doeshave a large number of small, street-level, local retailers. Among the top 25markets reviewed, Baltimore City is among the top 10 for the number of retailestablishments but it has the lowest average employment per establishment(i.e. lots of stores with small staffs). These independent shops contribute to thesense that Baltimore is a unique or authentic shopping destination.

One challenge Baltimore must over come in order to attract larger retail storesis that its existing building footprints and frontage are too small or otherwiseunsuitable for national retailers.

Whats Been Holding Baltimore Back?: Baltimores effort to attract nationalretail chains has been held back by: 1) demographics that have only recentlybegun to become attractive to retailers; 2) daytime Downtown employmentthat is well-below top markets; 3) no large, clustered shopping district or mall

in or near Downtown; 4) lack of adequate space to group retailers togetherand provide desired footprints and store frontage; 5) stiff competition fromColumbia and wealthy surrounding suburbs; 6) easy access to high-end urbanshopping experiences in New York, Philadelphia, and Washington; 7)inadequate and poorly connected public transportation system; 8) theperception of crime; 9) lack of comprehensive information and marketing dataabout the Baltimore market and how it compares to other cities and suburbanmarkets.

Reasons for Optimism in Baltimore: Baltimore has a number of reasons to beoptimistic about its position to attract and support a strong retail base. TheCity: 1) is arguably one of the nations top downtowns given its denseclustering of residents, businesses, visitors, institutions, sports facilities, andevents; 2) meets many factors that are driving national retail chain locations intop tier cities; 3) has high population density; 4) has a high number of highincome earners in the city center; 5) is realizing a booming demand for high-end residential units; 6) has a high hotel occupancy rate with many new hotelsin the pipeline; and 7) has the authenticity (architecture, culture, distinct

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neighborhoods, diverse populations) that is driving urban renewal in manymajor markets.

Suburbs Win Demographic Battle with City: While Baltimore and nearbyWashington, D.C. are performing fairly well against other central cities fordesired demographic attributes, the surrounding Maryland suburbs performmuch better. Within a 5-mile radius of their cores, Washington, Silver Spring,Baltimore, and Bethesda have by far the highest populations and employmentlevels in the region. However, growth, incomes, and consumer spending aremuch higher in the suburban towns than in Baltimore. The median householdincome within a 5-mile radius of Downtown Baltimore is $31,976, while it ismore than $80,000 in Columbia and Bethesda. All other jurisdictions, includingWashington, D.C., average more than $50,000. Combined with other keyfactors considered in retail location models, such as available land, parking,and public safety, and it is easy to see why retailers tend to cluster in suburbanareas.

Light Street to Canton is Strongest City Area : Among the Baltimoreneighborhoods reviewed, the areas around the Inner Harbor (from theintersection of Light and Pratt Streets, through Harbor East and into Canton)show the greatest potential for attracting national retail. Federal Hillpossesses fairly strong demographics and provides possibilities, however it isnot as central to the business and tourism core as the other areas and does nothave large buildings or land parcels to meet national retail needs. Incomesand household growth would likely deter high-end national chains from

considering Mt. Vernon, the East Side/JHU, and the West Side/UMMS, eventhough these neighborhoods have the largest populations within a 1-mileradius. These neighborhoods should be considered for local, boutique, andsmall national or regional retail chains.

Primary Implications of Findings for Baltimore

If Demographics Rule: Baltimores efforts to attract high-end national retail mustfocus on the neighborhoods within a 1-mile radius of Downtown. This is the area ofthe City that provides the demographics and attributes that are proving attractiveto high-end chains in other cities. Baltimore must also begin to producedemographics and marketing materials based on the entire City Center (e.g., 1-mile radius) and not a limited definition of what constitutes Downtown. IfBaltimore doesnt put its best foot forward in att empting to attract national retail,it is much less likely to be successful.

If Cities Dont Fit Retail Models: Baltimore must creatively package and marketitself to desired retailers guided by a well-conceived plan. Otherwise, the existingmodels will serve to pass the City by. Baltimore must also identify ways to

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differentiate itself from surrounding suburbs.

If National Retailers Cluster; If All Successful Cities Have Dedicated ShoppingDistricts and/or Malls: Baltimore must identify and promote areas where retailerscan co-locate and cluster together in large numbers.

If Retailers Want Certain Footprints and Frontage : Baltimore must either findspace that meets retailer models or work creatively with retailers to help themadapt their models t o unique urban environments.

If Authenticity Matters: Baltimore must preserve and leverage its uniqueneighborhoods, markets, and architecture.

If The Experience Matters: Baltimore must consider sidewalk cafes,parks/squares, and places to linger which are not dominated by automobiles whendetermining where retail will thrive.

If Access Matters; If Top-Tier Retail Cities Dont Prioritize Easy Parking:Baltimore must consider retail access in housing, transportation, and other growthplanning. The City must also ensure its designated shopping districts arepedestrian friendly since most urban shoppers arrive on foot.

If Department Stores Arent Anchors Anymore, but Part of the Mix; If MostDowntown Department Stores are High End: Baltimore should continue toexplore the possibilities department stores may provide to the overall retailenvironment and mix Downtown, but attraction of a department store should notbe viewed as a panacea that, by itself, will move the city ahead. The city shouldfocus Downtown efforts on higher-end department stores.

If Retail Incentives Arent Effective: Baltimore must consider the entire set offactors that are proving to drive attraction of t argeted national retail chains, asopposed to looking for an incentive that will serve as a silver bullet. The city mustalso focus on attracting and working with experienced developers that have theproven ability to attract desired retail to their projects.

If Baltimore has a Strong, Diversified Center City, but has Limited Presence ofNational Retail: Baltimore has the opportunity to move into the top tier of U.S.

downtowns for retail if it markets and manages its assets well.

If Most Cities Dont Have Dedicated Retail Marketing Programs: Baltimore hasthe opportunity to achieve success and be a first-mover among mid-tier markets,given its dedicated retail staff at Downtown Partnership, focus on commercial

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revitalization at BDC (including Main Streets) and existing center city attributesand demographics.

If Site Selection for Retail Varies by Size and Type : Baltimore must address thestrategy to meet the different needs of primary retail types: 1) high-end nationalchains; 2) mid-level national chains; and 3) smaller, local retailers. High-end retailmust focus primarily on the high-income core (1-mile radius); mid-level retail (e.g.,Target, Kohls, Marshalls) must focus on neighborhoods that provide lower cost,easy access to a wide variety of residents; and smaller, local retail must focusprimarily on the citys many unique neighborhoods.

Background: Project ApproachTo develop a successful assessment and strategy, the Team wanted to understand how

retail location decisions are being made, the key factors involved in the location process,how Baltimore and other places compare given these key factors, current and future retailtrends, and the recent experiences of other cities. To attain this understanding, the Teamapproached the project from a variety of different angles:

Understanding Retail Location Decisions: Forty national retailers wereevaluated to determine where they have actually located stores and how theymake location decisions. The 40 retailers represent a cross section of retail typesincluding department, grocery, specialty, and big box stores.

Comparing Center Cities in the Top 25 Metro Areas: Each of the top 25 U.S.metro areas and their core cities were evaluated to determine their demographics.The cities were also studied to determine which national retail chains are located inor near downtown.

Determining Retail Trends: A wide variety of articles and reports were reviewedto determine the latest retail trends.

Comparing Baltimore and Its Surrounding Suburbs: Baltimore was compared tosurrounding suburban towns to determine the difference in demographiccharacteristics and other factors most critical to retail location.

Comparing Baltimore Center City Neighborhoods: Key demographics wereevaluated using a 1-mile radius of 7 different neighborhoods in or near Downtown

Baltimore. The areas studied include: Canton, East Side/JHU medical campus,Federal Hill, Harbor East, Mt. Vernon, Pratt & Light Streets, and the WestSide/University System of Maryland.

Visiting a Top Retail City: Members of the project team visited Philadelphia tomeet with local officials and to experience the Citys retail shopping districts and

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associated neighborhoods firsthand.

City Comparisons: Apples and OrangesThe problem in comparing cities is that they are political jurisdictions that are verydifferent in size (land area) so the information obtained does not provide for apples-to-apples comparisons. For example, Phoenix has a city population of 1.39 million andBaltimore City has a population of 643,000. So it is commonly assumed that Phoenix (6th

largest U.S. city) is over twice as big as Baltimore City (18 th largest). However, PhoenixCity has a land area of about 475 square miles, whereas Baltimore City has only 81square miles. Baltimore City actually has a population density three times greater thanPhoenix.

Even downtowns are difficult to compare. The Team uncovered studies that compareddowntown areas in many cities, however most of the data was self-reported and thedowntowns varied in size and definition.

Therefore, instead of using the top 25 cities for comparison, the Team decided to start byidentifying the 25 largest metro areas, which represent true markets. Then, to ensureapples-to-apples comparisons of city centers, Claritas software was used to collectdemographic data for a 1-, 3- and 5- mile radius from each city center. Using this data,Baltimore ranks 8th among the top 25 U.S. metros for population within a 1-mile radius ofits City Center while Phoenix ranks 17th.

This approach more accurately portrays how national retailers make location decisionsand helps to explain why Phoenix, in spite of officially being the nations 6 th largest city,

has limited retail downtown. It also more accurately reveals the true strength ofBaltimores downtown and nearby areas.

Population and HouseholdsIt is important to recognize the importance of household growth, in addition to monitoringpopulation trends, when evaluating a market. In Baltimores case, while population incertain neighborhoods has declined the number of households within those neighborhoodsactually increased. Incomes are also rising in many city neighborhoods. In neighborhoodsin and around Downtown and the Inner Harbor, homes that used to house lower-incomefamilies of 5, are now middle- to upper-class households of one or two people. The city isalso seeing significant infill development. So, population may decline, but number ofhouseholds, median household incomes, property values, and tax revenues in manyneighborhoods are going up.

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Retail Strategy for Downtown BaltimoreExecutive SummaryDowntown Baltimore is emerging as a leading destination for local and national retailers.The pace of new store openings is quickening as more residents move into Downtown,more housing developments open with a ground-floor retail component, and as the citymoves forward with high-profile new projects. This combination of new residents,additional hotel rooms and new attractions has excited retailers about Downtown over thepast few years.

Where once there was a chicken and egg relationship between residential and retaildevelopment in Downtown Baltimore residents were reluctant to live where their accessto goods and necessities was limited, while retailers would not l ocate where the customerbase was small now there is a symbiotic relationship between residential developmentand retail growth.

This began to change over the past ten years as The Partnerships Downtown HousingInitiative, together with major public and private sector investments, helped dramaticallyincrease the number of Downtown residents to more than 37,000. While the newresidential developments have been coming online, The Partnership and BaltimoreDevelopment Corporation (BDC) were laying the groundwork for new Downtown retailinvestments.

According to The Partnerships annual State of Downtown Reports, Downtown employmentis up 6.8 percent to more than 100,000. Development projects worth $3.17 billion are

underway through 2008. Reflecting the need for both service and goods-oriented retail,more than 60 new retailers recently committed to Downtown, including top national brandssuch as:

Best Buy;

Bedrock;

Chipotle;

Cosi;

Filenes Basement;

Office Depot;

Starbucks; and,

Urban Outfitters.

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All signs point to sustained residential growth Downtown driven by young professionalsand retiring baby boomers. According to recent data, collected by The Sage PolicyGroup for The Partnership, this growth will be aided significantly by the addition of morethan 17,000 new jobs from the federal Base Realignment and Closure (BRAC) process, thenew biotech facilities opening at the University of Maryland and Johns Hopkins medicalcampuses, as well as the expansion of the four Downtown area hospitals.

To better attract retailers and direct retail investment, The Partnership has initiated amulti-stage retail planning process. In October 2005, The Partnership, in conjunction withBDC, the Baltimore City Department of Planning, and the Charles Street DevelopmentCorporation released Part One of this effort: the 2005 Downtown Baltimore Retail MarketAssessment(Addendum 1). The Assessmentestablished baseline demographic informationand examined key factors in retailers location decision-making process, as well as future

retail trends. The data that emerged from the Assessmentillustrates Downtowns retailstrength.

Within a 1-mile radius of the Downtown core, the 2005 Assessmentfound that:

Downtown Baltimore ranks 8th in the country for population density (37,000) and inthe number of households (3,145) earning $75,000 or more, making Baltimorecomparable to Denver, Boston, and Washington, D.C. These numbers are echoedin the more recent Demographic Analysis conducted by The Partnership and theJacob-France Institute of the University of Baltimore (JFI) in the summer of 2006.

Baltimore City ranks 10th among the top 25 U.S. metro areas with a per capitaincome of $35,556, making the region comparable to Philadelphia and Chicago.

Downtown Baltimore ranks 16th for total employment with 102,812 jobs, similar toCincinnati and Atlanta.

The economic data routinely used by developers and retailers when decidingwhere to locate new stores is insufficient to show the dramatic recent improvementsto Baltimores demographic profile.

In 2001, housing demand was estimated at approximately 5,300 new units over afive year period. Since then, 4,000 units have been built or are currently underconstruction. Rents are in an uptrend and sales prices are also rising steadily, a

strong indication that demand is outpacing supply. The 2006 update for housingdemand estimates that 7,400 new units need to be delivered by 2011.

The Partnership is utilizing the 2005 Downtown Retail Market Assessmentas the foundationupon which to build the detailed retail development strategy outlined in this report. Thestrategy focuses on the following main themes:

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Demographics & Marketing;

Retail Recruitment;

Retail Clustering;

Retail Building Program;

Authenticity & Placemaking;

Incentives; and,

Site Specific Recommendations.

Demographics & MarketingRetailers make location decisions based upon the dominant demographics and expected

growth of any given area. The new data emerging about Downtown Baltimoresdemography should make it very competitive to new retail, particularly within a one-mileradius of Downtowns core. To maximize this effectiveness, economic development officialsand real estate professionals should aggressively market the data to retailers as outlinedbelow.

DemographicsUtilize the 1-mile radius demographics established in the Retail Assessment (October 2005)

Create marketing materials focusing on the strength of 1-mile radius fromDowntowns core to recruit retailers.

Encourage everyone involved in retail recruitment or promotion of Baltimore,including developers, brokers, elected officials, economic development officials,and BACVA, to utilize this standard set of data.

Send updates and provide respective marketing materials to users.

Distribute demographic data to retailers and brokers at International Council ofShopping Centers (ICSC) conventions and individual meetings.

Include demographic data in any print mailings to retailers and brokers.

Make all information available on the Downtown Partnership website.

Research, review, and assess the demographics and buying power of neighborhoodsadjacent to Downtown (Federal Hill, Fells Point, Canton, etc.) and incorporate thisinformation into retail recruitment marketing materials. Residents in these neighborhoodswill shop Downtown.

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Complete pedestrian counts for key existing and future retail intersections in order toprovide further information for recruitment purposes.

Potential intersections could include:o Charles and Saratoga Streets;o Eutaw and Baltimore Streets;o Pratt and Calvert Streets;o Pratt and Light Streets;o Pratt and Market Streets.

Review CoStar traffic counts.

Select intersections, including those used for pedestrian counts.

Incorporate into documentation.

Create an interactive/GIS mapping system for existing retail development in Downtown,that includes:

Downtown retail totals as the first layer of each map;

Demographic break-downs for each neighborhood within Downtown;

Annual totals from the State of Downtown report (e.g. number of employees,residents, students, etc.);

Development pipeline (e.g. housing units under construction, in planning; hotelsunder construction, in planning, etc.);

Number of retailers, types of retail, lists of high-end or well-known retailers,square footages, rental rates, etc.

(Note: this information could be completed first as a Power Point document.)

Distribute information via website, print materials and conferences. Encourage developersand brokers to utilize these materials in recruitment efforts.

MarketingAs stated in the Demographics section above, all marketing materials should reflect a 1-mile radius of Downtowns core and recognize that adjacent neighborhoods can contributeusers of Downtown retail and locations for future retail expansions. Specific marketingrecommendations include the following:

Continue Baltimores presence at ICSC.

Encourage developers and brokers to include agency staff as part of initialdiscussions with retailers.

Coordinate retailer meetings to best target specific retailers for locations andavoid any overlap or confusion for the retailers.

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Increase amount of advertising in national retail publications. Create comprehensive and attractive insert on Downtown retail for national retail

publications.

Broaden presence on web.

Determine additional national retail websites to which Downtown Partnership canlink.

Implement a public relations campaign to tell Downtown Baltimores emerging retail story.

Research and select appropriate national publications, i ncluding non-retailpublications.

Contact respective members of the publication to pitch story.

Include demographics, retailers success stories, and overall quality of life.

Initiate an umbrella marketing campaign, geared to shoppers, to encourage Downtownshopping.

Identify best means and methods of reaching Baltimore metro area shoppers.

Capitalize on the sense of place and uniqueness within Downtown, and its distinctshopping experience, to draw more consumers.

Create incentives for shoppers such as free/reduced parking, discounts, etc.

Work with retailers to identify the needs and interests of the target audience.

Increase outreach to hotels and their guests.

Partner with existing agencies and organizations, such as:o Baltimore Area Convention & Visitors Association;o Baltimore Development Corporation;o Baltimore Main Streets;o Historic Charles Street Association;o Market Center Merchants Association;o Restaurant Association of Maryland; ando Westside Renaissance.

Retail RecruitmentFor decades, retailers did not locate in urban areas because the suburbs offeredinexpensive land close to more densely populated suburban markets. Slowly, retailersare returning to downtowns, although many struggle with reinventing their successfulsuburban retail models (e.g. pad sites, mall locations, and parking). Cities requireretailers to develop new models that maximize the space and frontage available to t hemin urban areas. Accordingly, Baltimore must market itself in ways that overcomeperceived obstacles to opening stores Downtown. This marketing should stress DowntownBaltimores demographic strengths and differentiate Downtown from the surroundingsuburbs. Specific recommendations include:

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Create a targeted list of potential retailers that Baltimores residents would like to havelocated in Downtown.

Include national and regional chains, local or independently owned and operatedrestaurants, boutiques, specialty stores, and services. While department stores,particularly higher-end department stores and/or mid-range multi-service storessuch as Target, will be part of the recruitment list, they are not to be considered asthe sole focus for a retail anchor.

Assess each retailers needs (space requirements, median household income,parking, etc.).

Determine potential Downtown locations for each retailer on the list.

Include appropriate broker or corporate contact.

Gather sales per square foot information for existing Downtown retailers. Obtain information for major national retailers.

Provide confidentially upon request to retailers, brokers and developers.

Create informational sharing opportunities to expand recruitment efforts.

Hold quarterly meetings with developers and brokers.

Strive to hold meetings at a time and location, including in the counties, which isconvenient for developers and brokers located outside of Downtown.

Review available space, retailers seeking a Downtown location and updateddemographic information.

Expand outreach beyond retailers to include those with experience in retail real estate.

Pursue local and national developers who have contacts and a successful historywith retail clients and tenants.

Establish relationships with a broader variety of brokers who have extensive retailexperience.

Collaborate with architects and contractors who have worked on retaildevelopments.

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Strengthen and coordinate agency recruitment efforts.

Include Downtown Partnership, BDC, the Baltimore Mayors Office, and theMaryland Department of Business and Economic Development (DBED).

Hold quarterly meetings to discuss available space, retailers seeking a Downtownlocation, and to update demographic information.

Coordinate marketing efforts including publication advertisements, press releases,and attendance at ICSC conferences.

Coordinate visits with prospective tenants/brokers that include tours andinformational sessions.

Review incentives offered at the State, City and Downtown level (see further detailin section below).

Retail ClusteringRetailers prefer to cluster together to better capture a larger audience of shoppers.Many successful cities have dedicated shopping districts within their downtown areas.Baltimore must identify and promote areas where retailers can co-locate and clustertogether in large numbers. Specifically, it should:

Identify streets, and blocks within streets, where retailers can co-locate to create a criticalmass. Foster connectivity between existing and future locations.

Market clusters of retailers, utilizing GIS mapping and demographics.

Include other existing retailers in that area, as well as vacant locations and those indevelopment.

(A comprehensive list of Downtown neighborhoods, including current and potentialclustering options, is explored in greater detail below.)

Work with developers and building owners within t hese nodes to create improved andcontiguous retail opportunities.

Where holes exist in the retail flow, encourage the building owner to renovate orcreate space and recruit potential retailers.

If the building owner neglects its property or violates City codes, encourage BDCto assemble large parcels where prospective developers already are in place;require ground floor retail as part of the development program.

Where possible, encourage multi-building purchases under the control of onedeveloper to create a thematic, non-conflicting cluster of retail possibilities.

Review ways to discourage non-retail uses on ground floors.

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Create GIS system (within neighborhood GIS mapping referenced above) of vacant retail,as well as retail under construction and in planning.

On an ongoing basis, work with developers, building owners, and brokers tocollect all retail information, including floor plans, photos, terms, timeframes, andcontact information.

Highlight the program on Downtown Partnership and agency websites, and marketit to outside sources.

Partner with CoStar on retail inventory to reach more prospective retailers.

Highlight Downtown properties regularly.

Host retail inventory on Downtown Partnership website with link to BDC andCoStar.

Work with brokers to utilize and update listing opportunities for all retail l ocationsin Downtown.

Continue working with groups such as Historic Charles Street Association, Market CenterMerchants Association, WestSide Renaissance, and Main Streets to strengthen and bettercoordinate efforts.

Existing and future clustering areas could include:

Inner Harbor long the center of retail and tourist activity, the area continues tothrive by reinventing itself. The Inner Harbor currently has the greatest capacity toattract national and high-end retailers due to its easy access and popularity with

residents, employees, and visitors. The majority of Downtowns national retail iscurrently located along the Inner Harbor. Additional retail should be considered,including vending/kiosks, to augment the pedestrian and retail experience aroundthe Harbor to Fells Point. Both 10 Inner Harbor (the former McCormick site) and300 E. Pratt Street are creating continuous retail opportunities both along PrattStreet and the respective side streets. For most properties in the Inner Harborretail should be considered on both the water and street sides to improve theaesthetics and pedestrian experience.

o Pratt Street currently, the area has predominantly national retailers withsome independents (mostly food). There are opportunities at existingbuildings where retail could/should be added. Maximizing ground-levelspaces for retail is critical to creating pedestrian flow and improving theconnectivity of existing, scattered retail.

Retail additions, as well as placemaking, will be explored as part of thePratt Street Design process. Work with the selected design team andstakeholders group should be ongoing throughout the process. Marketingmaterials (e.g. maps, renderings, and vision) should be used heavily in

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recruitment efforts as this is a very attractive area, demographically, formost national retailers.

o Harbor East is a mix of high-end national retailers, smaller nationalboutiques, and unique independent retailers. The area connects the Harborarea to Fells Point creating a continuous shopping/pedestrian experience.Ongoing recruitment efforts should focus on the creation of a neighborhoodthrough a variety of retail options, including further service retail. Thebuild-out of current plans is critical to momentum in this area.

City Center historically the regions leading business district, City Center is dottedmostly with food shops and accessory services, such as dry cleaners and drugstores. This is changing due to an influx of new residents over the past few years.Existing retailers are extending their hours while new retailers are moving in toserve this fast-growing base of customers. The new Superfresh at Charles andSaratoga Streets will serve as a key anchor to attract new retailers in this area.Space will need to continue to be renovated to meet more retailers needs.Where buildings are converted to residential or hotel uses, retail space should beincorporated into the building, particularly at key corner locations.

o Center, Charles, and Hopkins Plazas located along the Charles Streetcorridor, the plazas will function as a linear series of parks and retailenclaves. All three plazas will be renovated by the end of 2007. Fullyleasing the retail space at Charles Plaza, anchored by the Superfresh, willdo much to connect City Center with Mount Vernon. Center Plaza can

perform well as a destination retail location with predominantly foodofferings, a dry cleaners, and health club all of which appeal to officeworkers and nearby residents. As the site of the former Mechanic Theatreis renovated and reoccupied, attention should be directed to the inclusionof Hopkins Plaza as an asset to the new retailers, particularly for outdoordining.

o Power Plant Live is almost exclusively a food and entertainment venuefor locally- and nationally-owned businesses. There is room for additionalfood/entertainment/retail as new developments are built. When existingbuildings experience turnover, close attention should be paid to recruitingviable restaurant options. More effort should be placed on attractingbusiness lunch customers, as well as tourists, to augment the current customerbase of mostly evening and weekend attendance.

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o Charles Street is characterized by predominantly independent usesincluding food and boutique, with additional retail opportunities in thesouthern City Center blocks. Charles Street can become a connectorbetween the Inner Harbor, City Center, Mount Vernon, and Westsideneighborhoods. Continued placemaking efforts by the Historic CharlesStreet Association should be supported and encouraged. The Mechanic siteis critical as a location for large scale anchor tenants around whichadditional retailers will want to locate.

Mount Vernon has mostly independent uses in smaller historic buildings and isanchored by cultural institutions. Additional work is necessary to convert olderbuildings into usable retail space. Currently, side streets offer clusters of unique

retail experiences and attention should be given to highlighting these areas, aswell as creating connections to existing retail locations such as Antique Row andalong Charles Street. Developments in the northern portion of the neighborhood,such as State Center and UB Bolton Yards, must include large retail floorplates,including opportunities for grocery stores and national retailers to capitalize on acaptive audience and access from I-83, Penn Station, and Light Rail.

Westside has predominantly independent uses and is anchored by the LexingtonMarket, Hippodrome, and Centerpoint. Retail opportunities abound for small andlarge tenants, national and independent. Improving the existing buildings aroundLexington Market is critical, as is creating connectivity to the University ofMaryland Baltimore and the University of Maryland Medical Systems. Creatingconnections between Camden Yards and points north is imperative. Wherepossible, additional retail should be added to existing buildings and vacant lots,or surface parking, i.e. filling in the gaps. Completion of the Superblock iscritical to creating a connection between City Center, Mount Vernon, and theWestside. Larger retail floorplates should be considered for the buildings in orderto create an opportunity for mid-level national retailers. Smaller side streets suchas Saratoga and Park, currently dominated by independent retailers, should bethe focus of an outreach for signage and faade improvements. While notdisplacing current tenants, Lexington Market should upgrade offerings as existingtenants leases expire.

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Station North some small, independent retail is present. Designated as an Arts& Entertainment District, the area is anchored by the Charles Theater and PennStation. The redevelopment of the Chesapeake Restaurant site is imperative toadding retail to this area, as i s redevelopment of the Railway Express buildingand the Amtrak surface lots. The A&E District advantages should be marketedmore heavily and work should be ongoing with owners and developers of largefloorplate buildings to retrofit them for retail. Smaller buildings should work onadding art galleries, small live music venues and accessory retail (coffee shops,wine bars, etc.). Stores serving artists needs should also be considered forrecruitment. More attention should be paid to making the intersection at CharlesStreet and North Avenue a primary retail and entertainment destination at thecrossroads of the City.

Retail Building ProgramThe majority of existing Downtown buildings do not meet retailers standard models interms of square footage, frontage, and other associated requirements. Baltimore mustfind space that meets retailer models or work creatively with retailers to help them adapttheir models to unique urban environments. Specifically, Baltimore should:

Work with developers to create larger retail floor plates in new developments andrenovations.

Continue participation with BDC and City Department of Planning, including theUrban Design and Architecture Review Panel (UDARP), to support first floor retailas part of Downtown developments.

o Assess the development of stronger code and design criteria for retaildevelopment.

o Review setback regulations for new construction.

Encourage multi-building purchases in order to combine 1 st floor spaces for oneretail tenant.

Support the hiring of a retail architect from the start of a projects planning phase.

Promote limiting lobby and entrance space in mixed-use buildings.

Discourage blank walls and garage entrances near major intersections.

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Endorse two-story stores where the location is right, but the building is logistically difficultand multi-building purchase is not possible.

Identify potential two-story store sites.

Work with architects to draw basic concept plans and development costs.

Review and evaluate developer financial proformas and match with potentialalternate funding sources, such as BDC, the Maryland Department of Housing andCommunity Development (DHCD), and Baltimore Community Funding.

Market these locations to potential retailers.

Work with for-sale buildings to create whole block development (e.g. St. Jamesproperties, 400 block of N. Howard, Water/Light Street properties).

Maintain an updated list of for-sale and RFP development opportunities.

Make the list available on Downtown Partnerships website.

Distribute updates to retail-friendly and proactive developers and buildingowners.

Expand Downtown Partnerships Faade Improvement Program (FIP).

Extend boundaries of the existing program.

Market the program more effectively and to a broader audience, includingbuilding owners, developers, and brokers.

Offer further architectural assistance.

Hire an on-call architect to design improvements with approval from BDC & ThePartnership.

Seek to offer FIP grants to a row or block of building owners/tenants for maximumaesthetic impact.

Select a high-visibility area to perform this sample.

Assist in increased funding of selected area.

Publicize the results.

Energize the vision for future retail space.

Work to improve overall architecture in any renovated or newly constructedbuildings.

Continue to participate in Department of Planning and UDARP meetings.

Investigate the possibility of inclusion of retail design criteria in Urban RenewalPlans.

Authenticity & PlacemakingWhen compared with the suburbs, downtowns offer the promise of a more authenticexperience and provide a sense of place not found in cookie-cutter suburban malls orretail villages. In order to promote Downtown as a unique shopping experience, Baltimoremust preserve and leverage its distinctive neighborhoods, markets, and architecture.

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Baltimore must demand high quality architecture by creating a symbiotic relationshipbetween both historical and modern structures. Specific recommendations include:

AuthenticityCreate active (non-static or print) marketing materials that reflect Baltimores uniqueneighborhoods.

Use existing demographic information and planned GIS mapping systems forproduction of neighborhood marketing materials.

Produce concise descriptions of neighborhoods with demographics, culturalattractions, attributes, and retailers. Include photos.

Encourage developers, brokers, and CoStar to include Downtown Partnershipsneighborhood marketing materials as part of the marketing for any sites withinthat neighborhood.

Include vacant retail sites or sites in development within each neighborhood.

Link to The Partnership, BDC, and CoStar websites.

A large map of Downtown should be divided into neighborhoods and include theaforementioned information.

Ensure that all information can be easily updated.

Encourage preservation groups to find creative uses for historic buildings.

Connect preservation groups with proactive historic developers and retailers.

Expand marketing of Maryland Smart Codes.

Hold seminar for economic development staff, developers, and brokers to better

understand use of Smart Codes as a tool to assist i ncoming retailers. Advocate for the State to market Smart Codes more widely.

PlacemakingDowntowns offer a different kind of shopping destination and maximizing this differenceis key to getting shoppers to come Downtown and to keep coming back. Baltimore mustconsider sidewalk cafes, parks/plazas, and places to linger, (which are not dominated byautomobiles), when determining where retail will thrive. Additionally, Downtown shouldstrive for a pedestrian-friendly environment and unique experience. To do this, Baltimoreshould:

Improve the overall design, aesthetic, and pedestrian experience of Pratt Street. Createa grand boulevard with greater retail choices and better pedestrian aesthetics.Strengthen Pratt Streets existing amenities and create new opportunities for Downtownsfront yard.

BDC, in conjunction with The Partnership and Citys Departments of Planning andTransportation, issued a Request for Qualifications for consultant services (October2006) to provide a comprehensive Concept Plan for the public spaces along the

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Pratt Street Boulevard corridor in Downtown 16 blocks from Martin Luther King,Jr. Boulevard to President Street.

The new concept plan for Pratt Street should rethink improve the use of openspaces, enhance the aesthetic and functional design of the streets usage, activitiesand attractions, better activate the spaces and provide more pleasant andexciting pedestrian experiences.

The Concept Design chosen for implementation will be used to generate public andprivate sector support, identify necessary funding required to implement theproject and provide an implementation strategy.

Support major catalyst development projects.

Advocate for funding of a new Downtown arena with retail on all street fronts,entertainment, and housing uses.

Assess future proposals and developments for economic impacts and potential tobe a retail driver.

Increase and promote sidewalk cafes and outdoor dining.

Create an easier permit process.

Review the permit processes and success in outdoor dining in Boston andPhiladelphia (particularly in Philadelphias Center City).

Evaluate existing costs of permit process to retailer.

Create sliding scale minor privilege fee in conjunction with BDC and Citys MinorPrivilege Permits office.

Encourage developers designing new space or renovating existing locations toinclude an area for outdoor dining. Preferably, outdoor dining space should bepart of the property owners area so as to remove the need for a minor privilegepermit.

Create landscape standards as part of outdoor dining review permit.

Encourage the use of heat lamps to extend the outdoor dining season.

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Increase amount of outdoor displays, carts and kiosks associated with a specific retailerslocation, (not individual kiosks on plazas as is discussed below).

Review permits or legislation for outdoor displays and carts (e.g. fresh flowers).

Provide potential funding as part of a push for existing retailers to include outdoordisplays as part of their marketing and merchandising efforts.

Choose a few retailers (preferably clustered in one area like a block of Charles,Pratt or Saratoga Streets) to support financially and help design the outdoorswares/displays.

Market and highlight the effort.

Promote more aesthetically pleasing and relevant window displays for retailers.

Encourage windows to be open, not cluttered, so that pedestrians can see into the

store and easily recognize what is being offered. Hire a window display or retail consultant for those retailers who are interested in

receiving advice and assistance.

Consider expanding the consultant program to include renovation of the entirefaade.

Ensure that all aspects of the window display are directly related to themerchandising and marketing of the store.

For window displays, begin with seasonal/holiday displays, similar to HistoricCharles Street Associations holiday theme and competition.

Assist in funding the competition.

Give awards for the best designed, most relevant, most improved, etc.

Market and highlight the event.

Review other cities signage and window display ordinances (e.g. Scottsdale,Arizona).

Consider incorporating retail design criteria (e.g., no paper signs in windows) intorespective Urban Renewal Plans.

Endorse improved and effective signage.

As part of FIP grant, encourage new and more attractive signage.

Review extension of new Central Business District Urban Renewal Plan areasignage regulations to all of Downtown.

Encourage projecting (blade) signs, as well as signs which create a sense of depth.

Expedite sign permits for retailers within Downtown.

Formalize sign permit review process for Downtown retailers. (Signs to bereviewed by Planning, BDC and Downtown Partnership.)

Identify sign designers and companies willing to work with Downtown retailers atan expedited or reduced rate.

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Improve parks and plazas throughout Downtown through maintenance, activities andbranding. Prioritize distribution of resources to the parks and plazas based upon thepotential for success, greatest impact and highest usability.

Determine ownership and responsibility (e.g. mowing, planting and cleaning) forall parks and plazas.

Create maintenance and planting plan and design standards, including signage,lighting, benches and trash cans, for all plazas and parks.

Dedicate staff to landscape and maintain, as well as provide safety or serve ashosts.

Activate parks and plazas through programming, events and vending.

Provide regular activities. Users should be able to rely on a semblance of a setschedule of events, i.e. First Thursdays.

Create a parks programming task force to include representatives from cityagencies, Downtown Partnership, BACVA, building managers, community groupsand employers.

Identify activities, funding and scheduling.

Promote and advertise all activities.

Create a brand for Downtown parks and plazas.

By consistently designing, maintaining and programming the parks and plazas,users will begin to identify that they are in a public green/open space.

Utilize existing marketing/advertising agencies and associations to create taglinesand campaign.

Seek new opportunities for areas to function as green or public spaces.

Potential locations include:o President Streeto The Fallswayo Along the Jones Falls from Lombard Street south to the Inner Harboro Liberty Park, (at Liberty Street and Park Avenue)o St. Paul Plazao Areas on the Westsideo Others to be determined

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Implement a comprehensive vending and kiosk program for Downtown. Work with Citys Board of Hucksters, Hawkers and Peddlers, as well as existing

vendors.

Select locations parks and plazas, as well as intersections with larger sidewalks.

Focus on areas where vending and kiosks will not only pull employees out ofbuildings, but also encourage pedestrians to walk up streets that have additionalretail.

Encourage existing retailers to open a second location, perhaps as a preliminarytest-run for expansion.

Support small and minority businesses (through Small Business Resource Center andBridging the Gap) in opening vending or kiosk locations.

Ensure that vending, particularly in parks and plazas, is consistent in both days andtimes.

Recruit and schedule vending for parks and plazas early in each season.

Provide clear demographics as part of a vending and kiosk recruitment package.

Review health permit and city vending regulations carefully and provide anypotential participants upon request for application.

Improve Downtown streetscapes, landscaping and greening efforts.

Continue reconstruction of all Downtown streetscapes through City and DowntownPartnership.

Urge a consistency in the design and materials for all Downtown.

Expand streetscapes capital renovations program and speed of the projects.

Identify funding sources to maintain and repair streetscapes, including powerwashing sidewalks.

Increase the amount of street trees throughout Downtown.

Improve the maintenance and care of street trees.

Advocate for pedestrian-style lights on every block Downtown.

Encourage building owners to improve the exteriors of buildings and sidewalks.

Continue code enforcement program for the worst offenders.

Promote power washing of sidewalks and buildings.

Continue The Partnerships Best Kept Property Awards and actively publicize.

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Expand the greening of individual buildings.

Create a Downtown greening packet made available to building owners, tenantsand developers.

Utilize a landscape architect to create a variety of planting options including treesin large planters, flowers pots, small gardens and water features.

Select a few buildings (preferably near one another geographically) that willimplement greening plans created by the landscape architect.

Identify a nursery or wholesaler to assist in supplying the planters or plantmaterial, top soil, etc.

Upon completion of the plantings, use these buildings as examples, with beforeand after photos, in the greening packet.

Market and highlight the program.

If necessary, identify funding for some portion of the program.

Increase The Partnerships planters program.

Identify the best locations to make a recognizable impression with the additionalplantings.

Market and promote the program.

Expand public art throughout Downtown.

Increase the number of sculptures both on public and private property.

Create more interactive art, e.g. the fountains in Millenium Park in Chicago.

Expand the existing program of painting murals on vacant buildings 1st floorwindows.

Continue to support the existing Art Exposure program in 1st floor storefronts.

Encourage further use of vacant 1st floor spaces as art galleries or artists workspaces (e.g. Current Art Gallery on S. Calvert Street).

o Identify additional City owned properties which are currently in RFP ordeveloper awarded status.

o Seek out additional opportunities with private developers and propertyowners.

Include street entertainers t hroughout Downtown.

Licensed street entertainers enliven streets in specific locations Downtown, thusentertaining pedestrians, creating a sense of ease and encouraging furtherexploration of Downtown.

Licensed street entertainers should be encouraged to participate frequently and atkey corners for highest visibility.

This program should be expanded to encourage street entertainers around allretail areas Downtown.

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Transit & ParkingEasy access matters to retailers when making location decisions, however top-tier retailcities do not put a priority on providing easy parking. As with these top tier cities,shopping districts in Baltimore should be easily accessible to residential areas whereshoppers could easily walk, or be developed around transportation links. Whethershoppers arrive on foot, or by car or MTA, the retail district should offer a positivepedestrian experience, making it easy and enjoyable to stroll between shops andrestaurants.

Elected and economic development officials, as well as residents and businesses must allcontinue to advocate for improved public transit.

Coordinate with MTA to review and assess bus lines, as well as bus stops.

Coordinate with MTA on design and construction of Red Line; identify any effectthe recommendations for type and route may have on Downtown residential,retail, and office uses.

Push for Downtown circulator, either free or inexpensive to riders.

Encourage the continued study of a trolley in the Charles Street Corridor to connectthe Inner Harbor and Downtown with the Mt. Vernon Cultural Institutions, PennStation, and Johns Hopkins University.

Continue to support the housing initiative, realizing that building and occupying the newdevelopments is not the end result. Rather, residents must become a more important focusof constituent services and outreach events.

Expand activities and marketing efforts to Downtown residents.

Encourage elected officials to meet regularly with Downtown residents.

Encourage developers and brokers to understand the parking for their respectivebuildings as pertains to retail.

Review 3-block radius demographics for retail locations, thus reinforcing thepedestrian shopper possibilities for that location to the retailer.

Encourage a variety of parking options.

Facilitate, between developers/brokers/retailers and parking garage owners, thecreation of parking validation.

Assess existing valet parking and future valet parking options.

Decide on most effective regulations for valet parking, including locations best

suited for valet.

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Expand work with Baltimore City Parking Authority and private garages for specialparking rates geared toward shoppers and diners.

Continue special holiday parking rates and expand number of businessessupporting the payment of meters on behalf of customers, as well as garagesoffering reduced rates.

Identify new days, times and events when reduced parking rates will assist ineliminating the use of parking cost as a reason for not coming Downtown to shopor dine.

Work with Baltimore City Parking Authority to improve valet parking.

Review existing valet parking regulations.

Research other cities valet parking regulations and assess for suggested inclusion,(e.g. X amount of percentage of restaurant sales required in order to have valetparking).

Evaluate existing valet parking locations and operations.

Identify potential locations for multi-tenant/shared valet parking.

Assess the expansion of on-street parking with City Department of Transportation andBaltimore City Parking Authority.

Determine further streets for conversion to two-way with City Department ofTransportation and Baltimore City Parking Authority.

Incentives

As the 2005 Retail Assessmentshows, retail incentives by themselves are not effective inrecruiting and retaining major retailers. Rather, there is a range of factors that attractand sustain retailers. Instead of looking for a magic bullet incentive that will serve as thelinchpin of retail recruitment, Baltimore must directly market its strong demographics andother assets to retailers, and it must work with property developers that have the provenability to attract desired retail to their projects. Specifically, Baltimore should:

Improve the knowledge of and expand the variety and dollar amount of financialincentives available to retailers. Incentives to be pursued should include a package ofgrants, low-interest rate loans and matching dollars available to retailers, rather than taxincrement financing (TIF) directly for retail.

Update and expand the existing Baltimore Main Streets Resources Available forSmall Business in Baltimore City; Financial, Technical Assistance, and TaxIncentives.

Hold seminars for economic development officials, retailers and brokers on theexisting programs offered by the state, city and private institutions.

Market the existing programs, such as:o Enterprise Zone

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o

Maryland Capital Access Programo Neighborhood Businessworks Loan Programo Strategic Assistance Consulting Fundo Baltimore Community Funding

Execute a comprehensive review of the retail permitting process, including healthinspections, signage, etc.

Create a retail permitting booklet made available through Baltimore Citys PermitsOffice, Planning Department, BDC and DPOB.

Research cost reductions for various retail permits for retailers within Downtownarea.

Apply a sliding scale for signage fees and minor privilege permits for newretailers.

Expedite the permitting process for retailers within Downtown area.

Consider PILOTs and TIFs, in accordance with established City policy, only whendevelopment of the project would otherwise be cost prohibitive to include retail. Offerthese incentives to the developer contingent upon certain pass-throughs, e.g. tenantbuildout or reductions in cost, to the prospective retailer.

Site Specific RecommendationsAs detailed previously, retailers prefer to cluster together to better att ract large numbersof shoppers. High density, mixed-use developments with substantial residential and retailcomponents should be encouraged for all new development and redevelopmentDowntown. Sites Downtown which should be considered imperative for retail attractioninclude:

10 Inner Harbor (Inner Harbor) one of the last remaining open development sites alongthe Inner Harbor, the location is essential to connecting Federal Hill/South Baltimore withCity Center. The Charles Street frontage should be considered for neighborhood retail,such as a much-needed grocery store. Additional major retail should be addressed onConway and Light Streets, including restaurants and other amenities for the residents ofthe development, as well as pedestrians.

300 E. Pratt Street (Inner Harbor) the sites premiere location on Pratt Street begs foradditional retail opportunities. The site is adjacent to the Gallery and across fromHarborplace, both of which are established retail destinations in Downtown. As part ofthe development program, retail along both Pratt and Lombard Streets should beconsidered. Large floorplates and potentially multi-level retail should be part of theretail mix also, so as to create a consistent retail flow along Pratt Street.

400 Block of W. Baltimore Street (Westside) the 400 block is the pivotal connectorbetween the University of Maryland, Baltimore and the remainder of Downtown.

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Currently, the area is an inhibitor for pedestrians further exploration eastward, i ncludingthe Abell Building and Centerpoint where retail exists or is planned. The 400 block shouldbe assembled in order to provide a consistent flow of retail, including restaurants, tocapitalize on the existing student and employee base and visitors to the Hippodrome. Theemployees, students and visitors at the campus are in need of further retail options and alevel of comfort in leaving the campus.

Abell Building (Westside) the renovation of the building to include residential and retailis pivotal for the completion of the intersection. Retail in this building should be uniqueand complementary to the existence of the Hippodrome, as well as the increasingresidential population. A high-end restaurant ought to be pursued for the corner so as tobuild upon the audiences at the Hippodrome.

Amtrak surface lots (Station North) the surface lots directly north of Penn Stationcurrently provide a very visible barrier to the pedestrian flow to and from the north. Thesite should include first floor retail, congruent with the changing neighborhoods needs, aswell as the main anchor, Penn Station. The lot is of sufficient size to incorporate a largefloorplate for a mid-level national retailer to serve the growing residential base, as wellas the existing neighborhood to the south.

Center Plaza (City Center) the plazas renovation is a marked improvement to the coreof Downtown and will serve as connector between City Center and Westside. The retaillocations facing the plaza should be filled predominantly with restaurants capitalizing onthe large green space. Outside dining should be highly encouraged for these tenants.Signage will need to be carefully considered. The plaza, with the right tenant mix, will bea destination retail location for employees, hotel guests and the increasing number ofresidents.

Chesapeake Restaurant Site (Station North) the renovation and reuse of the site, aswell as the surrounding block is pivotal to the recreation of the emerging area. Anchoredby the Charles Theatre and a few stable restaurants, there is a need for further diningand entertainment options, as well as retail serving the increasing artist population.

Cityscape (City Center) the completion of the project is imperative to drawingpedestrians north along Calvert Street. Currently, the block is an impediment toconnecting City Center to the Inner Harbor. Development of Cityscape should includeretail along the length of the Calvert Street side, as well as addressing the Water Streetcorridor, particularly where it faces the existing Water Street retail, to create a constant

flow and neighborhood feel.

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Harbor East & Harbor Point (Inner Harbor) the ongoing development of theneighborhood with its inclusive retail allows for continuity in the pedestrian experiencefrom Pratt Street to Fells Point. The Four Seasons condominium project is to include high-end national retailers along the waterfront. The remaining developments include varying-sized floorplates attractive to both national and independent retailers of all levels.Harbor Point plans should include destination retail and should maximize waterfront viewsthrough outdoor dining and the creation of open spaces which tie into the Promenade.

Hotel Row, Baltimore/Light/Redwood Streets corridor (City Center) the area iscurrently transitioning from Class B office to numerous national and boutique-style hotels.Sites should include first floor restaurant and retail space as much as possible, particularlyat corner locations. The developments have the opportunity to create a transition betweentwo areas of City Center with the addition of more life on the street, usable buildings and

retail options. One Light Street must be developed and should include retail alongBaltimore, Light and Redwood streets as part of its program. The retail space at theHampton Inn should be marketed and a new and positive use for the Redwood Trust bedemanded.

Mechanic Site (City Center) the site is one of the few where large floorplates can bebuilt in the Downtown core. This key intersection, with its proximity to public transit is anideal location for a national retail anchor. The addition of such a retailer would in turnattract other national retail tenants in other adjacent buildings. The site should also seekto incorporate and activate Hopkins Plaza as part of its program, offering outdoor diningand display areas.

Oldtown Mall (East Baltimore) the size of the site provides a unique opportunity forlarge floorplates ideal for national retail anchor tenants, including a grocery store.Oldtowns proximity to Downtown and Johns Hopkins East Baltimore Medical Campus andpresence along Route 40, a key commuter route, allows it to draw from a large customerbase. The site should be expanded and explored as a possible urban retail village.

State Center (Mount Vernon) the transit-oriented development has the opportunity forlarge floorplates attractive to national retail anchor tenants. The site has access not onlyby light rail, metro and bus, but also I-83, and lies adjacent to well-established residentialareas of multi-leveled incomes. The existing employment base also bodes well for retailneeds. Large scale retail should be heavily recruited, as well as restaurants to capitalizeon the daytime employees, cultural visitors and residents.

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Superblock (Westside) the redevelopment of this area is imperative to connectingWestside with City Center and Mount Vernon. The development program must includeoffice and residential space which will provide customers for the first floor retailers.Existing retail plans should be expanded to create larger floorplates desired by mid-levelnational retailers. Restaurant options should also be considered for this development.Along Lexington Street, outside dining and displays should be strongly encouraged due tothe wide sidewalks.

UB Bolton Yards (Mount Vernon) the site is ideally situated to capitalize on the existingstudent base, established neighborhoods and varied transit options, including I-83, PennStation and Light Rail. Large retail floorplates should be included in the development andrecruitment efforts should be focused on grocery stores, as well as anchor tenant retailand restaurants.

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Label1 The Economic and Fiscal Impacts ofHospital Expansions, Bioparks, & BRAC on Downtown Baltimore

Executive SummaryBaltimores renaissance will continue. Though there are many uncertainties that linger overthe citys economic future, most recently because of the national downturn in housing, thisanalysis concludes that the economic and fiscal impacts associated with 1) hospital, 2)biopark and 3) BRAC-related investments in and around Downtown Baltimore may beenough in and of themselves to sustain the citys economic momentum for the next decade.

These three sources of economic activity will collectively unleash roughly $3 billion in newconstruction by 2012. By the end of the construction phase, these three sources ofinvestment will by themselves have increased Downtown Baltimores job base by at least13 percent and the citys total employment base will have increased by over 17,000.1

These jobs will increase aggregate income opportunities in Baltimore City by nearly $1billion2 and business sales will be enhanced by $2.2 billion. Exhibit E1 summarizes theeconomic impacts associated with planned investments in hospitals, bioparks, and BRAC-related activities in Baltimore City.

Exhibit E1: Economic impacts of construction and operations, 2004-2012(annual effects, 2006 dollars)Type of impact Jobs Supported

(full & part-time jobs)Associated

Income(millions)

Business revenue/sales(millions)

2004 1,561 $80.3 $171.42005 2,046 $105.1 $223.32006 9,644 $499.7 $1,072.92007 12,657 $654.6 $1,406.52008 15,668 $807.3 $1,732.02009 21,278 $1,130.3 $2,490.82010 19,414 $1,082.0 $2,446.32011 16,357 $925.1 $2,086.42012 17,584 $987.5 $2,214.2Note: Construction is assumed to end in 2014. Source: SPG

1 Of course, other development in and around Downtown not analyzed by this study will have the affect offurther boosting Downtown and citywide employment levels.2 In 2006 dollars.

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8/8/2019 Outlook Short

10/16

These economic impacts are associated with substantial new streams of revenue for theCity of Baltimore. By the end of 2012 when planned construction activities will be largelycomplete, the Citys tax base will be expanded by more than $49 million per annum. Thetax revenue implications of these three forms of investment are summarized in Exhibit E2.

Exhibit E2: Fiscal impacts of construction and operations, 2004-2012(cumulative, ongoing annual effects, 2006 dollars)Type of impact Property tax

(millions)Income tax(millions)

Total(millions)

2004 $0.4 $1.6 $2.02005 $0.8 $2.1 $2.92006 $2.8 $9.9 $12.7

2007 $4.3 $13.0 $17.32008 $5.2 $16.0 $21.22009 $14.8 $23.1 $37.92010 $25.4 $23.0 $48.42011 $26.7 $19.9 $46.62012 $28.1 $21.1 $49.2Source: SPG

Finally, these investments will also substantially increase the size of the citys scientificpopulation, its professional services population and by implication its purchasing power.When considered in conjunction with other planned investments in and around Downtown,the implication is that the citys ongoing renaissance will remain in place and mayaccelerate going forward. The investments studied here will also have the effect ofunleashing the economic activity necessary to support a number of Downtown developmentprojects that continue to await financing or broader economic support, includingcondominium, apartment and hotel developments.

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IntroductionBaltimores renaissance has continued to accelerate and broaden in recent years toinclude a growing number of neighborhoods. Once thought and feared to be aphenomenon limited only to the citys glittering waterfront, the renaissance has catapultedneighborhoods as diverse and distant as Patterson Park, Reservoir Hill and CharlesVillage toward growing prominence and prosperity. Data indicate an upswing ininvestment, household formation, income levels and property values throughout much of thecity, including Downtown.

But can it last or were the past several years merely a reflection of the housing boom thatswept across much of the United States but is now winding toward a hard landing? Thisreport seeks to address this from the narrow perspective of three sources of newDowntown-oriented investment and opportunity that collectively possess the capacity to

keep Baltimores renaissance in place and under the right circumstances could lead to itsacceleration. Specifically, this analysis uses standard econometric modeling software toassess the likely economic impact of three categories of major anticipated investments inand around Downtown Baltimore over roughly the next decade. 3

Some of these investments have already begun to take place, but most remain in front ofus. Importantly, this analysis does not consider numerous other potential sources ofinvestment that may take place Downtown in recent years, including proposedcondominium/hotel towers, the ongoing, broader West Side Renaissance, and thecontinued build-out of the area stretching from Harbor East through Canton. The economicand fiscal impacts of these additional investments will merely supplement those quantifiedby the research and analysis summarized in this report.

Three Emerging Downtown Development Drivers

Category 1: Baltimore as a Global Health Center

The first category of development analyzed by the study team includes the plannedexpansions of Downtown hospitals/medical complexes. In 2004, the Johns HopkinsHospital began a $1.2 billion renovation and expansion of its medical campus to becompleted by 2009. Neighboring Kennedy Krieger Institute will invest $50 million overthe next few years. On the west side, the University of Maryland Medical Center (UMMC)is beginning construction of its new $329 million ambulatory care center. Just blocks fromthe Inner Harbor, Mercy Medical Center has announced plans for a new $258 millionclinical tower as well as major investments in equipment and renovations.

3 Rather than trying to project inflation rates into the next decade, this analysis presents all monetary valuesin 2006 dollars. This assumes that real values of property, income, and other economic variables will notincrease over time. To the extent that there are in fact real, inflation-adjusted increa ses in these values, thefollowing discussion is conservative and underestimates the real value of these impacts.

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Category 2: Baltimore as a Global Medical Research Center

A second emerging health-related economic engine includes the biotechnology-orientedresearch parks connected to Johns Hopkins University (JHU) and the University ofMaryland, Baltimore (UMB). Together these bioparks will account for over $1 billion infacility investment in the Downtown area over the next decade to decade and a half.

The bioparks will help to accelerate the commercialization of technologies developed atBaltimores leading institutions and has the potential to attract dozens of leading-edgetechnology firms, venture capital and scientific/technical talent. In short, the bioparks willhelp elevate Baltimores role in the modern world economy while helping to improve thequality of life in one of the citys most challenging communities. The bioparks will alsoproduce hundreds of jobs for those with less formal educational attainment, providing jobsin health and health research that offer well-defined career paths and legitimateopportunities for upward mobility.

Category 3: An Opportunity for Baltimore to Participate More Fully in HomelandSecurity and Defense Activities

The third category of economic opportunity in Baltimore City is the base realignment andclosure (BRAC) activities that will result in over ten thousand new jobs at federal militaryfacilities in central Maryland. The major changes in federal employment will occur atthree Central Maryland facilities: Aberdeen Proving Ground, Fort Meade, and AndrewsAir Force Base.

Although these relocating federal government jobs will not be situated in Baltimore City,the spillover effects of these new jobs will generate employment and other economicbenefits for the city. The new BRAC jobs will create demands for companies that canprovide goods and services to the companies and federal agencies that will expand theiremployment at Aberdeen Proving Ground, Fort Meade, and Andrews Air Force Base.These suppliers represent an indirect effect of the new BRAC jobs. In addition, the workerswho will fill the new BRAC jobs and jobs at private suppliers will create additionaldemand for housing, consumer goods and services, which will support the creation ofinduced employment, income and business sales impacts.

The analysis below addresses the period from 2004 through