retail market assessment and implementation strategy · 2018-10-17 · project introduction +...

RETAIL MARKET ASSESSMENT

AND IMPLEMENTATION STRATEGY

Prepared for the Midtown Alliance by Larisa Ortiz Associates

April 2018

Midtown Atlanta - Retail Market Assessment and Implementation Strategy 2018 - Prepared by LOA 2

ACKNOWLEDGEMENTS

We would like to thank the members of the Midtown Alliance Retail Steering Committee, without which this effort would not have been possible:

Pam Atwater, Atwater Commercial Real Estate

Penelope Cheroff, The Cheroff Group

Shirley Gouffon, Selig Enterprises

William Herbig, Kimley-Horn

Tim Holdroyd, City Realty Advisors

Trina Joseph, Coro Realty

Patti Pearlberg, Coro Realty

Graham P. Little, John Hancock Real Estate

Christopher Martorella, Integral

John McColl, Cousins Properties

Coleman Morris, JLL

Steve Simon, Fifth Group Restaurants

Tom Stipes, Georgia Tech

Mark Toro, North American Properties

Marc Weinberg, The Shopping Center Group

Tosh Wolfe, Collier’s Retail


We would also like to thank the following members of the Midtown community for participating in the focus group and interview process:

Dan Alguyen, Sweet Hut

Kristi Benson, High Museum

Vincent Bucci, Canopy by Hilton

Darren Carr, Pig Citizen

Mark Castriota, Loews Atlanta

Steve DeMoss, Big Peach Running Company

Amy Dietrich, Piedmont Park Conservancy

Rachel Ewe, Sweet Hut

Jose Gutierrez, The Lawrence

Beth Hartzell, Blick Art Materials

Ben Johnson, The Canteen

Darlyne Johnson, Kale Me Crazy

Jennifer Johnson, The Canteen

Max Leventhal, Woodruff Arts Center

Matthew Powers, Escorpion

Sylvia Roberts, High Museum

Brian Studdard, Floral Matters

Yvette Thomas-Henry, Four Seasons

Christopher Wier, Savi Provisions

Mac Thurston, Mac’s Beer and Wine

Khoa Vuong, Pho King

David Weinert, North American Properties

Mark Williams, Georgian Terrace

CONTENTS


IMPLEMENTATION STRATEGY

Vision + Guiding Principles

Recommendations + Best Practices

Implementation Strategy

Conclusion

pg 26

pg 27

pg 28

pg 41

pg 43


Physical Environment

Business Environment

Market Demand

pg 13

pg 14

pg 20

pg 23

Strategic Positioning pg 25

Project Introduction + Objectives

Methodology

Framework for Data Collection

pg 8

pg 9

pg 10

Executive Summary pg 6

EXECUTIVE SUMMARY

In December 2017, Midtown Alliance commissioned Larisa Ortiz Associates to conduct a Retail Market Assessment and Implementation Strategy for Midtown Atlanta, a 1.2 square mile district. The goal of the study was to provide an understanding of barriers that may prevent successful attraction of local, regional and national retailers and to develop an implementation strategy to respond to these barriers and realize Midtown’s retail vision. The study was informed by the Midtown Alliance staff and a steering committee comprised of Midtown business owners representing restaurants, shops, and hospitality venues in the district.

Overall, Midtown’s fundamentals are nothing short of enviable. It has a growing residential community characterized by a strong number of Millennials about to enter their peak spending years. New office construction and an influx of Class-A tenants are similarly generating new demand from a growing number of workers and employees. Hotels are rising and the nearby Atlanta Beltline has become a marquee destination, suggesting the number of Midtown visitors will also only grow in the coming years. The Midtown Alliance has prepared for these changes by supporting a zoning code that actively supports street level activity and ground floor retail, investing in improved pedestrian and bicycle infrastructure, and committing to actively market and brand Midtown as an amenity-rich culture and arts destination.

An assessment of the market, business, and physical environments yielded the following key findings:

Market: Midtown has a strong and increasing demand for retail based on growth projections

• Given the robust pace and scale of development inMidtown since the 2010 Decennial Census,syndicated data does not reflect true-to-lifeconditions, in particular the rapid rise in populationand associated spending power


• Projected development, particularly targeted to high-income residents, is expected to more than double across Midtown between the years 2010 and 2020

• The customer base of Midtown includes a range of demographic segments, having a direct impact on what constitutes an appropriate tenant mix

• The daytime worker population is strong and growth of new Class-A office tenants is expected to increase the number of workers significantly

• Over 6.1M annual visitors provide significant spending potential that could be better leveraged with improved physical connectivity between arts and entertainment venues and retail microclimates

• Visitor spending is a growing potential retail customer base with over 6,400 current and proposed hotel rooms in the District

Physical: Midtown is undergoing a transition into a new urban reality. Continuing to execute projects to improve the urban fabric and expedite this trend will benefit retail

• Midtown’s retail is concentrated in six differentnodes and corridors; each area caters to acustomer generally within two to three blocks

• Midtown’s retail customer is increasingly localand walking, such that the need for goodpedestrian and bicycle infrastructure isparamount

• Gaps both within and between concentrations ofretail prevent a critical mass of offerings thatwould increase the size of the trade area anddraw more customers

EXECUTIVE SUMMARY

• More consistent signage, branding, and visibility ofexisting businesses could increase retail sales

• While sufficient parking is available, it can be hardto find and use

Business: Midtown has an opportunity to leverage its strengths and the distinctive characteristics of each retail microclimate to provide a unique and diverse tenant mix that will, in turn, expand the customer base

• Today, Midtown is heavily-weighted with food and beverage offerings but lacks other types of retail that create a balanced district. In several pockets of Midtown, food and beverage accounts for more than half of the total retail present

• Midtown has opportunities to build off existing successes and leverage growth in non-traditional retail formats, such as digital-native brands

• Fragmented ownership and restrictions embedded in lease structures will need to be addressed in order to sustain an optimal tenant mix

The recommendations in this report and prioritized within the Implementation Strategy will build on many existing opportunities and strengths of Midtown. Potential near-term and long-term actions include: centralizing market data and information for brokers, collecting accurate and timely pedestrian counts, advocating for creative storefront design, activating empty storefronts with temporary installations, adding more uniform parking signage throughout the district, actively managing curbside loading and deliveries, and an array of other tactics described further in this report.


PROJECT INTRODUCTION + OBJECTIVES

The retail vision for Midtown began with Blueprint Midtown in 1997, a community-designed master plan which called for ground-floor retail throughout the district. In 2004, the Midtown Alliance updated the plan with strategies that focused on specific corridors and nodes with Peachtree Street identified as Midtown’s signature shopping corridor. In 2016, Blueprint Midtown was updated once again, building on recent successes, incorporating new studies and plans, and refining many site-specific recommendations.

Midtown Alliance continues to pursue this vision of street-front retail and restaurants along discrete commercial corridors throughout the district. Their efforts have involved market studies, surveys, stakeholder councils, streetscape and circulation improvements, and new development and design guidelines. Since 2004, nearly 500,000 square feet of ground-floor retail space has been added on or near Peachtree Street. New retail-driven projects are underway in the Midtown core, including a 70,000 square foot Whole Foods Market at Spring Street and 14th Street, and the repositioning and expansion of Colony Square to provide 200,000 square feet of premier retail, restaurant and entertainment space.

In other words, Midtown is at a tipping point. Once seen as purely a commercial district, this 1.2 square mile core in the heart of Atlanta has more than tripled its residential population since 2000 and is on track to add more than 11,000 new residents based on development in the pipeline. In addition there have been 18,000 new jobs announced for Midtown between 2015 and mid-2018. This growth, coupled with Midtown’s central location, creates an opportunity for an unparalleled “Main Street” experience unique to the Southeast region. Midtown Alliance seeks to capitalize on this potential and work with property owners, merchants, and the Midtown community to provide neighborhood-serving retail to meet the needs of the growing base of local shoppers and to deliver a retail destination on par with other world class cities.


DEC 2017 JAN 2018 FEB 2018

Project Kick-off

Site visit, stakeholder meetings, and Steering Committee Meeting #1

Presentation of Retail Market Assessment to Steering Committee

MAR 2018

Development of recommendations and action plan and interim presentation to Steering Committee

APR 2018

Presentation of Final Action Plan to Steering Committee + “Let’s Talk Midtown” public presentation

Photos: LOA

METHODOLOGY

Background Document Review

The Consultant Team (the Team) commenced their research with a review of existing studies and reports on Midtown, many of which can be accessed through the on-line Midtown Alliance Resource Center <www.midtownatl.com/about/resource-center>. Particular attention was paid to previous retail studies by Buxton (2006), Alexander Babbage (2010), Downtown Works (2012), and the Bleakly Advisory Group (2013). These studies informed the Team’s understanding of Midtown’s retail environment and its trajectory. Other reports include (but were not limited to) the Midtown Community Survey (2016), the Midtown Parking Assessment and Action Plan (2015), Blueprint Midtown 3.0 (2016), and the Midtown Transportation Plan (2017). Collectively these reports provide a detailed picture of physical conditions, market profile and ongoing stakeholder priorities.

Site Visit and Stakeholder Interviews

The Consultant team conducted five site visits over the duration of the study. The first of these visits occurred on December 20th, 2017, and included a tour of Midtown with a preliminary physical diagnostic. The second site visit occurred on January 18th and 19th, and consisted of a series of stakeholder interviews and focus groups, along with the first of four meetings with the Midtown Alliance Retail Steering Committee. In these interviews, the Team spoke with property owners, brokers, merchants, hotel operators, and representatives from local arts and cultural institutions. The primary goals of these interviews were to (1) gather firsthand insight regarding the rapidly changing district, (2) develop an understanding of the current stakeholder mindset and orientation towards Midtown retail, (3) collect primary data on retail occupancy rates, tenant mix, rental rates, lease terms, and merchant sales performance, and (4) establish a framework through which to present Main Findings and structure Recommendations.

Subsequent site visits on February 16th, March 20th, and April 17th consisted of presentations to the Steering Committee on Main Findings and Recommendations for the Action Plan.


Market Analysis

In addition to data collected through stakeholder interviews, the Team collected market and demographic data from the United States Census, ESRI Business Analyst Online, Loopnet, CoStar, and the International Council of Shopping Centers U.S. Mall Performance Report.

Employment and primary worker data was taken from the U.S. Census Bureau’s Center for Economic Studies OnTheMap portal. The portal identifies small-area workforce characteristics based on 2003-2015 LEHD Origin Destination Employment Statistics (LODES).

Residential growth projections were calculated using a combination of Decennial Census data and both existing and projected development data provided by the Midtown Alliance.

Recommendations

The Team prepared a set of final recommendations based on feedback and priorities of the Steering Committee before giving a public presentation on the evening of April 17th, 2018.

Photo: Midtown Alliance

FRAMEWORK FOR DATA COLLECTION

The Team determined that the best way to definitively understand the more than one million square feet of retail spread over the 1.2 square miles of Midtown was to first identify prominent concentrations where strong co-tenancies existed. These concentrations (hereafter referred to as retail microclimates) were identified through field surveys and feedback from both the Midtown Alliance and Steering Committee. In some instances these microclimates developed organically over time around cultural and institutional anchors. Other times they were the result of a coordinated effort of property developers, brokers, and/or district managers. Regardless, they served as a valuable starting point from which to conduct further analysis and explore a retail strategy for the larger district.

Each retail microclimate was given a commercial district classification based on a system developed by the International Council of Shopping Centers (ICSC). This classification system takes into account the number and type of anchors, the number of retail tenants, the total amount of gross leasable area, and the overall character of retail (e.g. convenience vs. comparison). This allowed for a clearer understanding of how each microclimate compared against another


.

Map of Midtown Microclimates - Source: LOA

*Calculations for total GLA were based on the Midtown Alliance Retail Inventory Q3 2017 and Midtown Alliance Existing Development Data August 2017**Total GLA for Midtown Core is based on Midtown Alliance Existing Development Data August 2017 and includes retail not located in microclimatesSource: LOA



to identify points of differentiation as well as opportunities for synergy.

The microclimates were a mix of “neighborhood” and “regional” typologies—each with a unique trade area. At this point in the life cycle of Midtown, these clusters are relatively small on the ICSC classification scale and are largely driven by the customers located within a two to three block radius. Analyzing these walking trade areas can provide clues as to what kind of tenant mix would be most adept at leveraging demand from nearby customers and leading to more growth. At the same time, Midtown is experiencing a development boom and physical improvements are already underway. As these changes happen and the microclimates grow, they will more effectively support the co-tenancy requirements of national retailers and will consistently draw a larger customer base, providing new opportunities for more diverse and established retailers.

Using the microclimate framework to understand the supply of retail offerings, the next step was to develop a framework to understand the customer bases that patronized each of them. The Team was informed by stakeholders that the Midtown customer was increasingly a walking customer. Whereas past retail strategies for Midtown emphasized serving large regional trade areas, the growing realization was that with new development, Midtown had an unprecedented amount of new residential density and office workers, creating a substantial supply of captive demand. For this reason, the Team elected to use an existing framework for data collection initially defined in the updated master plan, Blueprint Midtown (BPM) 3.0, released in 2017. These Character Areas were developed based on their relative location, anchors, and mix of uses (see map at right).

The geographic boundaries for the Character Areas were not sharply defined in Blueprint Midtown, suggesting some nuance at the margins and boundaries that may evolve and shift

Map of Midtown Character Areas - Source: LOA



“In nature, ‘microclimates’ are small areas where existing conditions that are different from those of the surrounding area allow for certain organisms to survive and thrive. Think of the moss under a rock, home to thousands of organisms that need a dark, damp environment to survive. LOA coined the term “retail microclimates” to describe a similar set of circumstances that can be observed in retail districts. Managing tenant mix and addressing gaps through recruitment is important—but within some districts it is critical to explore further by looking at the unique characteristics of these microclimates. A good tenant recruitment strategy will identify and either create or reinforce strong retail microclimate.

Microclimates are important because retailers often seek unique conditions when selecting sites for new stores. They have learned over time that these conditions offer them the greatest chance of success in a particular location. Visitation drivers like theaters or cultural institutions, for example, create microclimates that support complementary retail uses. The pedestrian traffic created by a busy entrance to a mass-transit stop is an ideal microclimate for a business selling convenience goods. It should therefore come as no surprise that a drugstore exists on nearly every corner next to a subway stop in Manhattan. On the other hand, a restaurant might prefer proximity to a popular movie theater, and a stationery store might choose a location next to a post office. These principles of adjacencies are incredibly important to retailers. In dense urban communities, particularly ones where customers arrive on foot, bicycle or mass transit, a distance of 200 linear feet can mean the difference between one microclimate and the next.”

Improving Tenant Mix: A Guide for Commercial District Practitioners International Council of Shopping Centers, 2015

Author: Larisa Ortiz

Photo: LOA

over time. As an example, the Woodruff Arts Center (WAC) is regarded as the premier anchor of the Arts Area, yet is located immediately adjacent to Colony Square and the Entertainment area boundary. Conversations with representatives from both WAC and Colony Square evidenced a shared belief that the two anchors will have a strong mutually beneficial relationship upon the completion of the latter. Additionally, the Fox Theatre is a premier regional arts and culture institution but is not located in the Arts Character Area. However, as a framework for data collection, the Team needed to define clear boundaries to enable accurate data collection, and did so with the full expectation that these boundaries would be subject to change in the future.

What are “Retail Microclimates” and why do they matter?



Physical Environment

Business Environment

Market Demand

Strategic Positioning

PHYSICAL ENVIRONMENT

Key Findings:

• Retail sales are predicted to increasingly be driven bya pedestrian customer

• Physical gaps both within and between microclimatesprevent a critical mass of offerings to draw incustomers

• Signage, branding, and visibility of existing businessesis inconsistent and can dampen sidewalk activity

• Studies indicate sufficient parking, but it iscumbersome and hard to find and use. Moreover,trends suggest less commercial parking will benecessary as residential density increases

The Midtown customer is increasingly pedestrian.

The 2016 Midtown Community Survey found that 94 percent of residents felt investments in walking and transit were most important to them, a point affirmed by steady year-on-year rise in pedestrian counts along key retail corridors in Midtown.

Pedestrian counts collected by the Midtown Alliance in 2013 evidenced that the degree of pedestrian activity varied by location and time of the week. Peachtree Street experienced the highest pedestrian traffic on weekends—suggesting its popularity as a recreational destination—with Tech Square and Colony Square being highest on weekdays due to the activity of a large daytime student and office worker population.

Demonstrated growth in pedestrian activity is good for retail. A Brookings Institute study conducted in Washington, DC found that each increase in a predefined level of ‘walkability’ translated into an 80% increase in retail sales. Similarly, a survey conducted in San Francisco found that those who walked to downtown were spending more in a month than those that drove.1 While drivers tend to spend more per trip,


Maps of Midtown Pedestrian Counts – Source: Midtown Alliance 2013

1Leinberger & Alfonzo, 2012. Walk This Way – The Economic Promise of Walkable Places in Metropolitan Washington, DC. Brookings Institute. Bent & Shiga, 2008. Modal Choices and Spending Patterns of Travelers to Downtown San Francisco.

“…those who walked to downtown were spending more in a month than those that drove.”

walkers made more trips on average, resulting in a large degree of aggregate spending.

Retail brokers are well aware of the direct correlation between pedestrian counts and retail sales and that high ped counts figure largely into tenant site selection criteria. This creates the impetus for collection of timely and accurate counts. However, much of the publically available pedestrian count data for Midtown is not current, is not “apples-to-apples” between nodes, and does not reflect more recent developments.

Even as Midtown continues to experience a growing pedestrian population, overall counts are still rather moderate. Reasons for this are myriad, but it is in part attributable to physical conditions that impede pedestrian activity. In the Shopping Center industry, it is widely acknowledged that gaps in excess of 50 feet tend to be off-putting for pedestrians. Within the district there are several large intersections with excessive crossing distances and higher traffic speeds. As a result of these crossing distances, these intersections create a barrier between retail microclimates and undermine the connectivity between the offerings in each district.

Isolated storefronts in Midtown lack distinguishing signage.

Overall, signage and storefronts in Midtown are dynamic, pleasing, and suggest an active mercantile environment. However, a few storefront facades were either unengaging or lacked identifying characteristics, undermining a retailer’s ability to attract customers. Some stores had sought to mitigate this through the use of portable signs such as “A-frames” and “sandwich boards,” a strategy that can provide visual cues to customers and encourage them to walk longer distances along and between retail corridors. The City of Atlanta’s zoning ordinance dictates that these types of signs are only allowed for a period of time not to exceed 30 consecutive days per calendar year, and only under issuance of the appropriate permit. Whereas many signs were believed to be in violation of these provisions, enforcement was described as being relatively lax.


Wide crossing distances at Peachtree Pl + W. Peachtree - Photo: LOA

A storefront lacking identifying signage - Photo: LOA

Low visibility increases reliance on portable signage - Photo: LOA

“Gaps in excess of 50 feet tend to be off-putting for pedestrians.”

Projecting “blade” or “shingle” signs were also found within the district in key retail nodes, but in several cases were uninspiring and easy to overlook due to their small size and lack of distinguishing features. As with portable signs, when implemented well these are considered a best practice in terms of their ability to communicate to pedestrians the presence of retail that might otherwise be less visible.

In certain contexts, the addition of a new building sign or portable sign has even been found to add between five and fifteen percent to store sales revenues.2

Isolated storefronts in Midtown struggle with a lack of transparency and ground level activity.

Some storefronts had opaque windows, and were barren of seating, merchandise, planters, and other animating components. These poorly executed storefronts not only hurt the retailer, but deter customers from continuing down the street and encountering other retailers. Even one can hurt many. By contrast, studies have shown that adding a deck or patio can not only create a more pleasing walking environment, but can increase restaurant revenue between 20 and 60 percent.3

Class A office buildings, particularly on Peachtree Street between 10th and 14th Street, often had large setbacks and lacked retail. This physical condition created significant gaps in retail continuity. The zoning


2 Ellis, Seth, Ph.D.; Johnson, Robert, Ph.D., Murphy, Robin, M.B.A.: “The Economic Value of On-Premise Signage.” California Electric Sign Association, University of San Diego, International Sign Association, Sign Users Council of California, Business Identity Council of America, 1997. 3 Simmons Advisory Group: Best Practice for Increasing Restaurant Revenue? Just Add a Patio http://www.vsag.com/restaurant-best- practices-add-a-patio-increase-revenue/; NJ BIZ: Restaurants finding outside eating spaces can have big payoffs. http://www.njbiz.com/article/20140616/

Example of blade signs that could be better utilized - Photo: LOA

Example of Class-A office building with large setbacks - Photo: LOA

Example of retailer animating store frontage with outdoor seating - Photo: LOA

“The addition of a new building sign or portable sign has even been found to add between five and fifteen percent to store sales.”

“Adding a deck or patio can increase restaurant revenue between 20 and

60 percent.”

regulations governing Midtown have sought to control for these issues by mandating maximum building setbacks, minimum storefront window visibility depths, and minimum requirements for unobstructed clear zones for sidewalks. It also provides for “Supplemental Zones” fronting buildings where portable signage, outdoor dining, and street furniture are encouraged. The intent of these regulations has been to promote an active street-level environment. However, several buildings were built prior to the current zoning or have otherwise circumvented the regulations to the detriment of retail.

Privately-owned open spaces could be better utilized.

During site visits, attention was drawn to several locations in the district where private property was either vacant or under-programmed, creating gaps in the retail and pedestrian environment. These spaces included the following:

• Margaret Mitchell House seating area, located onthe western side of Peachtree Street between 10thStreet and Peachtree Place

• The seating and pedestrian walkways surroundingthe Federal Reserve Bank of Atlanta, located onthe western side of Peachtree Street and between10th Street and 11th Street

• Georgia Tech’s Scheller College of Business frontlawn area, on the southwest corner of 5th Streetand West Peachtree Street

• The vacant lot owned by the Saint Mark UnitedMethodist Church at the corner of PeachtreeStreet and 4th Street

These spaces offer opportunities for programming that would help eliminate gaps and enhance each microclimate’s critical mass of offerings.

Midtown has a clear and identifiable brand.

One of the most striking examples of the Midtown brand in action is the set of polychromatic letters located in Colony Square. Besides engaging pedestrians in the immediate vicinity and creating a spontaneous canvas for social media selfies, it creates a distinct gateway effect for visitors entering through the northern part of the district. The same color scheme and aesthetic of the Midtown letters also permeates the rest of the signage and wayfinding throughout the district.

At present, the “Midtown brand” does not distinguish between the larger district and the discrete microclimates. Though the general public may have clear associations of what constitutes Tech Square or


Scheller College of Business, Georgia Tech - Image: Googlemaps

Saint Mark United Methodist Church – Image: Googlemaps

Example of identifiable Midtown branding strategy – Photo: LOA

Colony Square, there may be opportunities to strengthen these existing associations through marketing and branding campaigns, special events, and consistent word of mouth.

However, the utility of a strategy to reinforce the identities of the microclimates would require consensus from both the Midtown Alliance and the Steering Committee on how to define their boundaries and an appropriate identity.

The issue of parking supply and management is widely contested.

The 2015 Midtown Parking Study and Action Plan conducted a survey of the Midtown community and yielded the following findings:

•46% of respondents said parking was tooexpensive

•46% said on-street parking was difficult to find

•32% said there was not enough available parking

•29% said parking was not an issue

The interviews conducted by the Team corroborated the diversity of opinions found in the parking study. Some of those interviewed stated that Midtown had an undersupply while others argued management and efficiency was the issue. Still others looking towards a longer horizon felt that parking was only going to become less important with higher utilization of car- and rideshare services and the impending new reality of autonomous vehicles.

Yet the Team’s review of previous studies and anecdotal feedback found that residents and employees who walk are a growing segment of the


customer base. One merchant estimated that the percentage of customers who drove had dropped from 90 percent to as low as 50 to 60 percent of all patrons. The 2016 Midtown Community Survey also found that among residents, 56 percent used on-demand rideshare services at least three times each month.

The 2015 Kimley-Horn Parking Study also observed sufficient parking availability. On-street parking occupancy rates varied from 47 to 65 percent based on time of day and week, whereas off-street parking in office building facilities averaged between 74 and 86 percent. An 85% parking occupancy rate is generally considered an optimal target performance rate.

Several stakeholders attested to parking decks and private lots reaching full capacity during peak periods, though peak was defined to mean when private lots were opened to the public during special events and not necessarily on a frequently occurring basis.

Also mentioned in the Parking Study and corroborated during the physical survey was the lack of consistent parking signage for private lots and parking decks. Current Midtown Special Public Interest District (SPI-16) zoning regulations govern acceptable signagestandards for new construction, but private lotspreceding these regulations have had theirnonconforming signs grandfathered into the currentsystem. The effect of having parking signs withdifferent sizes, styles, and orientation has been cited asa source of confusion for visitors, particularly thoseunfamiliar with the district.

Still others contended that signage is a secondary concern compared to the availability of the ParkMobile app for a given parking spot. Given its convenience and ubiquitous use, there may be reason to explore strategies to integrate ParkMobile with additional services and functions such as a navigation or reservation system.

Inconsistent signage for parking decks has been cited as an impediment to good parking utilization – Photos: LOA

Peachtree Street provides an opportunity to turn an existing traffic lane into either on-street parking or a bike lane.

Midtown Alliance asked that the Team investigate if retailers on Peachtree Street might be better served through conversion of one of its four traffic lanes into either on-street parking or a bicycle lane. When local merchants were asked if they preferred one scenario over the other, they expressed concerns with both. Some believed that the removal of a traffic lane would result in challenges for their vendors and commercial trucks requiring curbside lanes for loading and unloading. A second concern was that a reduction in the number of traffic lanes would promote congestion along Peachtree Street and would cause shoppers to avoid it altogether.

While businesses frequently express concern about changes to a retail environment to which they have grown accustomed, industry experts (Gibbs, National Main Street Center) suggest that in some retail environments, a single on-street parking space can generate between $200,000 – 300,000 in sales to nearby businesses.

The Midtown Alliance has also performed traffic studies along Peachtree Street to determine what impacts curbside parking or a bicycle lane would have on the overall level of service. It was determined that the impact of either scenario would be the equivalent of adding 25 seconds to drive time.

Overall perceptions of safety in Midtown were found to be positive.

The 2016 Midtown Community Survey found that 46 percent of respondents believed that Midtown was safer than five years previous, with 13 percent feeling “Much more safe.” Of remaining respondents, 30 percent felt that Midtown was “About the same” as it had been in the past.


Saint Mark United Methodist Church – Photo: LOA

Example of on-street parking at Atlantic Station – Photo: LOA

“A single on-street parking space can generate between $200-300K in

sales to nearby businesses.”

BUSINESS ENVIRONMENT

Key Findings:

• The prevailing tenant mix in Midtown continues toskew heavily towards food and beverage serviceestablishments

• Midtown has opportunities to build off existingsuccesses and leverage growth in non-traditionalretail formats

• Fragmented ownership and restrictions embedded inlease structures will need to be addressed in order tosustain good co-tenancies and support a critical massof retail

The retail tenant mix in Midtown is overrepresented by Food & Beverage (F&B).

In a microclimate-by-microclimate retail analysis, tenants were grouped into one of three categories: “F&B services”; “other services” (defined to include all non-F&B services); and “other retail” (defined to include soft- and hard-goods). Using these basic categorical definitions, the Team drew similar


conclusions to analyses conducted by Alexander Babbage (2010) and Downtown Works (2012)—that the district is overrepresented with restaurants, bars, and other F&B service establishments. Downtown Works reported that Midtown retail consisted of 67 percent F&B and 33 percent shops and services, suggesting that a more appropriate mix would be an inverse of the ratio. This is consistent with other communities with similar student, employment and residential demographics. In Cambridge, Massachusetts, with its strong student population and tech employment, 38 percent of tenants are F&B, 25 percent are “other services”, and 33 percent are “other retail”.

At Tech Square, 68 percent of surveyed establishments qualify as F&B. By contrast, the microclimate with the lowest percentage of F&B services was Colony Square with 39 percent. However, at the time of this study Colony Square was in the midst of repositioning and re-tenanting and will likely see a very different tenant mix in the future.

Calculations for tenant mix were based on a combination of the Midtown Alliance Retail Inventory Q3 2017 and physical surveys conducted on 1/18/18. Figures for Peachtree Street Core only include ground floor retail fronting on Peachtree Street Source:LOA

Midtown has opportunities to embrace new retail trends.

Despite the high prevalence of F&B service establishments, there are several tenants in Midtown that epitomize popular and growing retail trends. These are operators that possess a prominent experiential component or an emphasis on health & wellness. Brick and mortar retailers that are able to cultivate a unique and personalized experience while specializing in these trends are better positioned to succeed despite the increase in market share of on-line shopping. Examples in Midtown include Starbucks Reserve (with an experiential specialty coffee component) and Big Peach Running Company (a health-oriented store with an emphasis on personalized service).

Other growing retail trends include tech-influenced retailers and urban format stores. Tech-influenced retailers include digitally native brands that have embraced physical locations. The most notable examples of these “clicks to bricks” include companies like Warby Parker and Bonobos, specializing in apparel and accessories but with tech-enabled supply chains. Other examples of tech-influenced retail include those using in-store technologies like shelf-stocking robots,

Retail rents are on par with competitive districts with stronger retail co-tenancies

Real estate representatives generally agreed that Midtown retail tenants need to be performing at $600 per square foot in annual sales to remain viable at current rent levels, with $1,000 per square foot being optimal. Many felt that sales performance was a reflection of both a good operator as well as the presence of strong retail co-tenancies. Examples included Westside Provisions and Ponce City Market—two competitive markets that have grown rapidly in recent years and managed to build exciting tenant mixes with synergistic co-tenancies. Base rents for these markets range from $35-$65 per square foot. Areas of Midtown were found to have retail rents that were on par with Westside Provisions and Ponce City Market, though tended to top out earlier at $55 per square foot in base rent.

Challenges attracting soft good retailers reflect the ‘untested’ nature of the market and the lack of viable co-tenancies to offer consistent sales and drive foot traffic. At current rent levels, and without many visible success stories, smaller-scale boutique and local offerings may come to the conclusion that current rent levels effectively price them out of the market.


Source: LOA

augmented reality displays, and Wi-Fi beacons.

Urban format stores include a mix of both new and established companies that are “right-sizing” to fit into smaller spaces in denser environments. Target has been expanding the number of its “City Target” stores, which are 20,000-30,000 square feet compared to the average size of roughly 130,000 square feet for a traditional suburban store. In addition to carrying a smaller and more highly-curated inventory of products, City Targets function as fulfillment centers where customers can order online and pickup in-store. Dollar General has employed a similar strategy as Target with their “DGX” urban concept, employing a small, clean, modern aesthetic with a limited assortment of general merchandise supplemented with convenient grab-n-go food offerings. This model has allowed them to expand their reach into dense urban environments in southern cities like Nashville and Raleigh.


Structural challenges impose limitations on tenant mix

Landlords have a strong incentive to lease spaces to established credit-worthy tenants (i.e. national chains, banks, medical offices) whereas smaller local and regional operators are deemed riskier investments. This is common practice in the industry and Midtown is no exception. Yet with limited comps against which to compare potential sales, not to mention underwhelming co-tenancies, many retailers are understandably reticent to open locations in Midtown in what they deem to be an untested environment.

One solution is the concept of “percentage rent”, whereby a minimum base rent is collected, above which additional rent is collected as a percentage of sales. Depending on how it is structured, percentage rent can help tenants by offering assurances that higher rents kick in if and when sales are adequate. The Team inquired with brokers if percentage rents were being negotiated and found they were a common practice for agreements with large chain operators, but smaller merchants were less likely to have knowledge or experience negotiating them. They may also be more reluctant to open their books to landlords. Yet these smaller merchants are the ones in the best position to benefit from such leasehold provisions.

Another structural impediment was observed in mixed-use buildings with ground floor retail and multifamily residential. In some instances, lease agreements between retailers and their landlords included restrictions on the hours when vendors could make deliveries or might prohibit live entertainment in bars and restaurants, based on the perception that these activities create disturbances for residents.

Starbucks Reserve is an example of an experiential retailer - Photo: LOA

Big Peach Running Co. is an example of a health + wellness retailer – Photo: LOA

Here are some of the common traits ascribed to the Millennial shopper:

• Known for being more technologically-connectedand expecting immediate gratification.

• Make fewer driving trips and are more inclined totravel by foot, bicycle, or transit.

• More likely to seek out authentic food experiencesand eat out more often than older cohorts

• Tend to purchase more eco-conscious products

• Most choose to spend on experience over physicalproduct

• Most want to see innovation when it comes to theirin-store shopping experience.4

Daytime population contributes to a significant portion of overall spending.

With the exception of Landmark, every Character Area in Midtown had a substantially higher worker to resident ratio, signaling that a substantial amount of customer spending was being driven by an active daytime population. Using estimates from a 2011 ICSC

MARKET DEMAND

Key Findings:

• Given the robust pace and scale of development inMidtown since the 2010 Decennial Census,syndicated data does not reflect true-to-lifeconditions—particularly the rapid rise in populationand associated spending power

• Projected residential development is expected tomore than double across Midtown between the years2010 and 2020

• The customer base of Midtown is predominantlyMillennial, having a direct impact on what constitutesan appropriate tenant mix

• The daytime worker population outnumbers residentsfor all Character Areas except the Landmark District

• Over 10M annual visitors provide significant spendingpotential that could be better leveraged withimproved physical connectivity between arts andentertainment venues and retail microclimates

Midtown resident population is growing and is predominantly Millennial.

Using both U.S. Census data and development data provided by the Midtown Alliance, it was projected that between the years 2010 and 2020, the number of residents will have more than doubled, with approximately 16,269 additional residents. Based on ESRI average household spending data for 2017, these residents are estimated to generate additional spending of $300 million, or a total of $575 million. Much of this new spending is anticipated to be concentrated in the Entertainment and Landmark Character Areas where development has been particularly active in recent years. These areas are likely to see growth in retail offerings as businesses seek to meet the demands of a growing residential base.

Midtown occupies an advantageous position insofar as it already possess higher levels of median household income than Atlanta overall—a case that was found to be true across Midtown as a whole. Another important aspect of the Midtown residential population is that it has a higher proportion of Millennial residents (defined as individuals between the ages of 25 and 40) compared to Atlanta overall. What this means is that much of Midtown’s spending capacity will come from Millennials.


4 Chain Store Age, 2018. “Five Things Retailers Need to Know about Millennials and Baby Boomers”; Forbes, 2017. “Food Leaders Take Notice: How Millennials Are Changing The Way We Eat”; Federal Highway Administration, “National Household Driving Trends,” 2001-2009.

Source: ESRI Business Analyst Online 2017


study on weekly worker expenditures, daytime worker spending was found to be strongest in the Entertainment and Arts areas. When accounting for the additional spending generated by Georgia Tech, estimated annual expenditures for the Midtown daytime population was estimated to be over $450 million.

Workers outnumber residents, but residents generate more spending power.

While the number of workers is nearly double the number of residents (61 percent versus 34 percent), residents generate more demand than workers when accounting for total spending.

Visitor spending in Midtown is also expected to increase, but could be better leveraged.

New development data provided by Midtown Alliance also evidenced that by the year 2020, there will be over 5,000 available hotel rooms and a substantial increase in overnight visitor spending, particularly in the Entertainment Area where new hotel development will be concentrated. The total number of annual overnight guests is estimated to be close to 1.93 million persons generating $14.4 million in spending on food and dining alone.

Piedmont Park and the Woodruff Arts Center were identified as two of the largest visitation drivers in Midtown, though both are located north of 10th

Street. Despite the popularity of these two institutions and the growth in visitation in recent years, many stakeholders agreed that growth could be better leveraged into higher retail sales and more spillover into the rest of Midtown.

Midtown’s Character Areas have different customer profiles based on their mixes of residents, workers, and visitors.

The Landmark Area, despite not having the largest overall customer base, generates the most customer spending due to the larger number of residents within its boundary. This is strong evidence that the retail mix in Landmark and specifically along Peachtree Street would be best positioned at present by targeting a captive residential audience.

The Entertainment Area generated the second largest amount of overall spending and is classified by a much more even mix of resident and worker spending.

Source: LOA *Student spending not included

Resident spending based on 2017 ESRI Average Household Size and Average Household Spending and Midtown ATL Development data Visitor spending based on 70% hotel occupancy rate based on a 2014 Harlow HTL Study, and $30 expenditure per guest on food and dining, with a capture rate of 25%. Worker spending based on 2015 OntheMap Census Bureau, Center for Economic Studies Data and ICSC 2011 average urban worker weekly spending

Character Area Spending Power by Customer Base (2017)


The market analysis found that each Character Area reflected a unique customer base, destination drivers, and thematic offerings differentiated at the macro-level. A summary of each area’s present strategic position is outlined here, along with a description of its aspirational vision for the future.

Arts Description: Some of the highest income residents and employees in Midtown. Significant tourism and visitor spending is present given the proximity to the Woodruff Arts Center and Piedmont Park. Anchors: Colony Square, Woodruff Arts Center, Museum of Design Atlanta, SCAD, Digital Media Center, Center for Puppetry Arts, Breman Jewish Heritage Museum Vision: Reinforce the Arts area as the Atlanta region’s cultural and creative epicenter anchored by strong arts and cultural institutions and a highly visual urban experience with public art, street-level galleries, boutiques, artist studios and outdoor dining.

Entertainment Description: A mixed customer base consisting of large populations of residents, office, and hotel construction, signaling strong growth in spending across all groups in the near future. Concentration of long established restaurant and night life. Anchors: Colony Square, Federal Reserve Bank of Atlanta, The Proscenium, Ten 10th Street, Regions Plaza, 1180 Peachtree Street, 1075 Peachtree Street Vision: Further enliven the Entertainment area with significant public space amenities and enhanced connectivity to the rest of the region, sustaining it as a vibrant, walkable, corporate location of choice with premier amenities.

Landmark + Theatre Description: A very strong Millennial customer base with substantial residential spending power. Higher levels of weekend activity than other areas of Midtown. Anchors: Margaret Mitchell House Piedmont Park, Fox Theatre, new high-rise residential Vision: Embrace the stylish, urban character of this Landmark area that abounds with architectural gems, from historic assets to striking high-rises, and highlight its verdant personality with green streetscapes and street-level shops, restaurants, and cafes.

Research + Technology

Description: Large daytime student and worker population. Substantial new office and residential development, including student housing, is liable to reinforce this distinction.

Anchors: Georgia Tech, AT&T, NCR, student housing

Vision: Amplify the energy of the Research & Technology area that unites research, learning, and entrepreneurship, and strengthen its collaborative environment by building high performing, dense development and active third places such as cafes, co-working spaces, and public parks.

Health + Wellness

Description: Primarily defined by a large daytime workforce and visitors to the Emory Hospital and Emory Proton Therapy Center. Qualitatively different customer spending when compared to the rest of Midtown

Anchors: Emory University Hospital Midtown,

St. Luke’s Episcopal Church, Bank of America Plaza, One Georgia Center, Shakespeare Tavern

Vision: Develop the Health and Wellness area as a thriving health and wellness district that encourages walking and biking for travel and leisure, while providing access to goods, services, and foods that meet health and wellness needs—including physical therapy, medical massage, eye glasses, hearing aids, dentistry, pharmacies, florists, gift stores, and healthy takeout.

STRATEGIC POSITIONING


IMPLEMENTATION STRATEGY

Vision + Guiding Principles

Recommendations + Best Practices

Midtown Retail Strategy Action Plan

VISION


Caption. Source: Text

“A bustling and attractive cosmopolitan district with inviting sidewalks lined with a diverse mix of high-quality, one-of-a-kind and experiential street-level shops, restaurants, entertainment, and other retailers – tailored to the unique identity of each retail node and the people that live, work, and visit. Strategically located in an affluent, established and growing trade area, Midtown strives to offer pedestrian corridors that entice residents, visitors, and office workers to stroll along its wide sidewalks, peek into vibrant storefronts, and experience an authentic, outdoor, urban destination that is unlike any other in the Southeast.”

GUIDING PRINCIPLES

The Midtown Alliance Retail Steering Committee approved a set of six guiding principles for Implementation and Action:

1. Provide ACCESS with additional pedestrianand bicycle infrastructure

2. Improve OPERATIONS through effectiveparking management

3. Build CONNECTIVITY within and betweenretail microclimates with creativeplacemaking

4. Reinforce the unique IDENTITY of eachmicroclimate in marketing and brandingefforts

5. Enhance the VISIBILITY of Midtownbusinesses to encourage patronage

6. Diversify the TENANT MIX to reflect newretail trends

These principles will in turn be used as the organizing structure for the recommendations presented in the following sections.

Image: Midtown Alliance

Image: Midtown Alliance

1. Prioritize the pedestrian environment

1.1 Establish a dedicated budget for collection of pedestrian counts

The analysis found that the Midtown customer is increasingly a walking customer. Sharing this information broadly, and establishing year-over-year metrics to share with retailers and investors will be critical moving forward. Many retailers in the region have outposts in automobile reliant locations, and therefore have less of an understanding of how to project demand and operate in pedestrian oriented environments. Demonstrating the high levels of pedestrian traffic will be critical to overcoming retailer concerns about the limited availability of free parking. Midtown Alliance has previously made pedestrian count information publically available through their website. In addition, some developers have also collected their own pedestrian counts.

We recommend that the Alliance conduct counts on an on-going basis using the same methodology in consistent locations. Rapid changes in technology have made pedestrian counters less expensive and more reliable. Increasingly, many Business Improvement Districts use censors that collect pedestrian count data 24 hours, 7 days a week. This allows them to not only to monitor trends over time, but also to support retail attraction efforts and inform strategic decisions regarding events and activities. This will allow for benchmarking to show growth over time and serve as a selling point for prospective tenants.

Best practices: Downtown Development District (DDD), New Orleans & Center City District (CCD), Philadelphia

Both DDD and CCD partnered with the company Motionloft to deploy pedestrian count sensors throughout their shopping districts, allowing them to convey monthly reports and real-time data to developers, resulting in successful attraction of desired retailers.


1.2 Continue to pursue traffic calming initiatives that reduce effective traffic speeds to 25 MPH

The Alliance has consistently advocated for improvements to the pedestrian realm and will be instituting capital improvements and traffic calming measures, including midblock crossings, and signalized intersections that can help to reduce speeds organically to create a safer environment for pedestrians. Similarly, if roads and streets are not designed to reduce speeds, then speeds will remain high.

Posted speeds in Midtown are typically between 30 and 35 MPH. In select areas, such as Peachtree Street, we recommend traffic calming that will lower the effective speed of traffic to 25 MPH, which is consistent with walkable cities like New York, Boston, and Washington, DC.

Best practice: Tech Square pedestrian scramble crossing (aka “Barnes Dance”)

Midtown Alliance, in partnership with the City of Atlanta and Georgia Tech, implemented a scramble crossing at the intersection of 5th Street and Spring Street to address the high volumes of both autos and pedestrians. After an initial 90-day testing period, the crossing was approved for long-term implementation.

Scramble crossing located at intersection of 5th and Spring Streets – Photo: LOA

2. Explore parking management strategies



Parking was one of the most prevalent and pervasive topics discussed over the course of both the stakeholder outreach process and meetings with the Steering Committee. Midtown Alliance should consider a parking committee to address specific parking issues and to garner support for the following recommendations:

2.1 Develop a program to create consistent parking deck signage

Midtown Special Interest District zoning regulations govern acceptable design standards for private parking signage. However, nonconforming signs that preceded these regulations have been grandfathered into the current system. It is recommended that the Client work with parking operators, perhaps through a grant program, to get them to change/retrofit older signage to be consistent with the new zoning and to improve wayfinding.

Best practice: Longmont Downtown Development Authority, Longmont, CO

This organization created a grant program that reimbursed up to 25 percent of eligible sign costs for private buildings after inspection and approval.

Example of conforming sign for private parking – Image: Midtown Alliance

2.2 Pilot a “smart parking” program

The 2015 Midtown Parking Assessment and Action Plan suggested that parking efficiency could be improved with a smart parking pilot program, the purpose of which would be to communicate the location of available spaces in real-time to drivers through a mobile app. This is a recommendation that has received support, provided that it could be integrated with existing parking applications (such as ParkMobile) and other navigation apps like WAZE and Google Maps. The Team’s research identified a few instances in which ParkMobile has developed relationships with smart parking companies that allow them to integrate their payment technology with smart parking data collection services. It is recommended that the Midtown Alliance look closely at piloting such a program as a means of managing existing parking assets.

These programs may also be structured to include spaces within participating private parking decks in order to improve parking efficiency.

Best practice: Washington Metropolitan Transit Authority (WMATA), Washington, DC

WMATA partnered with the smart parking company Streetline to put sensors in parking lot spaces to capture arrival and departure data, then relayed parking information to customers to help them anticipate when parking would be available at transit stations. WMATA also integrated Streetline with the ParkMobile app to enable seamless payments.

2.3 Incentivize shopping with free parking during off-peak hours

The Midtown Community Survey found that between the years 2013 and 2016, the number of respondents that were likely to describe Midtown as a nighttime destination dropped from 80 percent to 69 percent. This same sentiment was expressed during stakeholder interviews when one participant was quoted as saying that Midtown had “lost its edge” in terms of nightlife. One strategy to address this drop in late night activity, along with other off-peak periods, is to reduce parking fees during evenings. This idea was first mentioned in a Steering Committee meeting in reference to three private companies in the downtown Charlotte area who had decided to offer free parking after 6pm as a way to induce more shopping visitation. With the


large number of parking decks and private lots in Midtown, there are very likely opportunities to employ a similar approach with Midtown Alliance recruiting property owners and parking management companies to participate.

Best practice: Crystal City Business Improvement District

The Crystal City BID in partnership with PMI Parking Management Inc. provides free parking in select garages after 4pm and during holidays/weekends when occupancy rates are low.

2.4 Provide flexible on-street parking spaces on Peachtree Street

While there may be other competing interests for the repurposing of a lane on Peachtree Street, the team believes that retail would be best served by converting one lane of traffic between 5th and 10th Street into flexible on-street parking—a recommendation that is consistent with prior recommendations from the 2017 Midtown Transportation Plan and the 2015 Midtown Alliance Parking Assessment and Action Plan.

The competing needs of the street, including loading and unloading of products into and out of local businesses, convenient parking for short trips and for handicap visitors, and car-share drop-off and pick up preclude a dedicated bicycle lane, which does not offer the same flexibility. Moreover, a dedicated lane would likely see competition from some of these uses (despite local laws that make blocking these lanes illegal), putting cyclists in danger by forcing them to move into the travel lane. While professional cyclists would likely have little trouble maneuvering obstacles in the bike lane, more casual cyclists might find it uncomfortable. We have recommended that bike lanes run East/West along calmer streets and between dedicated cycle tracks on parallel streets, and that at these intersections there be bike corrals and sufficient bike parking that would encourage parking one’s bike and walking along Peachtree Street.

What follows is a list of the possible additional functions provided by on-street parking:

“Teaser” spaces

Curbside parking sends a message to shoppers that parking is easy and accessible, especially when these “teaser spaces” are metered to encourage turnover.

This parking strategy is frequently employed in


shopping malls and lifestyle centers, with nearby Atlantic Station as one such example. With intuitive signage and wayfinding, teaser parking may induce more shopping trips while at the same time encouraging better utilization of existing lots.

Shorter perceived crossing distances and traffic calming

On-street parking has been shown to slow passing vehicle speeds, thereby giving pedestrians and cyclists more time to react in the event of a potential accident and greatly reducing the likelihood of an accident being life-threatening. While the tradeoff for creating a more pedestrian-friendly environment is a longer commute for autos, Midtown Alliance found in previous studies that the potential impact on level of service from providing 88 on-street parking spaces to Peachtree would only contribute an additional 25 seconds of travel time for drivers.

Commercial loading and unloading

Merchants expressed concern over losing space for commercial loading and unloading. On-street parking should include designated commercial loading areas during specified times of day.

Best practice: Philadelphia Parking Authority

This organization manages the loading zone permits which businesses can apply to have established outside their locations. Beyond dedicated loading hours, these spaces may be used by the general public even though permit holders pay for the installation and maintenance of the zone.

Examples of the diversity of uses permitted from on-street parking

Rideshare zones

A side effect of increased use of rideshare services like Lyft and Uber are concerns with traffic and bottlenecking in congested areas. In Midtown, representatives from area hotels complained that rideshare operators were frequently occupying valet lanes and inhibiting traffic circulation. If rideshare services continue to grow in popularity, there is reason to believe these issues will become more pronounced. As with commercial loading zones, certain on-street parking spaces can be dedicated as rideshare pick up/drop off zones during set hours to avoid congestion. The best practices listed below are a few of a growing number of examples where municipalities have partnered with Uber and/or Lyft to create dedicated zones in response to traffic congestion.

Best practice: Brickell City Center, Miami, FL

Best practice: DuPont Circle, Washington, DC Best practice: Las Olas Boulevard, Ft Lauderdale, FL

In addition to the uses already outlined, flexible on-street parking can also accommodate better ADA accessibility, spaces for bicycle infrastructure like corrals and racks, and temporary uses like parklets.


Designated rideshare pick-up on Las Olas Boulevard - Photo: City of Fort Lauderdale

3. Enhance connectivity within and

between retail nodes

3.1 Facilitate temporary pop-up retail stores and markets

Overall retail vacancy rates in Midtown were not found to be a critical problem. In urban markets, rates in excess of 10 percent are regarded as a cause for concern and this was only observed in the microclimates located in the Entertainment Area. This was believe to be largely as a result of Colony Square’s repositioning and new retail spaces located within the 12th & Midtown development.

However, there were several examples of vacant storefronts within key retail clusters that contributed to gaps in the retail environment, notably on Peachtree Street between 10th and 11th Streets and on 5th Street. Midtown Alliance could provide financial or technical assistance to interested retailers or market organizers to set up temporary operations in ground floor vacant spaces. This will allow merchants who might not ordinarily be able to occupy space in Midtown a chance to test the market, build awareness of their brand, and provide experiential marketing opportunities.

Best practice: Downtown Austin Alliance

BID provided technical assistance by producing a How-To-Guide on opening pop-up shops

Best practice: Downtown Poughkeepsie, NY

The Mid-Hudson Heritage Center, a non-profit community organization dedicated to local arts and culture, has dedicated space for merchants to sell locally-made products and artwork.

Best practice: Downtown Atlanta Pop-Up Shops Program

Central Atlanta Progress partnered with local property owners and offered grants of up to $500 for each approved program participants for start-up and space improvement costs




Pop-up shops can help soft goods retailers test the market, Tiburon, CA – Photo: LOA


This former Tower Records in NY became a temporary art installation – Photo: NLE

3.2 Partner with local arts organizations and galleries to fill short-term vacancies with art

Midtown has a strong set of cultural anchors who drive significant visitation to the area. These anchors could support the programming of space in vacant or underutilized space, particularly adjacent to existing retail microclimates, which in turn would further reinforce activity at those locations while also burnishing Midtown’s cultural destination brand. Midtown Alliance can help negotiate agreements and curate activity in the space.

Best practice: No Longer Empty Program (NLE), New York

NLE curates “site-responsive exhibitions, education and public programs” in partnership with residents, artists, and local schools. Exhibitions are open and free to the public and are designed to be both a reflection of the individual property and the surrounding community.

Best practice: Gallery 151, New York

This organization’s mission is to support emerging New York-based artists and provide a platform for their talent through an ongoing partnership with the Michael Name & Alfa Development company that allows them to occupy gallery space in the Chelsea neighborhood along with multiple annex locations.

3.3 Create a pilot pop-up retail kiosk program

The physical analysis of Midtown identified several public and privately-owned open spaces that create gaps in the retail and pedestrian environment. Filling these spaces with activity generators will enhance the concentration of offerings and drive additional pedestrian traffic into existing retail businesses. Midtown Alliance can build off of its existing outdoor placemaking initiatives and contract with retail kiosk operators to activate these spaces, with priority placed on locations adjacent to existing concentrations of retail businesses. A particular area of emphasis should be the block along Peachtree between 9th and 10th Streets.

Best practice: UrbanSpace in Union Square, NYC

This market is made possible via a five-year agreement with the Department of Parks and Recreation negotiated with the market’s operator and founder. The Parks Department opened a round of competitive

bidding, issuing a detailed request for proposals and site visits for prospective bidders. UrbanSpace pays the City an annual bill of either $1.2 million or 50% of the fees that retailers pay them to sell their goods onsite—whichever sum is greater. Each year, UrbanSpace has netted around $2.7 million in vendor fees and compensated the City over $1.3 million. Retailer rents for space average more than $18,000 per vendor.

3.4 Align Peachtree Place

The Team recognizes and supports Midtown Alliance’s initiative to realign Peachtree Place between Peachtree Street and Crescent Avenue (see renderings below). In so doing, it will provide a more pleasing pedestrian environment and new public space with the potential to deliver economic benefits to nearby retailers.

It is recommended that outdoor seating be allowed as a component of a retailer/dining permitting process that ensures there are active stewards charged with ongoing support and maintenance of adjacent outdoor seating.


3.5 Create bike connections between destination drivers

The Team recognizes and supports Midtown Alliance’s initiative, in coordination with the City of Atlanta, the PATH Foundation, and the Atlanta Beltline, to bring online the 10th Street Cycle Track between Monroe Drive and Piedmont Avenue. It is recommended that the possibility of extending this dedicated lane, along with other east-west connections between Piedmont Park, MARTA, and the Atlanta Beltline, be actively pursued as a means to create stronger connections between these anchors and Midtown. It is also recommended that in lieu of creating dedicated bike lanes on Peachtree Street, that bicycle infrastructure such as bike racks, lockers, and corrals be actively pursued and promoted on Peachtree Street at the intersections of 10th Street, 8th Street, 5th Street, and Ponce de Leon. These intersections represent areas where bicycle activity is already well-documented and where East/West connections to existing cycle tracks are most viable. From these locations, cyclists can leave their bikes and walk the corridor.

Before

After

Rendering of Peachtree Place realignment – Source: Midtown Alliance

4. Enhance the visibility of businesses

4.1 Encourage sidewalk spillover and outdoor dining

The Team recognizes that the Midtown Special Public Interest (SPI-16) District zoning requires sidewalks have a minimum clear zone free of merchandise, portable signs, and other objects that may impede pedestrian activity. The Zoning Text includes a “Supplemental Zone” defined as the area between the sidewalk and the building façade. Owners are given a degree of flexibility in what they do in this zone. However, even with this provision there are many storefronts with Supplemental Zones devoid of outdoor dining, signage, street furniture, or other animating appurtenances. It is recommended that the Midtown Alliance provide financial and technical assistance to merchants on Peachtree Street that are not occupying their Supplemental Zone with animating uses, but have the capacity to do so.

There are also cases in Midtown where large setbacks made animating uses in the Supplemental Zone less visible to pedestrians. In other cases, buildings lacked a large enough supplemental zone to support animating uses without impeding on the clear zone. It is therefore also recommended that the Midtown Alliance consider permitting temporary activation of clear zone sidewalk space with benches, displays, landscaping, and signage under certain conditions if they fall within two to three feet of the building façade.

Best practice: Downtown outdoor dining furniture grant program, Brentwood, CA

Businesses within the applicable boundary are eligible for grants up to $2,500 for outdoor furniture, provided they meet City design standards

4.2 Promote creative and effective storefronts and signage

Midtown had several examples of retail storefronts with uninspiring signage, as well as some that lacked identifying signage altogether. It is therefore recommended that the Midtown Alliance consider providing financial and technical assistance to tenants that wish to improve existing or install new pedestrian-centric signage.




Best practice: Downtown Far Rockaway Storefront Improvement Program, Queens, NY

This initiative of the New York City Business Assistance Corporation (NYBAC) and the Department of Small Business Services (SBS) provides a 75% match of funds up to $10,000 per storefront to help with new signage and awning, storefront framing, exterior lighting and painting, and other renovations consistent with City codes and regulations.

Best practice: Atlantic Avenue BID, Brooklyn, NY

This BID provided small grants of $2,500 to new businesses specifically for vertical blade signs.

Example of “sidewalk spillover” in Long Island City, NY – Photo: LOA

5. Recognize the unique identity and customer base of each retail microclimate through

marketing and branding

5.1 Embrace distinct identities of retail microclimates in marketing and branding efforts

The Character Areas presented in Blueprint Midtown 3.0 were used by the Team as a tool for understanding current retail market conditions that might inform the branding of each of the identified retail microclimates. Data was collected that demonstrated differing customer spending habits, price points, and tenant mix across Midtown. However, the Character Area framework is challenging in that it is a snapshot of a dynamic and evolving district, and therefore should be amended as appropriate. Regardless, it remains an effective means to develop unique strategic positioning which ultimately serves the individual retail microclimates. It is recommended that the Midtown Alliance continue to employ some form of organizing framework, whether Character Area or otherwise, for purposes of marketing and branding.

Best practice: Downtown Raleigh Alliance

Downtown Raleigh is divided into five “Destination Districts” spread over 1.18 square miles, with names that include “Warehouse District” and “Capital District.”



Best practice: Center City District, Philadelphia

The CCD presents downtown Philadelphia as five neighborhoods spread over two square miles with names that include “Rittenhouse Square” and

“Convention Center.” They also actively promote four shopping sub-districts (similar to microclimates) classified by their different tenant mixes and anchors.

Best practice: Downtown Memphis Commission (DMC)

The DMC has divided their 6.5 square mile downtown into four main districts (with names that include “Medical” and “Core”) and nine neighborhood sub-districts (with names that include “The Pinch” and “Mud Island”).

5.2 Embrace distinct identities of retail microclimates in the public realm

A strong marketing and branding effort based on microclimates can be further reinforced by being woven into the physical environment. It is recommended that the Midtown Alliance explore how to do so through both public art and placemaking. They can provide financial and technical assistance to guide these efforts in a manner that is consistent with the shared vision for each sub-district as well as the larger Midtown district.

Best practice (murals): Corning, NY

Local students working under the direction of Rockwell Museum staff, created a painted mural on Chestnut Street depicting their relationship to the local community.

Best practice (statues): Pittsburgh, PA

Neighborhood Allies, a local community developer, manages collaborative teams of artists and CDOs and helps facilitate community engagement surrounding temporary public art projects.

Best practice (street furniture): Greenbay, WI

An annual artistic bike rack, bench, and trash can program encourages artists to create works of art that improve upon existing infrastructure.

Image: Downtown Raleigh Alliance

5.3 Embrace distinct identities of retail microclimates with experiential events

The Team recognizes and supports the Midtown Alliance’s efforts to organize one-of-a-kind experiential events in Midtown, with Taste of Atlanta and the Fall Crawl as exceptional examples. It is recommended that the Midtown Alliance not only continue to pursue these events, but also continue to partner with local businesses and organizations to hold events that reinforce the identity of distinct nodes and serve to target the specific customer base associated with each.

Best practice: Yoga on the Square, Colony Square

Seasonal outdoor yoga classes are held through a partnership with Exhale Spa, Core Power Yoga, and Dancing Dogs Yoga, appealing to Millennial residents and workers who seek out health-and-wellness experiences.

Best practice: Dilworth Park Spring Training, CCD, Philadelphia

The Center City BID organizes 8 weeks of pop-up fitness classes that include yoga, Zumba, and fitness boot-camps led by trainers from area health clubs and cosponsored by an orthopedic research institute.

5.4 Build an all-inclusive itinerary for Midtown visitors

Representatives from the Woodruff Arts Center and the Piedmont Park Conservancy stated that their visitors either did not stay long in Midtown after attending events or seldom visited multiple Midtown destinations in a single trip. Both expressed an interest in seeing visitors spend more time in the district and taking advantage of the full suite of offerings on hand. It is recommended that the Midtown Alliance, in partnership with these institutions, develop a series of visitor itineraries featuring stops at Piedmont Park, Colony Square, the Margaret Mitchell House, the Woodruff Arts Center, and the Fox Theatre. Itineraries could be based around different themes and for different target audiences.

Best practices: Visit Dallas, Downtown Boston, and Downtown Austin

These three cities have developed different itineraries based on theme (e.g. arts, architecture, budget, beer, LGBT, film, etc) and audience (e.g. college students, ladies only, families, etc).


“Yoga on the Square” drives millennial customer base – Photo: Colony Square

Images: VisitDallas; The Downtown Boston Business Improvement District

6. Identify ways to work with property

owners to improve tenant mix

Ultimately, individual leasing decisions are controlled by property owners. While some BIDs play an active role in retail leasing, we find that this often occurs in districts with anemic brokerage communities, which is not the case in Midtown. We believe that the fundamentals for Midtown retail over time are sound, and that the Midtown Alliance is better served by providing property owners and their brokers with the data tools they need to make a credible business case to a broader set of retailers.

The strategy outlined here focuses on the role that the Midtown Alliance can play in creating opportunities for dialogue and consensus building among property owners. This includes disseminating data more broadly among the development community and facilitating a shared vision for retail, particularly along Peachtree Street and Georgia Tech.

An effective retail attraction strategy must also recognize that tenants naturally gravitate to places where they have a sufficient critical mass of their target customer base. The research presented here offers insight to ensure that retailers are making informed decisions based on market fundamentals for each retail micro-climate. Moreover, with a Midtown market that is increasingly defined by its local residents, rather than a larger outside trade area, these nuances need to be communicated effectively to all who have a role to play in district management and tenant attraction.

6.1 Serve as an information clearinghouse

The Team recognizes that one of the many valuable functions of the Midtown Alliance is to disseminate critical market information to owners, brokers, and prospective tenants. It is recommended that the Alliance continue to build upon these efforts by providing regular data updates, including pedestrian counts, worker to resident ratios, visitor counts, customer spending power, and new openings. The Steering Committee demonstrated strong interest in this recommendation, speaking to a desire to see more trade area data, GPS and cellphone driven data, and



the implementation of an intercept survey conducted in partnership with a Georgia Tech MBA class. With consistent and transparent information, based on an agreed upon framework, brokers will be better equipped to bring in new and exciting tenants.

6.2 Facilitate owner/broker breakfast sessions

In addition to establishing steering committees and serving in an information clearinghouse capacity, we recommend that the Midtown Alliance organize invite-only bi-annual meetups between property owners and brokers to disseminate information, conduct real estate working sessions, and engage in consultative selling. Whereas the previous recommendation illustrates what type of data would have the most utility for stakeholders, this recommendation demonstrates how best to operationalize that data in service of retail.

6.3 Convene steering committees based on select microclimates

Property ownership in some areas of Midtown is highly fragmented and represented by owners with a range of objectives. This presents a challenge to realizing any unified vision for Midtown retail, which will require constant communication and consensus building among multiple decision-makers. At the same time, there are other areas of Midtown with sophisticated landlords and established branding that already have a proven record of success, but may be interested in pushing the prevailing vision to a new level.

It is recommended that the Midtown Alliance use the momentum from this Retail Market Assessment and Action Plan to form steering committees for targeted microclimates. At the time of this study, Tech Square and Peachtree Street were two examples that were thought to benefit most from this recommendation. In so doing, property-owners with first-hand on-the-ground experience and a vested interest in positive outcomes can come together to discuss tenant mix, plan events, share information, and work to realize a stronger retail environment for all participants.




Source: LOA

Urban Format

Store Original Store Size Urban Format Size

Target 145,000 12,000 - 80,000

Nordstrom 140,000 3,000

Ikea/Lowe’s 112,000 20,000 - 30,000

Kohl’s 80,000- 90,000 35,000

Bonobos Online Only 1,500

Warby Parker

Online Only 1,500

Tech-influenced

Store Tech Capability

JCrew Free wifi

Sephora Virtual artist mirror

Uniqlo Magic mirror

Target, Whole Foods, Sephora

Alternative check-out options (self check out, apple pay etc.)

Macy’s, Apple In-store beacons to personalize marketing

Experiential

Store Experience

Starbucks Reserve Specialty coffee brewing

Home Depot DIY home décor class

Sur la Table Cooking class

Stone Summit Rock climbing wall

Best Buy Gaming events

Nordstrom Stylist events

Health + Wellness

Store Wellness component

Whole Foods Organic grocery

Kale Me Crazy Juicing, supplements, vitamins

Lululemon Athleisure apparel

[Solidcore] Fitness studio

Cherry Dry Bar Beauty and spa

6.4 Support retail attraction that reflects the changing retail habits of Millennials

The growth in on-line sales that has augured rapidly changing shopping habits, coupled with significant demographic trends, require property owners, brokers, merchants, and district managers alike to rethink their assumptions about what constitutes a profitable tenant mix. If there were a unifying trait across Midtown’s distinct retail districts, it would be the demographic tidal wave of Millennials who now call Midtown home. These shoppers spend at a robust rate, but in ways that differ from previous generations. Retailers that can successfully position themselves to respond to Millennial shopping trends will be better positioned to survive and thrive in the modern market.

The tables at right highlight four different retail trends, replete with retailer examples, that reflect Millennial customer preferences. Those listed in bold represent retailers that are already currently located within Midtown.

6.5 Support retail attraction of regional chains new to the Atlanta market

Having identified contemporary retail and demographic trends driving demand, it is equally important to identify specific retailers that are well positioned to meet this demand while simultaneously having cause to open a location in Midtown. A survey of some of the more iconic national brands with Millennial appeal found that they already had an established presence in the larger Atlanta region. As an example, Anthropologie has locations in Westside Provisions District and in Ponce City Market, two of Midtown’s main competitive shopping districts. Similarly, Sephora and Lululemon are both located in Ponce City Market and the Shops Around Lenox in Buckhead.

Well established regional retail chains with a contemporary style should contribute to the shared vision for Midtown retail that reinforces its identity as a destination with unique southern appeal. Midtown Alliance should encourage brokers and owners to target prospective retailers that do not have a presence in Atlanta but can be found in comparable markets that include cities such as Raleigh, Charlotte, Charleston, and Nashville. Four regional chain retailers that meet this criteria and have a presence in at least two of these markets are identified and shaded in yellow in the tables on the following page.


Source: LOA

National Chains

Regional Chains

RETAILERS THAT APPEAL TO THE MIDTOWN DEMOGRAPHIC




The Midtown Alliance and the Steering Committee reviewed the comprehensive list of proposed strategies and netted the following work plan priorities for future action:

DATA COLLECTION and MARKETING

• Serve as an information clearing houseCollect, package, and disseminate data on market conditions for the district. Provide hyper-local information aboutdemographics, pedestrian counts, parking availability, and retail space to local brokers and property owners on a semi-annual or quarterly basis. A list of identified data needs has been compiled and validated by the Retail SteeringCommittee.

• Facilitate owner/broker information sessionsAs a corollary to data collection, Midtown Alliance will host and facilitate a semi-annual or annual meeting betweenMidtown property owners and brokers to get regular input on desired information and reinforce a shared vision for retail.

• Build an itinerary for Midtown visitorsCreate a visitor itinerary that includes Midtown amenities and destinations tailored for specific demographic groups.

PROGRAMMATIC EFFORTS

• Curb managementDevelop a strategy in conjunction with the City to manage curbside loading for rideshare passengers and commercialdeliveries.

• Create temporary galleries in vacant storefrontsFill short-term vacancies by activating empty street level spaces with temporary art exhibits in partnership with localart/cultural organizations.

• Encourage sidewalk spillover and outdoor diningThe updated zoning supports merchandise displays within the sidewalk supplemental zone. Staff will continue toencourage developers and tenants to activate the pedestrian experience with patio dining and display by creating alookbook of best practices and design ideas to share during the DRC process.

• Promote storefronts and effective signageStaff will continue to encourage a more dynamic street level experience by creating a lookbook of best practices anddesign ideas to share during the DRC process.

• Promote creative storefronts and effective signageSimilar to outdoor dining and merchandise display, staff will continue to encourage a more dynamic street levelexperience by creating a lookbook of best practices and design ideas to share during the DRC process. Considerreinforcing this with financial incentives to improve existing storefront facades and signage.

• Target strategic placemaking initiatives in retail nodesImplement public art and activation efforts to amplify identity around retail microclimates and characterized byart/entertainment and technology/innovation.

• Explore a “Smart Parking” programExplore how to best provide real time parking availability for on-street and off-street parking options. Seek to collaboratewith ParkMobile and private parking lot owners to explore potential strategies, tools, feasibility, and cost.

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MIDTOWN RETAIL STRATEGY AND ACTION PLAN



PHYSICAL IMPROVEMENTS

• Continue street-calming initiativesReduce vehicle speeds through signalized timing, safe crosswalks, more mid-block crossings, and other similartransportation and infrastructure improvements.

• Collaborate with owners to install consistent parking signsThe updated zoning requires new development to provide uniform parking signage, but needs to specify exact size,location and illumination requirements. For existing parking structures, consider incentivizing parking signs consistentwith the updated zoning code.

• Expand bike infrastructureContinue working in conjunction with the City to expand the bike network as identified by the Connect Atlanta Plan andprioritize east-west connections between destination drivers such as the Beltline, Piedmont Park and Georgia Tech.

• Align and activate Peachtree PlaceImplement realignment of Peachtree Place to create a pocket park that serves adjacent retailers and connects surroundingnodes on Peachtree and West Peachtree. This would require a partnership between Midtown Alliance and the AtlantaHistory Center as well as other funding partners to deliver “Commercial Row Commons.”

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Conclusion

Investing in improved pedestrian and bicycle infrastructure, and committing to actively marketing and branding Midtown as an amenity-rich culture and arts destination.

The recommendations put forth in this report and prioritized within the Implementation Strategy serve to build off of the many existing opportunities and strengths of Midtown. It is hoped that they will assist the Midtown Alliance in its continued commitment to the local community, along with its goal of planning for a bright and successful future.

CONCLUSION




Source: 2013 Midtown Alliance

Overall, Midtown’s fundamentals are nothing short of enviable. It has a growing residential community characterized by a strong number of Millennials about to enter their peak spending years. New office construction and an influx of Class-A tenants are similarly generating new demand from a growing number of workers and employees. Hotels are rising and the Atlanta Beltline has become a marquis destination, suggesting the number of Midtown visitors will also only grow in the coming years. The Midtown Alliance has prepared for these changes by supporting a zoning code that actively supports street level activity and ground floor retail,

APPENDIX A – RECOMMENDED DATA COLLECTION TO SUPPORT RETAIL RECRUITMENT





1. Retail List of retailers by address, name, and category of retail

Size and estimated delivery dates of new retail space

2. Housing and Residents Existing and proposed number of housing units by type (condo, apt, and student)

Housing occupancy rates

Existing and 3 year projections of number, income, spending, age and gender of residents

3. Employers and Employees Existing and proposed square feet of commercial office space

Employers by size and type

Number of employees, salary ranges, and spending

Number of new job announcements by business and location

4. Attractions, Hotels and Visitors Attractions (by address, type, number of visitors)

Total number of visitors and spending

Existing and proposed number of hotel rooms by location

Number of overnight stays; current and projected visitor spending

5. Other List, location, and names of other destination drivers or anchors

24/7 pedestrian, vehicle, and bike counts and trends at primary retail locations

Origin and destination data by day of week and time of day

APPENDIX B – PROPOSED PEDESTRIAN COUNTER MAP





retail market assessment and implementation strategy · 2018-10-17 · project introduction +...

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