Main Streets and TOD post-COVID - ILCMA€¦ · TOD and entertainment district strategies Support...
Transcript of Main Streets and TOD post-COVID - ILCMA€¦ · TOD and entertainment district strategies Support...
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ILCMA Financial Forecast Forum | January 21, 2020
Trends and strategiesMain Streets and TOD post-COVID
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SB Friedman Development Advisors
COVID 19’s impact on downtowns and main streets
How can communities adapt and help businesses through the COVID crisis?
Will demand return for mixed-use places with active uses?
Is transit – and building community hubs around it – still relevant?
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SB Friedman Development Advisors
Preference for walkability and proximity to servicesMain Streets & TOD: Pre-COVID trends
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62%
45%
45%
55%
38%
55%
55%
45%
Live in a townhouse or apartmentEasy walk to shops & restaurants
Shorter commute
Live in a detached SFHDrive to shops & restaurantsLonger commute
Millennials
Gen X
Boomers
Silents/Greatest
Community & Transportation Preferences Survey U.S. Metro Areas, 2017, National Association of Realtors, American Strategies, and YouGov
In 2018:
The Chicago region had a 22% rent premium for walkable office development
The region’s suburbs had a 60% rent premium for walkable rental apartment development
Source: “Foot Traffic Ahead” Smart Growth America Study
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SB Friedman Development Advisors
Consumer spending on typical TOD uses is down
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Illinois percent change in consumer spending, compared to January 2020
Source: Opportunity Insights Economic Tracker
General retail has returned to normal levels in some places, but restaurants and retail remain low
By county By type of spending
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SB Friedman Development Advisors
Consumers will shop or dine in-person, but in limited waysWork and essentials remain the core reasons to leave home
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In the past 24 hours, have you visited any of the following places? Please select all that apply.
Source: Gallup poll, September 2020; SB Friedman* Date listed is the end of the 2-week polling period. Results are an average of the two week period.
Gym
Restaurant – dine in
Salon or barbershop
0%
10%
20%
30%
40%
50%
60%
5-Ap
r
12-A
pr
19-A
pr
26-A
pr
3-M
ay
10-M
ay
17-M
ay
24-M
ay
31-M
ay
7-Ju
n
14-J
un
21-J
un
28-J
un
5-Ju
l
12-J
ul
19-J
ul
26-J
ul
2-Au
g
9-Au
g
16-A
ug
23-A
ug
30-A
ug
6-Se
p
13-S
ep
20-S
ep
27-S
ep
4-O
ct
11-O
ct
18-O
ct
25-O
ct
1-N
ov
8-N
ov
15-N
ov
22-N
ov
29-N
ov
Grocery store
Place of work
Other store
Restaurant - carryout
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SB Friedman Development Advisors
Working at work, eating out, and travel are prioritiesWhat activities do people want to get back to?
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Once the government provides information that the spread of the virus is flattening how long will it take you to do each of the following?
0%
5%
10%
15%
20%
25%
30%
35%
40%
Visit the office Go out to dinner Go to a gymclass
Take publictransit
Stay in a hotel Go to themovies
Host/attend alarge societal
gathering
Fly on a plane Go to a sportingevent
Immediately Within 3 months 4-6 months 7-11 months A year or longer Never again
Source: Harris Poll, wave 40 (November 30-December 4, 2020)
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SB Friedman Development Advisors
COVI
D C
risis
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Consumers shifted spending back to brick-and-mortar retail once lockdowns endedCOVID temporarily accelerated e-commerce adoption
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Estimated Quarterly U.S. Retail E-commerce Sales as a Percent of Total Quarterly Retail Sales
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SB Friedman Development Advisors
Business closures, ghost kitchens, and eventual rent resetsMain street businesses adapt to major shifts
Cushman & Wakefield estimates that up to 1/3 of restaurants will close if pandemic shut-downs continue
“Ghost Kitchens” have helped some restaurants operate delivery out of a shared kitchen, reducing costs and expanding markets
Small shops have transitioned to online storefronts, workshops, and expanded services
Increased vacancies from closures offer opportunity: Reset on rents in high-demand areas Communities can plan for / seek out more desirable
tenant types or uses
8Source: Costar
(2,000,000)
(1,500,000)
(1,000,000)
(500,000)
0
500,000
1,000,000
1,500,000
2,000,000
2015 2016 2017 2018 2019 2020 2021
Retail Net Absorption and Vacancy within 1 Mile of Transit vs Remainder of Chicago Region
0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%
2015 2016 2017 2018 2019 2020 2021
All other retail Within 1 Mile of Transit
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Strategies
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SB Friedman Development Advisors
A few key factors will drive recovery
Regulations: Federal, state, and local decisions on reopening timelines
Behavior: Vaccine uptake
Capital: Public or private funding available to remain open, retool, and rehire
Market: Consumer perception on safety, income sufficient to purchase goods, and persistence of COVID-era adaptations in housing choices
Federal Assistance: Economic aid to highly vulnerable populations and businesses
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SB Friedman Development Advisors
Be flexible and plan for the many Consumers who are ready to return to experience-oriented districtsTOD and entertainment district strategies
Support affected businesses
Implement short and long-term Placemaking strategies
Plan for post-COVID priorities
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SB Friedman Development Advisors
Link businesses to resources and adjust local policies and feesSupport affected businesses
Connect businesses to resources: PPP utilizes private lenders – many small or minority-owned businesses need help establishing
banking relationships Advertise EIDL and other SBA resources
State of IL – https://coronavirus.illinois.gov/s/resources-for-business
Counties and non-profit coalitions offer small operating grants
COVID CDBG funds can be utilized for small operating grants to businesses meeting local priorities
Temporarily adjust regulations and policies: Allow outdoor dining or sales, shifted hours of operations, etc. Suspend or defer fees for all businesses or certain types of operators
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SB Friedman Development Advisors
Entertainment businesses have relief ahead
Limited relief from PPP funds because venues could not reopen
Save our Stages – a “Main Street” focus: $15 billion Grants up to 45 percent of 2019 revenue Includes performance, cultural, or hybrid
venues Targeted relief for businesses with <50
employees
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SB Friedman Development Advisors
Consumers are likely to continue to seek urban amenities Expand Placemaking Strategies
Short term: Use public ROW flexibly (outdoor
dining, winter activities, street closures, etc.)
Test shared streets and other multimodal options
Long term: Improve mobility options Zone for a mix of uses Pursue innovative use of the public
realm
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Melbourne, Australia: 20-minute neighborhood
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SB Friedman Development Advisors
Post-vaccine, many consumers are ready to return to experience-oriented districtsMid term: Plan for post-COVID priorities
Plan for post-COVID economic development priorities
Identify market opportunities for vacant space
Update zoning, development policies, etc.
Put in place BIDs, TIFs, etc. to aid post-COVID reinvestment
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0%
10%
20%
30%
40%
50%
60%
70%
Percentage of consumers wanting to return to an activity within 3 months of reduced COVID spread
Source: Harris Poll, wave 40 (November 30-December 4, 2020)
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SB Friedman Development Advisors
Questions
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SB Friedman Development Advisors
COVID 19’s impact on downtowns and main streets
Placemaking: Social hub Active and varied uses Comfortable and safe Accessible or central
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SB Friedman Development Advisors
Post-COVID, more people are likely to work from home some days of the weekClass A Office: What might happen?
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Working from home at least one full day per week, pre- and post-COVID, by industry
Source: Survey of Business Uncertainty conducted by the Federal Reserve Bank of Atlanta, Stanford University, and the University of Chicago Booth School of Business
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SB Friedman Development Advisors
Homebuyers are willing to increase purchase prices, but desired amenities have changed minimallyResidential: What’s happening now
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Change in desired home amenity features, July 2020
Source: Realtor.com, July 2020
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SB Friedman Development Advisors
Retail overallNon-store retailers
Sporting goods, hobby, instrument, & book stores Building material & garden supplies dealers
Grocery stores Health & personal care stores
Furniture & home furnishing stores General merchandise stores
Electronics & appliance stores Department stores
Gasoline stations Food services & drinking places
Clothing & clothing accessories stores
Discretionary purchases and entertainment are down, while home improvement and hobbies are upRetail: What’s happening today?
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Percent change in select types of retail and food sales (July 2019 to July 2020)
Source: US Census Monthly Retail Trade data, August 2020 dataset
2.4%
23.4%
17.6%
15.4%
10.8%
4.3%
1.3%
1.1%
-4.9%
-15.7%
-16.9%
-19.4%
-23.1%