DUE DILIGENCE
5Gstudio_collaborative, LLC.
311 N. Market St, Suite 230
Dallas, Texas 75202
o: 214.670.0050
f: 214.670.0052
Scott Lowe, LEED A.P.
Managing Partner
[email protected]
Hoang Dang, AIA, NCARB
Partner, Director of Design
[email protected]
Shoby S. Modjarrad, Assoc. AIA
Project Leader
[email protected]
Consultants:
RENDE DEVELOPMENT
7549 Brentcove Circle
Dallas, Texas 75214
c: 214.725.4118
Joseph R. Rende
Partner
[email protected]
DND Partners, LLC.
3506 Evelyne Drive
Wylie, Texas 75098
o: 972-533-8702
David Karr
Partner
[email protected]
Haley, Romero, Winick & Kroll
919 Congress Ave Suite 1130
Austin, Texas 78701
o: 512.472.1600
c: 512.657.4028
John Kroll
Partner
[email protected]
Lucid
214.827.0220
Rene Gracia
[email protected]
i
DUE DILIGENCE
Incorporated in 1866, the City of Lancaster is
one of the oldest communities in North Central
Texas. Located 15 minutes from downtown
Dallas and adjacent to the southern sector of
the Dallas city limits, Lancaster encompasses
approximately 29.2 square miles and is home
to an ethnically diverse population exceeding 32,000 persons. The City of Lancaster a
Home Rule Municipality that operates under a
Council-Manager form of government.
Lancaster’s Downtown encompasses approximately 70 acres of office, retail, commercial
and residential uses. The centerpiece of the
Downtown is the Historic Town Square, which
contains several historic structures that date
back to 1880. The Missouri-Kansas-Texas
Railroad line, now operated by Burlington
Northern Santa Fe, runs through the Downtown and provides the potential for the development of a commuter rail station adjacent to
the Historic Town Square.
The Downtown is also located within a mile of
the Dallas Logistics Hub, which promises to
become one of the largest Intermodal sites in
the country, at 6,000 acres. Over the next 25
years, the Dallas Logistics Hub is forecasted
to include 71 million SF of industrial and commercial space and bring 60,000 new jobs to
Dallas and Ellis Counties.
In November 2005, the City of Lancaster issued a Request for Qualification (#06-011)
and Proposal for Professional Services to
INTRODUCTION
conduct an Economic Analysis and create a
Downtown Development Plan. Phase One of
the project called for Data Collection, Analysis
and Strategy that related land uses to market
potential, and an Economic Analysis that provided a reasonable estimate of development
potential in the downtown area for the next
15 years.
By October 23, 2006, 5Gstudio_collaborative,
LLC, and a team of sub-consultants that included RENDE Development, DND Partners
and Haley Winnick Romero & Kroll, were selected to conduct the Economic Evaluation
and create the Downtown Development Plan.
The following pages and attached CD-ROM
present their Phase One-Due Diligence findings.
1
DUE DILIGENCE
EXECUTIVE SUMMARY
MARKET ANALYSIS
3
DUE DILIGENCE
MARKET ANALYSIS
Study Purpose
The purpose of the study was, first and foremost, to understand the conditions within the
retail and service business market that are
served by establishments within the Lancaster Downtown Commercial District.
Second, our aim was to conduct an analysis
of the supply of commercial retail and service
businesses within that market.
Third, we determined whether or not the Consumer Spending Potential within the market
was being satisfied by the businesses within
the market.
Fourth, conclusions from the findings were
drawn and recommendations on how to address the demand issues within the market
were outlined.
Trade Area Studied (contains Lancaster City
Limits)
Total Households Growth
2015 Total Households
14402
2010 Total Households
2005 Total Households
Commercial Demographics
The commercial demographics of the Lancaster Commercial District Trade Area, in
general, are very positive.
The Population Growth over the next ten
years is projected to exceed 25%, which is
well above the national and state averages.
Household Growth shares that same trend,
with projected 40% growth over the ten
years.
Household incomes in the Lancaster Commercial District Trade Area are projected to
increase at an increasing rate. In 2005, the
Average Household Income is 35% higher
than the Texas state average. In the next
ten years, the Average Household Income is
expected to grow by over 31%. On a macroeconomic scale, the economic health of the
Lancaster Commercial District Trade Area
appears to be much more vigorous than that
of both the State of Texas and the United
States.
5
11079
10295
2000 Total Households
9174
1990 Total Households
7649
0
2000
4000
6000
8000
10000
12000
14000
16000
Total Number of Households
Percent Households Growth
% Households Change 2010-2015
29.99%
% Households Change 2005-2010
7.62%
12.22%
% Households Change 2000-2005
19.94%
% Households Change 1990-2000
0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00
%
%
%
%
%
%
%
Percent Grow th ov er Period
%
Average Household Income
2015 Av erage Household
$78,019
Income
2010 Av erage Household
$69,400
Income
2005 Av erage Household
$59,392
Income
2000 Av erage Household
$51,467
Income
0
10000 20000 30000 40000 50000 60000 70000 80000 90000
Annual Av erage Household Income ($)
MARKET ANALYSIS
Aggregate Household Income in the Lancaster Commercial District Trade Area is calculated to be approximately $769 million. This
figure represents the total purchasing power
of all the households within the Lancaster
Commercial District Trade Area. From that
figure, total Disposable Income, or as industry
experts call it, Effective Buying Income, can
be derived.
Effective Buying Income is the difference between the Aggregate Household Income and
the dollars spent on housing, taxes, and debt
service. In the Lancaster Commercial District
Trade Area, the Effective Buying Income is
$514 million.
6
Percentage Growth 2005 to 2010 by Age
Group
The distribution of age groups, over the next
ten years, is expected to shift somewhat, and
very much in line, with what is being projected on a national level. The Lancaster Commercial District Trade Area will, like the entire
country, experience the growth of an older
age class as the baby boomers move into
their retirement years. Lancaster is projected
to experience a shrinking of the 25-44 years
old demographic age group. This is a positive
event. As the baby boomers move into their
twilight years, they will typically have more
dollars to spend on retail goods and services
than any other age group.
DUE DILIGENCE
Retail Goods and Services
Spending
Not all of this Effective Buying Income is spent
on retail goods and services. In the Dallas/Ft.
Worth MSA, of which the Lancaster Commercial District Trade Area is contained within,
84% of Effective Buying Income is spent on
retail goods and services. The amount spent
on retail goods and services is known as Aggregate Retail Expenditures. In the Lancaster Commercial District Trade Area, Aggregate
Retail Expenditures are approximately $431
million.
Lancaster Commercial District Trade Area :: 2005
Average Household Statistics
Income
Effective Buying Income
$59,392
$49,889
Spent on Retail
$41,907
Dallas/Ft. Worth MSA :: 2005
Average Household Statistics
Income
Effective Buying Income
$70,110
$58,650
Spent on Retail
$49,710
To reiterate, the total dollars available to
spend on retail goods and services in the
Lancaster Commercial District Trade Area is
approximately $431 million.
The Texas State Comptroller’s Office reports
that in 2005, the total dollars actually spent
on retail goods and services totaled only
$240 million. Since the potential dollars that
could be spent on retail goods and services
is approximately $431 million, this leaves an
unsatisfied demand, or “leakage” of approximately $190 million.
It is impossible to capture all this “leakage”.
There are a high number of commuter workers that reside in Lancaster and work in other
towns where they make purchases. Also, given the well developed system of highways and
roads within the D/FW Metroplex, consumers
have easy access to regional shopping opportunities. Because of these realities, local
development efforts could never capture all of
the “leakage” that Lancaster is experiencing.
DUE DILIGENCE
Therefore, the amount of “leakage” that can
be reasonably “recaptured” is determined by
applying a discount factor of 30%. This is a
common industry reduction percentage for an
MSA such as the D/FW Metroplex.
Discounting the “leakage” calculation of $190
million by 30% leaves an amount of approximately $134 million that can reasonably be
brought back in to the Lancaster Commercial
District Trade Area. Leakage of $134 million
translates into approximately $13,000 per
household in 2005.
Est. Avg HH Income
No. of Households
Aggregate Income
Effective Buying Income
Retail Spending Potential
Total Actual Retail Sales
LEAKAGE to Other Trade Areas
Discount for Outside Factors
LEAKAGE to capture
$59,392
10,295
$611,440,640
$513,607,255
$431,432,565
$239,803,729
$191,628,836
30%
$134,140,185
Commercial Supply Analysis
There are approximately 740 businesses located within the Lancaster Commercial District Trade Area, which comprise the existing
inventory of retail goods and service providers.
Within the Lancaster Commercial District
Trade Area, we have denoted three distinct
Business Districts – the IH-35 Corridor District, the Central Lancaster District, and the
Historic Downtown District.
The IH-35 Corridor District is made up of 204
travel-related and convenience businesses, in
addition to big-box retailers and other chaintype restaurants and retailers that rely on high
traffic counts and highway visibility to attract
business.
The Central Lancaster District contains 261
businesses that offer a much wider variety of
products and services. They serve the bulk of
the housing communities within the Lancaster
Commercial District Trade Area.
MARKET ANALYSIS
The Historic Downtown District and surrounding area contain 128 businesses, mainly consisting of government service businesses, sole
proprietor shops, and cafes, hobby shops, and
the like. Having been greatly damaged by an
F-4 tornado in 1994, this District is most fragile
of the three.
In the study, our analysis delved into the types
of businesses and number of each type in the
Lancaster Commercial District Trade Area.
We discarded the 207 businesses classified
as “Miscellaneous”, and determined that the
top three business types are Building Contractors and Suppliers, Consumer Services, and
Beauty Salons/Barbers.
Goods / Service
Apparel
Auto/Truck Parts and Repair
Auto/Truck/Boat/Aircraft Sales
Bakers/Donuts
Banks
Beauty Salons
Building Contractors/Subconts
Business Consultants/Services
Child Care Service
Clinics
Computers/Electronics
Convalescent Care
Convenience Stores
Department Stores (Wal-Mart)
Dry Cleaners
Financial Services
Florists
Furniture
General Consumer Services
Miscellaneous
Gift Shops
Grocers-Retail
Health Clubs Studios & Gyms
Home Access/Hardware
Home Centers/Feed
Home Services
Hotels & Motels
Insurance Services
Jewelry
Laundromat
Locks & Locksmiths
Newspaper/Publishing
Pet Services/Supplies
Pharmacies
Physicians/Dentists
Real Estate
Restaurants
Travel Services
Variety Stores
Video Tapes & Discs
TOTAL
# of Estabs
7
34
14
11
4
40
81
18
11
4
11
11
20
1
5
10
3
5
52
207
8
4
2
16
2
9
6
21
2
3
2
6
10
5
31
22
27
7
7
3
742
7
MARKET ANALYSIS
Commercial Opportunity Analysis
To determine the kind of retail and service
opportunities that exist within the Lancaster
Commercial District Trade Area, we synthesized three bits of information: the Effective
Buying Income, the types of businesses that
are receiving retail goods and services dollars, and the typical sales per square foot
those types of businesses generate.
For example: Knowing that we have $134
million “leaking” out of the Lancaster Commercial District Trade Area, and that of all the
dollars actually spent on retail goods and services, approximately 21%, was spent at dining establishments, then we can deduce that
$28.1 million (21% X $134 million = $28.1
million) of potential demand exists for dining
establishments.
8
The next step in the synthesis was to determine how much actual dining establishment
development must be done to satisfy this demand. Taking actual industry averages for
different types of businesses, to return to our
example, we know that dining establishments
typically gross $290 of sales per square foot
(SF) annually. Thus, if $28.1 million of demand (gross sales) exists in the market, then
we can deduce that approximately 97,000 SF
of dining establishment space must be developed to satisfy that demand ($28.1 million ÷
$290/SF = 97,000 SF).
This analysis was applied across all types
of retail goods and services in the Lancaster Commercial District Trade Area. We determined that approximately 360,000 SF of
space for retail goods and services must be
developed to satisfy the demand “leaking” out
to other communities.
Conclusions
It is clear that the Lancaster Commercial District Trade Area is languishing. It is losing significant retail goods and services spending to
surrounding communities that are attracting
new development.
DUE DILIGENCE
Retail and Food Services Sales Potential
Hobbies/Sports
Electronics/Appliances
Miscellaneous
Clothing/Accessories
Furniture/Home Furnishings
Health/Personal Care
Non-Store Retail (catalog/internet)
Building Materials
Gasoline Stations
Food Service/Drinking Places
Food & Beverage Stores
General Merchandise
Motor Vehicle/Parts
TOTAL RETAIL SALES
$8,852,810
$10,454,259
$11,934,077
$21,008,810
$21,929,784
$22,712,430
$25,794,914
$33,511,903
$35,450,604
$42,021,601
$55,082,763
$55,601,799
$87,076,811
$431,432,565
Retail and Food Services Actual Sales 2005
Hobbies/Sports
Electronics/Appliances
Miscellaneous
Clothing/Accessories
Furniture/Home Furnishings
Health/Personal Care
Non-Store Retail (catalog/internet)
Building Materials
Gasoline Stations
Food Service/Drinking Places
Food & Beverage Stores
General Merchandise
Motor Vehicle/Parts
TOTAL RETAIL SALES
$4,920,669
$5,810,805
$6,633,334
$11,677,354
$12,189,261
$12,624,280
$14,337,621
$18,626,965
$19,704,556
$23,356,921
$30,616,724
$30,905,221
$48,400,018
$239,803,729
Retail and Food Services Sales Leakage (30% Disc.)
Hobbies/Sports
Electronics/Appliances
Miscellaneous
Clothing/Accessories
Furniture/Home Furnishings
Health/Personal Care
Non-Store Retail (catalog/internet)
Building Materials
Gasoline Stations
Food Service/Drinking Places
Food & Beverage Stores
General Merchandise
Motor Vehicle/Parts
TOTAL RETAIL SALES
SQUARE FEET WARRANTED
Hobbies/Sports
Electronics/Appliances
Miscellaneous
Clothing/Accessories
Furniture/Home Furnishings
Health/Personal Care
Building Materials
Gasoline Stations
Food Service/Drinking Places
Food & Beverage Stores
General Merchandise
TOTAL RETAIL AREA
$2,752,499
$3,250,418
$3,710,520
$6,532,019
$6,818,366
$7,061,705
$8,020,105
$10,419,457
$11,022,234
$13,065,275
$17,126,227
$17,287,605
$27,073,755
$134,140,185
13,297
12,039
15,333
31,632
37,056
15,554
33,078
45,546
51,641
50,520
50,996
356,692
DUE DILIGENCE
The IH-35 Corridor District is, or is close to
being, fully developed. Its success is driven
by traffic counts on IH-35.
Development within the Central Lancaster
District is purely a function of housing growth,
and will be further aided by the installation of
frontage roads along the southern edge of IH20 at Lancaster’s northern border.
The truly dying gem of the City is the Historic
Downtown District. Reeling from a near fatal blow by the 1994 tornado, the District has
ever since limped along, depending mainly on
traffic generated by governmental services
workers and trips to the Post Office by Lancaster citizens. If the City Hall or the Post
Office were ever to relocate to a different District within the Lancaster Commercial District
Trade Area, the Historic Downtown District
would be adversely and irreparably affected.
While the 1994 destruction within the Historic
Downtown District was truly a devastating
blow to the City, there is an opportunity to create something positive from the event.
Recommendations
We recommend that very strong economic
incentives are used in the Historic Downtown
District to stimulate development in the area
before further decay of that Business District
occurs.
With almost three completely empty blocks
of city-owned land in the Historic Downtown
District Square, the City has a tremendous
amount of leverage that can be used to
stimulate growth in the District. The City of
Lancaster can create a catalyst for downtown
revitalization by selling the City owned land
at a steep discount to developers, or entering
into long-term ground leases with them. This
will offer developers a tremendous opportunity because their largest costs are typically
securing land for a development.
Creating a tax-increment-finance (TIF) district
in the Historic Downtown Square further of-
EXECUTIVE SUMMARY
fers real dollars that can be used to spur development of the area.
Creating public-private partnerships, much
like what has been done in many “Town
Square” projects around the country, provides
tremendous opportunities for both the City of
Lancaster and developers alike.
Given the City Staff’s office space needs, a
partnership could be established to create a
Municipal Complex in the Historic Downtown
District that would serve as an anchor tenant
to stimulate future retail growth. A developer
could develop, design and deliver the Municipal Complex, provided the City of Lancaster
enters into a long-term lease. This type of
arrangement would almost guarantee the
financing needed to complete the deal and
meet the growth and space requirements of
City Staff.
It is conceivable to imagine a mixed-use development on and surrounding the Square
that contains a new City Hall and Post Office
(designed according to the historic design
guidelines and well fitted with the other historic buildings on the Square). The development
could contain retail goods and service businesses along with residential space above on
the second floor of the building. This type of
development would be a boon for the District
and for the City of Lancaster, and would be a
step in the right direction in the City’s bid to
capture the retail goods and services “leakage” outlined above.
The heart of Lancaster is barely beating, but
the demand for retail goods and services
exists in large quantity. When the Historic
Downtown District is revitalized as a destination location, it will further energize the City
of Lancaster, enhance the quality of life and
help sustain the community.
9
DUE DILIGENCE
DESIGN STANDARDS
ECONOMIC ANALYSIS
11
DUE DILIGENCE
ECONOMIC ANALYSIS
Overview
HRWK Inc. has conducted a comprehensive
review of the city of Lancaster’s economic
factors. This report provides an overview
of the economic factors impacting the city of
Lancaster, its finances and the development
environment, including short and long term
development potential of the historic downtown Lancaster area.
Downtown Lancaster and the defined redevelopment site is a microcosm of many
older central city suburbs around the nation.
Downtown Lancaster is located several miles
off Interstate Highway 35E. Devastation by a
tornado and distance from major traffic arteries have combined to stifle new development
in the downtown Lancaster area.
The City of Lancaster is now exploring possible development options for the historic
downtown area given current and expected
market conditions and demands in the broader southern Dallas area. What economic factors are relevant while completing a review of
development opportunities?
This report will outline salient facts and figures
about the general area, economy, real estate
market, demographics and trends. The report
does not make a recommendation with regard
to redevelopment. The report simply provides
various data sets that local stake holders may
utilize when determining the future development of the downtown Lancaster area.
In Brief:
• The city has strong population growth potential and attractive median income levels,
especial among the African American community.
• Lancaster’s retail sector is not sufficient
to meet the consumer demands of its citizens
and does not compare well with other similar
communities.
• Employment potential rests in office, service and the retail sectors. The development
of the inter-modal terminal to the east will
command most industrial employment growth
and provide a catalyst for Lancaster’s employment growth.
13
• A relatively small increase in retail sector
development and employment will have a
dramatic impact on the economy of Lancaster
and city revenue projections.
• There are several threats facing Lancaster’s future economic development, including
retail diversification, traffic patterns and flow
and financial capacity.
• Lancaster enjoys multiple opportunities to
dramatically enhance its economy, including
quality of life, area employment/population
growth, transit possibilities and a progressive
municipal government participation in development.
ECONOMIC ANALYSIS
Demographics & Economic Characteristics
There are multiple demographic sets we
have compiled and reviewed for inclusion in
this report. Below are the highlights from our
Demographic and Economic Characteristic
analysis.
Ring Definitions:
14
The ring study data represent different trade
areas for Lancaster. The 1 mile ring is the
pedestrian trade area for the historic downtown area, the focus for our research. The 3
mile ring is the non-vehicular trade area for
the historic downtown area. The 5 mile ring
represents the “quick errand” trade area, basically the area limited by a 5 to 10 minute
vehicular trip. The 15 mile ring represents a
destination shopping trade area. The 20 and
25 mile rings represent the employment trade
area in the DFW Metroplex.
DUE DILIGENCE
people in their prime working years. Over the
next twenty-five years, this group will allow
for organic population growth with an ever increasing purchasing power.
NOTE: Lancaster is in the top 10% of all
communities in the nation where total income for African American households is
measured. The median household income
for African American households ($48,441) is
greater than that of the general population in
Lancaster. Lancaster is in the top 20% of the
nation in every economic category for African
American economic statistics. Lancaster has
a significant African America population earning in excess of $100,000 per year.
A recent article in the Dallas Morning News
(June 25, 2005) illustrated the power of the
African America household demographic and
its concentration in Lancaster. According to
the article, citing census figures, 7% of African American households in Lancaster earn
more than $100,000 per year.
Population:
There is significant conflicting information
on population figures and estimates for Lancaster. Our analysis of U.S. Census Data,
migration patterns and housing starts indicate
a fairly robust growth rate for Lancaster. The
census figures above seem low and inaccurate when compared with actual population
figures from the Texas Water Development
Board and the Texas Comptroller’s office.
Median Income:
Median household income is a key indicator
that commercial establishments review when
making location decisions. Lancaster’s median income characteristics are strong for the
area and make it an attractive location for
many retail establishments and other consumer driven development.
Median Age:
The median age in Lancaster is very favorable for a healthy economy. The age reflects
Retail Trends & Environment
An analysis of the retail activity in Lancaster
provides an insight into the long term health
and stability of the local economy. The U.S.
economy is increasingly driven by consumer
spending. Similarly, the overall tax structure
in Texas makes retail consumption an indicator of long term fiscal health for a political subdivision of the state.
Retail consumption in Lancaster is the most
troubling economic factor we have identified
during this analysis. Compared with other cities, as well as state and national statistics,
Lancaster’s retail economy is underdeveloped. Following is a comparison of Lancaster’s retail consumption data:
DUE DILIGENCE
When measured in isolation or compared with
area communities, Lancaster has an anemic
retail economy. This limited ability to capture
the retail consumption habits of its own citizens, as well as those within its natural trade
area, presents a significant obstacle to an
improved overall economy. Should this trend
continue, it will stifle other economic growth
as more of the cost to provide city services is
born by local property tax payers rather than
by a retail sales tax base.
Consumers across all income levels, for the
most part, have similar consumption habits.
Consumers generally spend the same percentage of income on similar categories. The
proportions of how consumers spend income,
does not change dramatically as income increases.
ECONOMIC ANALYSIS
• Lancaster has one of the highest percentages of residents earning over $3,400 per
month of comparable cities. The purchasing
power of this demographic is not captured by
the city of Lancaster.
• Cities similarly situated adjacent to Lancaster command much higher per capita taxable
sales. Due to an increased number of retail
outlets, among other factors, these cities,
with the exception of De Soto, capture twice
to four times the taxable purchases per capita
as does the city of Lancaster.
• Lancaster lacks jobs in retail. Comparable
cities employ twenty percent of their workforce in retail jobs while Lancaster only employs eight percent of its residents in retail.
Impact Analysis
Lancaster’s demographics suggest that its’ retail sales tax revenue should be robust when
this axiom is applied. The median household
income in Lancaster is above the state average and is in the top 20% nationwide. However, Lancaster does not capture near the
national average of
• According to Census Bureau and Bureau
of Labor Statistics figures, the average Lancaster resident spends $11,438.36 annually
on taxable purchases. However, Lancaster is
only realizing $5,246.80 in per capita taxable
sales. More than half of resident’s taxable
spending is being done outside of the city.
Additional economic development in the retail sector could have a tremendous impact
on the Lancaster economy. For every percentage point higher the percent of residents
employed in retail becomes, Lancaster can
expect to see an effect four times that size
on the amount of taxable revenues per capita
captured.
Complementing this effect is the effect that
additional retail outlets could have. Adding
just ten more outlets could increase revenues
captured per person by 1.7%. In 2005, adding just ten more outlets could have increased
taxable sales by almost three million dollars.
Had those ten more outlets employed an additional 1% of Lancaster’s workforce in retail,
there could have been an additional increase
15
ECONOMIC ANALYSIS
of over seven million dollars in total taxable
sales. A sizeable increase in sales tax revenues can be increased with added jobs and
retail outlets.
In 1995, the Energy Information Administration released its “Commercial Building Energy
Consumption Report. The report contains
survey data indicating that retail establishments, in various categories, average approximately 1,074 square feet per full time
equivalent employee. (A full time equivalent
[FTE] employee is defined as someone who
works at least 35 hours per week or a combination of workers whose hours total at least
35 hours per week.)
16
Other members of the 5G team estimate,
based upon solid statistical data, that the Lancaster area can support an additional 350,000
square feet of retail space. This level of new
retail space would require approximately 325
new FTE in the retail sector. These new retail
employees would have an annual payroll of
approximately $4,475,000 exclusive of ownership.
Using existing data, we can estimate new
local retail sales of approximately $78.3 million per year. At a local capture rate of 2%,
Lancaster could realize an additional $1.56
million in local sales tax revenue. These figures represent direct estimates based upon
expected new construction and occupation.
Any new retail or other new employment
development in Lancaster will also have a
broader impact on the community, southern
Dallas and the state as a whole. In order to
measure this impact, multipliers developed by
the U.S. Bureau of Economic Analysis were
used. The multipliers provided by the BEA
give estimates of the number of new jobs created in Lancaster as a result of the employees of the new retail establishments. BEA
multipliers for the retail industry were utilized
to estimate the direct employment impact of
these employees.
These figures indicate an additional 404 jobs
DUE DILIGENCE
will be created to directly support the new
retail establishments in Lancaster. These
404 jobs will have a payroll of approximately
$5.967 million per year. This is in addition
to the retail employment and payroll located
within the additional 350,000 square feet.
Employment
The Lancaster area is part of a single Southern
Dallas economic community with a relatively
mobile workforce. The median commute time
in the area is just over 30.5 minutes (source:
city-data.com), suggesting that very few residents are able to find desirable employment
near the Lancaster bedroom community.
This figure demonstrates that Lancaster residents are willing to work a great distance from
their home. The data for surrounding area
also suggests that residents of other DFW
communities are willing to drive a great distance to suitable employment, even employment in Lancaster.
Lancaster’s geographic location, near the
major Dallas employment center allows Lancaster to compete with other bedroom communities in the area. Furthermore, the development of a Rail Port (Dallas Logistics Hub)
employment center will enhance Lancaster’s
desirability for spin off employment center opportunities.
The supply of industrial and business park
green-field sites is quite adequate for the
area. However, it is likely that much of the
development will occur in the master planned
Rail Port offering. Our report assumes that
the Rail Port will garner the majority of new
industrial and logistics employment center
development in the area for the foreseeable
future.
The Texas and national economies are moving to a more service and logistics oriented
economy and away from industrial production. As the population of the area grows, the
service sector will continue to expand and
demand additional inventory of suitable real
DUE DILIGENCE
property. It is in this area, that Lancaster may
have its greatest employment center opportunity.
ECONOMIC ANALYSIS
• Educational Facilities – providing employment pool
• Abundant city owned / controlled real estate
Increasingly, intangibles such as design,
quality and amenities play a large roll in site
location decisions for commercial development. The demand in the Southern Dallas
for business park space, particularly Class A
and B office space is something addressed
in other sections of the 5G report. However,
one can assume the demand for this type of
real estate product will rise significantly with
population and industrial / logistics employment in the area.
Demand for retail and restaurant space is expected to increase along with the population.
Retail and restaurant development is a function of population and disposable income,
both of which are growing in Lancaster.
The factors above form a tremendous basis for economic development opportunity in
Lancaster. However, there are several existing conditions that threaten Lancaster’s future
development. The threat is even more pronounced in the historic downtown area of the
city.
• Retail Diversification: Our analysis indicates
that the City of Lancaster derives as much as
45% of its annual retail sales tax revenue
from two stores. Neither Home Depot nor
Wal-Mart has any long term loyalty to Lancaster. Both companies have demonstrated
a propensity to close a given store without
warning to local jurisdictions. Should either
or both stores close, Lancaster would face a
significant financial crisis.
Threats / Opportunities
Lancaster is facing a critical economic development juncture. The opportunity exists
for Lancaster to become an employment and
retail destination for southern Dallas County.
Steps that the city takes over the next two to
five years will dictate its progress toward that
end.
The City of Lancaster has adopted as a priority the further development of a robust retail
economy. This report and planning exercise
is an affirmative step in that direction. Several factors enhance the City’s opportunity to
become an employment and retail hub for the
area.
• Quality of life and historic charm
• Inter-modal terminal and development next
door
• Potential for a Dallas Area Rapid Transit terminal, Regional or commuter rail
• Progressive city leadership
• Downtown Traffic Patterns: The Texas Department of Transportation daily traffic count
information indicates a potential problem for
the historic downtown Lancaster area. The
numbers suggest that currently, downtown
Lancaster is an “errand” destination. Traffic is driven to the downtown area by citizen
need to access governmental services. The
U.S. Post Office and Lancaster City Hall are
the primary destination of downtown visitors.
Should either relocate away from the historic
town center, retail economic activity will suffer.
• Traffic Flow: The current traffic flow and infrastructure is not designed to funnel people
into the historic downtown area. As the area
population and employment develops (intermodal terminal), Lancaster is not poised to
benefit from increased economic activity in
the historic downtown due to the difficulty in
driving to the area.
• Budget / Investment Constraints: The City of
Lancaster’s financial ability to drive economic
17
ECONOMIC ANALYSIS
development and growth is limited. This is
tempered somewhat by the City’s ability to
participate in development activities with land
and other, non financial tools.
Conclusion
A complete review of the data and economic
analysis of the historic downtown Lancaster
area suggests that there are significant opportunities and threats facing its redevelopment. The demographic makeup and growth
patterns of the area, coupled with the above
average median income, are a tremendous
asset for redevelopment and marketing to
development partners. However, traffic patterns and a reliance on 1 or 2 key businesses
(Wal-Mart and the U.S. Post Office) for considerable revenue or commercial traffic is a
significant weakness.
18
The opportunity exists to redevelop the area,
attracting a good mix of retail and office employment to the historic downtown. Southern
Dallas also lacks a significant retail / entertainment destination. Downtown Lancaster, if
developed properly could capture that designation. The threat is that another community
may move to fill that gap before Lancaster.
Certainly HRWK can recommend proactive steps that Lancaster might undertake.
However, it is incumbent upon the citizens of
Lancaster to recognize the economic factors
under which this redevelopment plan is progressing. Lancaster must weigh these factors and make its own proactive decision to
address these factors. Once that strategic
decision is made, tactical plans must be developed to accomplish those strategic goals.
Phase II of the Historic Downtown Redevelopment Plan is designed to accomplish the
logical next steps.
DUE DILIGENCE
DUE DILIGENCE
SITE DATA & SITE ANALYSIS
KEY EXITS / SIGNAGE
PARKS / DEVELOPMENT
FIGURE GROUND DIAGRAM
ZONING / LAND USE
BUILDING USE
PROPERTY MARKET VALUE
TRAFFIC / ROUTE ANALYSIS
STREETCAPES / INTERSECTIONS
CONCLUSION
22-23
24
25
26
27
28
29
30-31
33
21
DUE DILIGENCE
KEY EXITS / SIGNAGE
I-20 & N. DALLAS AVE
I-20 & BONNIE VIEW RD.
22
I-35 & PLEASENT RUN RD
Lancaster lacks a strong sense of place and identity
that can easily be recognized. The high-lighted exits
(above) work as ‘gateways’ to the city. These need
to be marked clearly with signage and function as
thresholds to the City of Lancaster.
I-35 & W. BELT LINE RR
I-35 & BEAR CREEK RD
There are two issues that need attention: 1. Way finding 2. Identify. Essentially they do the same job with
different results. Every successful town or development marks their developed area with their logo and
branded name or icon. Way finding for the general
public and tourism is essential to create a more car
friendly and walk friendly environment.
DUE DILIGENCE
SITE LOCATION
Lancaster Town Center lacks the advantage
that many town squares / developments in
the metroplex share. In the case of Shops at
Legacy, Mockingbird, South Lake, to name a
few the immediacy to the major thoroughfares
places them at an advantage. Lancaster Town
Square is essentially in the middle of the city
and a good distance from any major highway.
In this case wayfinding and signage become
essential.
South Lake
SOUTH LAKE
IRVING COWBOYS STADIUM MASTER PLAN (FUTURE)
ADDISON CIRCLE
PLANO DOWNTOWN
DOWNTOWN MC.KINNEY
SHOPS AT LEGACY
161
183
Duncanville
114
635
30
12
67
23
356
DeSoto
Waxahachie
35
635
35
35
Dallas
20
Richardson
Lancaster
75
175
30
45
Plano
Allen
Wilmer
45
Hutchins
Ennis
McKinney
SNIDER PLAZA
MOCKINGBIRD STATION
GREENVILLE
UP TOWN
ARTS DISTRICT
DOWNTOWN
LANCASTER
N
PARKS / DEVELOPMENT
DUE DILIGENCE
24
CURRENT PARKS & FUTURE TRAILS
CREEKS & FLOOD PLAINS
CURRENT & FUTURE DEVELOPMENTS
ALLEN GROUP
RESIDENTIAL / RETAIL
CITY OF LANCASTER
SOURCE: 2006 HIKE & BIKE TRAIL MASTER
PLAN SYNOPSIS, DCAD
SOURCE: CITY OF LANCASTER, ALLEN
GROUP
DUE DILIGENCE
FIGURE GROUND DIAGRAMS
DOWNTOWN MCKINNEY _ BUILDING BLOCK DENSITY
LANCASTER - BUILDING BLOCK DENSITY
SPACE
IN
RELATION
TO
OPEN
DOWNTOWN MCKINNEY _ STREET GRID
25
DOWNTOWN MCKINNEY
LANCASTER - BUILDING BLOCK DENSITY
Block
IN
RELATION
TO
EACH
DOWNTOWN MCKINNEY
The scale of the downtown street blocks does
not transition well into the northern street grid.
This demonstrates the scale shift from town
center to its immediacies (left, below).
DOWNTOWN BLOCKS
OVERLAID ON NORTHERN
RESIDENTIAL BLOCK
LANCASTER - STREET GRID
DUE DILIGENCE
ZONING & LAND USE
Downtown Lancaster is currently zoned as
commercial with some flexibility for mixed
used. To its immediate east, along the BNSF
rail road tracks is mainly light industrial, single
family residential remains the majority to the
north, south and west of downtown. There is
a cluster of high density housing zoned north
of downtown, however there are only two high
density housing facilities available immediate
to the town center.
The Land Use map presents what the land is
actually being used for; in comparison to the
zoning map it does not demonstrates much
variance. However, it validates the need for
revaluation of the development area. It demonstrates a desire for mixed-use environment
and potential for a denser core.
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ZONING
The significant portion of vacancies (both in
buildings and empty lots) permits the opportunity for a recreation of downtown with less effort. This only demonstrates land vacancy and
not building. The figure ground map shows a
clear diagram of the large unoccupied lots
(according to Dallas Central Appraisal District
on Jan 07).
CURRENT LAND USE
SF-4
SINGLE FAMILY
SF-5
SINGLE FAMILY
SF-6
SINGLE FAMILY
MF
MULTY-FAMILY
LI
LIGHT INDUSTRIAL
CS
COMMERCIAL SERVICE
CITY OWNED PROPERTY
CIVIC USE
VACANT LOT
VACANT
DUE DILIGENCE
BUILDING USE
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RETAIL
AUTO SERVICE
SINGLE-FAMILY RESIDENTIAL
RELIGIOUS
MULTI-FAMILY RESIDENTIAL
HISTORIC
OFFICE
SURFACE PARKING
CIVIC
PROPOSED TRAILS/ PARKS
LIGHT INDUSTRIAL
PROPERTY MARKET VALUE
DUE DILIGENCE
DEVELOPMENT SITE PROPERTY VALUE
28
CITY OWNED PROPERTY VALUE
LAND VALUE ($1000)
0 - 10K
10.1 - 50K
50.1 - 100K
100.1 - 150K
150.1 - 200K
200.1 - 300K
300.1 - 400K
400.1 - 500K
500.1K +
VACANT LOT PROPERTY VALUE
DUE DILIGENCE
TRAFFIC / ROUTE ANALYSIS
The major routs to/through Downtown Lancaster bear over 9,000 cars (daily average
based on TXDOT 2004) that pass through the
core. More than half of these drivers are driving north/south on Dallas Ave. The remainders
dissipate south, east and west. Downtown
core needs to be easily accessed by mean
of visual signage and road accessibility in order for it to be desirable. Road blocks and too
many turns in order to reach the celebrated
center will deter most drivers.
24 HR TRAFFIC COUNT
# CARS
150
300
600
1200
2400
4800
9600
ACROSS TOWN TRAFFIC COUNT _ SOURCE: NCTCOG /
TXDOT 2004
29
MAJOR TRAFFIC ROUTES
MAIN AXIS THROUGH SITE
POINT OF ENTRANCE
SIGNIFICANT CORNER LOTS
STREETSCAPE
DUE DILIGENCE
POINTS OF ENTRANCE
STREETS
TOWN CENTER NEED TO
WITH LANDSCAPE AND GOOD VISUAL SIGNAGE
LEADING TO
BE TREATED
30
ALONG MAJOR AXIS
SHOPS AT LEGACY
DOWNTOWN CARROLLTON
ALONG MAJOR AXIS
DUE DILIGENCE
RELEVANT INTERSECTIONS
A - LOOKING WEST
A
B
C
INTERSECTIONS WITH VISUAL IMPACT
B - LOOKING NORTH
31
C - LOOKING NORTHWEST
Corner buildings are neighborhood landmarks, and become iconic corners. Busy intersections are high-profile and buildings at
such locations need to be more suggestive.
Corner buildings that enhance the neighborhood and set a strong design standard for the
streetscape can be very successful. These
can also be hot-spots for retail and commercial usage, due to their high-visibility.
EXAMPLES OF PROMINENT CORNERS / INTERSECTIONS
KIERLAND CORNER
VICTORIA GARDENS
DUE DILIGENCE
CONCLUSION
cio-economic advantage over its competitor
cities. The City can also maintain an enviable
quality of life by actively promoting and stimulating retail goods and services development
in the Downtown District.
The Downtown District contains the most positive attributes of a traditional neighborhood
design and the Historic Town Square offers
the authentic and historic elements sought
by new town center developments across the
country. The City possesses significant land
holdings, with over 920 acres and 240,000
square feet of improvements owned within the
city limits, coupled with significant city-owned
property located within the Downtown District
itself. With resources like this, Lancaster already has a tremendous advantage over its
competitor cities…property ownership.
CONCLUSION
As our analysis indicates, the development
and revitalization of Lancaster’s Historic Town
Square and Downtown District can be supported by current households and sustained
by future residents of the City.
Lancaster, however, possesses a narrowing
window of opportunity to develop the appropriate retail and service infrastructure necessary
to capture the disposable income and satisfy
the shopping preferences of their citizens.
As the population increases in the Southern
Sector of Dallas County, Lancaster will face
increased competition from adjacent communities who have already grown and will continue to expand their retail base and service
businesses. To that, Lancaster will be better
served by further diversifying its retail sales
tax base, as 45% of its annual retail sales tax
revenue is derived from only two stores, Home
Depot and Wal-Mart. The loss of these retailers would truly be devastating to the City.
We believe that with the proper alignment of
civic priorities, city resources and political resolve, Lancaster can gain a competitive so-
In our estimation, many of the elements required to create a successful destination are
already in place. What is required is a catalyst to inspire further retail goods and services
businesses to develop. Many creative solutions exist to create this catalyst, such as the
development of a new City Hall and United
States Post Office on the Town Square. This
development would create density and draw
sufficient traffic to attract new retail and business services to the area. Another creative
solution would be to create a Tax Increment
Finance (TIF) zone that includes the Downtown District. Implementation of other creative
Public-Private Partnerships to further spur
economic growth in the area is also strongly
recommended.
The next phase of our project will focus on
creating a compelling vision that heightens
the sense of what is possible and further defines the environment for revitalization.
We will work collaboratively with City Staff,
Elected Officials, Civic Leaders and other
Stakeholders to add structure, plans and designs for not only the economic realities that
exist today, but what Lancaster can be tomorrow.
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