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Kim Pendergraft Affiliate Services Coordinator Texas Municipal League

© Copyright Buxton, 2009 – Private & Confidential – Not for redistribution without prior approval.

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Bill Shelton Partner CommunityID, Buxton

Amy Wetzel

Bryan Spain

Senior Vice President

President

CommunityID, Buxton

Buxton Development

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Today’s Agenda • Retail Development in a Changing Economy • Community and the Development Partner • Round-Table Discussion with Developer Bryan Spain

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Retail Development in a Changing Economy

© Copyright Buxton, 2009 – Private & Confidential – Not for redistribution without prior approval.

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What Makes Headlines

Starbucks To Close 600 Stores

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What Didn’t Make Headlines Planned Store Openings Walgreen’s - 495 JCPenney - 36 William-Sonoma - 51 Lowe’s - 75 Whole Food - 34 Tractor Supply - 70

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Challenges and Opportunities Outlets and Factory Centers 35 new ones by January 2011 18 expanding in 2009-2010

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Challenges and Opportunities Downsizing: Mid-and Smaller Sizes Cheesecake Factory - 2,000 sq. ft. Wal-Mart’s Neighborhood Markets - 40,000 sq. ft. Home Depot - 28,000+ sq. ft. Walgreens - 5,000 sq. ft. Office Max - 2,000 sq. ft.

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Challenges and Opportunities Discount Retailers Scoring Dollar General - up 10.1% McDonald’s - same store sales up 7.1% Family Dollar - up 6.4% Sam’s Club - up 6.2% (excludes gasoline)

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Challenges and Opportunities Luxury Stores Find Outlets Saks Off 5th - 4 stores Neiman Marcus Last Call - 3 stores Nordstrom Rack - 10 stores

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Challenges and Opportunities Off-Mall Locations JCPenney - Smaller stores off-malls Kirkland - 15-20 new stores off-malls Sears - Retooling to outside of malls Sears - Converting Kmart into MyGofer; a drivethru warehouse

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Challenges and Opportunities U.S. Retail Market Attractive Ikea - Sweden Tesco Fresh & Easy - Britain H&M - Sweden

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Challenges and Opportunities Challenge: Keeping Perspective Pent-Up Shopping Demand Auto Dealerships - Reuse Opportunities Smaller Concepts - New Markets

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Community and the Development Partner

© Copyright Buxton, 2009 – Private & Confidential – Not for redistribution without prior approval.

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Community Retail Challenges • • • • •

Growth/development/progress/image Lacks customer base Risky investment (real or perceived) Competition outside trade area No dedicated champion

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The Retail Challenge for Communities Lack of retail understanding and muscle

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Attracting the Developer Partner: Build a Compelling Story • • • •

Validate the market potential (unmet need) Align incentives and financing to share risks Streamline regulatory processes Assemble sites with retail potential

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Sites With Retail Potential First Cut Customers Visible Access

Second Cut Size, Shape Infrastructure Competition

Third Cut Zoning Ownership Impact 18


Understanding the Developer Partner A developer must take extraordinary risks to develop in unproven markets.

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The Community’s Role Extraordinary efforts are required to lessen developer’s risks.

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Overcoming Risks • • • •

Lack of customer density Low income/spending levels Unproven or stagnant markets Lack of comparable existing businesses

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Extraordinary Efforts Build Community Commitment • Avid and vigorous commitment • Developers want predictability • Good planning attracts development

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Sustainable Community Efforts • • • • •

Leadership’s long-term commitment Continuity of programs and policies Speed-to-market Manage development like well-run shopping malls Cooperative marketing efforts

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The Developer Partner’s Role • • • •

Incorporate city’s vision into development Site planning in context of community Marketing & leasing Developing the property

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Selecting the Developer Partner • Create and send RFP • Perform due diligence • Select the developer

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Texas Municipal League Annual Conference Positioning Your Community for Retail: Maximizing Retail Opportunities Tuesday, October 22, 2009 9:00 – 10:15 Fort Worth, Texas

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Texas Municipal League ~ Educational Calendar of Events ~ June 29, 2009

Texas Municipal League Legislative Wrap-Up

Austin

July 17, 2009

Texas Municipal League Small Cities’ Problem-Solving Clinic

Alpine

July 24-25, 2009

TML-AMCC Newly Elected City Officials' Orientation

Austin

August 7-8, 2009

TML-AMCC Newly Elected City Officials' Orientation

Austin

August 14, 2009

Texas Municipal League Small Cities’ Problem-Solving Clinic

Canyon

September 3-4, 2009

Texas Municipal Human Resources Association: Employment Law Seminar

Galveston

September 11, 2009

Texas Municipal League Small Cities’ Problem-Solving Clinic

Tye

October 21-23, 2009

Texas Municipal League Annual Conference and Exhibition

Fort Worth

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Contact Us Texas Municipal League 512-231-7400 www.tml.org Buxton buxton@buxtonco.com www.buxtonco.com 888-2BUXTON 28


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