TA-03-02G-06: 

Text amendments to 20-1107 regarding standards for Market Impact Analysis as part of site plan or zoning process.

 

 

 

 

Pg No.

Section No. 20-

Recommended Text Change

 

 

Article 11.  General Development Standards

 

11-10 & 11

1107

20-1107                      Retail Market Impact Analysis

 

(a)             Applicability

 

An independent market impact analysis shall be required for any application for site plan, development plan, or zoning that could result in 50,000 square feet or more of additional Floor Area for retail businesses in the City.  Developments that would create less than 50,000 square feet of added retail space in the City or those that would reoccupy retail space that is already part of the City’s retail database (whether currently occupied or currently vacant) shall be exempt from the independent market impact analysis.

 

(b)             Definitions

 

(1)       A retail business shall be defined as one whose primary coding under the North American Industrial Classification System (NAICS) falls into at least one of the following sectors or sub sectors:

 

(i)             Sectors 44-45: Retail Trade;

 

(ii)            Sub sector 722: Food Services and Drinking Places;

 

(iii)           Sub sector 811: Repair and Maintenance; and

 

(iv)         Sub sector 812: Personal and Laundry Services.

 

(2)       Retail space shall be defined as enclosed Floor Area that is principally intended for occupancy by any of the above kinds of retail businesses regardless of whether that space is vacant or occupied by other types of business.

 

(3)       Retail space occupied by a non-retail use shall be identified with respect to the calculations of Section 20-1107.

 

(c)             Criteria for Independent Market Impact Analysis

 

(1)       The independent market impact analysis will be undertaken by an independent consultant selected by the City from a list of approved consultants certified for this analysis by the City of Lawrence.  The applicant may provide comment and advice concerning the selection of the consultant, however, the ultimate selection of the consultant shall be determined by the Director of Planning.

 

The applicant shall bear the expense of the independent market impact analysis.

 

(2)       The market impact analysis shall provide at least the following information:

 

(i) The independent consultant will verify that the facts, assumptions, projections, and market data provided by the City are valid and reasonable. 

 

(ii) The City will provide sales tax information disaggregated to the extent possible by region of the city and type of retail activity. Based on that data, the independent consultant will determine what, if any, retail sectors are underserved in the City of Lawrence.  Such determination will be based upon generally accepted norms for retail consumption per capita or per household.  Sufficient information shall be provided as to allow for replication and verification of the consultant’s conclusions.

 

(iii)Computation of a hypothetical citywide retail space vacancy rate using current (i.e., at the time of application) data on the City’s existing retail space vacancy rates.  The independent consultant shall assume that the new retail space will either be entirely vacant when opened or will cause an equal amount of space elsewhere in the city to become vacant.

 

(iv) Based upon population and disposable income trends, as well as projected retail absorption by NAICS sector or sub sector, the independent consultant will prepare a phasing plan for the development of various retail outlets.  Such plan would not be site specific, but rather it would forecast absorption rates for the city at large.   The plan would be designed to avoid an unacceptable citywide vacancy rate within retail properties to ensure that well served retail sectors are not prematurely expanded.  Pursuant to the Comprehensive Plan, the project shall not be approved if the market impact analysis indicates the commercial project or proposed phase cannot be absorbed into the community within three years from the date of its estimated completion, or that it would result in a community-wide retail vacancy rate of greater than 8 percent.

 

4)               The Planning Commission, the City Commission or the Planning staff may require additional data, analysis or information for the market impact analysis depending upon the proposed project or the proposed phase of the project.  The Planning Commission shall establish standards and methods for analyzing retail market data.

 

 

(d)             Responsibilities of the City

 

(1)       The Lawrence Douglas County Metropolitan Planning Office will maintain a list of not less than three independent consultants who are certified by the Planning Office to conduct the research and analysis necessary for the market impact analysis reports.  The Planning Office will, from time to time, require these consultants to participate in appropriate training and informational sessions both to retain certification and to learn about new data and techniques suitable for the market impact analysis.

 

(2)       The Lawrence Douglas County Planning Office will maintain a database of retail space and retail businesses in the City.  This database will contain nonproprietary information, such as business name (or vacancy), address of the space, estimated Floor Area and land /parcel area of the space, NAICS code of the establishment, general physical condition of the exterior of the space, zoning of the land/parcel, and related information that is readily accessible and useable by the public, by City officials, applicants for retail space development or occupancy, and independent consultants. The database shall be analyzed annually (at a minimum) to determine and document the conversion of retail space into non-retail space and vice-versa.  The database shall undergo annual updating, including field research, at least annually but may be subject to periodic updating as revised information is obtained during normal city government operations.

 

(3)       The Lawrence Douglas County Planning Office will maintain a database of retail sales tax receipts disaggregated by region of the city and type of retail activity as a measure of retail sales in the City of Lawrence.

 

(e)              Relationship of Market Impact Analysis to Project Approval

 

The market impact analysis shall be used in conjunction with the appropriate review and decision making criteria in the evaluation of zoning map amendment applications and decisions and approvals of development plans and site plans.  The market impact analysis, coupled with information maintained by the Lawrence Douglas County Planning Office, is designed to help guide the decision process to avoid: (1) unreasonably impacting retail activity in the Central Business District; and (2) introducing retail businesses that cannot be absorbed by the market thus adversely impacting other retail districts.

 

Additionally, the market impact analysis is not intended to regulate the specific types of businesses proposed, but coupled with information maintained by the Lawrence Douglas County Planning Office, should be used to identify underserved retail sectors and provide compelling rationale for attracting retail businesses to satisfy this market demand.

 

 

 

 

 

STAFF REVIEW (Provided for the Planning Commission at their April 2006 Meeting)

 

Section 20-1107 of the “Development Code, November 11, 2005 Edition” was recommended for approval by the Planning Commission at their February 2006 meeting. This text amendment is for the consideration of alternative language that was developed by an ad hoc committee to the Planning Commission.

 

Specifically, the ad hoc committee identified the following changes to the original text developed by Development Strategies Inc.:

1.      Add that an independent market impact analysis can be required for any application regarding a development plan, not just a site plan or zoning application under Section 20-1107 (a).

2.      Under Section 20-1107 (b) 1, North American Industry Classification System (NAICS) sub sectors will also be used in addition to sectors.

3.      In addition to the calculation of retail uses in retail spaces, retail space occupied by non-retail use will also be identified under section 20-1107 (b) 3.

4.      Clarified that the applicant may provide comment on the selection of an independent consultant from an approved list, but that the choice will ultimately be up to the Director of Planning under Section 20-1107 (c) 1.

5.      Section 20-1107 (c) 2 clarifies that the applicant bears the expense of the independent market analysis.

6.      Section 20-1107 (c) 3 states that the independent consultant will verify data provided by the City and that the City will also supply sales tax data. The consultant will then determine sectors that are underserved based upon norms for retail consumption per capita per household.

7.      The consultant will use population and income trends, as well as projected retail absorption rates to design a phasing plan for the retail development. The phasing plan would be based upon city-wide and not site-specific absorption rates. Specifically, Section 20-1107 (c) 3 (iv) calls for projects to be fully absorbed into the market within 3 years from the completion date of the project or retain an under 8% community wide vacancy rate.

8.      Section 20-1107 (c) 4 allows for the Planning Commission, City Commission or staff to require additional data, analysis or information and allows for the Planning Commission to establish standards and methods for analyzing the retail market data.

9.      Section 20-1107 (d) describes the responsibilities of the City and determines that the database should be analyzed and updated annually. It further states that the Planning Office will maintain a database of sales tax receipts.

10.  Section 20-1107 (e) outlines the relationship of Market Impact Analysis to project approval and was clarified in new language by the ad hoc committee. In short, the market impact analysis will guide the decision process to avoid unreasonably impacting retail activity in the Central Business District and introducing businesses that cannot be absorbed by the market. Additionally, the information will be used to identify underserved sectors in order to attract business that will satisfy market demand and provide a good fit.

 

At the March 8th Mid-Month meeting, the Planning Commission discussed revisions to the above language. Changes to the revised Retail Market Impact Analysis section (20-1107) were identified, specifically:

  1. Change “sector” to “sectors” under Section 20-1107 (b) 1 (i).
  2. Remove the word “conspicuously” from Section 20-1107 (b) 3.
  3. Propose alternate text for Section 20-1107 (c) 2 (ii)
  4. Propose alternate text for Section 20-1107 (d) 3

 

In addition, staff supplied alternate language under 20-1107 (e) that clarifies the intent of the Market Impact Analysis on project approval regarding the regulation of specific types of businesses.

 

These changes have been made on the current version of the document attached to this memo.

 

The Ad Hoc Committee on Retail Impact Studies developed a set of “Standards for Retail Impact Studies” to act as a set of operating procedures that will guide analysis of retail market studies to be completed by City Staff for Lawrence as a whole, as well as independent retail market studies completed by developers of individual projects. These standards are designed to provide guidelines for the analysis of retail impact studies based on certain numerical indicators, as set forth in Horizon 2020 Chapter 6, Policy 3.11 and the proposed New Development Code, Chapter 20, Article 11. These standards are to be considered for adoption by the Planning Commission on the April 19, 2006 agenda as Item #20.

 

Estimation of Staff Hours:

Staff estimates that to maintain the duties associated with the Retail Market Impact Analysis section (20-1107) of the proposed new Development Code that it will take one person approximately 386 hours a year of working time. First year hours may be more based on initial set-up of the required files and data.

 

 

Task

Hours per Year

Inventory of Retail Supply

0

     Ongoing Database Management

50

     Annual Update

160

Demand Side Figures

0

    Annual Sales Tax Receipt Database Update

40

    Annual Sales Tax Data Analysis

40

Individual Project Review (estimation of 5/year)

80

Other Administrative Duties

16

Total

386