Manitou Springs East Corridor

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Manitou Springs East Corridor Manitou Springs, CO
Preliminary Market Findings Discussion August
2006 Presented to Manitou Springs
EDC Presented by Leland Consulting Group
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Background

• The Citys East Corridor has suffered
  economically in recent decades
• Remnants of the auto tourism based economy of
  1950s era motels, associated retail remain
• but with deterioration of infrastructure
  properties, underutilization (some lodging has
  given way to single room occupancy rentals) and
  general economic stagnation
• Initial Market Questions
• What are general trends in demographics,
  lifestyles, and economics that could impact
  redevelopment success?
• What level of demand for residential, retail, and
  office development are supported by area
  household, employment, and tourism growth?

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Primary Trade Area

• Trade Area encompasses
• for retail land uses
• potentially competitive retail centers
• resident households most likely to support
  retail uses
• for residential land uses
• residential projects likely to compete for the
  same household growth

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Demographic Profile
Household Characteristics
Household Growth

• The primary trade area has smaller households,
  more renters, and more non-family household
  arrangements versus the county overall

• The primary trade area represents approx. 6 of
  county households
• Growth is somewhat slower in the trade area
  versus the county

Source U.S. Census ESRI, Inc. and LCG CAGR
Compound Annual Growth Rate
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Demographic Profile
Ethnicity (2006)
Population by Age (2006)

• The primary trade area is less diverse than in El
  Paso county overall

• The 3-mi. trade area skews considerably older
  than the county as a whole

Source U.S. Census ESRI, Inc. and LCG CAGR
Compound Annual Growth Rate
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Demographic Profile
Household Income (2006 est.)
Educational Attainment (2000)

• Educational attainment is somewhat higher in the
  trade area than in El Paso county as a whole

• Because of its smaller households, the trade area
  actually has a higher per capita income than El
  Paso County despite having lower household incomes

Source U.S. Census ESRI, Inc. and LCG CAGR
Compound Annual Growth Rate
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Lifestyle/Psychographic Segments
Top Trade Area Lifestyle (Tapestry) Segments
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Lifestyle/Psychographic Segments
Top Trade Area Lifestyle (Tapestry) Segments
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Lifestyle/Psychographic Segments
Top Trade Area Lifestyle (Tapestry) Segments
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Lifestyle/Psychographic Segments
Top Trade Area Lifestyle (Tapestry) Segments
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Lifestyle/Psychographic Segments
Top Trade Area Lifestyle (Tapestry) Segments
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Lifestyle/Psychographic Segments
Top Trade Area Lifestyle (Tapestry) Segments
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Lifestyle/Psychographic Segments
Top Trade Area Lifestyle (Tapestry) Segments
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Lifestyle/Psychographic Segments
Top Trade Area Lifestyle (Tapestry) Segments
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Lifestyle/Psychographic Segments
Top Segments in Select Comparison Cities
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Retail Strategy Discussion

• Projected new retail absorption is modest for the
  East Corridor
• Visitor growth, a key component of historical
  retail trade in Manitou Springs, appears
  relatively flat
• Trade area residents are in close proximity to
  Colorado Springs shopping options not a captive
  audience
• Because of successes in west Manitou Springs, the
  East Corridor could begin to benefit from
  spill-over
• particularly among artists/galleries out-priced
  on the west side
• Opportunity to capitalize on superior visibility
  of Car Museum area and unique adjacency to trails
  river around Car Wash/Dillon Motel/Cottonwood
• Recommend working towards assembly of the
  westernmost Corridor properties for themed
  destination redevelopment
• promoted as flagship retail location capable of
  rekindling visitorship
• exploiting visibility/traffic
• integrating with unique urban/natural overlaps (a
  la REI at Confluence Park in Downtown Denver

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Retail Activity/Trends
Growth in Retail Sales by Municipality
(inflation-adjusted to 2004 dollars)
Fountain, Cripple Creek, and Woodland Park have
shown the largest gains in total retail sales
since 1990 Other than an aberration in 1994-95,
Manitou Springs retail sales have been relatively
flat (adjusting for inflation), suggesting that
visitor trade has been declining enough to offset
population gains
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Retail Activity/Trends
Retail Sales Per Capita by Municipality
(inflation-adjusted)
As a captive market for both its own residents
and a large tourist population, Estes Park has
high retail sales per capita. Despite strong
visitor traffic, Manitou Springs and Fountain are
the lowest of this group, in part because their
residents are close enough to Colorado Springs to
shop there
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Retail Demand
Projected growth in trade area rooftops (along
with replacement of obsolete space growth in
visitor traffic) should generate demand for
almost 220,000 s.f. of new retail demand over 10
years The East Corridor could capture almost
44,000 s.f. of this demand by 2016
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Retail Tenant Site Criteria
Note that 3-mi. trade area population is
approximately 25,000, with traffic counts of
approximately 28,000 ADT
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Residential Strategy Discussion

• Demand for wide range of price points (including
  some higher end) should naturally look towards
  the East Corridor over time
• Given scarcity of developable land in Manitou
  Springs
• Area psychographic/lifestyle segments are very
  consistent with attached product with a more
  dense urban feel (townhome/condo/rowhouse/loft--
  esp. mixed use)
• Barriers to East Corridor residential development
  do exist, however
• flood hazard limits residential to second story
  across much of the area
• general commercial/infrastructure decline hurts
  area aesthetics (and may contribute to negative
  perceptions of safety)
• few, if any sizable assemblages of land currently
  available to work with
• Recommend 3-4 story mixed use rental and
  ownership attached housing over retail
  opportunistically replacing underutilized
  commercial uses in the east of the corridor
• -- leaving the west end as a potential catalyst
  assemblage more geared towards commercial
  activity (key is balance of uses, with a
  disciplined approach towards what is a
  sustainable retail critical mass)

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Residential Demand
10-yr. trade area growth at projected rates calls
for almost 500 new trade area rental units and
over 900 new ownership units
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Residential Capture Single Family Attached
The East Corridor could absorb 5 attached
ownership units annually at a trade area capture
rate of just under 14, concentrated around the
200K per unit price point
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Residential Capture Apartments
At a capture rate of just over 11, the East
Corridor could absorb another 5 units per year of
rental apartments Note that this table excludes
demand at the lowest income level, since such
units would be well below market rents
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Office Strategy Discussion

• Manitou Springs is not a primary office market
  location
• But, it is extremely appealing to smaller niches
  on a sheer quality- of-life basis
• by professionals with the luxury of operating
  from anywhere -- especially those seeking
  smaller-town environment with access to culture
  and natural recreation
• Potential exists for promotion as a themed
  office-retail professional cluster
• Recreation-oriented industries seem like a
  logical fit particularly sports medicine and
  sports/leisure-related management (where the
  employees and professionals would have a natural
  predilection for
• Recommendation In the shadow of Garden of the
  Gods, the East Corridor should be able to promote
  itself as an excellent location for professions
  related to nature and recreation

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Office Demand
Decent projected job growth in the trade area,
along with replacement of obsolete space, should
create demand for 230,000 s.f. of new office
demand in ten years, with 57,000 s.f. absorption
possible in East Corridor