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HomeMy WebLinkAboutJOHNSON FARM - REZONE - 24-00 - SUBMITTAL DOCUMENTS - ROUND 1 - SUPPLEMENTAL INFORMATIONSpring Creek Farms Development Analysis Prospects For the Spring Creek Farms as a Neighborhood Serving Retail Location Assets Assuming continued residential growth in the area, The Local Neighborhood CMA will, over the next 3-5 years support a grocery -anchored neighborhood retail site. Local traffic volumes are currently low, but with the planned widening of Timberline and the emerging employment concentrations along the Mulberry and Harmony_ Road corridors, RCG expects the Local Neighborhood CMA to generate growing interest. Sites adjacent to The Drake and Timberline intersection are well located for grocery anchored neighborhood retail uses with convenient right turn movements that can accommodate Timberline and Drake Traffic. Liabilities The Spring Creek Farms site is at a disadvantage -given the recent approval of the adjacent Rigden Farm property which has approvals for significant retail development. This project will compete directly for any area retail tenants. Development at Rigden is preceding that of Spring Creek Farms. As a consequence, the limited retail demand forecasted will, in all probability, be fully served by Rigden, eliminating any significant retail opportunity at Spring Creek Farms. Prospects for Spring Creek Farms parcel. Residential Both single and multi -family residential are the most likely development prospects for the Spring Creek Farms. Multifamily, particularly for rent product, could take advantage of the visibility benefits that will accrue to the site as traffic volume increase along Timberline and Drake. Residential product would also benefit from and be a complement to the convenience and amenity provided by the Rigden Farm retail. Proximity to the Union Pacific Railroad will provide a challenge for mitigation of impacts, however, the city's long term plan for this right-of-way provides for a multi -modal corridor, which will support the synergy of locating higher density residential adjacent to this line. Overall Implications for Spring Creek Farms Parcel Given these factors, and absent any change to current city land use controls on the site, it is likely that the Spring Creek Farms property will remain undeveloped, or underdeveloped for many years. The Spring Creek Farms property is not an ideal site for significant commercial uses: ■ It is located far (1-2 miles) from more desireable east -west (Interstate 25 connecting) arterials. ■ The existing residential (local consumer) base is immature. ■ More competitive local serving commercial properties (Rigden Farm) are further along in the approval and development process and, as such, will develop far sooner than Spring Creek Farms ■ Residential uses will likely succeed on the site, but current land use regulations limit this use to only 25% of the developable area. IV-3 Spring Creek Farms Development Analysis V. CONCLUSIONS/RECOMMENDATIONS In light of the foregoing analysis, RCG recomends that the The Cumberland Companies pursue a land plan that accomodates higher density residential and multifamily as its primary use. RCG believes that such a change will have a number of positive effects: ■ The redesignation will help to resolve the indicated land use allocation imbalance that exists in the Fort Collins CGMA. ■ The Spring Creek Farms property could be brought to market sooner as part of a larger strategy to reduce leapfrog development An immediate market exists for new residential in this location. ■ The additional future residents at Spring Creek Farms will help supplement the consumer base necessary to develop and maintain the significant commercial space planned for the Rigden Farm project ■ The project will fill a significant need for multi -family housing. Land for this use is short supply relative to other land uses, and the anticipated absorption over time will make this issue more prononuced. Balancing the land market by committing more land to multi -family will improve regional housing affordability. ■ Spring Creek Farms residential will provide a more compatible land use and complementary development for existing adjacent neighborhoods. • Higher residential quantity and density will reduce total vehicle miles traveled by locating residential nearer to services and area jobs, and adjacentcy to a future multi -modal corridor. • Multi -family residential uses will continue to promote a variety of land uses and housing alternatives within the city. V-1 Spring Creek Farms Development Analysis RosarJ ��/a1��_?8j4r!?a!p.,i Local serving retail uses such as a grocery anchored neighborhood center was considered an area of potential opportunity. To evaluate the supply demand analysis further for the Spring Creek Farms site, RCG conducted a more refined retail analysis that evaluated demand for additional grocery store anchors within the Local Neighborhood Competitive Market Area (Local Neighborhood - CMA). Grocery Demand/Supply Analysis Assumptions: ■ Local Neighborhood CMA for Grocery Related Uses RCG assumed a Local Neighborhood CMA extending as a I -mile radius from the Drake and Timberline intersection. ■ Population Growth According to the subscription demographic website "Anysite.com", the 1999 population within the defined Local Neighborhood CMA was 9,687. This population is expected to grow by nearly 3,800 persons to 13,480 by 2009. 'Y; The Local Neighborhood CMA is physically limited by a natural trade barrier provided by the Cache la Poudre River located on the eastern edge of the area. RCG estimates 1/3 of the Local Neighborhood CMA population growth will be lost to this trade barrier. As a result RCG reduced estimated Local Neighborhood CMA population to 6,393 in •1999 and 8,896 in 2009. •, Per Capita Expenditures on Grocery Items An estimate of $2,793 per capita of expenditures for "Food at Home" for persons - residing within the Local Neighborhood CMA in 1999 was also provided by Anysite.com. ■ Estimated Sales Per Foot Considering the 12 grocery stores that currently exist within the Fort Collins CGMA, an average sales per person of $2,793 and an average modern grocery size of 50,000 square feet. RCG derived an average sales of $500 per foot of grocery store. ■ Existing Competition Within the Local Neighborhood CMA, only one grocery, Toddy's exists. Toddy's, by today's standards, is a small market measuring approximately 18,000 square feet and carrying a conventional line of grocery products. Analysis Conclusions: Within the Local Neighborhood CMA, existing demand for grocery uses currently amounts to approximately 35,600 square feet of grocery. related uses, or just under one modern grocery store. Between the years 1999 and 2009, population growth in the area will generate demand for an additional 13,000 square feet of grocery related uses. IV-2 Spring Creek Farms Development Analysis 6.w•P., IV. LOCAL SITE MARKET ANALYSIS: SPRING CREEK FARMS PROPERTY Prospects for Spring Creek Forms parcel: Office Set apart from the local competitive market, the Spring Creek Farms site initially appears as a feasible office location. Traffic volumes along Timberline are anticipated to grow as the planned widening is completed in 2000 and new commercial development in and around Prospect Road and Mulberry Street is added to the north. The growing residential base could, perhaps in the next 5-7 years, support medical and professional offices of modest size. In general however, the prospect of Spring Creek Farms as a significant office site is challenged by the overwhelming land resources that will continue to exist within the current core of the local competitive market area for office. No office of significance exists within close proximity to the site and the Harmony Road corridor is the proven office location in the local market. As land closest to Harmony is absorbed, RCG expects office development to migrate both to the south toward and beyond County Road 36 and the north toward Drake. Given the estimated land absorption velocity of 24 acres per year, build -out of office locations more than what is designated for Spring Creek Farms will take many years to complete. Finally, Drake Road terminates after Timberline, reducing the site's attractiveness to users who wish. direct access to Interstate 25. Prospects for Spring Creek Farms parcel: Industrial and Institutional The Spring Creek Farms site has an historic association with industrial use given its shared property. line with the adjacent piping plant located immediately to the north as well as the western property . . line shared with a Union Pacific Railroad right-of-way. However, this historic connection has in recent years given way to new market realities. Ample industrial ground exists within the greater regional competitive market as new parks continue to emerge to the south in the communities of Greeley, Windsor and Loveland. In addition, adequate land reserves exist in the local competitive market, especially in the "I" Zone district (Industrial District) located to accommodate absorption for many years. These sites, with their immediate access to Interstate 25 are considerably more desirable to industrial users than the Spring Creek Farms site. Likely locations for new institutional space varies given the diversity of activities conducted by single users. Office, high technology and research and development users will tend to locate in proven locations such as Harmony and Horsetooth Corridors while more industrial users will tend to locate to the north along Mulberry, and to some degree along Prospect Industrial and distribution users are generally attracted to highly accessible locations where land costs are comparatively low. This tendency will favor sites some distance from office locations and nearer to 1-25 access points. Prospects for Spring Creek Farms Parcel: Retail Uses Regional retail uses such as "Big Box" retailers are not likely tenant prospects given the lack of direct access to Interstate 25. IV-1 Spring Creek Farms Development Analysis OVERALL CGMA DEMANDISUPPLY CONCLUSION RCG anticipates commercial land to absorb at an average of 83 acres per year over the next ten years. Full absorption of commercial land in the CGMA is projected in about 22 years (2021). RCG anticipates the exhaustion of multi -family land by 2006-2007. Single family land, absorbing at the historical rate of 3.4 units per acre, will likely be exhausted by 201 1-2012. The table below summarizes remaining land resources and likely timing of buildout by land use: Assummed Annual Estimated Net Buildable Assumed Average Absorption Buildou Vacant Acres Densi Acres can Commercial 1,79 .20 - .25 83 22 Residential (Units/Acre) Single Family 4,99 3.4 417 12 Multi -Family 12 ZQ 8 Subtotal 5,552 487 Total 1 7,349 Totall 570 IMPLICATIONS Long -Term Land Use Imbalance Throughout The CGMA The foregoing absorption statistics suggest that a large imbalance of -buildable land resources within the CGMA for residential and commercial uses will occur as the CGMA buildout progresses. Current CGMA-land inventories for residential uses will be depleted far sooner than those identified for commercal uses. RCG anticipates that this imbalance will become more pronounced with the passage of time, eventually resulting in rising prices for residential land throughout the CGMA. Spring Creek Farms Development Analysis The results of this analysis are listed in the following table: Possible Multi -family Development Sites /lass-Cv_asu/lJ��g.6 wipes Total Zone Total Vacant Factors Influencing Multi -Family Development % of Total Acres Multi. District Land for Multi -Family Family Ames C 280ac Interstate Access - commercial orientation 10% 28ac Frontage on College Ave - commercial orientation Surrounding Uses - predominady commercial Roodplain - restricts residential development C-C 137ac Frontage on College Ave - commercial orientation 10% 12ac Association with Budwieser facilities C-C-N 137ac Proximity to College Ave - commercial orientation 25% 34ac Surrounding Uses - predominady commercial/industrial H-C 906ac Only 25% an be used as Secondary Uses 70% 0f 25% of I SBac Of that 257k a maximum 70% will likelybe developed oped u multi- overall total family (per the Harmony Technological Park) M-M-N 480ac Other support uses that may occur 70% 336ac I 519ac Floodplain issues - restrict residential development 10% S 1 ac Major Transit Corridor and Frontage to 1-25 - prime industrial T 276ac Structure Ran Overlay Uses 25% SSac E 870ac Can only utilize 2S% as Secondary Uses 10% of 25% of 21 ac . Only 10% of that will be developed as multi -family based on overall total current development trends Total Possible Vacant Areas for Multi -Family Development 695ac L-M-N 2.336ac Different product orientations are not comparible - an only develop to 12 dulac maximum in any given parcel while not exceeding 8 dulac for the overall development MMN requires 12dulac minimum. No individual sites or acreages under 7ac are included. In addition to this estimate, The Fort Collins Advance Planning Department indicated that two areas with approved MMN zoning, Mountain Vista and East Mulberry, are likely to request a rezoning to eliminate residential uses. These properties total 140 acres. Subtracting this number from the 695 acres of multi -family estimated above results in a net total of 555 acres of remaining land for multi- family development, and 4,997 acres of single family land. 111-10 Spring Creek Farms Development Analysis AREA LAND SUPPLY ESTIMATES �FZ�� 4<4l.��Jf.•��g�6r,��g, RCG analyzed the remaining developable land resources in the local competitive market area. This effort was undertaken to help establish the likely timing of land absorption in the Fort Collins and the implications for the Spring Creek Farms parcel. COMMUNITY GROWTH MANAGEMENT AREA (CGMA) MAP 41 CUAt _ Ile eDOSEVIiT i +Y k'y ♦ � IIATIOML FOREST earn 9TAre .,wk 90 :`•t �• � 1 _-� .'� PAW c .I bttcEeolll V 199E Mpon11 .AI I1EsvM. ' As part of City Plan, The City of Fort.Collins established a Community Growth Management Area (CGMA) which serves as a management tool for land development occurring within and immediately adjacent to the city boundary. For the purpose of this analysis, RCG has used the CGMA as a proxy for the local competitive market area. The map above delineates the current CGMA. Remaining Buildable Property Within the CGMA. According to the City's Advance Planning Department, 11,216 total gross acres of buildable property exists within the CGMA. This figure includes all land in the area that is either approved, but not built, currently under review, and vacant properties with no submitted development proposal. Subtracting out non -local roads, parks, schools, layout inefficiencies and vacancies reduces the gross acreage above to 7,490 net acres. Of this net acreage approximately 24%, or 1,797 net acres is designated for commercial uses while the remaining 5,692 net acres is designated as residential uses. To further refine the estimate of net acres available for multi -family development, RCG obtained an analysis conducted by Nuszer Kopatz Inc. which estimates the inventory of acreage where multi- family development is likely to occur. In the analysis, Nuzer Kopatz IT Identified the Fort Collins Zone districts where multi -family development is permitted. IS Estimated the vacant acreage existing within each district. IS Appiled estimates of the likely percentiage of the vacant land that may develop as multifamily. III-9 Spring Creek Farms Development Analysis Ross; C�ns�llLP9 6!�!P.-� Residential Uses Local Fort Collins residential land has been absorbed at an average annual rate of 382 acres per year over the last 3 years. Single Family and mobile home product have absorbed at an average of 310 acres per year over this period, while multi -family has absorbed at about 72 acres per year. Location Patterns Throughout the local market area, residential development has served as an in -fill use, although more systematic zoning was recently put into place via the Fort Collins City Plan. In addition, infill locations are depleting, forcing most new residential to the fringes of the CGMA. Market Balance 2,000 1,500 m i 1,000 500 0 Competitive Trade Area New Residential Construction '95 196 '97 '98 199 O New Residential Construction (Units), Source: Realtec According to Realtec, overall housing growth -in the City of Fort Collins (single and multi -family) has averaged 3.8% per year for the years 1997 — 1999. Rents for a two -bedroom apartment have escalated an average of 5.7% per year over the same period. Estimated vacancy over'the 1997 -1999 period has averaged 3.8%. Multi -family vs. Single Family Absorption Over the next ten years, RCG estimates absorption rates for single family development at about 417 acres per year. Multi -family development is projected to absorb at a rate of 70 acres per year. Assuming the historic density of multi -family development in Fort Collins of 12 units per acre. Spring Creek Farms Development Analysis Retail Uses Retail land has been absorbed at a rate of 23 acres per year for the last 3 years. Retail space in the local competitive retail market totaled nearly 3.4 million feet in January 1999. Location Patterns Retail growth within the local competitive market area has chiefly been concentrated in neighborhood commercial centers. The two most recent centers include the Safeway Marketplace project, and Harmony Market, anchored by Home Depot and King Soopers. As residential rooftops emerge and in -fill continues along the eastern fringe of Fort Collins, retailers will be attracted to important area intersections, including Drake and Timberline. Market Balance Retail vacancy rates reached 6.1 % in January 1998 as the local Fort Collins competitive market absorbed an estimated 536,000 square feet of new space. Another 700,000 square feet of additional space is anticipated in 1999, which should force the local retail space into an oversupply condition for the short term. m LL CT C W 1,000,000 800,000 600,000 400.000 200,000 0 Fort Collins Retail Market Balance: Historic & Projected '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 MEAN New Retail Demand r:i-v New Constnxtion — Vacancy Source: Ross Consulting Group RCG anticipates retail absorption to average approximately 164,000 square feet per year for the next ten years. In addition, we anticipate the market will supply approximately 210,000 square feet per year. Applying an average FAR of 0.25 over the anticipated new construction estimate yields an average annual land absorption of approximately 20 acres per year. III-7 Spring Creek Farms Development Analysis Rossi Coi�su/tlisg 6��p� Current vacancy for multi -tenant industrial use is estimated at 4.6%. Vacancy for institutional users is not available. As a special note, for purposes of this analysis, RCG assumes no vacancy for single users and provides a blended vacancy estimate of 2.3% for the combined multi -tenant industrial and institutional space in the local competitive market Over the next ten years, RCG anticipates continued growth for multi -tenant industrial and institutional uses with an average absorption of 375,000 square feet per year. RCG projects a split of office/R&D institutional and multi and single tenant industrial space demand resulting in an average of nearly 248,000 square feet of single and multi tenant industrial and 127,000 square feet of office/R&D institutional absorption per year. Assuming a 0.20 FAR for single and multi -tenant industrial uses, RCG anticipates an average absorption of approximately 29 acres per year. In addition applying an average FAR of 0.25 office and R&D oriented institutional uses yields an average absorption rate of approximately I I.S acres per year. As a consequence, RCG anticipated a total average absorption of approximately 40.5 acres per year for all industrial and institutional space in the local competitive market area3� Spring Creek Farms Development Analysis �iP�}� �)�rifxJil9J gip✓ Multi -Tenant Industrial and Institutional Uses Multi -tenant industrial and institutional (single tenant) uses within the local Fort Collins Market totaled over 1 I million feet in December 1999 according to information provided by Realtec. Location Patterns In the past, multi -tenant industrial and institutional uses within the local competitive market have tended to locate near the Harmony corridor. In recent years however, the land market along Harmony has matured. As a result, Harmony Road's high visibility, image and direct access to the significant commercial uses along College and Shields and the regional access afforded by Interstate 25 have attracted office, retail and some institutional uses. Land prices within the area have been forced higher as a result, causing industrial users to seek more affordable locations in the local and regional competitive markets. Growing areas for multi -tenant and single tenant industrial uses within the local competitive market include the area surrounding Mulberry Road as well as the region near the Anheuser Busch plant. Regionally, new business parks are emerging in areas to the south including Loveland, Greeley, and Windsor. Together with the lower costs, users are generally attracted by good access to Interstate 25 and other local arterials and the growing labor pool within smaller communities located in Larimer and Weld Counties. Market Balance An average of 275,000 square feet per year of new multi -tenant industrial and institutional space has been absorbed within the local competitive market over the 3-year period from 1997 to 1999.Of this number approximately 50% is attributable to multi -tenant industrial uses. RCG estimates that one half of the institutional uses are predominantly industrial in nature while the balance functions chiefly as office and research and development use. Competitive Industrial Trade Area Market Balance: Historic & Projected 600,000 LL m 400,000 200,000 0 20^ia -5% © New Industrial Demand r7 New Constnlction — Vacancy Source: Reallec & Ross Consulting Group Spring Creek Farms Development Analysis Rosser190FPO u/W"JF"4Y- 19!., Office Uses According to Realtec sources, office space within the local competitive market totaled 4.1 million feet as of December 1999. This total represents multi -tenant space only. Single tenant and owner occupied space is evaluated under institutional uses which follows in the next section. Location Patterns Most new office space in the local market is clustering near Harmony Road, between College Avenue and Interstate 25 to take advantage of the direct access to those major north/south arterials. In . addition, Harmony Road is located to the south, closer to Denver than Prospect and Mulberry, and historically associated with high quality high technology names such as Hewlett Packard and Celestica. Market Balance Competitive Office Trade Area Market Balance: Historic & Projected 400,0001 T 300,000 m LL 200,000 100,000 0 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 ttia New Office Demand r_=1t New ConstrtLtion — Vacancy Source: ReaBec, Ross Consufung Group In recent years, the local Fort Collins office market has absorbed an average of 125,000 square feet of new space per year. By January 1998, vacancy rates had increased to 9.2% due largely to corporate relocations from multi -tenant space to new single tenant build -to -suits within the local market. In 1999, vacancy was expected to increase again as government users conduct a similar transition to new space. Given projected employment growth, and assuming restraint for new supply over the next two years, RCG expects local office absorption to improve market balance. On average, RCG anticipates office absorption at a rate of approximately 260,000 square feet per year over the next ten years. Assuming a 0.25 floor area ratio (FAR), RCG anticipates the annual land absorption rate for new office space within the local competitive market to average about 24 acres per year. 111-4 Spring Creek Farms Development Analysis /�D89�; COl1��C�A9j 61�f191 AREA LAND DEMAND (ABSORPTION) FORECASTS The forecasts that follow provide an analysis of historic development activity and help elicit the likely land absorption within the CGMA over the next 25 years. Competitive Market Areas The Fort Collins real estate market competes on a regional and local level. The regional market includes Fort Collins, Greeley, Loveland, and Windsor, while the local market, in general, is limited to the boundaries of Fort Collins. This analysis is primarily focused on local competitive markets but RCG has also factored key regional influences such as transportation into the analysis. REGIONAL COMPETITIVE TRADE AREA MAP Ibrl _ ^�'..�� ,•-$y. l _ `fie. Ca C[ � /� Ilanrn! rtm • / nn, ty-f#rai= 141 .. wetly t n f 'rp tact l•..bnr„ -M� -n ibrawrJ (rms' t 'Fd. r Cat.p t x ArwaoO 7 Bnvm I !'� - OtfiBBlAttmotl .AI st®nwJ. LOCAL COMPETITIVE TRADE AREA MAP III-3 0811" Spring Creek Farms Development Analysis Population Growth Ross; jq gww=J"g G ip, 6.0% Projection ---� 5.0% e 4.0% a 3.0% m 'c 2.0% a` 1.0% 0.0°k '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 — City of Fort Collins —State of Colorado — Web & Larcner Counties — U.S. 20.0% r V e 10.0% " a 0.0% " Source: US Census S Colorado Division of Local Government Retail Sales Growth 91 92 W er 83 'M 97 'BB VO 100 101 W M V4 Di OB n7 DS —City of Fort Collins —Colorado — Weld & Latimer Counties —Denver MSA Source: Colorado Department of Revenue M RCG anticipates growth in the near term will slow in all these areas, but still outperform US averages. At least two major factors will account for this slowdown. First, rising interest rates and inflationary pressures will create a slowing effect on economic expansion and investment nationwide. Second, the current record lows in unemployment in the region will place strains on corporate expansion plans. HN Spring Creek Farms Development Analysis C""PPANIMWFJ�� Ill. LAND DEMAND AND SUPPLY: COMMUNITY GROWTH MANAGEMENT AREA (CGMA) General Methodology To complete this assignment, Ross Consulting Group evaluated historic demographic and real estate trends, interviewed city staff, industry and local market experts. RCG uses employment, population and retail sales growth as primary variables in determining demand (land and building space) over a given analysis period. Office, industrial, R&D and institutional demand/absorption is primarily determined by projected employment growth, retail uses by population and retail sales growth, and residential uses by population growth. RCG consulted with Realtec Commercial Real Estate Services, a local commercial brokerage company specializing in Larimer and Weld counties, regarding existing commercial space and land availability within the local competitive market In addition, RCG also met with City of Fort Collins Advance Planning staff to understand the remaining developable land resources in the CGMA. Historic Growth Patterns Employment, population and retail sales growth in the Fort Collins and Larimer County areas have° recently outpaced the nation. Employment Growth 15.0% 12.o% Projection t c� 9.0% s.0% 3.0% 0.0% sasssmssl9Wo+ Waswm — Denver MSA — U.S. — Larimer County Source: BLS b Colorado Department of Labor and Employment Spring Creek Farms Development Analysis City objectives and land market balance: The City of Fort Collins has identified several important citywide planning objectives for which City Plan is designed to address. Among these are: • Compact urban form • Promotion of mixed use development • Promotion of housing affordability and variety • Reductions in Vehicle Miles Traveled (VMT) • Promotion of a jobs -housing balance • Promotion of good air quality The appropriate placement and balanced allocation of land resources are critical components to achieving these goals. Improper placement and imbalance of land allocations could result in: • Leapfrog development/sprawl • Higher prices for uses for which land is in short supply • Higher VMTs and reduction of air quality (due to jobs -housing imbalances) Cumberland objectives and overall balance Cumberland's objectives relate to the desire to link market supply/demand for specific land uses with a viable, well conceived and planned real estate development In short, the intent is to systematically match the market needs, based on a current/future land use inventory and absorption rates, and meet these findings with the best land use plan for the site. Methodology. To complete the assignment, Ross Consulting Group conducted two levels of analysis: ■ Land Demand and Supply: Community Growth Management Area (CGMA) The first level of analysis concerns overall land absorption for commercial (office, retail and industrial) and residential property within the Fort Collins CGMA. ■ -Local Site (Spring Creek Farms parcel) Market Analysis The second level of analysis focuses on the Spring Creek Farms site specifically, and evaluates the appropriate uses for the property in the context of local competition and current and future supplies of specific area land uses. A range of possible uses were considered, including office, retail, industrial and residential. 11-2 Spring Creek Farms Development Analysis Russ- - CQ�su/t/�sg�Ciprip� II. INTRODUCTION: ANALYSIS OBJECTIVES The objective of this analysis is to estimate the development timing and achievable land uses likely to occur on a 55 acre undeveloped parcel located at the northwest corner of Drake and Timberline Roads within the City of Fort Collins, Larimer County, Colorado. The parcel is currently listed with an "E" (Employment) designation under the City of Fort Collins City Plan which limits the majority of the site to commercial employment related uses. REGIONAL VICINITY MAP ROOSEYAT RATIO" FONBT"'.(-, � •';F ._ .Comrlilt Can tw. — — t -�OR �' vkuwr la hr1 ibYi. •� .M Owed �ooesrlt^ *'�,_.--_OGra pe/a e l l.,�LT�F C O O-R A 0 `Q .• �', _.Fvl !a mom- V 0 )1 / ... PRI➢ANO pi � ��+� � r Layhn� tlll'�' jOarR.l O1F, ,F, N111gWLFOREST. Bmrbl - 1. 9YersFsvY i T'd r MR LOCAL VICINITY MAP Land uses considered include office, industrial, research and development, retail and residential. The results of this analysis are to be used by the Cumberland Companies to determine the most appropriate mix of land uses for the site given its location and the emerging competitive market in the local vicinity. M., Spring Creek Farms Development Analysis Ross 6�ip, complete, it will effectively eliminate any significant retail opportunity in the local competitive market If this site is considered for commercial, only a small percentage of the property could economically support such uses. Residential Uses: The Spring Creek Farms site is most likely to succeed as a mostly residential development for the following reasons: • Absent any significant changes to zoning, land supplies of a size and location appropriate for multifamily will become increasingly scarce throughout the CGMA. • The Spring Creek Farms site is large enough to support a broad variety of housing types (for sale, for rent and a variety of densities). • 'Multi -family (rental) developers will be attracted to the higher traffic volumes anticipated for Timberline and the visibility the site will provide to potential renters. • Nearby retail developments at Rigden Farm will provide an attractive convenience to prospective residents within walking distance of the Spring Creek Farms site. Other Considerations: In addition to these conclusions, and as an outgrowth of these analyses, Ross Consulting Group believes a development more heavily weighted to medium to higher density residential at the Spring Creek Farms site will promote many of the City Plan objectives listed earlier. Increases in residential, particularly mull -family and residential attached housing will: • Help promote a compact urban form and discourage leapfrog development by bringing a significant edge parcel to market at roughly the same time as the Rigden Farm project; • Locate additional consumers directly adjacent to the mixed -use development planned for Rigden Farm, thus providing extra economic support for the retail at that location; • Maintain housing accessibility/affordability by committing needed land resources to higher density residential uses; • Reduce in Vehicle Miles Traveled (VMT) and improve air quality by locating higher density residential between Rigden Farm commercial and the future multi -modal corridor planned for the Union Pacific Railroad right-of-way to the west. • Provide the best compatible land uses with existing adjacent area neighbors. • Allow for future development of a region with a variety of land uses and housing alternatives. 1-3 Spring Creek Farms Development Analysis Estimated CGMA land Inventory and Buildout (Years) Rvss; Cgnsu/�/isWIMP Assumrned Annual Estimated Net Buildable Assumed Average Absorption Buildout Vacant Aicre2 Densi Acres ears Commercial 1,79 .20 - .25 83 22 Residential (Units/Acre) Single Family 5,279 3A 417 13 Multi -Family 545 12 79 8 Subtotal 5,82 Total 7,621 Totall 570 The analysis results indicate: • Significant land resources exist to support commercial uses for the next 21-22 years. • Current CGMA land resources needed to support lower density residential uses (+/- 5 dwelling units/acre) will be exhausted in approximately 12 to 13 years. • Multifamily (attached for sale and for rent) land resources within the CGMA will likely be completely absorbed within 7-8 years. Local Site (Spring Creek Farms parcel) Market Analysis The second level of analysis focuses on the Spring Creek Farms site specifically, and evaluates the appropriate uses for the property in the context of local competition and current and futuresupplies of specific area land uses. A range of possible uses were considered, including office, retail, industrial and residential. The conclusions of this analysis are as follows: Commercial Uses (Office, Industrial, Retail): The Spring Creek Farms site is not likely to succeed as a significant commercial site. The property is at a competitive disadvantage for several reasons: • Ample land resources for commercial exist in better locations (Harmony, Prospect and Mulberry Corridors). • The Spring Creek Farms property has no direct connection to Interstate 25 unlike the better commercial alternatives on Harmony, Prospect and Mulberry. • The property is not near a proven commercial center/corridor. Rather, the Timberline Corridor has and is likely to continue to develop into a chiefly residential location. • The local retail market is severely limited by the Cache la Poudre River, which eliminates most of the potential retail customer base to the east. • Rigden Farm, a neighboring real estate development, is currently approved for between 275,000 and 488,000 square feet of commercial space. Once the Rigden project is 1-2 Spring Creek Farms Development Analysis 1. Executive Summary J"?JW; 19gnA1W19 ng; 6ra J,71 Study Purpose Ross Consulting Group was asked by The Cumberland Companies to prepare a market analysis for a 55-acre site located at the northwest corner of Drake and Timberline Roads in Fort Collins, Colorado (herein described as the Spring Creek Farms site). The parcel is currently zoned with an "E" (Employment) designation under the City of Fort Collins City Plan which limits the majority of the site to commercial employment related uses. The results of this analysis will be used to assist in the planning of the overall project City objectives and land market balance. The City of Fort Collins has identified several important citywide planning objectives for which City Plan is designed to address. Among these are: • Compact urban form • Promotion of mixed use development • Promotion of housing affordability and variety • Reductions in Vehicle Miles Traveled (VMT) • Promotion of a jobs -housing balance • Promotion of good air quality The appropriate placement and balanced allocation of land resources are critical components to achieving these goals. Improper placement and imbalance of land allocations could result in: • Leapfrog development/sprawl • Higher prices for uses for which land is in short supply • Higher VMTs and reduction of air quality (due to jobs -housing imbalances) Cumberland objectives and overall balance Cumberland's objectives relate to the desire to link market supply/demand for specific land uses with a viable, well conceived and planned real estate development In short, the intent is to systematically match the market needs, based on current/future land use inventory and absorption rates, and meet these findings with the best land use plan for the site. Methodology. To complete the assignment, Ross Consulting Group conducted two levels of analysis. Land Demand and Supply: Community Growth Management Area (CGMA) The first level of analysis concerns overall demand and supply of developable land for commercial (office, retail and industrial) and residential property within the Fort Collins CGMA. The analysis included a projection of demand for these land uses, which was then translated into a land absorption estimate. This absorption was then compared to estimated land supplies within the local CGMA. The results of this demand/supply analysis are as follows: 1-1 TABLE OF CONTENTS EXECUTIVE SUMMARY II. INTRODUCTION: ANALYSIS OBJECTIVES III. LAND DEMAND AND SUPPLY: COMMUNITY GROWTH MANAGEMENT AREA (CGMA) IV. LOCAL SITE MARKET ANALYSIS: SPRING CREEK FARMS PROPERTY V. CONCLUSIONS/RECOMMENDATIONS Frederick Ross Company Spring Creek Farms Development Analysis Prepared For: The Cumberland Companies April 27, 2000 By: lFtn��Rst�p 717 17'" Street, Suite 2000 Denver, Colorado 80202 Esloblished 1888 Brock Chapman Analysis Memorandum 08/03/00 Page 9 of 9 If you have any questions or comments regarding the contents of this analysis, please contact me at (303) 260-4207. Respectfully submitted, ROSS OZ7 GROUP f ` Tom Martin Established 1888 Brock Chapman Analysis Memorandum 08/03/00 Page 8 of 9 RCG believes that Rigden Farm's early entry into the attached residential market in this region will provide ample fuel to capture the greatest share of the overall absorption as compared to both the Johnson and Spring Creek Farms parcels. Maintaining the "E" designation on the Spring Creek Farms parcel will effectively eliminate any significant attached multi -family component there, leaving Rigden to compete only with the Johnson Parcel: CAPTURE ESTIMATE: ASSUMING SPRING CREEK REMAINS AS "E" (Employment) Year 2000 2001 2002 2003 2004 2005 2006 2007 Total Rigden Units 14 40 38 216 42 234 48 234 866 Johnson Units 0 0 14 34 33 174 25 174 454 Spring Creek Farms Q Q JA 2Q 31 n 0 Q L7 parcel Units Total Units . 14 40 66 270 108 418 73 408 1,397 Rigden % Capture 100% 100% 58% 80% 39% 56% 66% 57% Johnson % Capture 0% 0% 21 % 13% 31 % 42% 34% 43 % Spring Creek % 0% 0% 21 % 7% 31 % 2% 0% 0% Capture Weighted average estimated capture over 8-years w/out Spring Creek re -designation from "E": Rigden 62%; Johnson 32%; Subject 6%. Overall Citywide Benefit RCG believes the re -designation of the Spring Creek Farms parcel from "E" to another classification allowing more attached multi -family residential development would have some effect on Rigden Farm absorption. This reduction could be offset however, by the increase in competition brought by more residential land locally. This additional competition would likely spur lower pricing, greater product differentiation, and, arguably, higher quality. More competitive pricing would, in turn, drive absorption rates higher on all three projects. Established 1888 Brock Chapman Analysis Memorandum O8/03/00 Page 7 of 9 • Johnson Parcel/Spring Creek Farms Parcel In contrast to Rigden, the Johnson and Spring Creek Farms parcels will also be of substantial size, which will enable the creation of significant "places" there. Rigden's early entry into the limited commercial market will result in the capture of most, if not all commercial retail demand in the local area, long before the Johnson and Spring Creek Farms parcels are substantially under -way. As a result, the mix of uses at Rigden will probably be greater then these other local competitors. PricelQuality Due to the as -yet unplanned nature of the Johnson and Spring Creek Farms parcels, we assume pricing, product type and quality levels will. be similar between the three communities. As a result of all these factors, The Rigden Farm project will likely capture the highest proportion of market share until the Johnson and the Spring Creek Farms parcels are substantially under development. Rigden will maintain this timing advantage until the project nears completion. Conclusion Considering the foregoing, RCG has prepared the following attached residential absorption estimates: CAPTURE ESTIMATE: ASSUMING REDESIGNATION OF SPRING CREEK FARMS Year 2000 200I 2002 2003 2004 2005 2006 2007 Total Rigden Units 14 40 38 214 SO 86 192 85 719 Johnson Units 0 0 14 37 32 57 192 57 389 Spring Creek Units 14 JZ 32 57 185 25 350 Total Units 14 40 66 280 88 184 542 183 1,458 Rigden % Capture 100% 100% 58% 74% 44% 43% 34% S 1 % Johnson % Capture 0% ' 0% 21 % 13% 28% 29% 34% 34% Spring Creek % 0% 0% 21 % 13% 28% 29% 33% 15% Capture Weighted average estimated capture over 8-years with Spring Creek Farms parcel re -designation from "E": Rigden 49%; Johnson 27%; Spring Creek 24%. Established 1888 Brock Chapman Analysis Memorandum 08/03/00 Page 6 of 9 residential market, we anticipate new demand to travel farther south and north of Harmony, generally along Timberline. Market share north of Harmony will grow. Already, Rigden Farm has received final plating approval for 14 town - homes. Lot.inventory for apartment and for sale attached residential (Concept, Preliminary and Final Platting) within the City is estimated at 2,224 lots as of. June 2000, yielding approximately a 4.5 year supply at a 2.5% annual compounded growth rate Other Absorption Drivers Timing • Rigden Farm Rigden Farm recently received approval for its first multi -family plats (14 units of townhome product). Development and sale of this product will prove -up Rigden and the local area as an attached product location, ultimately leading the way for development of the remaining 600-800 units planned, as well as any subsequent attached product that may occur on both the Johnson and the Spring Creek Farms parcel. Of the three sites under evaluation, Rigden clearly has the advantage in terms of timing and its effect on absorption. Given that the Rigden project is "first in", more development risk applies. It is likely that, the residential product developed at Rigden will, in the initial stages, be built at comparatively low densities, followed by moderate overall density increases occurring with each successive phase. • Johnson Parcel/ Spring Creek Farms Parcel RCG estimates that the Johnson and Spring Creek Farms parcels are at least 18 to 24 months away from any physical development, due to the need for regulatory approval through the city. As a consequence, Rigden will have the local (Drake and Timberline) multi -family market to itself over this period. Size & Masterplan Character • Rigden Farm Coupled with timing, Rigden's comparatively large size could potentially allow it to develop a recognizable identity and become a "place". This masterplan character also will effect absorption positively. With timing and size on its side, Rigden can establish itself within the sub - market as a location of choice for homebuyers and residential and commercial developers as opposed to the newer competition which will follow. Established 1888 Brock Chapman Analysis Memorandum 08/03/00 Page 5 of 9 Local Competition & Market Share From a competitive standpoint, RCG has identified several major factors as most important in projecting absorption for properties fronting the Drake and Timberline Intersection. • Overall City Land Development and Absorption Patterns • Timing • Size & Masterplan Character • Price/Quality Overall City Land Development and Absorption Patterns: Citywide for -sale attached residential product absorption was estimated using historic sales data obtained from Homebuilders Research. Apartment absorption' data was obtained from Realtec. For -Sale Attached Residential Product According to data supplied by Home Builders Research, • Sales of new attached housing in Fort Collins reached 311 units in 1998 and 484 in 1999 indicating an annual increase of 55% for the year. More recently, year over year sales increased by 34% during the first quarter of 2000 versus 1999. • During the period from 1/98 to 12/99, 78% of all multi -family sales occurred east of College Avenue. More specifically, 16% of all multi -family sales during this period occurred east of College and north of Harmony, with 42% of sales occurring east of College and south of Harmony. Apartment (Rental) Product Data supplied by Realtec indicate: • Apartment absorption increased by 17% last year from 380 units in calendar year 1998 to 445 in 1999. General Market Trends Harmony Road has been the location of choice for multi -family development due to proximity to employment, retail and access to 1-25. As multi -family ground closest to Harmony is absorbed, or priced beyond the means of the Estoblished 1888 Brock Chapman Analysis Memorandum 08/03/00 Page 4 of 9 LOCAL MARKET CAPTURE ANALYSIS The purpose of the Localized Market Capture Analysis is to evaluate the zoning of the Spring Creek Farms parcel to allow significant multi -family development, and the impact of this change to multi -family absorption on locally competitive properties. Project Descriptions Of the four properties fronting the Drake and Timberline intersection one is developed as single family residential and three remain vacant developable. The vacant properties include the following. • The Rigden Farm Parcel Rigden Farm is located on the southeast comer of Drake and Timberline and has PUD approval for between 671 and 1076 multi -family units. Given current and anticipated market acceptance of housing densities RCG estimates that, at best, no more than perhaps 700-800 multi -family units will be constructed on the Rigden Farm property. • The Johnson Parcel This property is located on the northeast corner of Drake and Timberline. The Johnson Parcel is currently zoned transition and, like Rigden Farm, the development has several Structure Plan designations including; Neighborhood Commercial Center, Medium Density Mixed -Use Residential, Low Density Mixed -Use Residential, Urban Estate and Industrial. For the purpose of this exercise, RCG assumed between 70 and 80 acres of multi- family development potential on the site (or between 800 and 1,000 attached units). • The Spring Creek Farms Parcel The Spring Creek Farms parcel is located on the northwest corner of Drake and Timberline. The property is zoned transition and has an Employment (E) designation under the City Structure Plan. As "E", RCG assumes the potential of between 70 to 80 multi -family units on the property. Under a re -designation scenario, RCG assumes the potential for 300-400 multi -family units. Established 1888 Brock Chapman Analysis Memorandum 08/03/00 Page 3 of 9 In addition, the numbers below illustrate the historic trend in annual growth for both residential building permits (new home construction) and population. It is notable that the average growth for building permits is higher than population. Some difference is acceptable when one assumes the need for excess inventory to satisfy demand. Falling housing densities in the form of persons per household also have an effect Fort Collins Residential Units: Historic Growth Suildin Permits Growth n si enti Permits er Year Total Housing Stock 1"1 2 1 % 1992 1.8% 1993 3.0% 1994 S.4% 199S 3.7% 1996 3.7% 1997 3.0% 1"8 4.5% 1999 4.0% Average 1991-1999:3.5% Source: Realtec Fort Collins Population: Estimated Annual Growth Year Estimated Annual Growth 1991 1.8% 1992 2.4% 1993 3.1 % 1994 3.8% 1995 3.0% 1996 4.2% 1997 3.0% 1998 3.8% 1999 3.6% Average 1991-1999:3.2% Source: Fort Collins Advance Planning Dept. Established 1888 Brock Chapman Analysis Memorandum 08/03/00 Page 2 of 9 SENSITIVITY ESTIMATE: FORT COLLINS MULTI -FAMILY LAND SUPPLY The summary table below shows the remaining supply of multi -family land in Fort Collins (in years) assuming population growth rates of between 2% and 4.25%, an average household size of 2.4 persons (constant), and 545 developable acres of multi -family land. Percent Years Of Land Supply Annual Growth Multifamily Single Family 200% 15.3 24.7 2.25% 13.5 21.7 250% 120 19.3 2.75% 10.8 17.3 3.00% 9.8 15.7 3.25% 8.9 14.3 3.50% 8.2 13.2 3.75% 7.5 121 4.00% 7.0 11.2 4.25% 6.5 10.5 Note that this analysis assumes estimated persons per household in Fort Collins at a static 2.4 to reflect existing city estimates and the historical trend. Using city data, the numbers below illustrate this historical trend: Year Persons Per Household 1960 3.15 1970 3.13 1980 2.56 1990 2.48 1999 2.44 Established 1888 Frederick Ross Company /////1/1//11111111///111 . - Worldwlde Real Estate Services 717 Seventeenth Street, Suite 2000, Denver, Colorado 80202-3323 (303) 892-1111 Telefox: (303) 892-6338 August 3, 2000 Mr. Brock Chapman The Cumberland Companies 6300 South Syracuse Way, Suite 293 Englewood, CO 80111 RE: Supplemental Memorandum — Spring Creek Farms parcel Dear Brock. - The Cumberland Companies has asked Ross Consulting Group (RCG) to assist in evaluating a possible Structure Plan re -designation for a 55-acre parcel from "E" (Employment) to a category which permits more multi -family residential product. The property, known as the Spring Creek Farms parcel, is located within the City of Fort Collins, at the northwest corner of Drake and Timberline Roads. This memorandum is prepared as additional backup to a previous report dated April 27, 2000. Issues addressed in this memorandum include: • Sensitivity Estimate of Remaining Fort Collins Multifamily Land Supply To provide additional backup to the April 27, 2000 report, RCG prepared a sensitivity table which estimates remaining Fort Collins multi -family land supply given variations in annual household growth over the next 20 years. • Localized Market Capture Analysis To answer market related questions posed by City of Fort Collins Advance Planning Staff, RCG prepared a localized market capture analysis for developments anticipated at the Drake 8i Timberline intersection. The purpose of this analysis is to evaluate the zoning of the Spring Creek Farms parcel to allow significant multi -family development, and the impact of this change to multi -family absorption to locally competitive properties. ® Offices throughout the United States. Asia. 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