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HomeMy WebLinkAbout4.3 7470 East Point Douglas Marketing Plan 7470 EAST POINT DOUGLAS ROAD Marketing Plan Objective Sell the .54 acres of land located at 7470 East Point Douglas Road. Business Summary Property Summary The .54-acre property at 7470 East Point Douglas Road is located at the corner of Hefner Avenue and East Point Douglas Road and was vacant and listed for sale in March of 2019. The previous use at the site has included a gas station and most recently the Village Transmission Shop, which closed in the Fall of 2018. The Cottage Grove Comprehensive Plan guides the property for commercial land use that includes retail, service, and office uses. The site is zoned B-2, Retail Business. The purpose of the B-2 District is to encourage retail sales and services by grouping businesses that minimize the influence on surrounding residential neighborhoods. Automotive repair is not allowed in the B-2 District, and the assumption is that at one time automotive repair was allowed so the transmission shop had been operating as a legal non-conforming use. MN State Statute allows for the replacement, restoration or improvement of a building but not the expansion of the nonconforming use. The right to continue to operate a legal nonconformity is lost if the use is discontinued for more than one year. City staff was able to establish that the Village Transmission Shop discontinued their use on November 8, 2018. If an automotive use purchased the site before the date of November 8, 2019 they would be allowed to operate under the legal non-conforming rights. The City of Cottage Grove Economic Development Authority saw an opportunity to purchase the site for redevelopment to repurpose the site as a retail, restaurant, or an office location. The site was purchased for $315,000 by the City of Cottage Grove Economic Development Authority on July 28, 2019. SWOT Analysis th The City of Cottage Grove wants to help position 80 Street commercial corridor in the strongest possible position for retail, restaurants, and other commercial services. With that mind we want to be up front with what the site does well, try to improve what it doesn’t, capitalize on its opportunities and be aware of potential challenges to the site. Below is a SWOT analysis that factors in current conditions in the area. Strengths Weaknesses Opportunities Threats Great site lines and East Point Douglas Parcel is a greenfield Retail and visibility from Road and Hefner site and allows buyer restaurants want to Highway 61/10. Road currently has to design to their be on or as close as th an average daily specifications (i.e. possible to 80 traffic count of 8,400. drive-thru). Street and East Point Douglas Intersection Located near the Site currently has an The parcel can be There are multiple anchor tenant of obsolete fence that competitively priced sites currently th HyVee and the 80 will need to be to allow for available at 7240 and Street commercial replaced by the new development before 7210 East Point corridor. property owner and more costly sites Douglas that could th deters from the closer to 80 Street. be leased or visual appeal of the developed before site. this site. Site is positioned Site is limited in size Potential in future to No funding or near one of the and does not allow purchase additional schedule of proposed Red Rock for a large building or parcels surrounding implementation for Corridor Bus Rapid parking area. the site to create a the Red Rock Transit Station. larger parcel for Corridor Bus Rapid development. Transit Station. Marketing Initiatives The City of Cottage Grove would like to see the site developed into a retail or small fast casual restaurant location. With the idea that the site must be in front of your key audience at least three times before it is remembered as a possible destination for a future or current developer, the following initiatives are proposed. Initiative 1 – MNCAR Site Marketing Description: Place the site on the Minnesota Commercial Association of Real Estate/Realtors (MNCAR) website. Goal of initiative: To increase the awareness and site information to regional commercial brokers in the Minneapolis-St. Paul area. Metrics to measure success: Get 50 to 100 page views or brochure downloads within the first quarter of listing the site. Initiative 2 – Constant Contact Email Campaign Description: Feature the site in a direct to email quarterly campaign to all commercial brokers and developers through Constant Contact. Goal of initiative: Bring awareness to the site to our key demographics by placing the site directly in front of them in the form of an email creating an ease of communication and contact. Metrics to measure success: Gather at least 50 contacts that can be used to distribute the site and get at least 3 requests for information from the campaign. Initiative 3 – Site Brochure Distribution Description: Create a one-page brochure for the site that gives the key details on demographics, site information, a map and neighboring tenants. Goals of initiative: Allows for an easy to access and send document that can be sent to interested parties and brought to conferences, workshops, and other promotional events. Metrics to measure success: Distribute at least 1000 brochures through downloads, page views, email campaigns, and direct to mail campaign. Initiative 4 – Direct to Mail Campaign Description: Through a direct to mail campaign send the site brochure to developers and brokers in the retail and small-scale restaurant end users. Goal of initiative: Reach our key audience directly, specifically targeting active developers and brokers in the Cottage Grove region. Metrics to measure success: Mail 100 informational brochures to our target market in 2020. Target Market Industries In 2020, the City of Cottage Grove is targeting the following groups to market the commercial site: Commercial Brokers This includes any licensed real estate broker who specializes in non-residential properties specifically those that are currently or have previously done business in the City of Cottage Grove. Commercial Companies Real Estate Professionals or Owners This includes any employee or owner who may decide on new markets for expansion. These individuals may be the owner if it is a small business or a real estate professional for larger companies (i.e. Real Estate Manager, etc.). Commercial Developers Commercial development companies tend to work directly with retail and restaurant groups to develop buildings specifically to their clients needs. All though less likely to buy the site directly they may pass along the site to one of their clients who may be interested in the area. Competitive Analysis Within the City of Cottage Grove market(s), the site is expected to compete with the following sites: 7781 Hardwood Avenue S. (vacant site) This is a commercially zoned site off of Hardwood Avenue that is 1.36 acres. As development occurs around the area, specifically in the Harkness Area, it is expected that this site will become more desirable in the market. This may make the site a more desirable location compared to the site at 7470 East Point Douglas Road. 7210 East Point Douglas Road (Grove Plaza) The property at 7210 East Point Douglas Road we know from our conversations with area brokers and developers may be the most desirable location for commercial in the City of Cottage Grove. The site has a pad site for sale and additionally have smaller spaces of 6,060 square feet and 8,080 square feet available. However due to the large amount of tenant restrictions at the property and the high cost of leasing or developing the property it may make 7470 East Point Douglas site more competitive. Cottage GroveCostAcresSquare Feet (SF)Price/SF 7470 East Point Douglas$372,0000.54 23,522$15.81 Pizza Ranch (Restaurant)$600,0001.67 72,745 $8.25 Junction 70 Grill (Restaurant)$332,7891.05 45,738 $7.28 Primrose School (Office)$548,9101.68 73,180 $7.50 Woodbury 3rd Act Brewery (Restaurant)$1,029,3161.39 60,548 $17.00 City & County Credit Union (Office)$853,0750.98 42,688 $19.98 8461 – 8471 East Point Douglas Road (Jamaica Square) th Although further removed from the 80 Street corridor the property at 8461-8471 East Point Douglas Road does have a better traffic count due to its proximity to Jamaica Avenue. Any potential user that doesn’t need a greenfield site may view this site as a better option. Market Strategy Product th A .54-acre commercial site with great visibility in a current growing corridor off 80 Street. Price The City of Cottage Grove paid $315,000 for the site for a price of $13.39 per square foot. In addition, the City is estimated to pay around $57,000 for demolition of the former building. There is some additional environmental remediation on site but most of those costs will be recovered in the form of grants. If we factor in the demolition costs plus the purchase price to recoup our costs the list price would be at $15.81 per square foot or $372,000. From what we know of the Cottage Grove market the $15.81 per square foot price for just the land will be difficult to receive. A list of similar parcels that were undeveloped commercial land within the communities of Cottage Grove and Woodbury are listed below. If the site does not sell in 2020, a full appraisal of the land will be done in 2021. Table 1. Shows a list of undeveloped commercial properties sold in Cottage Grove and Woodbury. The price listed for 7470 East Point Douglas is the amount the land would need to be sold for to break even on the property. Promotion The commercial site will be promoted through the use of MNCAR location services, direct to email campaigns through Constant Contact, the use of a site brochure at conferences and other meetings, and a direct to mail campaign. People This Marketing Plan will be carried out by the Economic Development Division, which consists of: Christine Costello – Economic Development Director Matt Wolf – Economic Development Specialist Process Although a set price or a price range should be determined before marketing the site. If in the process of marketing the site there is a desired use that is widely needed in the community or can help facilitate other economic development as a result of the sale, it should be considered lowering the price of the land to assist in the sale. Specifically, to the $8.00 per square foot or $188,176 range that has been seen elsewhere in the Cottage Grove market. Budget Over the course of 2020 the City of Cottage Grove is tentatively budgeting the following items to ensure we meet the objectives outlined in this marketing plan. Marketing Expense Estimated Price Constant Contact – Email Marketing $840 Subscription (2020) Direct-to-Mail Marketing Campaign $62 Professional Photography of Site $500 Brochure Printing (Erza Design) $100 MNCAR Membership – Listing of Sites On-Line $2,200 Total $3,702