EDA Agenda - 04/10/2024 (Workshop)AGENDA
ECONOMIC DEVELOPMENT AUTHORITY SPECIAL MEETING
Wednesday, April 10, 2024 — 5:00 p.m.
Academy Room, Monticello Community Center
1. Call to order
2. Review and Discussion of Retail Market Analysis Proposal
3. Adjournment
000 WCOMB GROUP' Ltd.
O011 R E A L E S T A T E A N D
ODO RETAIL CONSULTANTS
March 3, 2024
Mr. Steve Johnson, President
Economic Development Authority
CITY OF MONTICELLO
505 Walnut Street, Suite 1
Monticello, Minnesota 55362
Dear Mr. Johnson:
In response to your request, we have prepared a work program to conduct market analysis to
identify retail market demand for retail stores, restaurants, and services in Monticello. Following
completion of these tasks, we will prepare recommendations for a marketing program focused on
presenting the facts that the retailers consider important in selecting retail sites.
DELIVERABLES: Deliverables from this engagement are expected to include, but are not
limited to the following items.
I. PHASE ONE: RETAIL MARKET REPORT
A. Retail Market Analysis
I . Site analysis and retail tenant mix
2. EDA site visits
3. Identification of competitive shopping areas and tenant mix
4. Customer Spotting Survey
5. Evaluation of trade area population and other demographic characteristics
6. Trade area driving tour
7. Monticello employment trends and large employers
8. Realtor interviews
9. Monticello retail sales trends
10. Retail sales potential by tenant type
11. Voids analysis to identify tenants that are under represented or void in Monticello
12. Findings and recommendations
13. Draft market research report, marketing brochure, and EDA site descriptions
II. PHASE TWO: MARKETING REPRESENTATION
A. Prepare Draft Marketing Representative Job Description
B. Identify Marketing Representatives
C. Engage Marketing Representative
D. Identify Retailer Tenant Representatives
826 Lake Ridge Drive • St. Paul, Minnesota 55129 • (612) 339-7000
Mr. Steve Johnson
March 3, 2024
Page 2
III. PHASE THREE: PRIVATE SECTOR PARTICIPATION
Monticello has several privately owned sites that are suitable for retail development.
Should these owners be offered the opportunity to participate in the marketing plan? If
so, on what basis?
IV. PHASE FOUR: MARKETING PLAN
A. Finalize Marketing Plan
B. Finalize Marketing Brochure and Collateral Information
C. Implement Marketing Plan
Work products described above in Phase One have easily identifiable work scopes, which
provide the basis for a fixed cost proposal. The work scopes for Phases Two, Three, and Four
will become apparent at the end of Phase One. As a result, only the budget for Phase One is
included in this proposal.
MARKET RESEARCH WORK PROGRAM
The work program outlined below is designed to provide the information necessary to complete
the deliverables described for Phase One.
♦ Monticello Retail Area Evaluation
Monticello's retail areas will be visited to identify existing retail stores, restaurants, and
services to determine Monticello's tenant mix. Individual businesses will be identified and
categorized by type. Other factors to be considered include traffic counts on I-94, Highway
25, and Broadway Street.
♦ EDA Property Evaluation
Properties owned by the EDA will be visited to identify site characteristics and potential
uses based on tenant criteria. Potential tenant types and site information will be prepared
for each site.
♦ Competitive Evaluation
Competitive shopping areas will be identified and visited to determine the tenant mix.
Competitive retail communities are expected to include Clearwater, Buffalo, Albertville,
St. Michael, Big Lake, Elk River, and Rogers. Retail tenant mix in each of these
communities will be identified for comparison with Monticello.
♦ Customer Spotting Survey
Retail businesses in downtown Monticello will be asked to participate in a survey of their
customers to determine where they live and work and why they shopped in that business.
As contemplated, employees of each store will conduct a brief survey as customers pay for
their goods and services. The budget assumes 10 to 15 business participants. In a previous
engagement, the Monticello Downtown Business Association agreed to distribute survey
forms and instructions to participating businesses, and to collect completed survey
instruments. Each business participant will be provided with survey results for their
Mr. Steve Johnson
March 3, 2024
Page 3
business. This information will be used to help identify the primary trade area for
Monticello retailers and the amount of inflow patronage.
♦ Trade Area Analysis
The trade area for Monticello will be delineated based on arterial road networks and
McComb Group experience. The trade area delineation will take into consideration
physical barriers and competitive shopping areas in surrounding communities. The
economy of the trade area will be analyzed to identify and quantify those factors that
generate support for retail, restaurant, and service establishments. Demographic
characteristics include, but are not limited to: employment, population, households, and
household income for 2000, 2010, 2023, and 2028. Retail purchasing power of trade area
households will be identified for target years of 2024 and 2029. Our proprietary purchasing
power model includes over 120 types of business establishments. A list of these business
establishments is attached.
♦ Trade Area Driving Tour
Homes that are representative of the Monticello trade area will be photographed and
mapped on a driving tour to portray the mix of residential areas served by Monticello
retailers. These will be presented in a form similar to the Rochester report (copy attached).
♦ Monticello Employment Trends
Wage and salary employment trends in Monticello will be evaluated to identify
employment by category and trade area penetration. Large employers will be identified to
demonstrate the variety of businesses located in Monticello.
♦ Realtor Interviews
Realtors active in Monticello will be interviewed to obtain their perceptions of market
support and demand for retail space in Monticello. Realtor observations about current and
future market conditions will also be obtained.
♦ Retail Sales Trends
Retail sales trends for Monticello will be analyzed utilizing information from the Census
of Retail Trade for 2007, 2012, and 2017, and updated with Minnesota Sales Tax
information to determine 2023 retail sales. Retail sales by store type will be compared
with purchasing power to determine current market share.
♦ Retail Sales Potential by Tenant Type
Retail sales potential in Monticello will be estimated taking into consideration competitive
impacts, trade area demographics, trade area purchasing power, and estimated market
share. Based on this analysis and current trends, future retail, restaurants, and service sales
potential will be estimated by business type. These retail sales estimates will be compared
with estimated retail sales by category in Monticello to determine those businesses with
sufficient retail sales for profitable operation in Monticello. Estimates of retail, restaurant,
and service establishments supported by retail sales potential will be prepared for target
years of 2024 and 2030.
Mr. Steve Johnson
March 3, 2024
Page 4
♦ Voids Analysis and Retail Store Demand
Monticello's retail tenant mix will be compared with results of retail sales potential to
identify categories that are under represented or not located in Monticello.
♦ Findings and Recommendations
Findings and recommendations will be prepared for client review and discussion.
♦ Draft Reports
Draft reports will be prepared for the market research report, marketing brochure, and
format for EDA sites.
MEETINGS
Four meetings are planned during the course of the evaluation to keep the client informed of our
progress and findings. These meetings include the following:
♦ Start -Up Meeting will be held at the beginning of the engagement to finalize research
objectives and obtain client provided information.
♦ Progress Meeting will be held with the client to discuss preliminary results of the market
analysis, retail sales potential, and retail store demand.
♦ Progress Meeting will be held with the client to discuss preliminary findings and
recommendations, results of site visits, and potential marketing brochure subjects.
♦ Report Meeting will be held to assess present results of our research and recommendations
with the client. This meeting will cover all aspects of the research program.
The budget provides for four meetings as described above. Additional meetings will be billed at
our normal hourly rates plus expenses.
SCHEDULE
The market research described in Phase One of this proposal can be completed within a three-
month period following receipt of the signed engagement letter and retainer.
QUALIFICATIONS AND EXPERIENCE
McComb Group, Ltd. is a full-service retail and real estate consulting firm specializing in market
research and financial feasibility. The firm has extensive experience in the real estate industry and
has conducted market research, financial feasibility, and development consulting for all types of
real estate developments.
McComb Group, Ltd. has a team that is qualified to conduct the research described in this proposal.
McComb Group's professional staff associated with this engagement includes the following:
♦ James B. McComb, President, founded the predecessor of McComb Group in 1974
following six years as a member of the corporate staff with Dayton Hudson Corporation.
He is experienced with all types of real estate development and has conducted market
research and financial feasibility for shopping centers, retail stores, office buildings,
Mr. Steve Johnson
March 3, 2024
Page 5
business parks, multi -family, and mixed-use developments. The firm's approach to market
analysis and financial feasibility has undergone continuous development and refinement.
Mr. McComb has directed and participated in all the firm's research activities for over 45
years.
♦ Susan Nache, Associate, has over 25 years of experience and performs market research,
demographic analysis, and consumer research tasks. Ms. Nache conducts consumer
research analysis and cross -tabulation on McComb Group's survey processing software;
and utilizes McComb Group software programs for financial feasibility and statistical
analysis.
Mr. McComb will be responsible for managing and directing the overall research program and will
participate directly in findings and conclusions. Individual work tasks will be assigned to
personnel within the firm based on qualifications and experience.
BUDGET
The budget for the work program and work products described in this proposal is shown below.
Professional Services
Budget
Monticello Retail Area Evaluation
$ 2,400
EDA Property Evaluation
800
Competitive Evaluation
7,300
Customer Spotting Survey
3,200
Trade Area Analysis
2,200
Trade Area Driving Tour
2,100
Monticello Employment Trends
1,800
Realtor Interviews
400
Retail Sales Trends
2,100
Retail Sales Potential by Tenant Type
1,600
Voids Analysis and Retail Store Demand
400
Findings and Recommendations
800
Draft Reports
2,100
Report Preparation
2,100
Meetings
1,600
Total Professional Services
$ 30,900
ExUenses (Estimated
Mileage and Travel
$ 1,250
Demographics
750
Computer and Software
500
Report Production
2,000
Reproduction
300
Miscellaneous
150
Total Expenses
$ 4,950
TOTAL BUDGET
S15,850
Mr. Steve Johnson
March 3, 2024
Page 6
The professional fees for the services outlined in this proposal total $30,900 and will be performed
at a price not -to -exceed that amount. Expenses, estimated at $4,950, are to be reimbursed based
on actual cost. The budget is based on the amount of time required to perform the work tasks and
our normal hourly billing rates of $200 for principals, $150 for senior associates, $125 for
associates, and $754100 for consultants.
Company policy requires a retainer of approximately one-quarter the estimated budget for the
project or $9,000. The retainer will be applied to the final invoice as a credit for billing of
professional services and expenses. Invoices for professional services and expenses will be
rendered at mid -month and month-end as our work progresses.
Standard billing terms are net ten days. A finance charge of 1.5 percent will be charged on all
unpaid balances outstanding more than 30 days.
REPORT PURPOSE
This proposal was prepared with the understanding that the results of our work will be used by the
client to establish a marketing plan to attract retail stores to Monticello. Our report will be prepared
for that purpose and will be subject to the following qualifications:
♦ Our analysis will not ascertain the legal and regulatory requirements applicable to this
project, including zoning, other state, and local government regulations, permits, and
licenses. No effort will be made to determine the possible effect on the proposed project
of present or future federal, state, or local legislation, or any environmental or ecological
matters.
♦ Our report and analysis will be based on estimates, assumptions and other information
developed from research of the market, knowledge of the industry and discussions with the
client. Some assumptions inevitably will not materialize and unanticipated events and
circumstances may occur; therefore, actual results achieved will vary from the analysis.
♦ Our analysis will not evaluate management's effectiveness or be responsible for future
marketing efforts and other management actions upon which actual results are dependent.
♦ Our report will be intended solely for the purpose described above and should not be used
for any other purpose without our prior written permission. Permission for other use of the
report will be granted only upon meeting company standards for the proposed use.
These qualifications will be included in our final report. If the report is used for purposes other
than specified above, we reserve the right to review the materials for proper use of our work.
ACCEPTANCE PROCEDURES
To indicate acceptance of the proposal, please sign a copy of the proposal and return it to us
together with your check for the retainer as authorization to proceed with this engagement.
We appreciate the opportunity to submit this proposal and look forward to hearing from you soon.
If you have any questions concerning the proposal, please call me at (612) 339-7000.
Mr. Steve Johnson
March 3, 2024
Page 7
Accepted By:
Company:
Title:
Date:
McComb Group, Ltd.
6 �bM641W
James B. McComb
President