THIRD STREET RETAIL ASSESSMENT

(1)

THIRD STREET RETAIL ASSESSMENT

prepared for

The San Francisco Redevelopment Agency

Prepared By

C

onley

C

onsulting

G

roup

(2)

THIRD STREET RETAIL ASSESSMENT

prepared for

The San Francisco Redevelopment Agency

Prepared By

C

onley

C

onsulting

G

roup

403 Martin Luther King Jr. Way

Oakland, California 94607

Submitted January 2003

Revised April 2003

(3)

The San Francisco Redevelopment Agency commissioned this report to evaluate the retail potential of Third Street. Conley Consulting Group (CCG) has analyzed retail supply and demand conditions on Third Street, estimated the retail district’s current success in capturing retail sales from the shopper base, and evaluated the likely future trends based on proposed and projected development in the Trade Area.

Current Performance

In the last five years, Third Street retail uses have shown stagnating sales performance. Today these retailers capture only a small portion of the expenditure potential generated by Trade Area residents and employees of local businesses. CCG estimates that Third Street retailers currently capture less than 13% of the residents' expenditure potential, and that nearly $160 million in total expenditure potential is lost each year as leakage to other retail areas. This is an extension of a long-documented trend: Over the past twenty years, various retail analysts have reported annual leakage in excess of $100 million for the district. Local shoppers report that they travel outside of the Trade Area to patronize other districts, including the nearby San Bruno Avenue neighborhood shopping district, for basic shopping needs.

The current retail environment—including the poor condition of the street and sidewalks; deteriorated storefronts; poor pedestrian environment; evidence of deferred investment and poor maintenance standards of the surrounding uses; people congregating near liquor and convenience stores; and lack of a critical mass of shopper attractions— suggests that there is limited potential to recapture the current retail leakage. Future Trends Supporting Retail

However, there are recent indicators that physical conditions will improve on Third Street in the near term. Streetscape improvements planned on Third Street between Kirkwood and Shafter as part of the Light Rail system will include improved sidewalks, lighting, and provision of street furniture, public art, and paving. Improvements are scheduled to be completed in 2003. Planned residential development along Third Street, with provisions for ground-floor retail uses, will further improve the environment and support retail revitalization. Since most of the users of the Light Rail System in Bayview are projected to be people who already live in the Trade area, the Light Rail will improve visibility and shopper awareness of Third Street retailers, but likely will not generate a new shopper base for existing businesses. A façade improvement program could further improve the environment and potentially encourage support for the retail district.

New housing development along Third Street, as is projected, will further strengthen the district’s retail performance, by providing an increased level of pedestrian activity on the street and consequently adding to the flow of potential shoppers from which area stores can draw support. Most importantly, with appropriate street-level uses and urban design, these developments will improve the pedestrian environment on Third Street.

(6)

Retail Opportunities

This report is not a prediction that new retail on Third Street is likely to recapture all of the current retail leakage from the market area. Rather, CCG estimates the maximum amount of retail sales potentially available for capture in the future. The maximum amount of retail sales available for capture by the year 2011 would support more than 400,000 SF of new retail. However, the portion of the retail leakage that can be successfully recaptured is largely a function of the retail improvement implementation strategy enacted for the district, and whether new retail with sufficient drawing power and performance potential can be added to the retail mix on Third Street.

In the near term, the best opportunities for market success are stores selling

convenience goods and restaurants. Additionally, preventing the development of new package liquor stores or markets that sell liquor—uses already prevalent in the area—is also important to retail revitalization on Third Street. Personal services like beauty shops, beauty supply stores, and nail salons are potentially successful additions to the retail inventory in the near term.

Attraction of comparison goods stores is likely to be the most difficult, because of the critical mass and co-tenancy requirements for success of apparel, general merchandise, and specialty retail stores. These stores typically perform best with an anchor tenant securing shopper patronage patterns and enough stores to accommodate the

comparison aspect of shopping for these goods. A careful strategy to attract anchor or mini-anchor comparison goods stores is needed to successfully attract this portion of the retail sales potential to Third Street retail outlets.

(7)

(8)

I. Introduction

A. Assignment

The Conley Consulting Group has been retained by the San Francisco Redevelopment Agency to evaluate the market potential for retail development on Third Street. Over the last decade or so, the City and Agency have hired consultants to evaluate the potential for retail revitalization on Third Street multiple times, including:

1993, Sedway, Third Street Corridor Study. Identifies Economic development

opportunities for Third Street, including retail and business development opportunities. Identified 156,000 SF of retail space which could be supported by recapturing sales leakage.

1996, Keyser Marston Associates,Inc (KMA), Bayview Hunters Point Concept Plan. Examines retail revitalization opportunities. Identified $115 million in sales leakage which would support up to 134,000 SF of new retail space.

1998, Pittman Hames and Keyser Marston Associates . This analysis, performed for MUNI, evaluated revitalization opportunities in conjunction with the planned development of the Light Rail System on Third Street. Included in the report is a 1996 retail analysis, performed by KMA, which identified $75 to $95 million in sales leakage for the two retail districts in Bayview Hunters Point (Third Street and Bayshore Boulevard). It was

estimated that 65,000 to 85,000 SF of new retail space could be supported.

Each analysis has found that while there is market potential in terms of unsatisfied retail demand, there are significant barriers to retail revitalization.

B. Report Organization

Following this Introduction, which is the first section, this report is organized as follows: Section II describes the Trade area served by the existing retail supply on Third Street.

Section III estimates the retail expenditure potential of the residents in the Trade Area.

Section IV evaluates the current inventory of retail stores on Third Street, the sales performance of the retail uses, and estimates the existing capture share of the expenditure potential.

Section V estimates the existing retail Sales Leakage of expenditure potential from the Trade Area, and evaluates the opportunity to recapture that leakage given both the current and estimated future population base. Section VI discusses the Caveats and Limitations of this analysis.

(9)

(10)

II. Trade Area and Functions Served

A. Location

The Trade Area served by Third Street is characterized by its isolation from the rest of San Francisco. The Bayview Hunters Point neighborhood is the extreme southeastern portion of the City, divided by major transportation routes from the rest of the City, including Cesar Chavez to the North, and the 101 and I-280 freeways to the West. These geographic barriers limit the influx of potential shoppers from adjacent neighborhoods.

B. Retail Functions and Trade Area Served

CCG surveyed the Third Street retail area from Cesar Chavez to Jamestown in Fall, 2002. Appendix A presents the results of our survey, providing an inventory of ground floor uses throughout the district. One hundred eighty-four uses were identified in the survey, with small markets selling liquor being the most common store type identified. Fifteen of the uses were vacant at the time of the survey. Thirty-five percent of the uses surveyed were non-retail uses including both social organizations and churches, as well as business and personal services.

Notably absent from the retail district are continuous groupings of retail uses at the ground-floor level, as the street-level network is frequently interrupted by non-retail uses including service businesses and social-service uses, business functions, and vacant storefronts. The northern side of the street has historically had a more continuous retail network, despite the more frequent interruptions caused by the intersection of Third Street with the street grid pattern.

The primary retail functions served along Third Street are food related: small grocery stores and food and beverage outlets dominate both the number of stores and reported taxable sales in the area. In our survey work we noted pedestrian activity on the street concentrated near the corner stores, with evidence of loitering and unsavory activity serving to discourage shopper traffic.

According to local sources, retail uses are most successful in the blocks around Evans Street, where eating places, in particular, benefit from the support of employees at local businesses. This success translates into higher sales performance and rental rates. The primary source of shopper support for the district are the residents of the Bayview Hunters Point neighborhood, the area commonly understood to be bounded by Cesar Chavez and Islais Creek to the North, Bayshore Boulevard to the West, the Bay

shoreline to the east, and The San Mateo County line to the south. This area represents the primary Trade Area served by Third Street retail. In addition to drawing support from Trade Area residents, local retailers are patronized by the more than 30,000 employees of local businesses. Merchant interviews along Third Street confirm that few shoppers are drawn from outside of the Trade Area.

(11)

(12)

III. Expenditure Potential and Leakage

A. Current Trade Area Demographics and Trends

The primary source of data available today for demographics related to population, housing, and households is the 2000 US Census. As this study was being conducted, most of the relevant data from the Census had been released. The projections included in this report are primarily based on 2000 Census data. However, due to the relatively recent release of the Census, forecasts of future demographics based on this data are not accessible for all demographic categories. In these cases, existing forecasts based on data from the 1990 Census are utilized.

1. Population

The total population for the Trade Area per the 2000 Census is 33,170, estimated at 34,694 for 2002, and is projected by Claritas to grow to 38,121 by 2007.

The Trade Area has historically been home to one of the City’s primary concentrations of African-Americans. Though the population of the Trade Area remains predominantly American, the racial composition of the Area is in flux and numbers of Americans have been declining. In 2000, 48.0% of the population was African-American, a decline from 62.5% in 1990 according to the Census. The decline in the percentage represented by African-Americans in the Trade Area population is projected to continue: by 2002 this group is estimated to represent 45.98% of the total. In

comparison, the 2000 Census indicated that only 7.8% of the City’s population is African-American (see Table 1).

In the Trade Area, Caucasians, Asians/Pacific Islanders, and All Other Races

constituted 9.6%, 27.9%, and 10.4% of the population, respectively. For the City of San Francisco as a whole, Caucasians, Asians/Pacific Islanders, and All Other Races constituted 49.7%, 31.3%, and 6.9% of the population, respectively.

The Asian and Pacific Islander population increased 28.1% between 1990 and 2000, from 21.8% of the Trade Area population to 27.9%. The Caucasian population

decreased by 11.4% and All Other Races increased 113.7%. The Trade Area has also seen a major increase in its Latino population, growing from 9.5% in 1990 to 16.7% in 2000, with estimates at 17.7% in 2002. Meanwhile, the City’s Caucasian and African-American populations both decreased. The Caucasian population decreased from 53.6% to 49.7%, a 7.2% decrease, and the African-American population decreased from 10.9% to 7.8%, a 28.5% decrease. The Asian population increased by 7.5%, from 29.13% to 31.3% of the overall population. Compared to the Trade Area, the City’s Latino population has increased at a slower rate, from 13.9% to 14.1%.

The Trade Area’s population is 47.8% male and 52.2% female. The community’s age composition is evenly balanced, with approximately 33% of the Trade Area population under 20 years of age and 21% between 20 and 44 years of age, 35% between 35 years and 65 years, and 10.5% above age 65. The median age of Trade Area residents is estimated at 31.97 years of age for 2002 (see Table 2).

(13)

TABLE 1

POPULATION CHARACTERISTICS

THIRD STREET RETAIL MARKET ANALYSIS SAN FRANCISCO REDEVELOPMENT AGENCY

1990 Census (1)

2000 Census

2002 (Estimate)

2007 (Projection)

1990 - 2000 % Change

2000 - 2007 % Change Bay View Hunters Point Trade Area

Total Population 27,899 33,170 34,694 38,121 18.89% 14.93%

% White 10.85% 9.62% 9.62% NA (11.39%) NA

% Black 62.48% 48.00% 45.98% NA (23.18%) NA

% Asian & Pac. Islander 21.81% 27.94% 29.11% NA 28.11% NA

% Other 4.85% 10.37% 11.17% NA 113.69% NA

Total 100.00% 95.93% 95.88% NA (4.07%) NA

% Latino by Origin 9.49% 16.67% 17.65% NA 75.59% NA

Total Households 8,646 9,153 9,627 10,372 5.86% 13.32%

Median Household Income (2) NA $37,146 $52,259 NA NA NA

Per Capita Income $10,190 $14,200 $16,652 NA 39.35% NA

City of San Francisco

Total Population 723,959 776,733 7.29%

% White 53.56% 49.70% (7.21%)

% Black 10.92% 7.80% (28.56%)

% Asian & Pac. Islander 29.13% 31.30% 7.46%

% Other 6.39% 6.90% 7.98%

Total 100.00% 95.70% (4.30%)

% Latino by Origin 13.91% 14.10% 1.35%

Total Households 305,584 329,700 7.89%

Median Household Income $33,414 $55,221 65.26%

Per Capita Income $19,695 $34,556 75.46%

Notes:

(1) 1990 Census data is provided as an aggregate of the BVHP census tracts forming a slightly larger area as compared to the area covered for the 2000 Census, 2002 estimates, and 2007 projections.

(2) Claritas, Inc. supplied the 2002 estimate, based on projections from 1990 census data, for this particular demographic segment. CCG considers this estimate to be unreliable.

Source: Conley Consulting Group, Claritas Inc., US Census report tables 20200.002.xls - T1 Population

(14)

TABLE 2

SOCIAL CHARACTERISTICS

1990 Census 2000 Census 2002 (Estimate)

1990 - 2000 % Change

2000 - 2002 % Change Bay View Hunters Point Trade Area

Median Age (x) 31.60 31.97 (x) 1.17%

Population by Age 27,899 33,170 34,694

0-19 9,000 11,066 11,494 22.96% 3.87%

20-34 6,648 7,063 7,310 6.24% 3.50%

35-64 8,726 11,590 12,087 32.82% 4.29%

65+ 3,525 3,451 3,612 (2.10%) 4.66%

Households by Household Size 8,646 9,296 9,627 7.52% 3.56%

1 person household 1,846 1,655 1,699 (10.35%) 2.67%

2-4 person household 4,886 5,178 5,317 5.98% 2.68%

5+ person household 1,914 2,463 2,612 28.68% 6.04%

Male 46.96% 47.80% 47.80% 1.80% 0.00%

Female 53.04% 52.20% 52.20% (1.59%) 0.00%

Educational Attainment (age 25+) 16,888 19,553 20,705 15.78% 5.89%

No High School Diploma 6,112 7,127 7,371 16.61% 3.42%

High School Graduate (or GED) 4,655 4,665 5,762 (1) 0.21% 23.52%

Some College 3,463 4,456 4,367 28.67% (2.00%)

College Degree or Higher 2,658 3,305 3,205 24.34% (3.02%)

Notes:

(1) Claritas, Inc. supplied the 2002 estimate, based on projections from 1990 census data, for this particular demographic segment. CCG considers this estimate to be unreliable.

Source: Conley Consulting Group, Claritas Inc., US Census report tables 20200.002.xls - T2 Social

(15)

TABLE 3

INCOME DISTRIBUTION

Num. % Total Num. % Total Num. % Total Num. % Total Num. % Total Num. % Total Income Distribution

Total Households 8,664 100.0% 9,153 100.0% 5.64% 0.00% 305,984 100.0% 329,850 100.0% 7.80% 0.00% less than $15,000 2,991 34.5% 2,194 24.0% (26.65%) (30.57%) 66,768 21.8% 48,655 14.8% (27.13%) (32.40%) $15,000 to $34,999 2,481 28.6% 2,161 23.6% (12.90%) (17.55%) 92,104 30.1% 57,738 17.5% (37.31%) (41.85%) $35,000 to $49,999 1,269 14.6% 1,185 12.9% (6.62%) (11.61%) 52,686 17.2% 43,784 13.3% (16.90%) (22.91%) $50,000 to $74,999 1,247 14.4% 1,562 17.1% 25.26% 18.57% 50,536 16.5% 58,297 17.7% 15.36% 7.01% $75,000 + 676 7.8% 2,051 22.4% 203.40% 187.19% 43,890 14.3% 121,376 36.8% 176.55% 156.54%

1990 Census 1990 Census

Bay View Hunters Point Trade Area City of San Francisco 2000 Census

2000 Census 1990 - 2000 % Change 1990 - 2000 % Change

Source: Conley Consulting Group, Claritas Inc., US Census report tables 20200.002.xls - T3 Income

(16)

TABLE 4

HOUSING CHARACTERISTICS

BVHP San Francisco

1990 Census

Total Housing Units 9,203 328,471

Occupied Units 8,600 305,584

Owner Occupied 4,566 105,497

% Owner Occupied 53.09% 34.52%

Renter Occupied 4,034 200,087

% Renter Occupied 46.91% 65.48%

Median Value $202,668 $298,900

Median Rent 459 653

2000 Census

Total Housing Units 9,508 346,527

Occupied Units 9,296 329,700

Owner Occupied 4,774 115,391

% Owner Occupied 51.36% 35.00%

Renter Occupied 4,522 214,309

% Renter Occupied 48.64% 65.00%

Median Value $253,900 $422,700

Median Rent 554 928

1990-2000 % Change

Total Housing Units 3.31% 5.50%

Occupied Units 8.09% 7.89%

Owner Occupied 4.56% 9.38%

% Owner Occupied (3.27%) 1.38%

Renter Occupied 12.10% 7.11%

% Renter Occupied 3.70% (0.73%)

Median Value 25.28% 41.42%

Median Rent 20.80% 42.11%

Source: Conley Consulting Group, Claritas Inc., US Census report tables 20200.002.xls - T4 Housing

(17)

2. Income

The Trade Area median household income in 2000 was $37,146 according to the Census and estimated to be $52,259 for 20021_{by Claritas. The median household}

income for the City was $55,221 in the 2000 Census. The 2000 Census per capita income for the Trade Area was $14,200, compared to $34,556 for the City as a whole. The Trade Area per capita income for 2002 is estimated at $16,652.

Income distribution of Trade Area households in the 2000 Census is as follows: 24.0% are less than $15,000, 23.6% are between $15,000 and $34,999, 12.9% are between $35,000 and $49,999, 17.1% are between $50,000 and $74,999, and 22.4% are over $75,000. In comparison, the City’s income distribution is as follows: 14.8% are less than $15,000, 17.5% are between $15,000 and $34,999, 13.3% are between $35,000 and $49,999, 17.7% are between $50,000 and $74,999, and 36.8% are over $75,000.

3. Housing Tenure and Pricing

The Trade Area served by Third Street has a higher homeownership rate than does the City as a whole, although the Trade Area home ownership rate has declined slightly in the last decade. In the 2000 Census, 51.4% of the occupied units were owner occupied, with the remaining 48.6% renter occupied. For the City as a whole, only 35% of the occupied housing units are owner occupied with the majority at 65% of the units renter occupied.

Census data on housing costs reveal a differential value trend between the Trade Area and the City. In 2000, the median value of owner-occupied units in the Trade Area was $253,900, a 25.3% increase from its 1990 value. In San Francisco, the median value was $422,700, a 41.4% increase since 1990. Similarly, the median rent in the City rose at a much faster rate between 1990 and 2000 than in the Trade Area. The City’s median rent rose from $653 per month in 1990 to $928 per month in 2000, a $42.1% increase. The Trade Area’s median rent rose from $459 per month in 1990 to $554 per month in 2000, a $20.8% increase. Thus, in the last decade, housing price increases were less rapid in the Trade Area than in the City of San Francisco as a whole.

B. Expenditure Potential

CCG calculated the expenditure potential of Trade Area residents based on income characteristics and demonstrated retail expenditure patterns derived from an

examination of reported sales tax collections in California. Per capita expenditure patterns in the Central Valley Region were used to estimate the expenditure potential of Trade Area residents in various categories (see Table 5). Although there are significant differences between Central Valley and Bayview residents, including the fact that the former devote a lower portion of their income to housing costs, spending patterns for this group are judged to be closer to Bayview residents than the much higher income

residents of either the Bay Area as a whole or of San Francisco County.

1_{See Table 1. This estimate by Claritas, Inc. is based on projections from 1990 census data and is}

(18)

C. Leakage

Sales Leakage is a term that refers to the loss of sales from one district to neighboring one, as suggested when sales figures in a district are significantly less than the

projected expenditure potential of its Trade Area. The expenditure potential of Trade Area residents was compared to sales tax collections data for Third Street, and, as demonstrated in Table 6, the expenditure potential of Trade Area residents currently exceeds sales on Third Street by roughly $160 million annually. This unsatisfied expenditure potential is assumed to be lost to other retail areas as leakage.

D. Current Achieved Capture Share

The extent to which Third Street retail captures the expenditure potential of Trade Area residents differs by retail category, as shown in Table 6. For Convenience Goods, including grocery, drug and liquor stores, Third Street merchants capture 22% of the potential expenditures. For Comparison Goods like those sold in apparel, general merchandise, home furnishings, and appliance stores, Third Street merchants capture 2% of the sales potential. CCG estimates that 24% of the potential expenditures are captured by Third Street merchants in the category of Eating & Drinking. For restaurants and other eating and drinking outlets however, residents' expenditure potential is

supplemented by the daytime purchases from employees of local businesses. Still, CCG estimates that 48.7%, or less than half of the available expenditure potential from Trade Area residents and employees, is captured by Third Street merchants in the category of Eating & Drinking. In all, CCG estimates that less than 13% of local expenditure potential is captured by Third Street businesses.

(19)

TABLE 5

TRADE AREA RESIDENT EXPENDITURE POTENTIAL - 2002 3RD STREET RETAIL MARKET ANALYSIS

SAN FRANCISCO REDEVELOPMENT AGENCY

Total Estimated 2002 Population Estimated 2002 Per Capita Income

% of Per Capita Estimated Total Bay View Hunters Point Trade Area PCI (1) Retail Sales Expend. Potential Convenience Goods

Food Stores Selling Liquor (2) (35% taxable) 6.1% $1,019 $35,345,987 All Other Food Stores (2) (35% taxable) 4.3% $720 $24,987,465 Drug Stores (2) (80% taxable) 1.1% $176 $6,097,940 Liquor Stores 0.4% $61 $2,116,866 Convenience Goods Subtotal 11.9% $1,976 $68,548,258 Comparison Goods

Apparel 1.4% $228 $7,911,341 General Merchandise (except drugs) 8.2% $1,360 $47,198,389 Home Furnishings & Household Appliances 1.5% $248 $8,616,973 Specialty Retail 4.6% $772 $26,777,490 Comparison Goods Subtotal 15.7% $2,609 $90,504,193 Eating & Drinking 4.6% $759 $26,326,554 Total Selected Retail Expenditure Potential 32.1% $5,343 $185,379,006

Notes:

(1) Based on the sales pattern in the Central Valley region, which most closely resembles the Trade Area's demographics and income levels (per capita income) in comparison with other Bay Area and Northern California regions.

(2) %PCI is adjusted updwards to represent total expenditures. Non-adjusted %PCI calculations were based on

taxable sales. Taxable sales for drugstores are assumed to represent an estimated 80% of total and taxable

sales for food stores are estimated at 35% of total sales. 34,694 $16,652

Source: Conley Consulting Group

(20)

TABLE 6

ESTIMATED RESIDENT UNMET DEMAND - 2002 3RD STREET RETAIL MARKET ANALYSIS SAN FRANCISCO REDEVELOPMENT AGENCY

Bay View Hunters Point Trade Area Estimated Total Retail % Sales by Total Retail Current Estimated Target New Available Sales in Trade Area Sales by Capture Unmet Sales Volume Retail Expenditure Trade Area Residents Trade Area Share Demand To support new Supportable

Potential Residents Stores ($/SF)

Convenience Goods

Food Stores Selling Liquor (1) (35% taxable) $35,345,987 $6,432,511 85% $5,467,635 15% $29,878,352 All Other Food Stores (1) (35% taxable) $24,987,465 $6,743,091 85% $5,731,628 23% $19,255,838 Drug Stores (1) (80% taxable) $6,097,940 $4,139,479 85% $3,518,557 58% $2,579,382 Liquor Stores $2,116,866 $472,023 85% $401,220 19% $1,715,647

Convenience Goods Subtotal $68,548,258 $17,787,105 85% $15,119,039 22% $53,429,219 $400 133,573 SF

Comparison Goods

Apparel $7,911,341 $74,996 85% $63,747 1% $7,847,595

General Merchandise (except drugs) $47,198,389 $29,764 85% $25,299 0% $47,173,090 Home Furnishings & Household Appliances $8,616,973 $134,083 85% $113,971 1% $8,503,002 Specialty Retail $26,777,490 $2,377,534 85% $2,020,904 8% $24,756,586

Comparison Goods Subtotal $90,504,193 $2,616,377 85% $2,223,920 2% $88,280,273 $300 294,268 SF

Eating & Drinking (2) $26,326,554 $12,557,492 50% $6,278,746 24% $20,047,808 $350 57,279 SF

Total Selected Retail Expenditure Potential $185,379,006 $32,960,975 72% $23,621,706 13% $161,757,300 $333 485,120 SF

Notes:

(1) Total Retail Sales are adjusted to represent total sales from tax collections data. Taxable sales for drugstores are assumed to represent an estimated 80% of total salesand taxable sales for food stores are estimated at 35% of total sales.

(2) based on stakeholder interviews.

Source: Conley Consulting Group report tables 20200.002.xls; T6 Leakage

(21)

(22)

IV. Third Street Retail Supply and Performance

A. Current Inventory 1. Retail Outlets by Type

The majority of the existing retail uses along the Third Street Corridor are small

storefronts located on the ground floor of older, mixed-use residential buildings. There are a few strip retail structures, stand-alone retail buildings, and relatively newer developments (estimated to date from the late 1980s or early 1990s). A handful of national retailers, primarily fast food and drug stores (e.g., McDonalds and Walgreens), have opened within the last five years, introducing nodes of increased sales activity in the Corridor. However, most of the merchants on Third Street are small mom-and-pop-type merchants with little representation from national or regional chains.

Based on CCG fieldwork, the composition of the retail inventory is summarized in Table 7 and Figure 1, and detailed in Appendix A.

2. Geographic Distribution of Outlets

The Third Street Corridor can be segmented into three sub-areas: the North Corridor, which spans from Cesar Chavez to Jerrold Avenue, the Central Corridor, spanning from Jerrold Avenue to Shafter Avenue, and the South Corridor, which spans from Shafter Avenue to Jamestown Avenue. These sub-areas have distinct identities and function in the Corridor’s economy in terms of business and housing composition, residents, employees, and resulting commerce activity. The retail in each sub-area has distinct characteristics reflecting these differences.

Retail along the North Corridor is situated amongst industrial buildings and businesses and draws support from the area’s employees. Retail stores in the area are primarily small restaurants and eateries operating amidst large industrial, manufacturing, and service businesses. In addition, the Bayview Plaza shopping center is located in the North Corridor, adding national retailers to the area that serves the neighborhood as well as the office tenants occupying the Class B commercial space in the plaza.

The Central Corridor is characterized by high-density apartments and attached low-quality single-family homes, situated above small, ground-floor retail storefronts. The retail inventory is primarily neighborhood-serving specialty retail, food and liquor stores, restaurants, personal care shops such as beauty salons and barber shops, and an abundance of community-oriented business/personal service offices. It should be noted that the Central Corridor houses a large majority of the liquor stores and the smaller food markets that sell liquor.

Retail in the South Corridor is less dense than in the Central Corridor. The South Corridor has a greater portion of apartments and attached single-family homes which sit above garages that front on the street. Residential uses along the South Corridor and adjacent streets are among the higher-end housing in the Bayview area. Like the

(23)

Central Corridor, retail is primarily mixed with residential uses and other neighborhood-serving uses. However, unlike the Central Corridor, the South Corridor has a larger variety of retail stores, including apparel, general merchandise, hardware and household appliance/furnishing stores, in addition to restaurants, food markets/liquor stores,

specialty retail, and business/personal services. It should be noted that a vast majority of the Comparison Goods available along Third Street can be purchased in the South Corridor. There are also fewer options for purchasing liquor in this area as compared to the Central Corridor. However, the South Corridor has a relatively large number of eating places that serve liquor (e.g. bars and seemingly defunct night entertainment establishments). Retail in this sub-area has the potential to capture customers from traffic generated by sporting events at 3Com Park, more specifically 49ers games. Table 7 shows the geographic distribution of retail outlets among the three Corridor sub-areas.

(24)

TABLE 7

GROUND-FLOOR RETAIL INVENTORY by SUB-AREA 3RD_{STREET RETAIL MARKET ANALYSIS}

Retail North Central South

Category Corridor Corridor Corridor Total

Family Apparel 1 1 1 3

General Merchandise 1 2 2 5

Gifts, Art Goods, and Novelties 0 0 2 2

Jewelry 0 0 1 1

Other Specialties 0 12 4 16

All Other Food Stores 0 4 0 4

Packaged Liquor Stores 0 4 0 4

Eating Places: No Alcoholic Beverages 6 2 6 14

Household and Home Furnishings 0 1 4 5

Second-hand Merchandise 1 0 0 1

Food Stores Selling All Types of Liquor 0 4 3 7

Eating Places: Beer and Wine 2 6 4 12

Eating and Drinking: All Types of Liquor 1 3 4 8

Lumber and Building Materials 0 1 0 1

Hardware Stores 0 0 4 4

Automotive Supplies and Parts 4 1 2 7

Service Stations 2 0 0 2

Business and Personal Services 16 28 21 65

All Other Outlets 6 1 1 8

Vacant 4 8 3 15

Total Outlets 44 78 62 184

Source: Conley Consulting Group Survey performed Fall 2002.

(25)

B. Sales Performance 1. Sales Trends by Category

Based on sales tax collections data provided by SFRA, annual sales tax collections from businesses along the Third Street Corridor have increased by 8.04% between fiscal year 1997/98 and 2001/02, from $385,696 to $416,704 (see Table 8). Based on sales tax collections data, total taxable sales for the Third Street Corridor during fiscal year 2001/02 are estimated at $41.67 million. In fiscal year 2001/02, eating and drinking establishments generated strong retail sales, accounting for approximately $8.95 million or 21.5% of the total estimated taxable sales in the Trade Area. Next to Eating and Drinking, retail sales were highest for Convenience Goods, followed by Automotive Service and Supply, reporting sales of $8.6 million and $5.5 million in sales, respectively. Comparison Goods (including apparel and accessories, general merchandise, furniture and furnishings, and specialty retail goods such as jewelry, gifts, and novelties, etc.) contributed a small portion of corridor sales at 5.7%, or $2.4 million in sales. Non-Retail Stores, mainly Business and Personal Service companies, reported the largest

contributions to overall sales tax collections at 38.08%, or $15.9 million.

In fiscal year 1997/98, the same retail categories – Eating and Drinking, Convenience Goods, and Automotive Service and Supply – were the leaders in retail sales within the Trade Area. At that time however, Convenience Goods generated more sales than Eating and Drinking, followed by Automotive Service and Supply (24.3%, 18.9%, and 10%, respectively). Comparison Goods still contributed a small portion of corridor sales at approximately 6% and Non-Retail Stores generated 40% of taxable sales.

For Convenience Goods, retail sales decreased by 8% between fiscal year 1997/98 and 2001/02, a decrease caused by a significant decline in sales for all food stores. A large decline in Convenience Goods sales was offset by increased performance in the categories of Drug Stores and Packaged Liquor Stores. Sales in drug stores increased steadily between fiscal year 1997/98 and 2001/02, as larger national retailers, such as Walgreens, had an increasing presence along the Corridor. Sales in packaged liquor stores increased by an alarming 215%.

During the same time period, significant sales increases occurred in the Automotive Service and Supply and Building Materials categories (42% and 28%, respectively), which can be attributed to an increase in industrial business activity in the northern section of the Third Street Corridor. Sales activity for the Eating and Drinking category increased by 23%, an increase that is also likely associated with the increased industrial business activity in the area.

Overall, retail sales trends over the past five fiscal years show pockets of improvement caused by the significant impact of a few national retailers new to the Corridor and increased business activity in the industrial area that has had a positive influence on nearby retailers. Outside of those isolated areas of improvement, sales activity along the Central and Southern Corridor has been in steady decline, as small neighborhood-serving and/or local retailers become less viable.

(26)

2. Sales Trends Compared to City-Wide Trends

Based on data provided by the SFRA, CCG compared sales tax collection trends for the Third Street Corridor to trends for the City as a whole (see Tables 8 and 9). On Third Street the sales trends for stores selling Convenience Goods, like food markets, drug stores, and package liquor stores were mixed. Overall, there was an 8% decline in sales in this category between 1997/98 and 2001/02. In contrast, in the same period for the City as a whole, sales rose by roughly 13%.

For Comparison Goods, including apparel, general merchandise, home furnishings and appliances, and specialty stores, sales at Third Street retailers had just over a 4% growth rate, while City-wide sales grew by less than 3.7%.

C. Proposed Development

According to City Planning records, by the year 2020 proposed development in the Trade area would result in addition of 2870 new households and 6219 new jobs. This includes nearly 3300 new jobs generated by the proposed stadium and shopping mall at Candlestick Park, which is currently an inactive development proposal. Planned

residential development includes more than 1800 units planned as part of the redevelopment of the Hunters Point Shipyard. If the substantial amount of new

residential units are developed in the Bayview Hunters Point area as projected, the total expenditure potential available to Third Street retail outlets will likely increase by more than $67 million (see Table 12, after Section V).

(27)

FIGURE 1

GROUND FLOOR RETAIL INVENTORY - SUMMARY 3RD STREET RETAIL MARKET ANALYSIS SAN FRANCISCO REDEVELOPMENT AGENCY

Retail Retail No. of Category Code Outlets

Family Apparel 03 3 General Merchandise 05 5 Gifts, Art Goods, and Novelties 11 2

Jewelry 17 1

Other Specialties 19 16 All Other Food Stores 20 4 Packaged Liquor Stores 22 4 Eating Places: No Alcoholic

Beverages

24 14

Household and Home Furnishings

30 5

Second-hand Merchandise 32 1 Food Stores Sellings All Types

of Liquor

34 7

Eating Places: Beer and Wine 35 12 Eating and Drinking: All Types

of Liquor

36 8

Lumber and Building Materials 50 1 Hardware Stores 51 4 Automotive Supplies and Parts 61 7 Service Stations 62 2 Business and Personal

Services

70 58

All Other Outlets 99 15

Vacant 00 15

Total Outlets 184

Business and Personal Services 32%

Household and Home Furnishings

3% Second-hand Merchandise

1% Food Stores Sellings All Types

of Liquor 4%

Eating Places: Beer and Wine 7%

Eating and Drinking: All Types of Liquor

4% Lumber and Building Materials

1% Hardware Stores

2% Automotive Supplies and Parts

4% Service Stations

1% Vacant

8%

Packaged Liquor Stores 2% Eating Places: No Alcoholic

Beverages 8% All Other Food Stores

2%

Other Specialties 9% Gifts, Art Goods, and Novelties

1% General Merchandise 3% Family Apparel 2% Jewelry 1% All Other Outlets

8%

Family Apparel General Merchandise Gifts, Art Goods, and Novelties

Jewelry Other Specialties All Other Food Stores

Packaged Liquor Stores Eating Places: No Alcoholic Beverages Household and Home Furnishings Second-hand Merchandise Food Stores Sellings All Types of Liquor Eating Places: Beer and Wine Eating and Drinking: All Types of Liquor Lumber and Building Materials Hardware Stores

Automotive Supplies and Parts Service Stations Business and Personal Services

All Other Outlets Vacant

Source: Conley Consulting Group report tables 20200.002.xls

(28)

TABLE 8

SALES TAX COLLECTIONS FY 1997/98 - FY 2001/02 THIRD STREET RETAIL MARKET ANALYSIS SAN FRANCISCO REDEVELOPMENT AGENCY

(1) FY 1997/98 FY 1998/99 FY 1999/2000 FY 2000/01 FY 2001/02 Total % Change 1997/98 - 2001/02 Convenience Goods

Food Stores Selling Liquor $26,926 $22,986 $24,493 $22,514 $17,674 (34.36%)

All Other Food Stores $37,591 $30,732 $22,198 $23,601 $25,532 (32.08%)

Drug Stores $25,953 $27,290 $30,273 $33,116 $32,997 27.14%

Packaged Liquor Stores $3,154 $3,166 $3,112 $4,720 $9,929 214.81%

Subtotal Convenience Goods $93,624 $84,174 $80,076 $83,951 $86,132 (8.00%)

Apparel $447 $416 $406 $750 $467 4.54%

General Merchandise (except Drug Stores) $305 $179 $216 $298 $398 30.49%

Home Furnishings and Appliances $0 $0 $604 $1,341 $386 (x)

Specialty $22,285 $22,176 $29,494 $23,775 $22,774 2.19%

Subtotal Convenience Goods $23,037 $22,771 $30,720 $26,164 $24,026 4.29%

Eating & Drinking $72,809 $94,293 $117,244 $125,575 $89,498 22.92%

Subtotal Retail Stores $189,470 $201,238 $228,040 $235,689 $199,655 5.38%

% Change (X) 6.21% 13.32% 3.35% (15.29%)

% Total 49.12% 51.55% 49.96% 49.79% 47.91%

Building Materials $2,893 $2,808 $2,833 $3,389 $3,710 28.23%

Automotive Service & Supply $38,490 $39,896 $51,096 $58,853 $54,648 41.98%

Business and Personal Services $5,610 $4,995 $3,538 $2,612 $2,188 (61.00%)

All Other Outlets $149,233 $141,404 $170,949 $172,776 $156,504 4.87%

TOTAL $385,696 $390,341 $456,455 $473,320 $416,704 8.04%

Notes

(1) The fiscal year includes the 2nd, 3rd, and 4th quarters from one calendar year, and the 1st quarter of the following calendar year

Source: Conley Consulting Group, San Francisco Redevelopment Agency report tables 20200.002.xls - T8 Sales

(29)

TABLE 9

CITY-WIDE SALES TAX COLLECTIONS FY 1997/98 - FY 2001/02 THIRD STREET RETAIL MARKET ANALYSIS

(1) FY 1997/98 FY 1998/99 FY 1999/2000 FY 2000/01 FY 2001/02 Total % Change 1997/98 - 2001/02 Convenience Goods

Food Stores Selling Liquor $2,878,828 $2,951,881 $3,071,194 $3,227,887 $3,173,598 10.24%

All Other Food Stores $971,312 $968,896 $990,764 $1,418,937 $1,024,366 5.46%

Drug Stores $1,659,465 $1,733,102 $1,909,332 $2,041,435 $2,004,694 20.80%

Packaged Liquor Stores $721,297 $727,695 $800,835 $851,244 $836,479 15.97%

Subtotal Convenience Goods $6,230,902 $6,381,574 $6,772,125 $7,539,503 $7,039,137 12.97%

Apparel $7,507,987 $7,739,284 $8,383,228 $8,918,166 $8,263,813 10.07%

General Merchandise (except Drug Stores) $8,231,021 $7,833,641 $8,842,967 $8,936,583 $8,022,067 (2.54%)

Home Furnishings and Appliances $3,872,046 $4,350,732 $5,204,178 $5,090,075 $3,190,369 (17.61%)

Specialty $16,859,240 $17,196,946 $19,498,927 $21,527,121 $18,327,128 8.71%

Subtotal Convenience Goods $36,470,294 $37,120,603 $41,929,300 $44,471,945 $37,803,377 3.66%

Eating & Drinking $15,446,810 $16,400,705 $18,008,900 $20,221,516 $18,816,884 21.82%

Subtotal Retail Stores $58,148,006 $59,902,882 $66,710,325 $72,232,964 $63,659,398 9.48%

% Change (X) 3.02% 11.36% 8.28% (11.87%)

% Total 60.35% 60.15% 61.36% 61.34% 63.01%

Building Materials $2,983,276 $3,162,822 $3,513,696 $3,701,713 $3,310,201 10.96%

Automotive Service & Supply $8,328,925 $7,194,096 $8,111,758 $9,694,722 $8,808,784 5.76%

Business and Personal Services $6,689,651 $7,777,246 $7,111,554 $8,023,260 $6,686,639 (0.05%)

All Other Outlets $20,205,118 $21,553,023 $23,268,603 $24,102,033 $18,561,103 (8.14%)

TOTAL $96,354,976 $99,590,069 $108,715,936 $117,754,692 $101,026,125 4.85%

Notes

(1) The fiscal year includes the 2nd, 3rd, and 4th quarters from one calendar year, and the 1st quarter of the following calendar year

Source: Conley Consulting Group, San Francisco Redevelopment Agency report tables 20200.002.xls - T9 SF Sales

(30)

(31)

V. Third Street Retail Potential

A. Current Leakage and Retail Development Potential 1. Theoretical Leakage

Currently, more than $160 million in expenditure potential from Trade Area residents is not captured by Third Street businesses and assumed to be lost to other areas as leakage. Approximately 27% of the leakage is in the category of Convenience Goods, including food stores, drug stores, and liquor stores. This leakage would support an additional 133,500 SF of retail store space. Half of the leakage is in the category of Comparison Goods, including lost expenditure potential for goods sold at department, apparel, and specialty stores. This leakage—which, as described above, is likely to be more difficult to recapture—would support an additional 294,000 SF of store space. Sales at eating and drinking outlets also fall short of the potential demand, with an estimated $20 million in leakage for this category, which could support between 50,000 and 60,000 SF of additional retail space. In theory, if all of this retail support potential could be captured by Third Street merchants, the recaptured leakage could support an additional 485,000 SF of retail space (see Table 6).

2. Maximum Recapturable Leakage

However, a certain amount of the leakage could likely never be captured by Third Street stores. The FoodsCo and Walgreens Stores located adjacent to Third Street on

Williams will likely continue to capture a significant share of the potential support from the Trade Area. Also, Trade Area residents are likely to continue to patronize general merchandise stores like Macy’s that are located outside of the Trade area. Table 10 provides an estimate of the maximum share of retail expenditure potential that is likely to be captured by Third Street retail stores. The maximum current recapturable leakage is estimated at over $124 million in sales. That sales potential, if captured by Third Street retailers, would support an additional 301,000 SF of new retail space (see Table 11). Again, it must be noted, that without a focused implementation strategy to change shopper patronage patterns, it is unlikely that the maximum recapturable leakage will be satisfied by Third Street retailers, especially for Comparison Goods outlets.

B. Future Retail Potential

Planned residential development in the Trade Area will further increase the expenditure potential available to Third Street merchants. In this analysis we have assumed that the planned residential development in the Trade Area, including the Hunters Point

Shipyard, occurs by 2020 and that the new units, on average, are priced to be affordable to households earning 80% of the area median income, which is within the definition of moderate- to low-income households. The income level and size of these households are based on interviews with housing developers active in the BVHP area, who report that households seeking new units in the area are both more affluent and smaller than existing Trade Area households.

(32)

The addition of 28,070 housing units would result in an addition of roughly 8,600 new residents in the Trade Area. CCG projects that new residents would have per capita income of $24,267, compared to the current estimated per capita income of $16,652 (see Table 12). Theoretically, these new residents could support an additional $67 million of retail spending. If all of this new expenditure potential could be captured on Third Street, 199,000 SF of additional retail store space (beyond the 301,000 SF reported in Table 11) could be supported. If, as is more likely, only a portion of the expenditure potential is captured by stores on Third Street, this new residential support base would support up to an incremental 132,000 SF more than the 301,000 SF reported in Table 11, for a total of 433,000 SF of new retail space (see Tables 13 and 14).

This analysis does not assume any retail development in the Shipyard or the Stadium Mall project. Both of these projects are currently in the planning stage, and the retail components of these projects have been preliminarily identified but are not defined in detail adequate enough to include in this analysis. However, major new retail

development in these areas could potentially divert retail potential from Third Street and affect the conclusions of this analysis. Additionally, the proposed Home Depot

development on Bayshore Boulevard is not anticipated to induce shoppers from outside of the Bayview neighborhood to patronize Third Street. In the past, Whole Earth Access and Goodman’s Lumber patrons from outside of the neighborhood did not patronize Third Street..

(33)

TABLE 10

MAXIMUM RESIDENT RETAIL EXPENDITURE AVAILABLE FOR CAPTURE - 2002 3RD STREET RETAIL MARKET ANALYSIS

Estimated Total Est. % (1) Est. Avail. Bay View Hunters Point Trade Area Expend. Potential Avail. Expend. Pot. Convenience Goods

Food Stores Selling Liquor $35,345,987 60.0% $21,207,592 All Other Food Stores $24,987,465 85.0% $21,239,345 Drug Stores $6,097,940 60.0% $3,658,764 Liquor Stores $2,116,866 85.0% $1,799,336 Convenience Goods Subtotal $68,548,258 69.9% $47,905,038 Comparison Goods

Apparel $7,911,341 60.0% $4,746,805 General Merchandise (except drugs) $47,198,389 60.0% $28,319,034 Home Furnishings & Household Appliances $8,616,973 60.0% $5,170,184 Specialty Retail $26,777,490 60.0% $16,066,494 Comparison Goods Subtotal $90,504,193 60.0% $54,302,516 Eating & Drinking $26,326,554 85.0% $22,377,571 Total Selected Retail Expenditure Potential $185,379,006 67.2% $124,585,125

Notes:

(1) Subject to adjustment based on future retail development scenarios. Given current retail supply on Third Street and adjacent retail (FoodsCo, Walgreen's) located off of Third, for Convenience Goods less than 100% of potential is likely to be available to Third Street stores.

(34)

TABLE 11

Bay View Hunters Point Trade Area Estimated Total Retail % Sales by Total Retail Current Estimated Target Maximum Available Sales in Trade Area Sales by Capture Unmet Sales Volume New Expenditure Trade Area Residents Trade Area Share Demand To support new Retail

Potential Residents Stores ($/SF) Supportable Convenience Goods

Food Stores Selling Liquor (1) (35% taxable) $21,207,592 $6,432,511 85% $5,467,635 26% $15,739,957 All Other Food Stores (1) (35% taxable) $21,239,345 $6,743,091 85% $5,731,628 27% $15,507,718 Drug Stores (1) (80% taxable) $3,658,764 $4,139,479 85% $3,518,557 96% $140,206 Liquor Stores $1,799,336 $472,023 85% $401,220 22% $1,398,117

Apparel $4,746,805 $74,996 85% $63,747 1% $4,683,058

Notes:

(1) Total Retail Sales are adjusted to represent total sales from tax collections data. Taxable sales for drugstores are assumed to represent an estimated 80% of total sales and taxable sales for food stores are estimated at 35% of total sales.

(2) Based on stakeholder interviews.

(35)

TABLE 12

TRADE AREA RESIDENT EXPENDITURE POTENTIAL - 2020 3RD STREET RETAIL MARKET ANALYSIS

SAN FRANCISCO REDEVELOPMENT AGENCY in $2002

Total Estimated 2020 Population (1) Estimated 2020 Per Capita Income (2)

% of Per Capita Estimated Total

Bay View Hunters Point Trade Area PCI (3) Retail Sales Expend. Potential

Food Stores Selling Liquor (4) (35% taxable) 6.1% $1,055 $45,497,606

All Other Food Stores (4) (35% taxable) 4.3% $746 $32,164,044

Drug Stores (4) (80% taxable) 1.1% $182 $7,849,312

Liquor Stores 0.4% $63 $2,724,846

Convenience Goods Subtotal 11.9% $2,047 $88,235,807

Apparel 1.4% $236 $10,183,535

General Merchandise (except drugs) 8.2% $1,409 $60,754,104

Home Furnishings & Household Appliances 1.5% $257 $11,091,829

Specialty Retail 4.6% $799 $34,468,176

Comparison Goods Subtotal 15.7% $2,702 $116,497,643

Eating & Drinking 4.6% $786 $33,887,728

2020 Total Selected Retail Expenditure Potential 32.1% $5,535 $238,621,179

2002 Total Selected Retail Expenditure Potential $185,379,006

Expenditure Potential Increase 2002-2020 $53,242,173

Notes:

(1) Assumes development of 2807 new dwelling units by 2020, per SFRA cummlative growth projections, and that each housing unit represents an additional 3 residents, based on household size of residents in new units (2) Assumes new housing unit residents have incomes at approximately 80% of area median household income

(or $73,280 per household, with 3 persons per household)

(3) Based on the reported taxable sales in the Central Valley region, which most closely resembles the Trade Area's demographics and income levels (per capita income) in comparison with other Bay Area and Northern

California regions.

(4) %PCI is adjusted updwards to represent total expenditures. Non-adjusted %PCI calculations were based on taxable sales. Taxable sales for drugstores are assumed to represent 80% of total drugstores sales and taxable sales for food stores are estimated at 35% of total sales.

43,115 $17,248

(36)

TABLE 13

MAXIMUM RESIDENT RETAIL EXPENDITURE AVAILABLE FOR CAPTURE - 2020 3RD STREET RETAIL MARKET ANALYSIS

in $2002

Estimated Total Est. % (1) Est. Avail. Bay View Hunters Point Trade Area Expend. Potential Avail. Expend. Pot. Convenience Goods

Food Stores Selling Liquor $45,497,606 60.0% $27,298,564

All Other Food Stores $32,164,044 85.0% $27,339,437

Drug Stores $7,849,312 60.0% $4,709,587

Liquor Stores $2,724,846 85.0% $2,316,119

Convenience Goods Subtotal $88,235,807 69.9% $61,663,707

Apparel $10,183,535 60.0% $6,110,121

General Merchandise (except drugs) $60,754,104 60.0% $36,452,462

Home Furnishings & Household Appliances $11,091,829 60.0% $6,655,097

Specialty Retail $34,468,176 60.0% $20,680,905

Comparison Goods Subtotal $116,497,643 60.0% $69,898,586

Eating & Drinking $33,887,728 85.0% $28,804,569

Total Selected Retail Expenditure Potential $238,621,179 67.2% $160,366,862

Notes:

(1) Subject to adjustment based on future retail development scenarios. Given current retail supply on Third Street and adjacent retail (FoodsCo, Walgreen's) located off of Third, for Convenience Goods less than 100% of potential is likely to be available to Third Street stores.

(37)

TABLE 14

in $2002

Bay View Hunters Point Trade Area Estimated Total Retail % Sales by Total Retail Capture Estimated Target New

Available Sales in Trade Area Sales by Share Unmet Sales Volume Retail

Expenditure Trade Area Residents Trade Area Demand To support new Supportable

Potential Residents Stores ($/SF)

Food Stores Selling Liquor (1) (35% taxable) $27,298,564 $6,432,511 85% $5,467,635 20% $21,830,929 All Other Food Stores (1) (35% taxable) $27,339,437 $6,743,091 85% $5,731,628 21% $21,607,809 Drug Stores (1) (80% taxable) $4,709,587 $4,139,479 85% $3,518,557 75% $1,191,030

Liquor Stores $2,316,119 $472,023 85% $401,220 17% $1,914,899

Apparel $6,110,121 $74,996 85% $63,747 1% $6,046,374

Notes:

(1) Total Retail Sales are adjusted to represent total sales from tax collections data. Taxable sales for drugstores are assumed to represent an estimated 80% of total salesand taxable sales for food stores are estimated at 35% of total sales.

(2) based on stakeholder interviews.

(38)

(39)

VI. Caveats and Limitations

1. The analysis contained in this document is based, in part, on data from

secondary sources such as state and local government, planning agencies, real estate brokers, and other third parties. While CCG believes that these sources are reliable, we cannot guarantee their accuracy.

2. The analysis assumes that the current economic slowdown will begin to abate in late 2003, and that economic conditions begin to improve in 2004 or 2005, and that neither the local nor national economy will experience a prolonged or additional

recession. If an unforeseen change occurs in the economy, the conclusions contained herein may no longer be valid.

3. The findings are based on economic rather than political considerations. Therefore, they should be construed neither as a representation nor opinion that government approvals for development can be secured.

4. Market feasibility is not equivalent to financial feasibility; other factors apart from the level of demand for a land use are of crucial importance in determining feasibility. These factors include the cost of acquiring sites, relocation burdens, traffic impacts, remediation of toxics (if any), and mitigation measures required through the approval process.

5. Development opportunities are assumed to be achievable during the specified time frame. A change in development schedule requires that the conclusions contained herein be reviewed for validity.

6. The analysis, opinions, recommendations and conclusions of this document are CCG's informed judgment based on market and economic conditions as of the date of this report. Due to the volatility of market conditions and complex dynamics influencing the economic conditions of the building and development industry, conclusions and recommended actions contained herein should not be relied upon as sole input for final business decisions regarding current and future development and planning.

(40)

(41)

APPENDIX A

GROUND FLOOR RETAIL INVENTORY 3RD STREET RETAIL MARKET ANALYSIS SAN FRANCISCO REDEVELOPMENT AGENCY

Business Name Address Section Block

(N/S/E/W)

Retail Category Retail Code

SF Description Comments

North Corridor Retail

R & S Erection of SF, Inc. 3101 3rd Street N E Business and Personal

Services

70 na door/gate repair center large industrial

SFO Apparel 3150 3rd Street N W Family Apparel 03 na large manufacturing

Bay Area Metals 3201 3rd Street N E All Other Outlets 99 na scrap metals

Delta Detailing Shop 3215 3rd Street N E Service Stations 62 na

Square & Circle Importing 3225 3rd Street N E Business and Personal

Services

70 na

Tiki Go Go 3235 3rd Street N E Business and Personal

Services

70 na personal chef service & delivery

TGC - Isuzu Truck Center 3240 3rd Street N W Automotive Supplies

and Parts

61 na

J & S Pacific Auto Co. 3245 3rd Street N E Automotive Supplies

and Parts

61 na auto body shop

SFFD 3301 3rd Street N E All Other Outlets 99 na 3rd at Cargo

Vinka Azich & Associates 3301 3rd Street N E All Other Outlets 99 na pier 90 shipping & receiving

R.N. Field Construction 3450 3rd Street N W Business and Personal

Services

70 na

Rubecon Digital Shipper, Inc. 3450 3rd Street N W Business and Personal

Services

70 na

Synertel 3450 3rd Street N W Business and Personal

Services

70 na

Sojourner Truth 3450 3rd Street N W All Other Outlets 99 na foster care center

??? 3550 3rd Street N W Vacant 00 na large warehouse

Tomra Recycling Network 3600 3rd Street N W All Other Outlets 99 na refuse systems, industrial bldg

vacant/demolished 3750 3rd Street N W Vacant 00 na former gas/auto service station

(Xtra Oil Co.)

Union 76 3800 3rd Street N W Service Stations 62 na At Least 10 Years

Tiffany Cafe - Bayview Plaza 3801 3rd Street N E Eating Places: No

Alcoholic Beverages

24 na coming soon…

(42)

APPENDIX A

GROUND FLOOR RETAIL INVENTORY 3RD STREET RETAIL MARKET ANALYSIS SAN FRANCISCO REDEVELOPMENT AGENCY

Business Name Address Section Block

(N/S/E/W)

Retail Category Retail Code

SF Description Comments

On-time Cleaners - Bayview Plaza 3801 3rd Street N E Business and Personal

Services

70 na new to plaza

Chic by Design - Bayview Plaza 3801 3rd Street N E Business and Personal

Services

70 960 Hair & Beauty Salon new to plaza

Union Bank of California - Bayview Plaza

3801 3rd Street, Ste. 150 N E Business and Personal Services

70 3,500 At Least 10 Years

Tops Boutique - Bayview Plaza 3801 3rd Street, Ste. 300 N E Business and Personal Services

70 870 beauty salon At Least 10 Years

Subway - Bayview Plaza 3801 3rd Street, Ste. 310 N E Eating Places: No

Alcoholic Beverages

24 na fast food/deli At Least 10 Years

Goodwill Store - Bayview Plaza 3801 3rd Street, Ste. 330 N E Second-hand Merchandise

32 5,600 discount apparel At Least 10 Years

SOO Fang - Bayview Plaza 3801 3rd Street, Ste. 370 N E Eating Places: Beer and Wine

35 na chinese restaurant At Least 10 Years

Generation Nails - Bayview Plaza 3801 3rd Street, Ste. 525 N E Business and Personal Services

70 970 nails & beauty supply At Least 10 Years

Walgreens - Bayview Plaza 3801 3rd Street, Ste. 550 N E General Merchandise 05 5,600 general merchandise and pharmacy

At Least 10 Years

Baycopy Plus - Bayview Plaza 3801 3rd Street, Ste. 575 N E Business and Personal Services

70 2,900 copies & reproduction new to plaza

Shamrock Moving and Storage 3830 3rd Street N W Business and Personal

Services

70 22,000 large industiral building

El Norteño 3906 3rd Street N W Eating Places: Beer and

Wine

35 na mexican taqueria was a different restaurant in '92

vacant 3910 3rd Street N W Vacant 00 1,300 former auto body shop

1/4 Burgers 4000 3rd Street N W Eating Places: No

Alcoholic Beverages

24 na At Least 10 Years

Primitive BBQ Catering 4004 3rd Street N W Eating Places: No

Alcoholic Beverages

24 3,000 was a bar w/ catering

KA-PA Tire Service 4011 3rd Street N E Automotive Supplies

and Parts

61 1,300

Associated Builders 4026 3rd Street N W Business and Personal

Services

70 6,000 At Least 10 Years

Globe-Bay Area Forklift, Co. 4040 3rd Street N W Business and Personal

Services

70 5,000 was truck repair place

Bayview Opera House Inc 4075 3rd Street N E All Other Outlets 99 5,000

Cosey's Inn 4100 3rd Street N W Eating and Drinking: All

Types of Liquor

36 na bar, restaurant, night club appears to be vacant - wsa called Louisiana Club in '92

vacant 4114 3rd Street N W Vacant 00 na

THIRD STREET RETAIL ASSESSMENT

THIRD STREET RETAIL ASSESSMENT

prepared for

The San Francisco Redevelopment Agency

Prepared By

C

onley

C

onsulting

G

roup

THIRD STREET RETAIL ASSESSMENT

prepared for

The San Francisco Redevelopment Agency

Prepared By

C

onley

C

onsulting

G

roup

403 Martin Luther King Jr. Way

Oakland, California 94607

Submitted January 2003

Revised April 2003

Table of Contents

North Corridor Retail